06-17-93 Special
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CITY OF DELRAY BEACH. FLORIDA - CITY COMMISSION
SPECIAL MEETING - JUNE 17. 1993 - 4:00 P.M.
COMMISSION CHAMBERS
AGENDA
Please be advised that if a person decides to appeal any decision made
by the City Commission with respect to any matter considered at this
meeting or hearing, such persons will need a record of these
proceedings, and for this purpose such persons may need to ensure
that a verbatim record of the proceedings is made, which record
includes the testimony and evidence upon which the appeal is to be
based. The City does not provide or prepare such record.
Pursuant to Section 3.07 of the City Charter of the City of Delray
Beach, Florida, Mayor Thomas E. Lynch has instructed me to advise
you of a Special Meeting of the Commission to be held in the
Commission Chambers at 4 P.M. on Thursday, June 17, 1993.
This meeting has been called for the purpose of considering
the following:
1. Resolution No. 60-93 authorizing the negotiated sale of Water and
Sewer Refunding Bonds Series 1993A in the aggregate principal amount
of $30,000,000 and Water and Sewer Revenue Bonds 1993B in the initial
aggregate principal amount of $10,OOO,OOO¡ and determining certain
details of said bonds as further described in the caption of the
resolution.
A~M~~~
City Clerk
MEMORANDUM
TO: MAYOR AND CITY COMMISSIONERS
FROM: f!!'{:TY MANAGER
SUBJECT: AGENDA ITEM # ~/I - SPECIAL MEETING OF JUNE 1 7. 1993
RESOLUTION NO. 60-93
DATE: June 16, 1993
This is a resolution authorizing the negotiated sale of Water and
Sewer Refunding Bonds Series 1993A in the aggregate principal amount
of $30,000,000 and Water and Sewer Revenue Bonds 1993B in the initial
aggregate principal amount of $10,000,000¡ and determining certain
details of said bonds as further described in the caption of the
resolution.
The copy of Resolution 60-93 attached as backup material for this item
is a draft. The final document will be provided at Thursday
afternoon's meeting.
Recommend approval of Resolution No. 60-93.
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SUMMARY
$21,238,997.35 Water and Sewer Refunding Revenue Bonds,
Series 1993 A
$6,865,477.25 Water and Sewer Revenue Bonds,
Series 1993 B
Purpose
Refunding a portion of the Water and Wastewater Refunding Revenue Bonds, Series
1988 and the Water and Sewer Revenue Bonds, Series 1991 A & B
· Present Value Savings
· Funds for new construction ($6,674,000)
1993 Project
· Golf course wells
· Land acquisition for southwest storage tank
· Northeast storage tank improvements
· Installation of six 12" water mains
· Production wells
· High service pumps
Structure
· Approximatley $375,000 annual debt service reduction from 1993 to 2000
· Approximatley $150,000 annual debt service increase from 2001 to 2014
Security
· Net Revenue of the Combined Utility System
The Refunding Plan
· Purchase of the escrow securities by Stifel Nicolas
· Bidding of the forward purchase contract
Tax Law Constraints
· Allocation of "refundable" bonds based on a regulation due to expire July 1,
1993
· Regulations extended to August 15, 1993 providing marketing flexibility
Bond Insurance
· Competitively bid saving the City $20,000 to $60,000
· AMBAC was selected as low bidder
Savings
· Total Gross Debt Service Savings: 3,515,618.72
· Present Value Debt Service Savings: 1,191,441.72
Conclusions
· Gross Spread of $9.50 is fair and reasonable to the City
· Arbitrage Yield of 5.479% is fair and reasonable to the City
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NO. 60-93
A RESOLUTXON 01' THE CXTY COKKXSSXON 01' THB CXTY 01' DBLRAY
BEACH, FLORXDA, AUTHORXZING THB NEGOTXATED SALB 01'
CXTY 01' DELRAY BEACH, FLORXDA, WATER AND SEWER REFUHDXNG
REVENtJB BONDS, SERXES 1993 A, XN THB XNXTXAL AGGREGATB
PRXNCXPAL AMOUNT 01' $21,238,997.35, AND CXTY 01' DELRAY
BEACH, FLORXDA, WATER AND SEWER REVENUB BONDS, SmUES
1993 B, XN THB XNXTXAL AGGREGATB PRXNCXPAL AMOUNT 01'
$ 6, 865, .. 7 7 . 25; DETElUUNING CERTAIN DETAXLS 01' SAID BONDS;
PROVXDXNG FOR THE APPLXCATXON OJ' THB BOND PROCEEDS;
APPROVXNG THB I'ORK 01', AND AUTHORXZING THB EXECUTION AND
DELIVERY 01', A BOND PURCHASB AGREmœN'r TO EJ'J'ECT THB
NEGOTIATED SALB 01' THB BONDS; APPROVXNG THB I'ORK 01' AND
AUTHORIZING THB BXECUTION 01' AN OJ'PICXAL STATEKEN'l' IN
CONNECTXON WITH THB OFJ'ERXNG AND SALB 01' THB BONDS AND
APPROVING, RATIPYING AND CONJ'XRKING THB DISTRXBUTION 01'
A PRELIKXNARY OPI'XCIAL STATmœN'r BY THB UNDERWRITERS;
AWARDXNG THB BONDS; APPOXNTXNG AN ESCROW AGENT; APPROV-
XNG THB PORK 01' AND AUTHORXZXNG THB EXBCUTXON AND
DELXVERY 01' AN ESCROW DEPOSXT AGREmœN'r; APPOXNTING A
PAYXNG AGEN'l'; APPOXNTXNG A REGXSTRAR; APPROVING THB PORK
01' AND AUTHORIZXNG THB EXBCUTXON AND DELXVERY OJ' A PAYING
AGBNT AND RBGISTRAR AGRBmœN'r RELATING TO THB BONDS;
PROVIDING POR A BOND INSURANCB POLXCY AND A RBSERVB
ACCOUNT CREDIT J'ACXLITY SUBSTXTUTB POR THB BONDS PROVIDBD
BY AKBAC INDEKNXTY CORPORATION; AUTHORXZING THB RELEASB
AND APPLICATION 01' CASH AND PERKITTED XNVESTKEN'l'S 01' SUCH
CASH FROK THB DEBT SERVICB RESERVB ACCOUNT AND PROVIDING
POR THB REPLACEKEH'r THEREOI' WITH A RESERVB ACCOUNT CREDIT
PACXLITY SUBSTITUTB PROVIDED BY AKBAC INDEKNITY CORPORA-
TION; APPROVING THB PORK 01' AND AUTHORIZING THB EXBCUTION
AND DELIVERY 01' GUARANTY AGREEKENTS WITH AKBAC INDBKNITY
CORPORATION RELATING TO THE RESERVB ACCOUNT CREDIT
FACILITY SUBSTITUTES; AMBNDXNG AND SUPPLEKBNTING CERTAIN
PRIOR RESOLUTXONS IN CONNECTION WITH THB POREGOXNG;
AUTHORIZXNG THB PROPER OPPICERS 01' THB CXTY TO DO ALL
OTHER THINGS DEmœD NECESSARY OR ADVISABLB AS TO THB SALB
AND DELIVERY 01' THB BONDS; AND PROVIDXNG FOR AN BPI'BCTIVB
DATE.
WHEREAS, the City Commission of the City of Delray Beach,
Florida (referred to herein as the "City commission"), did, on
June 12, 1984, adopt Resolution No. 45-84, which was amended and
supplemented on June 26, 1984, and October 17, 1984, authorizing
C:\DA TA \DEl.JtA ¥.34\DETAJU. V4 1 Res. No. 60-93
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the issuance of its Water and Sewer Revenue Bonds, Series 1984 (the
"1984 Bonds"); and
WHEREAS, the City commission did, on June 28, 1988, adopt
Resolution No. 36-88, which was amended, supplemented and restated
by Resolution No. 39-88, adopted on July 12, 1988, as further
amended and supplemented (collectively, the "1988 Resolution") ,
authorizing the issuance of the City's Water and Sewer Refunding
Revenue Bonds, Series 1988 (the "1988 Bonds"), to refund the City's
1984 Bonds; and
WHEREAS, the City did, pursuant to the 1988 Resolution on
September 15, 1988, i~sue its 1988 Bonds in the aggregate principal
amount of $25,135,000; and
WHEREAS , the City commission did, on April 24, 1990,
adopt Resolution No. 46-90, as amended and supplemented (the "1991
A Resolution"), which authorized the issuance of $8,000,000 Water
and Sewer Revenue Bonds (the "1991 A Bonds") of the City for the
purpose of financing certain additions, extensions and improvements
to the City's Combined Public utility (as such term is defined in
the 1988 Resolution); and
WHEREAS , the City commission did, on October 23, 1990,
adopt Resolution No. 104-90, as amended and supplemented (the
"1991 B Resolution"), which authorized the issuance of not
exceeding $50,000,000 Water and Sewer Revenue Bonds (the "1991 B
Bonds") of the City for the purpose of financing certain additions,
extensions and improvements to the City's Combined Public utility;
and
C:\DA T A \DBUtA Y .34\DET AILS. V4 2 Res. No. 60-93
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WHEREAS , the City did, on April 30, 1991, issue its
1991 A Bonds and 1991 B Bonds in the aggregate principal amounts of
$8,000,000 and $14,585,000, respectively; and
WHBREAS, the 1988 Resolution, the 1991 A Resolution, and
the 1991 B Resolution are herein, collectively, referred to as the
"Original Resolution"; and
WHEREAS , the Commission did, on June 8, 1993, adopt
Resolution No. 50-93 (the "Series A Resolution") authorizing the
issuance of not exceeding $30,000,000 in aggregate principal amount
of Water and Sewer Refunding Revenue Bonds, Series 1993 A, for the
purpose of paying and refunding certain 1988 Bonds and certain 1991
A Bonds (herein, the "Refunded Bonds"'); and
WHEREAS , the City is desirous of issuing $21,238,997.35
in initial aggregate principal amount of such Water and Sewer
Refunding Revenue Bonds pursuant to the terms and provisions of the
Original Resolution and the Series A Resolution (herein called the
"Series 1993 A Bonds"); and
WHEREAS , the Commission did, on June 8, 1993, adopt
Resolution No. 51-93 (the "Series B Resolution") authorizing the
issuance of not exceeding $10,000,000 in initial aggregate
principal amount of Water and Sewer Revenue Bonds, Series 1993 B,
for the purpose of financing certain additions, extensions and
improvements to the City's Combined Pubic utility; and
WHBREAS, the City is desirous of issuing $6,865,477.25 in
initial aggregate principal amount of such Water and Sewer Revenue
Bonds pursuant to the terms and provisions of the Original
C:\DA T A \DELRA Y .34\DBT AILS. V4 3 Res. No. 60-93
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Resolution and the Series B Resolution (herein called the "Series
1993 B Bonds"); and
WHEREAS, the Series 1993 A Bonds and Series 1993 B Bonds
are, collectively, referred to herein as the "1993 Bonds"; and
WHEREAS , the Series A Resolution and the Series B
Resolution are, collectively, referred to herein as the "1993
Series Resolutions; and
WHEREAS, the outstanding 1988 Bonds and 1991 A Bonds,
which are not being refunded with the proceeds of the Series 1993 A
Bonds, together with the outstanding 1991 B Bonds, are collectively
referred to as the "Prior Bonds"; and
WHEREAS, the 1993 Bonds will be issued on parity with the
Prior Bonds except as provided in the Original Resolution, the 1993
Series Resolutions, and this Resolution; and
WHEREAS, the 1993 Series Resolutions provide that certain
details of the 1993 Bonds and certain other provisions of the 1993
Series Resolutions shall be determined by subsequent proceedings of
the City, which shall be deemed to be supplemental to the Original
Resolution and the 1993 Series Resolutions; and
WHEREAS, the City has determined the details of the 1993
Bonds; and
WHEREAS , smith Barney, Harris Upham & Co. Incorporated,
on behalf of smith Barney, Harris Upham & Co. Incorporated, Stifel,
Nicolaus & Co., Inc., and Hanifen, Imhoff, Inc. (collectively, the
"Underwriters"), has submitted to the City a proposal in the form
of a Bond Purchase Agreement (the "Purchase Contract"), attached
C:\DA TA \DELRA Y .34\Dm'An.s. V4 4 Res. No. 60-93
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hereto as Exhibit A, between the Underwriters and the City to
purchase the 1993 Bonds, a copy of which is hereby furnished to
each of the City commissioners; and
WHEREAS, pursuant to Section 218.385, Florida Statutes,
an authorized officer of Smith Barney, Harris Upham & Co. Incorpo-
rated on behalf of the Underwriters, has delivered to the City a
disclosure statement and truth-in-bonding statement, both of which
are attached to or incorporated in the Purchase Contract; and
WHEREAS, there have been prepared and submitted to the
city:
(a) a Preliminary Official Statement, dated June 8,
1993, attached hereto as Exhibit B¡
(b) an Escrow Deposit Agreement (the "Escrow Deposit
Agreement"), attached hereto as Exhibit C¡ and
(c) a Paying Agent and Registrar Agreement (the
"Paying Agent and Registrar Agreement"), attached hereto
as Exhibit D¡ and
(d) a Guaranty Agreement by and between AMBAC and
the City relating to the 1991 AMBAC Surety Bond, as
herein def ined (the 1991 "Guaranty Agreement"), and a
Guaranty Agreement by and between AMBAC and the City
relating to the 1993 AMBAC Surety Bond, as herein defined
(the "1993 Guaranty Agreement") , attached hereto as
Exhibit E-1 and E-2, respectively¡ and
C:\DA T A \DP.LRA Y .34\DBT AJLS. V4 5 Res. No. 60-93
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WHEREAS, the city's financial advisor has recommended the
negotiated sale of the 1993 Bonds in a letter attached hereto as
Exhibit F; and
WHEREAS , based on the advice of the City's financial
advisor, it is in the best interest of the city to accept the Bond
Purchase Contract and to award the 1993 Bonds to the Underwriters;
and
WHBREAS, the city's financial advisor has recommended in
a letter, attached hereto as Exhibit F, that the principal and
interest on the 1993 Bonds be insured by a municipal bond insurance
policy (the "Bond Insurance Policy" ) issued by AMBAC Indemnity
Corporation (" AMBAC·') ; and
WHEREAS, the city's financial advisor has recommended in
a letter, attached hereto as Exhibit F, that in lieu of funding the
Debt Service Reserve Account Requirement with the proceeds from the
1993 Bonds, it would be in the best economic interest of the City
to purchase a Reserve Account Credit Facility Substitute from AMBAC
in the form of a surety bond (herein, the "1993 AMBAC Surety
Bond") ; and
WHEREAS , pursuant to the terms and provisions of the
1991 A Resolution and 1991 B Resolution (collectively, the "1991
Resolutions"), the City is authorized to remove the cash and
permitted investments of such cash relating to the 1991 A Bonds and
1991 B Bonds (collectively, the "1991 Bonds") from the Debt Service
Reserve Account created and established under the 1988 Resolution
and continued under the 1991 Resolutions, and replace the same; and
C:\DA TA \DF.L.RA Y .34\DETAILS. V4 6 Res. No. 60-93
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WHEREAS , the Commission hereby determines, based on the
recommendations of the City's financial advisor, that it would be
in the best interest of the city to remove such cash and permitted
investments of such cash from the Debt Service Reserve Account and
provide in lieu thereof a Reserve Account Credit Facility
Substitute from AMBAC in the form of a surety bond {herein, the
"1991 AMBAC surety Bond"; and
WHEREAS, the 1991 AMBAC Surety Bond and the 1993 AMBAC
Surety Bond are herein, collectively, ref erred to as the "AMBAC
Surety Bonds"; and
WHEREAS, the Commission hereby adopts the recommendations
of the City's financial advisor regarding the Bond Insurance POlicy
and the AMBAC Surety Bonds; and
WHBREAS, as a condition of obtaining the Bond Insurance
Policy and the AMBAC Surety Bonds, it is necessary to supplement
the 1991 Resolutions and the 1993 Series Resolutions regarding
certain notices, payment provisions relating to the Bond Insurance
Policy and AMBAC Surety Bonds, and other matters relating thereto;
and
WHEREAS, it is necessary to amend the Original Resolution
and the 1993 Series Resolutions to provide for separate funding of
the Debt Service Reserve Requirement for one or more series of
Bonds.
NOW, THEREFORB, BB XT RESOLVED BY THB CITY COMKXSSION 01'
THB CXTY OJ' DELRAY BEACH, FLORXDA, AS FOLLOWS:
C:\DA TA \DELRA Y .34\DETAILS. V4 7 Res. No. 60-93
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SECTION 1. Definitions. That all capitalized terms used
in this Resolution not otherwise defined shall have the meanings
ascribed to such terms in the Original Resolution or the 1993
Series Resolutions, as the case may be, unless the context clearly
indicates otherwise.
SECTXON 2. Purpose and Bond Desiqnations. That the City
hereby determines at this time (i) to issue $21,238,997.35 in
initial aggregate principal amount of its series 1993 A Bonds for
the purpose of (a) paying and defeasing the Refunded Bonds, (ii) to
issue $6,865,477.25 in initial aggregate principal amount of its
series 1993 B Bonds for the purpose of financing all or a portion
of the Project (as such term is, defined in the 1991 B Resolution)
not financed with the proceeds of the 1991 B Bonds, and (iii) to
pay the costs of issuance of the 1993 Bonds, including paying the
premiums for the Bond Insurance Policy and the 1993 AMBAC Surety
Bond, and (iv) to designate such 1993 Bonds, respectively, as its
"Water and Sewer Refundinq Revenue Bonds, Series 1993 A," and its
"Water and Sewer Revenue Bonds, Series 1993 B."
SECTXON 3. Description of the Bonds. That the 1993 A
Bonds shall be issued as Capital Appreciation Bonds and as bonds
that pay interest on each April 1 and October 1 (herein referred to
as the "Current Interest Bonds") . The 1993 B Bonds shall be issued
both as Capital Appreciation Bonds and Current Interest Bonds. The
CUrrent Interest Bonds for both the 1993 A Bonds and 1993 B Bonds
shall be dated June 1, 1993, shall bear interest payable on October
1, 1993, and semiannually thereafter on April 1 and October 1 of
C:\DA TA \D1!LJtA Y .J4\DETAIU. V4 8 Res. No. 60-93
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each year, and shall mature on October 1 of each of the years, in
the amounts, and at the rates as follows:
1993 A CURRENT INTEREST BONDS
Interest
Year Amount Rate
1998 $ 15,000 4.250%
1999 1,805,000 4.500
2000 1,885,000 4.625
2001 2,435,000 4.750
2002 2,675,000 5.000
2003 2,815,000 5.000
2004 2,950,000 5.100
2005 3,105,000 5.200
2006 3,260,000 5.300
2007 100,000 5.400
2008 105,000 5.400
1993 B CURRENT INTEREST BONDS
Interest
~ Amount Rate
2001 $ 100,000 4.750%
2002 110,000 5.000
2003 110,000 5.000
2004 120,000 5.100
2005 120,000 5.200
2006 135,000 5.300
2007 140,000 5.400
2008 145,000 5.400
The Capital Appreciation Bonds shall be dated the date
that such 1993 Bonds are delivered to the Underwriters. The
Capital Appreciation Bonds shall bear interest, as described in the
definition of "Accreted Value" set forth in the original Resolu-
tion, at the approximate yields to maturity, shall be issued in the
denominations such that the maturing Accreted Value equals $5,000
or integral multiples thereof, shall be issued in such or ig ina 1
C:\DA TA\DELRA Y .34\DETAn.s. V4 9 Res. No. 60-93
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principal amounts, and mature on October 1 of each of the years and
in the total principal amounts, all as set forth below:
1993 A CAPITAL APPRECIATION BONDS
Original Accreted Approximate
Principal Value at Yield to
Year Amount Maturity Maturity
2009 $45,759.65 $115,000 5.75%
2010 43,237.70 115,000 5.75
1993 B CAPITAL APPRECIATION BONDS
original Accreted Approximate
Principal Value at Yield to
Year Amount Maturity Maturity
2009 $ 59,686.50 $ 150,000 5.75%
2010 56,397.00 150,000 5.75
2011 1,575,737.00 4,475,000 5.80
2012 1,488,206.00 4,475,000 5.80
2013 1,391,725.00 4,475,000 5.85
2014 1,313,725.75 4,475,000 5.85
The Capital Appreciation Bonds shall be payable only at
maturity. The Accreted Values of the Capital Appreciation Bonds
per $5,000 maturity amount on each April 1 and October 1 (commenc-
ing October 1, 1993) shall be as set forth on Schedule A attached
hereto and by this reference incorporated herein.
SBCTXON ... Redemption Provisions. The Current Interest
Bonds maturing on and prior to October 1, 2003, shall not be
redeemable prior to their stated dates of maturity. The Current
Interest Bonds maturing on October 1, 2004, and thereafter are
redeemable at the option of the City from any legally available
source, in part, in any order of maturity selected by the City, and
by lot within a maturity if less than an entire maturity is to be
C:\DA TA\DELRA Y .34\DETAILS. V4 10 Res. No. 60-93
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redeemed, on October 1, 2003, or at any time thereafter, or as a
whole, on October 1, 2003, or at any time thereafter, at the
redemption prices (expressed as percentages of the principal amount
to be redeemed) set forth below, together with accrued interest to
the date fixed for redemption:
Redemption Period Redemption
(Both dates inclusive) Price
October 1, 2003 to September 30, 2004 102\
October 1, 2004 to September 30, 2005 101\
October 1, 2005 and thereafter 100\
The Capital Appreciation Bonds shall not be redeemable
prior to their stated dates of maturity.
Notice of redemption of the 1993 Bonds shall be mailed,
postage prepaid, by the Registrar not less than thirty (30) days
before the date fixed for redemption to the registered owners of
any 1993 Bonds or portions of 1993 Bonds which are to be redeemed,
at their addresses as they appear fifteen (15) days prior to the
date such notice is mailed on the registration books of the City
kept by the Registrar.
The Registrar also shall mail (by certified mail, return
receipt requested) a copy of such notice for receipt not less than
thirty-two (32) days before such redemption date to the following:
The Depository Trust Company, 711 Stewart Avenue, Garden City, New
York 11530; Midwest Securities Trust Company, Capital Structures -
Call Notification, 440 South LaSalle Street, Chicago, Illinois
60605; Philadelphia Depository Trust Company, Reorganization
Division, 1900 Market Street, Philadelphia, Pennsylvania 19103;
C;\DA TA \DEUtA Y .34\DETAD..S. V4 11 Res. No. 60-93
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Attention: Bond Department; provided, however, that such mailing
shall not be a condition precedent to such redemption and failure
to mail any such notice shall not affect the validity of any
proceedings for the redemption of the 1993 Bonds. The Registrar
shall also provide notice, at the same time notice of redemption is
given to the Bondholders, to Kenny Information Systems Notification
Service, 65 Broadway, 16th Floor, New York, New York 10006, and
Standard & Poor's Called Bond Record, 25. Broadway I New York, New
York 10004; provided, however, that such mailing shall not be a
condition precedent to such redemption and failure to mail any such
notice shall not affect the validity of any proceedings for the
redemption of the 1993 Bonds.
A second notice of redemption shall be given sixty (60)
days after the redemption date in the manner required above to the
registered owners of redeemed 1993 Bonds which have not been
presented for payment within thirty (30) days after the redemption
date.
Such notice of redemption shall set forth (i) the date
fixed for redemption, ( ii) the redemption price to be paid,
( iii) that such 1993 Bonds will be redeemed at the principal
corporate trust office of the Paying Agent (as herein defined), and
the name, address and telephone number of a contact person, (iv) if
less than all of the 1993 Bonds shall be called for redemption, the
distinctive numbers, letters and CUSIP identification numbers, if
any, of such 1993 Bonds to be redeemed, (v) in the case of 1993
Bonds to be redeemed in part only, the portion of the principal
C:\DA TA \DBLRA Y .34\DETAJLS. V4 12 Res. No. 60-93
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amount thereof to be redeemed, and (vi) any other information the
City or the Registrar deems relevant. In case any 1993 Bond is to
be redeemed in part only, the notice of redemption that relates to
such 1993 Bond shall state also that on or after the redemption
date, upon surrender of the 1993 Bond, a new 1993 Bond or 1993
Bonds of the same maturity, bearing interest at the same rate and
in aggregate principal amount equal to the unredeemed portion of
such 1993 Bond, will be issued. Failure of the registered owner of
any 1993 Bonds which are to be redeemed to receive any such notice
shall not affect the validity of the proceedings for the redemption
of 1993 Bonds for which proper notice has been given. Interest
shall cease to accrue on any of the· 1993 Bonds duly called for
prior redemption if payment of the redemption price has been duly
made or provided for.
SECTXON 5. Application of 1993 Bond Proceeds and
Disposition of Koneys. That all moneys received by the City from
the sale of the Series 1993 A Bonds shall be disbursed as provided
in section 5 of Article III of the Series A Resolution. Moneys in
the Sinking Fund created and established under the 1988 Resolution
and continued under the 1991 A Resolution allocable to the Refunded
Bonds shall be transferred to the escrow agent for deposit pursuant
to the Escrow Deposit Agreement.
That all moneys received by the City from the sale of the
Series 1993 B Bonds shall be disbursed as provided in Section 2 of
Article III of the Series B Resolution.
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SECTION 6. Negotiated Sale. That the Commission hereby
adopts the recommendations of the City's financial advisor, as
described in a letter from the City's financial advisor, dated the
date of this Resolution and attached hereto as Exhibit F. The City
hereby finds that, due to the complicated nature of the financing
and volatile market conditions, it would be in the best interest of
the City that the 1993 Bonds be sold on a negotiated basis.
SECTXON 7. Purchase Contract. That the Purchase Contract
for the 1993 Bonds, dated the date of this Resolution, between the
City and the Underwriters, as submitted to this meeting and
attached hereto as Exhibit A, be and the same hereby is approved
and accepted, and the 1993 Bonds are hereby sold to the Underwrit-
ers at a purchase price of $27,666,727.45 (representing the initial
par amount of the 1993 Bonds less underwriters' discount of
$201,770.47 with respect to the Series 1993 A Bonds and $65,222.03
with respect to the Series 1993 B Bonds and less original issue
discount of $161,523.70 with respect to the Series 1993 A Bonds and
$9,230.95 with respect to the Series 1993 B Bonds) plus accrued
interest with respect to the Current Interest Bonds to the date of
delivery thereof, on the terms and conditions set forth in the
Purchase Contract, and the Mayor of the City or, in his absence,
the Vice Mayor is hereby authorized and directed to execute, and
the Clerk of the City to attest (if so required by the terms of the
Purchase Contract), the Purchase Contract and to deliver the same
to the Underwriters.
C:\DA TA \DELJtA Y .34\DBTAn.s. V4 14 Res. No. 60-93
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SECTION 8. preliminary and Final Official Statement.
That the Official statement of the City, to be dated the date of
this Resolution, will be in substantially the form of the Prelimi-
nary Official statement presented to this meeting and attached
hereto as Exhibit B, with the such insertions and changes as shall
be necessary to reflect the terms of the 1993 Bonds, as set forth
in the Purchase Contract and as shall be approved by the Mayor of
the City and the City Manager (upon advice of Bond Counsel and the
City Attorney) with such approval to be conclusively evidenced by
their execution and delivery thereof, and the City hereby approves
the use of the final printed Official statement by the Underwriters
in connection with the offering and sale of the 1993 Bonds, and the
city hereby further approves the use by the Underwriters of any
supplement or amendment to the final printed Official statement
which is necessary so that the final printed Official statement
does not include any untrue statement of a material fact or does
not omit to state any material fact necessary to make the state-
ments therein not misleading. The City hereby ratifies, approves
and consents to the use by the Underwriters of the Preliminary
Official statement in connection with the public offering of the
1993 Bonds attached hereto as Exhibit B. The Mayor of the City and
the City Manager are hereby authorized and directed to execute the
Official statement and any amendment or supplement thereto, in the
name and on behalf of the City, and thereupon to cause the Official
statement and any such amendment or supplement to be delivered to
the Underwriters.
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SBCTION 9. Escrow Trustee. That the City hereby
appoints First Union National Bank of Florida, as escrow trustee
(the "Escrow Trustee" ) under the Escrow Deposit Agreement (as
herein defined).
SECTION 10. Bscrow Deposit Agreement. That the form,
terms and provisions of the Escrow Deposit Agreement, attached
hereto as Exhibit C, between the city and the Escrow Trustee, as
submitted to this meeting, be and the same are hereby approved and
accepted. The Mayor of the city or, in his absence, the Vice Mayor
each is hereby authorized and directed to execute and deliver the
Escrow Deposit Agreement in substantially the form submitted to
this meeting, with such changes, insertions and deletions thereto
as are necessary or desirable for carrying out the purposes thereof
as may be approved by the Mayor of the City or the Vice Mayor, upon
advice of the city Attorney and Bond Counsel, the execution of said
Escrow Deposit Agreement being conclusive evidence of such
approval. The City Clerk is hereby authorized and directed to
affix the seal of the City and attest to the same, if so required
by the terms thereof.
SECTION 11. Paying Agent and Registrar. That First
Union National Bank of Florida, is hereby appointed as paying agent
(the "paying Agent") and registrar (the "Registrar") for the 1993
Bonds.
SECTION 12. Paying Agent and Registrar Agreement. That
the form, terms and provisions of the Paying Agent and Registrar
Agreement, attached hereto as Exhibit D, between the City and First
C:\DA TA \DP.LRA Y .34\DBTAn.8.V4 16 Res. No. 60-93
".
Union National Bank of Florida, as Paying Agent and Registrar, as
submitted to this meeting, be and the same are hereby approved and
accepted. The Mayor of the city or, in his absence, the Vice Mayor
each is hereby authorized and directed to execute and deliver the
paying Agent and Registrar Agreement in sUbstantially the form
submitted to this meeting, with such changes, insertions and
deletions thereto as are necessary or desirable for carrying out
the purposes thereof as may be approved by the Mayor of the City
or, in his absence, the Vice Mayor, upon advice of the City
Attorney and Bond Counsel, the execution of said Paying Agent and
Registrar Agreement being conclusive evidence of such approval.
The city Clerk is hereby authorized and directed to affix the seal
of the City and attest to the same, if so required by the terms
thereof.
SECTION 13. Disclosure statement. That the City does
hereby find that the Underwriters have submitted the disclosure
statement and truth-in-bonding statement required by Section
218.385, Florida statutes, copies of which are attached to or
incorporated in the Purchase Contract.
SECTION 1.&. Bond Insurance policy and AMBAC surety Bonds
and Liquidation of all xnvestments in the Debt Service Reserve
Account. That, based on the recommendations of the City's
Financial Advisor, set forth in a letter attached hereto as
Exhibit F with respect to the 1993 Bonds, the Commission finds that
obtaining the Bond Insurance policy from AMBAC and the AMBAC Surety
Bonds are in the best interests of the city, and the commission
C:\DA TA \DELRA Y .34\DETAILS. V4 17 Res. No. 60-93
,
·
hereby directs that the premiums due on the Bond Insurance Policy
and the AMBAC Surety Bonds be paid in accordance with the terms
thereof. The Commission directs that all investments in the Debt
Service Reserve Account be liquidated and the proceeds therefrom be
used, first, to pay the premium on the 1991 AMBAC Surety Bond and
the balance be deposited into the trust fund created under the
Escrow Deposit Agreement.
SECTION 15. Guaranty Agreements. The form, terms and
provisions of the 1991 Guaranty Agreement and the 1993 Guaranty
Agreement (collectively, the "Guaranty Agreements"), both between
the City and AMBAC, substantially in the forms attached hereto as
Exhibit E-1 and E-2, respectively, as submitted to this meeting, be
and the same are hereby approved and accepted. Either the Mayor,
the Vice Mayor, or the Director of Finance is hereby authorized and
directed to execute and deliver the Guaranty Agreements on behalf
of the City in substantially the forms submitted to this meeting,
with such changes, insertions and deletions thereto as are
necessary or desirable for carrying out the purposes thereof as may
be approved by the Mayor, Vice Mayor, or Director of Finance, with
the advice of the City Attorney and Bond Counsel, the execution of
said Guaranty Agreements being conclusive evidence of such
approval. The City Clerk is hereby authorized and directed to
affix the seal of the City and attest to the same if so required by
the terms thereof.
SECTXON 16. Payment Procedures of Bond Insurance policy.
As long as the Bond Insurance Policy shall be in full force and
C;\DA TA\DELRA Y .34\DETAILS. V4 18 Res. No. 60-93
"
effect, the City, the Registrar, and the Paying Agent agree to
comply with the following provisions:
(a) At least one (1) day prior to all Interest
Payment Dates, the city and the Paying Agent will
determine whether there will be sufficient funds, in the
funds and accounts created and established under the
Original Resolution and continued and maintained under
the 1993 Series Resolutions, and available to pay debt
service on the 1993 Bonds (herein, the "Funds and
Accounts") , to pay the principal of or interest on the
1993 Bonds on such Interest Payment Date. If the City or
the Paying Agent determines that there will be insuffi-
cient funds in such Funds or Accounts, the City or the
Paying Agent shall so notify AMBAC. Such notice shall
specify the amount of the anticipated deficiency, the
1993 Bonds to which such deficiency is applicable and
whether such 1993 Bonds will be deficient as to principal
or interest, or both. If the City or the Paying Agent
has not so notified AMBAC at least one (1) day prior to
an Interest Payment Date, AMBAC will make payments of
principal or interest due on the 1993 Bonds on or before
the first (1st) day next following the date on which
AMBAC shall have received notice of nonpayment from the
city or the Paying Agent.
(b) The Registrar shall, after notice to AMBAC has
been given, as provided in (a) above, make available to
C:\DATA\DP.UtA Y .3.&\DBTAILS. V. 19 Res. No. 60-93
.,
AMBAC and, at AMBAC's direction, to the United states
Trust Company of New York, as insurance trustee for
AMBAC, or any successor insurance trustee (the "Insurance
Trustee"), the registration books of the City maintained
by the Registrar, and all records relating to the Funds
and Accounts maintained under the Original Resolution and
continued and maintained under the 1993 Series Resolu-
tions.
(c) The Registrar shall provide AMBAC and the
Insurance Trustee with a list of registered owners of the
1993 Bonds entitled to receive principal or interest
payments from AMBAC under the terms of the Bond Insurance
Policy and shall make arrangements with the Insurance
Trustee (i) to mail checks or drafts to the registered
owners of the 1993 Bonds entitled to receive full or
partial interest payments from AMBAC, and (ii) to pay
principal upon the 1993 Bonds surrendered to the Insur-
ance Trustee by the registered owners of the 1993 Bonds
entitled to receive full or partial principal payments
from AMBAC.
(d) The Paying Agent shall, at the time notice to
AMBAC has been provided pursuant to (a) above, notify
registered owners of the 1993 Bonds entitled to receive
the payment of principal or interest thereon from AMBAC
(i) as to the fact of such entitlement, ( ii) that AMBAC
will remit to them all or part of the interest payments
C:\DATA\DBLRA Y .34\DETAR.S. V4 20 Res. No. 60-93
.,
next coming due upon proof of Bondholder entitlement to
interest payments and delivery to the Insurance Trustee,
in form satisfactory to the Insurance Trustee, of an
appropriate assignment of the registered owner's right to
payment, (iii) that, should they be entitled to receive
full payment of principal from AMBAC, they must surrender
their 1993 Bonds (along with an appropriate instrument of
assignment in form satisfactory to the Insurance Trustee
to permit ownership of such 1993 Bonds to be registered
in the name of AMBAC) for payment to the Insurance
Trustee and not the City or the Paying Agent, and (iv)
that, should they be entitled to receive partial payment
of principal from AMBAC, they must surrender their 1993
Bonds for payment thereon, first, to the Paying Agent,
who shall note on such 1993 Bonds the portion of the
principal paid by the City or the Paying Agent, and then,
along with an appropriate instrument of assignment in
form satisfactory to the Insurance Trustee, to the
Insurance Trustee, which will then pay the unpaid portion
of principal.
(e) In the event that the City or the Paying Agent
has notice that any payment of principal of or interest
on a 1993 Bond, which has become Due for Payment (as such
term is defined in the Bond Insurance Policy) and which
is made to a Bondholder by or on behalf of the City, has
been deemed a preferential transfer and theretofore
C:\DA T A \DELRA Y .34\DETAILS. V4 21 Res. No. 60-93
.
recovered from its registered owner pursuant to the
United states Bankruptcy Code by a trustee in bankruptcy
in accordance with the final, nonappealable order of a
court having competent jurisdiction, the Paying Agent
shall, at the time AMBAC is notified pursuant to (a)
above, notify all registered owners that, in the event
that any registered owner's payment is so recovered, such
registered owner will be entitled tq payment from AMBAC
to the extent of such recovery if sufficient funds are
not otherwise available, and the Paying Agent shall
furnish to AMBAC its records evidencing the payments of
principal of and interest on the 1993 Bonds which have
been made by the Paying Agent and subsequently recovered
from registered owners and the dates on which such
payments were made.
(f) In addition to those rights granted AMBAC under
this Resolution, the Original Resolution, and the 1993
Series Resolutions, AMBAC shall, to the extent it makes
payment of principal of or interest on the 1993 Bonds,
become subrogated to the rights of the recipients of such
payments in accordance with the terms of the Bond
Insurance Policy, and to evidence such subrogation: (i)
in the case of subrogation as to claims for past due
interest, the Registrar shall note AMBAC's rights as
subrogee on the registration books of the City maintained
by the Registrar upon receipt from AMBAC of proof of the
C:\DA TA \DEUtA Y .34\DE!TAß..S. V4 22 Res. No. 60-93
"
payment of interest thereon to the registered owners of
the 1993 Bonds; and (ii) in the case of sUbrogation as to
claims for past due principal, the Registrar shall note
AMBAC's rights as subrogee on the registration books of
the City maintained by the Registrar upon surrender of
the 1993 Bonds by the registered owners thereof, together
with proof of the payment of principal thereon.
SECTION 17. Other provisions regarding the Bond
Xnsurance policy and AKBAC Surety Bond.
Consents
Any provision in this Resolution, the original Resolution
or the 1993 Series Resolutions ·expressly recognizing or granting
rights in or to AMBAC shall not be amended by the City in any
manner which adversely affects the rights of AMBAC without the
prior written consent of AMBAC. The city shall not remove any
paying agent, registrar or escrow trustee relating to either the
1991 Bonds or 1993 Bonds without the prior written consent of
AMBAC, which consent shall not be unreasonably withheld.
Notices
A. While the Bond Insurance policy and the AMBAC Surety
Bonds are in effect, the City shall furnish to AMBAC:
(i) as soon as practicable after the filing
thereof, a copy of any financial statement of the city
and a copy of any audit and annual report of the City;
( ii) a copy of any notice to be given to the
registered owners of the 1991 Bonds or 1993 Bonds,
C:\DA TA\DELRA Y .34\DETAILS. V4 23 Res. No. 60-93
.
including, without limitation, notice of any redemption
of or defeasance of the 1991 Bonds or the 1993 Bonds and
any certificate rendered pursuant to the original
Resolution, the 1991 Resolutions, the Series 1993
Resolutions or this Resolution, relating to the security
for the 1991 Bonds or 1993 Bonds; and
(iii) such additional information AMBAC may
reasonably request.
B. The City shall notify AMBAC of any failure of the
City to provide relevant notices, certificates, etc.
C. The City will permit AMBAC to discuss the affairs,
finances and accounts of the city or any information AMBAC may
reasonably request regarding the security for the 1991 Bonds or
1993 Bonds with appropriate officers of the city. The City will
permit AMBAC to have access to and make copies of all books and
records relating to the 1991 Bonds or 1993 Bonds at any reasonable
time.
SECTXON 18. Amendment to Reflect Reserve Account Credit
I'acility Substitutes. That, subject to the requirements of the
last paragraph of this Section, the 1988 Resolution, as amended and
supplemented, with respect to the 1988 Bonds, the 1991 Resolutions,
as amended and supplemented, with respect to the 1991 Bonds, and
the Series 1993 Resolutions, with respect to the 1993 Bonds, are
amended to include the following provision:
C:\DA TA\D1!UtA Y .34\DBTAn.s. v.. 24 Res. No. 60-93
.,
Notwithstanding any provision in this Resolution to
the contrary, if the amounts on deposit in the Debt
Service Reserve Account in the form of cash or Permitted
Investments of such cash and/or one or more Reserve
Account Credit Facility Substitutes, equal the Debt
Service Reserve Requirement for the Bonds and all other
~ cassu additional Bonds, the City may allocate such
cash or Permitted Investments of such cash and the
Reserve Account Credit Facility Substitutes on deposit
therein, or any combination thereof, to anyone or more
series of Bonds, provided that such allocation does not
result in the coverage for such one or more series of
Bonds to be less than the Debt Service Reserve Require-
ment for such one or more series of Bonds. The City is
authorized to do all things deemed necessary, including
the creation of subaccounts within the Debt Service
Reserve Account, to further evidence such allocation by
the City.
The above-referenced amendment to the 1988 Resolution
shall not become effective without the prior written consent of
Municipal Bond Investors Assurance corporation, the Bond Insurer
for the 1988 Bonds, on behalf of the registered owners of the 1988
Bonds. The above-referenced amendment to the 1991 Resolutions and
the Series 1993 Resolutions shall not become effective without the
prior written consent of AMBAC, the Bond Insurer for the 1991 Bonds
and 1993 Bonds, on behalf of the registered owner of the 1991 Bonds
and 1993 Bonds.
SECTION 19. J'Urther Authorizations. That the Mayor, the
Vice Mayor, the City Manager, the Finance Director, the City
Attorney, and any other proper official of the City, be and each of
them is hereby authorized and directed to execute and deliver any
and all documents and instruments, including but not limited to any
conditions to obtain the Bond Insurance Policy and/or the AMBAC
Surety Bonds, and to do and cause to be done any and all acts and
C:\DATA\DEUtAY.34\DETAILS.V4 25 Res. No. 60-93
·
things necessary or proper for carrying out the transactions
contemplated by this Resolution.
SECTION 20. Bffective Date. That this Resolution shall
take effect immediately upon its passage.
PASSED AND ADOPTED in special session on this the 17th
day of June, 1993.
CXTY 01' DZLRAY BEACH, PLORXDA
By: ~~
Attest:
o /;mn'llþf' Jj~ !:In'li1f
ci ty Clerk .
C:\DA TA \DELltA Y .34\DETAn.s. V4 26 Res. No. 60-93
., '
SCHEDULE A
........---.
ACClETlON TAlLI .
-.............
Yield 5.7501 5.750% 5.800% 5.aOOX 5.8501 5.8501
Maturity
Oat. 01·Oct-ZOO9 OH)çt-201Q 01-0ct-Z011 01·Oct·2012 01-Oct-Z013 01-Oct- 2014
····...··..··..··....·........................z...........................................................
29· Jun-93
01-Oct-93 2,018.60 1,907,35 1,786.55 1,687.25 1,578.10 1,419.65
01-Aþr-94 Z,01'6.65 1,962.20 , ,1ß8.35 1, t.56.20 1,624.25 1,533.25
01-0ct-94 2,136.35 2,018.60 1,891.65 t,786.55 1,671.75 1,5'18.10
01 "A :Ir-95 2,197.75 2,076.65 t ,946.50 1,838.35 ',720.65 1,624.25
01-ect-95 2.260.95 2,136.35 2,002.95 1.891.65 1,170.95 ',671.75
01-ApI'-96 2.325.95 2.197.75 2,061.05 1,946.50 1,822.80 1,720.65
01-0I:t-96 2,192,80 2.260.95 2,1l0.80 2,002.95 1,876.10 1,710.95
01·Apr-9T 2,461.60 2.325.95 2,182.30 2,061.05 1,930.95 1,822.80
01·Oct-91 2,532.40 2,392_80 2,245.60 2,120.80 1,987.45 1,876.10
01-Apr-" 2,605.20 2,461.60 2,310.75 2,182.30 2,045.60 1,930.95
O'·Oct-98 2,680.10 2,532.40 2,371.75 2,245.60 2,105.40 1,987,45
01-Ap,.-99 Z, 751.15 2,605.20 2,446.70 2,310.75 2,167.00 2,045.60
01-Oct·99 2,836.40 2,680, '0 2,51'7.65 2.377.75 . 2, 23D.40 2,105.40
O'-Apr-2000 2,917.95 2,157,'5 2,590.65 2,446.70 2,295 .65 2,167.00
01-Oct·2000 3,001.85 2,836.40 2,665.80 2.517.65 2,362.80 2,230.40
01·Ap,.·200' 3,oa8.15 2,911.95 2,743.10 2.590.65 2,431.90 2,295.65
. O'-Oct-ZOO1 3,t76.95 3,001.85 2,1522.65 2,665.80 Z,503.00 2,362.80
O'-Ap,.-2002 3,U8.30 3,088.15 2,904.50 2,743.10 2,576.25 2,43' .90
01·Oct-Z002 3.36Z.25 3,176.95 2,988.75 2,822.65 2,651.60 2,503.00
01-Apr-ZOO3 3,458_90 3,Zð8.JO 3,075.40 2,904.50 2,729.15 2,516.25
01-Oct-ZOO] 3,558.35 3,362.25 3,164.60 2,988.75 2,809.00 2.651.60
01-Apr-2004 3,660.65 3,458.90 3,256.40 3,O~."0 2.891. ,5 2,729.15
01-0et-2004 3,165.90 3,551.35 3,350.80 3,164.60 2,915.70 2,809.00
01-Ap,.-Z005 3,114.15 3,660.65 3,1,48.00 3,256.40 3,062.75 2,891.'5
at-Oct· zoos 3,985.55 3,765.90 3,548.00 3,350.80 3,'52.35 2,975.70
O'-Apr-Z006 4,100.15 3,874.15 3,650.90 3,448.00 3,244.55 3,062.75
O'·Occ·Z006 4,218.00 3,985.55 3,756.75 3,548.00 3,339.45 3,152.35
01·Apr-ZOD7 4,339.30 4,100.15 3,865.70 3,650.90 3,437.15 3,244.55
01-Oct·ZOO7 4,464.05 ',218.00 3.977.80 3,756.75 3,537.65 3,339.4'
01-Apr-2008 4,592.40 4.339.30 4,093. '5 3,865.70 3,641.15 3,437.15
01·Oct-200B 4,724.40 4,464.05 4,211.85 3,917.80 3,747.65 3,537,65
01-Apr-2D09 4,860.25 4,592.40 4,334.00 4,093.15 3,857.25 3,64'.'5
01·Oc:t·2009 5,000.00 ",724.40 4,459.70 4,211.85 3,970_10 3,71,7.65
01-Apr-Z010 4,860.Z5 4,589.05 4,334.00 4,086.20 3,857.25
01·Oct·2010 5,000.00 4,722.10 4,459.70 4,205.75 3,070, to
01-Apr- 2011 4,859.05 ',sa9.0S 4,328.75 4,086.20
O'-Oct-2011 5,000.00 4,722.10 4,455.35 4.205.75
O'-Apr-20'2 4,859.05 4,585.10 4,328.75
O'·OCt·Z012 5,000.00 4,119.85 4,455.35
01-"p,.-2013 4,857.90 4,585.70
01-Oct-ZOt] 5,000.00 4,719.85
01-'pr-20'4 ",8'7.90
0' -Oct-ZO'" 5,000.00
01-Apr-2015
01·0et-20'5
01 -Apr-2016
01-Oct·201'
Ot·Apr-Z017
01-Oct-2017
01-Apr-2018
Ot-Oct-20,a
01-Apr-2019
01-Oc:t-2019
.
,
Exhibits to
Resolution No. 60-93
Exhibit A - Bond Purchase Agreement
Exhibit B - Preliminary Official Statement.-
Exhibit C - Escrow Deposit Agreement
Exhibit D - Paying Agent and Registrar Agreement
Exhibits E-1 and E-2 - Guaranty Agreements
Exhibit F - Financial Advisor Letter
'.
,
fih,bJT IÎ
City of De1ray Beach, Florida
$21,238,997.35 $6,865,477.25
Water and Sewer Refunding Water and Sewer Revenue Bonds,
Revenue Bonds, Series 1993 A Series 1993 B
BOND PURCHASE AGREEMENT
June 17, 1993
Honorable Mayor and Members
of the City Commission of
the City of Delray Beach, Florida "
100 N.W. First Avenue
Delray Beach, Florida 33444
Mayor and Commissioners:
The undersigned, Smith Barney, Harris Upham & Co. Incorporated
("Smith Barney") on behalf of itself, Stifel, Nicolaus & Co., Inc. and
Hanifen, Imhoff Inc. (collectively, the "Underwriters"), offers to
enter into this Bond Purchase Agreement (the "Agreement") with the City
of Delray Beach, Florida (the "City") , which, upon the acceptance of
this offer and the execution of this Agreement by the City, shall be
in full force and effect in accordance with its terms and shall be
binding upon the City and the Underwriters. All capitalized terms
herein not otherwise defined shall have the meanings ascribed to such
terms in the Bond Resolution (as hereinafter defined) .
Smith Barney has been duly authorized to execute this Agreement
on behalf of the Underwriters. The City's Water and Sewer Refunding
Revenue Bonds, Series 1993 A (the "1993 A Bonds") and Water and Sewer
Revenue Bonds Series 1993 B (the "1993 B Bonds" ) are collectively
referred to herein as the "1993 Bonds".
This offer is made subject to your acceptance and execution of
this Agreement on or before 11:00 p.m., prevailing local time, on the
date hereof, and, if not so accepted, will be subject to withdrawal by
the Underwriters upon written notice delivered by the Underwriters to
the City at any time prior to the acceptance hereof by the City.
1. Purchase of Bonds. Upon the terms and conditions and ~pon
the basis of the representations, warranties and agreements hereinafter
set forth, the Underwriters hereby agree to purchase from the City for
offering to the public all (but not less than all) of the aggregate
principal amount of the 1993 Bonds, and the City hereby agrees to sell
to the Underwriters all (but not less than all) of the 1993 Bonds at
a purchase price of $27,666,727.44 representing the initial par amount
of the 1993 Bonds less underwriters' discount of $201,770.47 with
respect to the 1993 A Bonds and $65,222.03 with respect to the 1993 B
,. '·'1
,
~
Bonds and less original issue discount of $161,523.70 with respect to
the 1993 A Bonds and $9,230.95 with respect to the 1993 B Bonds) (the
"Purchase Price"), plus accrued interest with respect to the Current
Interest Bonds from June 1, 1993 to but not including the day of
Closing (hereinafter defined) , payable to the City by a check or checks
payable to the order of the City in immediately available funds or by
wire transfer to or on behalf of the City's account. The Underwriter
agrees to make a bona fide public offering of substantially all of each
maturity of the 1993 Bonds offering to the public at initial public
offering prices set forth in Exhibit "A" hereto; provided, however,
that the Underwriters reserve the right to make concessions to certain
dealers, certain dealer banks and banks acting at:; agents and to change
such initial pub¡ic offering prices as the Underwriters shall deem
necessary in connection with the marketing of the 1993 Bonds.
2. Good Faith Deuosit. Delivered to the City herewith, as a
good faith deposit, is a corporate check of the Underwriters payable
to the order of the City in the amount of $281,045.00 (being
approximately one percent ( 1%) of the principal amount of the 1993
Bonds), as security for the performance by the Underwriters of their
obligation to accept delivery of and to pay for the 1993 Bonds at
Closing (as herein defined) in accordance with the provisions hereof.
In the event that the City accepts this offer, said check will be held
uncashed by the City as a good faith deposit. At the Closing, the
check shall be returned to the Underwriters. In the event the City
does not accept this offer, the check shall be immediately returned to
the Underwriters. If the Underwriters fail (other than for a reason
permitted hereunder) to accept delivery of and pay for the 1993 Bonds
at the Closing as provided herein, the check may be cashed by the City
and the proceeds retained by the City as and for full liquidated
damages for such failure and for any and all defaults hereunder on the
part of the Underwriters, and the retention of such amounts shall
. constitute a full release and discharge of all claims and damages for
such failure and for any and all defaults hereunder on the part of the
Underwriters. The City understands that in such event the City's
actual damages may be greater or less than such sum. Accordingly, the
City's acceptance hereof shall constitute a waiver of any right, claim
or demand it may have to additional damages from the Underwriters and
the Underwriters hereby waive any right to claim that the City's
damages are less than such sum.
In the event that the City fails to deliver the 1993 Bonds at the
Closing, or if the City is unable at or prior to the Closing date to
satisfy or cause to be satisfied the conditions to the obligatioris of
the Underwriters contained in this Agreement, or if the obligations of
the Underwri ters contained herein shall be cancelled or terminated for
any reason permitted by this Agreement, the City shall be obligated to
immediately return the good faith deposit check to the Underwriters as
and for full liquidated damages for such failure and for any and all
defaults hereunder on the part of the City, and the return of the good
f·à.ith deposit check to the Underwriters shall constitute a full release
and discharge of all claims and damages for such failure and for any
and all defaults hereunder on the part of the City. The Underwriters
understand that in such event its actual damages may be greater or
2
If ' ",.,
less than such sum. Accordingly, the Underwriters' exec'Lltion of this
Agreement shall constitllte a waiver of any rights the Underwriters may
have to additional damages from the City and the City's acceptance
hereof shall constitute a waiver of any right to claim that the
Underwriters' damages are less than such sum.
3 . The 1993 Bonds. The 1993 Bonds shall be as described in,
and shall be issued and secured under and pursuant to, Resolution No.
39-88, adopted by the City Commission of the City (the "City
Commission") on July 12, 1988, as amended and supplemented (the "1988
Resolution") . The 1993 A Bonds are further authorized and issued
pursuant to a series resolution (the "1993 A aesolution") adopted by
the City Commission on June 8, 1993, as supple~ented. The Serias 1993
B Bonds are further authorized and issued p'L'.rsuant to a series
resolution (the "1993 B Resolution") adopted by the City Commission on
June 8, 1993, as supplemented. The 1988 Resolution, the 1993 A
Resolution and the 1993 B Resolution are sometimes hereinafter referred
to collectively as the "Bond Resolution." The 1993 Bonds shall be
issued in accordance with the requirements of the Constitution of the
State of Florida, Chapter 166, Florida Statutes, the City Charter of
the City and other applicable provisions of law (collectively the
"Act") . The 1993 Bonds shall mature on such dates, shall bear interest
at such rates, and shall be subject to redemption as set forth in the
Bond Resolution and as set forth in Exhibit A hereto. Payment of
principal of, and interest on, the 1993 Bonds shall be insured by AMBAC
Indemnity Corporation (the "Bond Insurer"). In connection with the
public offering of the 1993 Bonds, the Underwriters have delivered to
the City a letter containing the information required by Sections
218.385 (2) , (3) and (6), Florida Statutes, which letter is in the form
attached hereto as Exhibit B. It shall be a condition to the
obligation of the City to sell and deliver the 1993 Bonds to the
Underwriters, and the obligation of the Underwriters to purchase and
accept delivery of the 1993 Bonds, that the entire aggregate principal
amount of the 1993 Bonds shall be sold and delivered by the City and
paid for by the Underwriters at the Closing.
The term "Combined Public Utility" used herein refers to the
existing water treatment and distribution system and the wastewater
collection and disposal system owned and operated by the City, as
described in the Final Official Statement (as defined herein) . The
term "1993 Project" used herein refers to the acquisition and
construction of improvements to the Combined Public Utility as
described in the "Engineering Report on Combined Public Utility
prepared by Professional Engineering Consultants, Inc. (June 1993) "
which is included in the Preliminary Official Statement (as defined
herein) as Appendix D thereto. The phrase "Rates and Charges" refers
to the rates, fees, rentals and other charges for the use of the
services and facilities of the Combined Public Utility.
4. Official Statement. Prior to the time of acceptance hereof,
the City shall have provided to the Underwriters a preliminary official
statement relating to the 1993 Bonds that the City has deemed final as
of its date, except for certain information permitted to be omitted
(the "Permitted Omissions") under 17 C.F.R. Section 240-15c2-12 (the
"Rule" ) (such preliminary official statement, together with the cover
page thereof and all appendices attached thereto, is herein referred
3
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-
to as the "Preliminary Official Statement." At the time of or before
the City's acceptance hereof, the City shall deliver to the
UIiderwriters an executed original counterpart or certified copy of its
Award Resolution authorizing the execution and delivery of this
Agreement by the City. In addition, as promptly as practicable after
the date hereof and in sufficient time to accompany any confirmation
that requests payment from any customer, but within not more than seven
(7) business days after the date of execution hereof by the City, the
City shall provide, at its expense, and deliver or cause to be
delivered to the Underwriters as many copies of the final printed
official statement (the "Final Official Statement"), complete as of its
date of delivery to the Underwriters and in form reascnably
satisfactory to the Underwriters, as are reasonabl y necessary to enable
the Underwriters to comply with subparagraph (b) (4) of the Rule and to
fulfill its duties and responsibilities under the applicable rules of
the Municipal Securities Rulemaking Board. The City authorizes the use
of copies of the Final Official Statement in connection with the public
offering and sale of the 1993 Bonds. The City also approves and
ratifies the use by the Underwriters prior to the date hereof of the
City's Preliminary Official Statement.
The Underwriters hereby agree that it will not confirm the sale
of any 1993 Bonds unless a final written confirmation of sale is
accompanied or preceded by the delivery of a copy of the Final Official
Statement. The Underwriters shall give notice to the City on the date
which is one day after the "end of the underwriting period" (as such
term is defined in Section 5 hereof) and the date after which the
Underwriters no longer remain obligated to deliver Final Official
Statements pursuant to subparagraph (b) (4) of the Rule.
5. Amendments or Suuulements to Official Statement. From the
date the Final Official Statement is delivered to the Underwriters (but
in no event later than seven (7) business days after the date hereof)
and during the shorter of (i) 90 days from the "end of the underwriting
period" (as hereinafter defined) or (ii) the time when the Final
Official Statement is available to any person from a nationally
recognized municipal securities information repository (but in no case
less than 25 days following the end of the underwriting period), (A)
the City will not adopt any amendment of or supplement to the Final
Official Statement to which, after having been furnished with a copy,
the Underwriters shall object in writing, or which shall be disapproved
by Counsel to the Underwriters or Bond Counsel, in either case based
upon such amendment or supplement containing a material misstatement
of fact or a material omission of fact, and (B) if any event shall
occur as a result of which it may be necessary, in the opinion of the
City and Underwriters, to amend or supplement the Final Official
Statement in order to make the Final Official Statement not misleading
in the light of the circumstances exiting at the time it is deliver.ed
to a purchaser, the City shall, at its expense (unless such event is
a result of information provided by the Bond Insurer or the
Underwriters, in which case the City and the Bond Insurer or the City
and the Underwriters, shall discuss and negotiate such expense),
forthwith prepare and furnish to the Underwriters, a reasonable number
of copies of an amendment of or supplement to the Final Official
4
I. ;",
Statement (in form and substance satisfactory to the City and the
Underwriters) which will amend or supplement the Pinal Official
Statement so that it will not contain an untrue statement of a material,
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the
time the Final Official Statement is delivered to a purchaser, not
misleading. The term "end of the underwriter period" means the later
of (a) the date of Closing or (b) the date on which the Underwriters
do not retain, either directly or as a member of an underwriting
syndicate, an unsold balance of the 1993 Bonds for sale to the public.
The Underwriters will notify the City promptly upon the occurrence of
the event described in clause (b) of the p:receding sentence. The City
will promptly notify the Underwriters of the occurrence of any event
of which it has knowledge, in its opir..ion, is an event described in
clause (B) of the first sentence of this Section 5.
The Underwriters agree to file the Final Official Statement with
at least two Nationally Recognized Municipal Securities Information
Repositories ( "NRMSIR" ) which have been designated as such by the
Securities and Exchange Commission pursuant to the Rule not later than
two business days after the date of Closing, and will furnish to the
City the names and addresses of each NRMSIR receiving a copy of the
Final Official Statement with each NRMSIR shall be in accordance with
the terms and conditions applicable to such NRMSIR. The City hereby
agrees and covenants to furnish ongoing reports and information to the
Underwriters as are reasonably requested and which are or may become
customary in the industry for municipal obligations similar to the 1993
Bonds, and specifically to furnish to the Underwriters a copy of the
City's audited financial statements. The City further agrees and
covenants to furnish to the Underwriters such other information as
becomes available from time to time as, under the requirements of
clause (B) of the first sentence of this Section 5, would have been
included in the Final Official Statement had the information been known
at the time of preparation thereof or of the event from which the
information arises had occurred. The obligations of the City contained
in this paragraph shall terminate twenty-five (25) days after the "end
of the underwriting period" (as def ined in the preceding paragraph of
this Section 5) .
6 . Representations and warranties of the City. The City
represents and warrants to the Underwriters as follows:
(a) As of the time of acceptance hereof the statements and
information contained in the Preliminary Official Statement, as
of its date, is accurate in all material respects, and does not
contain any untrue statement of a material fact or omit to state
any material fact (other than the Permitted Omissions) necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading. As of Closing, the
statements and information contained in the Final Official
Statemeny\will be accurate in all material respects, and will not
contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
5
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misleading. In addition, any amendments to the Final Official
Statement prepared and furnished by the City pursuant to Section
5 hereof will not contain any untrue statement of a material fact
or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(b) As of its date, the Preliminary Official Statement was
deemed "f inal" by the City for purposes of 17 C. F. R. Section
240 .15c2-12 (b) (1) .
(c) When executed and delivered by the City in accordance
with the provisions of this Agreement, the 1993 Bonds will have
been duly authorized by the City, in the manner required under
applicable law, executed, issued and delivered and will
constitute valid and binding limited obligations of the City,
enforceable against the City in accordance with their terms, in
conformance with the Act and the Bond Resolution, such
enforceability being subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws, relating to or
affecting the enforcement of creditors' rights generally and to
the exercise of judicial discretion in accordance with general
principles of equity.
(d) The adoption by the City of the Bond Resolution and the
execution and delivery by the City of this Agreement, the Escrow
Deposit Agreement, the Guaranty Agreement, and all other
documents executed and delivered by the City in connection with
the issuance of the 1993 Bonds (collectively, along with the Bond
Resolution, the "Bond Documents") and the compliance by the City
with the provisions thereof will not in any material respect
conflict with or result in a breach or violation of any of the
terms or other instrument to which the City is a party or by
which the City is bound, or an existing law, administrative
regulation, court order or consent decree to which the City or
its property is subject.
(e) The City will furnish such information, execute such
instruments and take such other action in cooperation with the
Underwriters as the Underwriters may reasonably request, to (i)
qualify the 1993 Bonds for offer and sale under the Blue Sky or
other securities laws and regulations of such states and other
jurisdictions of the United States of America as the Underwriters
may designate and (ii) determine the eligibility of the 1993
Bonds for investment under the laws of such states and other
jurisdictions and will use its best efforts to continue such
qualifications in effect so long as required for the distribution
of the 1993 Bonds. This paragraph shall not, however, require
the City to submit to the jurisdiction of a court of any state
other than Florida, consent to the service of process in any
jurisdiction or qualify to do business in any jurisdiction.
(f) Between the date of this Agreement and the time of
Closing, the City will not execute any bonds, notes or other
6
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obligations for borrowed money, other than those the proposed
issuance or incurring of which is referred to explicitly in
Exhibit A hereto, without giving prior written notice thereof to
the Underwriters.
(g) The City is, and will be at the date of Closing, duly
organized and validly existing as a municipal corporation under
the Constitution and laws of the State of Florida, with the power
and authority set forth in the Act.
(h) The City (i) has full legal power and authority to
adopt the Bond Resolution; to execute and deliver this Agreement
and the other Bond Documents; to issue, sell and deliver the 1993
Bonds; and to carry out and consummate the transactions
contemplated by this Agreement, the Preliminary Official
Statement and the other Bond Documents; (ii) has fully complied
with or will comply with as of the date of Closing all applicable
provisions of law relating to such transactions; (iii) has duly
authorized, approved and adopted the Bond Resolution, the
execution, delivery and distribution of the Preliminary Official
Statement and Exhibit A hereto, and the taking of all such action
as may be required on the part of the City to carry out and
consummate the transactions contemplated by the aforesaid
instruments; (iv) has in full force and effect all consents,
approvals, permits or other actions by or filings with any
governmental authority required for the execution and delivery by
the City of this Agreement and the other Bond Documents, and for
the performance by the City of the transactions contemplated
thereby (except that the City makes no representatioris regarding
compliance with state Blue Sky laws or legal investment laws or
Federal securities law); (v) represents that from the time of
acceptance by the City hereof through the date of the Closing,
except as contemplated by the Preliminary Official Statement and
Exhibit A hereto, the City will not incur any material
liabilities, direct or contingent, or enter into any transaction
that could adversely affect the transactions contemplated hereby
or by the Bond Documents, (vi) represents that from the date of
its acceptance hereof through the date of Closing, except as
contemplated by the Preliminary Official Statement and Exhibit A
hereto, there shall not have been any material adverse change in
the condition, financial or physical, of the City or the Combined
Public Utility other than changes in the ordinary course of
business or in the normal operation of the Combined Public
Utility operated by the City that could adversely affect the
transactions contemplated hereby; and (vii) represents that the
execution and delivery by the City of this Agreement, the 1993
Bonds and the other Bond Documents, the compliance by the City
with the provisions thereof, and the carrying out and
consummation by the City of its obligations under such documents
and instruments will not conflict with or constitute a breach of
or a default under any law, administrative regulation, court
decree, instrument or agreement to which the City is subject or
by which the City is or any of its properties are bound.
7
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(i) Except as disclosed in the Preliminary Official
Statement, to the best knowledge of the City, as of the date
hereof, there is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court,
government agency, public board or body, pending or threatened
against the City, affecting or seeking to prohibit, restrain or
enjoin the levy, imposition and collection of Rates and Charges
as provided in the Bond Resolution or the sale, issuance or
delivery of the 1993 Bonds or contesting or affecting the City's
levy, imposition and collection of Rates and Charges as provided
in the Bond Resolution, or contesting the exclusion from gross
income for ~ederal income tax purposes of interest on the 1993
Bonds, or contesting the powers of the City or its authority for
the issuance of the 1993 Bonds, the adoption of the Bond
Resolution, or the execution and delivery by the City of this
Agreement.
(j) The City will not take or omit to take any action which
would adversely affect the exclusion from gross income of the
interest on the 1993 Bonds under the Internal Revenue Code of
1986, as amended.
(k) Any certificate signed by any official of the City and
delivered to the Underwriters shall be deemed to be a
representation and warranty by the City to the Underwriters as to
the statements made therein.
7. Closinq. On the terms and conditions set forth in this
Agreement, the Underwriters shall purchase all (and not less than all)
of the 1993 Bonds, and pay the Purchase Price of the 1993 Bonds, plus
accrued interest thereon to the date of Closing on all Current Interest
Bonds, as set forth in Section 1 hereof, and the City shall deliver the
aggregate principal amount of the 1993 Bonds in the manner specified
below. On June 29, 1993 atft12:00 p.m., prevailing local time, or at
such other place or other date or time as may be agreed upon by the
parties hereto (the "Closing"), the City shall deliver the 1993 Bonds
in definitive form (to be printed or lithographed on steel engraved
borders) to the Underwriters, at a location designated by the
Underwriters in New York, New York, registered in the names and in
authorized denominations provided by the Underwriters (which names and
denominations shall be specified by the Underwriters not less than 5
days prior to Closing), bearing CUSIP numbers and duly executed and
authenticated. Any irregularity relating to such CUSIP numbers shall
not affect the Underwriters' obligations to purchase the 1993 Bonds.
The City hereby agrees that it shall make the 1993 Bonds available to
the Underwriters at least 24 hours prior to Closing for inspection and
packaging. Simultaneously with such delivery of the 1993 Bonds, the
Underwriters shall pay the Purchase Price to the City in the manner
provided for in Section 1 hereof and the City shall execute an.d deliver
the Bond Documents and other documents referred to in Section 8 hereof.
The execution and delivery of the Bond Documents and other Closing
documents is to take place at the offices of Bond Counsel (hereinafter
defined) located at 515 North Flagler Drive, Suite 900, West Palm
Beach, Florida.
8
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,
8. Conditions of Closinq. The Underwriters have entered into
this Agreement in reliance upon the representations and warranties of
the City herein contained and the performance by the City of its
obligations hereunder, both as of the date hereof and as of the time
of Closing. The obligations of the Underwriters hereunder are subject
to the following conditions:
(a) At the time of Closing, (i) the Bond Documents and any
other documents deemed necessary by Bond Counsel in connection
with the issuance of the 1993 Bonds shall be in full force and
effect and shall not have been amended, modified or supplemented
in any material respect prior to the Closing, except as may have
been agreed to in writing by the City and the Underwriters, and
the City shall have duly adopted and there shall be in full force
and effect the Bond Resolution and such additional resolutions,
or ordinances or agreements as shall, in the opinion of Susan A.
Ruby, City Attorney of the City ("City Attorney"), Mudge Rose
Guthrie Alexander & Ferdon, West Palm Beach, Florida, Bond
Counsel ( "Bond Counsel" ) and Becker & Poliakoff, P.A. , Fort
Lauderdale, Florida, Counsel to the Underwriters ("Counsel to the
Underwriters") , be necessary in connection with the issuance of
the 1993 Bonds, (ii) the 1993 Bonds shall have been duly
authorized, executed, authenticated and delivered, (iii) the
representations and warranties of the City herein shall be true
and accurate in all material respects, (iv) the Paying Agent
shall have received the executed original municipal bond
insurance policy (the "Policy") or a copy thereof and a copy of
the Surety Bond and (v) the City shall perform or have performed
all obligations required under or specified in this Agreement to
be performed at or prior to the Closing.
(b) At the date of execution hereof and at the Closing, the
Bond Resolution shall have been duly approved and adopted by the
Ci ty, shall be in full force and effect, and shall not have been
amended, modified or supplemented, except for the Award
Resolution and to the extent to which the Underwriters shall have
given their prior written consent, and there shall have been
taken in connection therewith and in connection with the issuance
of the 1993 Bonds all such action as, in the opinion of Bond
Cou~sel and Counsel to the Underwriters, shall be necessary and
appropriate in connection with the transactions contemplated
hereby.
(c) At the Closing there will be no pending or threatened
litigation or proceeding of any nature seeking to restrain or
enjoin the issuance, sale or delivery of the 1993 Bonds, or the
pledge collection or application of the Revenues to pay the
principal of and interest on the 1993 Bonds or in any way
contesting or affecting the validity or enforceability of the
1993 Bonds, the Bond Resolution, the Escrow Deposit Agreement,
the Guaranty Agreement or this Agreement or contesting in any way
the proceedings of the City taken with respect thereto, or
contesting in any way the due existence or powers of the City or
9
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the title of any of the members of the City Commission or
officials of the City to their respective offices and the
Underwriters will receive the certificate of the Mayor and the
Clerk to the foregoing effect or an opinion of the City Attorney
that any such litigation is without merit.
(d) Except as disclosed in the Final Official Statement,
there shall have been no material adverse change in the financial
condition of the City since September 30, 1992.
(e) At or prior to the Closing, the Underwriters shall have
received the following documents:
(i) The approving opinions of Bond Counsel, dated the
date of Closing, substantially in the forms appended to the
Preliminary Official Statement as Appendix E and a letter
of such Bond Counsel, dated the date of Closing and
addressed to the Underwriters, to the effect that the
foregoing opinions addressed to the City may be relied upon
by the Underwriters to the same extent as if such opinions
were addressed to them.
(ii) A supplemental opinion of Bond Counsel, dated the
date of the Closing and addressed to the Underwriters to the
effect that:
(A) the information contained in the Final
Official Statement under the headings "Introduction, II
"Description of the 1993 Bonds," IIPlan of Refunding, II
"Security for the 1993 Bonds," (except for any
information reqardinq the Bond Insurer, the Policy or
the Sure tv Bond) IITax Exemption," IIEnforceability of
Remedies" and IIValidation," and the information
contained in IIAppendix B - Summary of Certain
Provisions of the Bond Resolution" and IIAppendix E -
Forms of Bond Counsel Opinions, II to the extent the
information under such headings and in such Appendices
purports to summarize portions of the Bond Resolution,
the 1993 Bonds, or the law referred to therein, such
information constitutes a fair summary of the portions
of such documents and the law purported to be
summarized therein; and
(B) the 1993 Bonds are not subject to the
registration requirements of the Securities Act of
1933, as amended, and the Bond Resolution is exempt
from qualification pursuant to the. Trust Indenture Act
of 1939, as amended.
(iii) A certificate or certificates, dated the date
of Closing, signed by the Mayor or the City Manager, in form
satisfactory to Bond Counsel, the Underwriters and Counsel
to the Underwriters, in which such officials state that, to
the best of their knowledge:
10
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·
(A) the representations and warranties of the
City contained in this Agreement are true and correct
in all material respects as of the Closing, the City
has satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the
Closing, and the information and statements contained
in the Final Official Statement are true, correct and
complete in all material respects for the purposes for
which such Final Official Statement is to be used, and
nothing has come to their attention that would lead
them to believe that such information in the Final
Official Statement includes any untrue statements
therein, in the light of the circumstances under which
they were made, not misleading;
(B) no event affecting the City has occurred
since the date of the Final Official Statement which
should be disclosed in the Final Official Statement for
the purposes for which it is to be used or which it is
necessary to disclose therein in order to make the
statements and information therein not misleading in
any material respect;
(C) the financial statements and the other
financial and statistical data relating to the City,
the 1993 Project, Future Capital Projects, Water and
Sewer Rates, Historical and Projected Revenues and
Expenses, proj ected Revenues Expenses and Coverage and
the Combined Public Utility included in the Final
Official Statement are true and correct as of the date
of such certificate;
(D) since the date of the financial statements
of the City included in the Final Official statement
as Appendix C thereto, (i) no material and adverse
change has occurred in the financial condition of the
City or the Combined Public Utility, except as
disclosed in the Final Official Statement and (ii) the
City has not incurred any material liabilities other
than in the ordinary course of business, except as set
forth in or contemplated by the Final Official
Statement;
(E) no obligations issued or guaranteed by the
City as to payment of principal or interest have been
in default as to payment of principal or interest at
any time after December 31, 1975;_
(F) except as disclosed in the Final Official
Statement, there is no litigation of which either of
them have notice, and to the best knowledge of each of
them no litigation is pending or threatened (1) to
restrain or enjoin the issuance or delivery of any of
the 1993 Bonds, (2) in any way contesting or affecting
11
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·
the validity of any of the proceedings or authority for
the issuance of the 1993 Bonds or the validity of the
1993 Bonds, the Bond Resolution, the Rates and Charges,
the Escrow Deposit Agreement, the Guaranty Agreement
or this Agreement, (3) in any way contesting the
corporate existence or powers of the City, (4) to
restrain or enjoin the collection of revenues pledged
or to be pledged to pay the principal of, premium, if
any, and interest on the 1993 Bonds, (5) which may
result in any material adverse change in the business,
properties, assets and the finan~ial condition of the
City taken as a whole, or (6) asserting that the Final
Official Statem~nt contains any untrue statement of a
material fact or omits aüY material fact necessary to
make the statements therein, in light of the
circumstances under which they were made, not
misleading;
(G) the Final Official Statement other than
information provided by the Bond Insurer did not as of
its date, and does not as of the date of Closing,
contain any untrue statement of a material fact or omit
to state a material fact required to be included
therein or necessary in order to make the statements
contained therein, in light of the circumstances in
which they were made, not misleading; and
(H) during the period from September 30, 1992
through the Closing, there have not occurred any
material changes in the long-term debt of this City,
other than as disclosed in the Final Official Statement
or as occasioned by repayments of such indebtedness.
(iv) The Mayor or the City Manager shall also execute
a certificate or certificates, dated the date of Closing and
in form satisfactory to Bond Counsel and the Underwriters
as is required under Part I, Article III, Section 4G of the
1988 Resolution with respect to the issuance of Dari passu
additional bonds.
(v) An opinion, dated the date of Closing, of the City
Attorney, addressed to the City, Bond Counsel and to the
Underwriters, in form and substance satisfactory to . the
Underwriters and Counsel to the Underwriters to the effect
that:
(A) the City is a duly . existing municipal
corporation of the State of Florida (the "State") and
had and has good right and lawful authority under the
Constitution and laws of the State to adopt the Bond
Resolution and to authorize and issue the 1993 Bonds;
the proceedings for the implementation of the Rates
and Charges and the Bond Resolution have been duly
adopted by the City, are in full force and effect and
12
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·
constitute the valid, legal and binding obligations
of the City enforceable in accordance with their terms
and, with respect to the Bond Resolution, constitute
a valid and legally binding contract with the several
holders of the 1993 Bonds; and under the laws of the
State, the holders of the 1993 Bonds are not precluded
pursuant to any sovereign immunity lar,01s or similar laws
from bringing proceedings to enforce the obligations
imposed by the Bond Resolution;
(B) as of the Closing da~e, the City has duly
performed all obligations required to be performed by
it as of such date pursuant to the Bond Resolution;
(C) this Agreement, the Escrow Deposit
Agreement, the Guaranty Aqreement and the Bond
Resolution have been duly authorized, executed and
delivered by the City and each constitutes a valid and
binding agreement of the City enforceable in accordance
with its terms;
(D) the adoption of the Rates and Charges and
the Bond Resolution and the execution and delivery of
the Escrow Deposit Agreement, the Guaranty Agreement,
this Agreement, and the 1993 Bonds and compliance with
the provisions thereof, will not, to the best of her
knowledge, conflict with or constitute a breach of or
default under any existing law, administrative
regulation, court decree, resolution or agreement to
which the City is subject and the City has the power
and authority under the laws of the State to pledge the
revenues so pledged under the Bond Resolution to the
extent provided in the Bond Resolution, to pay the 1993
Bonds and interest thereon;
(E) The City is authorized under the
Constitution and Laws of the State to levy, impose and
collect the Rates and Charges to· provide for the
payment of the 1993 Bonds, and upon adoption all
proceedings relating to the implementation of the Rates
and Charges levied in connection with the 1993 Bonds
shall constitute a valid levy by the City and the
holders of the 1993 Bonds are not precluded under any
sovereign immuni ty laws or similar laws from bringing
proceedings to enforce the obligations of the City
under the Bond Resolution;
(F) except as disclosed in the Final Official
Statement, to the best of her knowledge after due
inquiry with respect thereto, no litigation or other
proceedings are pending or threatened in any court or
other tribunal of competent jurisdiction, State or
Federal, in any way (A) restraining or enjoining the
levy, imposition or collection of Rates and Charges or
13
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,
.
issuance, sale or delivery of any of the 1993 Bonds,
or (B) questioning or affecting the validity of the
Escrow Deposit Agreement, the Guaranty Agreement, this
Agreement, the 1993 Bonds, the Bond Resolution, or the
pledge by the City of the revenues so pledged under the
Bond Resolution, or (C) questioning OT affecting the
validity of any of the proceedings for the
authorization, sale, execution, registration, issuance
or delivery of the 1993 Bonds and the security
therefor; or (D) questioning or affecting (1) the
organization or existence of the City or the City
Commission or the title to office of the officers
thereof, or (2) the power or authority of the City to
levy, - impose and collect the Rates and Chargee; or (E)
which could materially adversely affect the operations
of the Combined Public Utility or the financial
condition of the Combined Public Utility;
(G) the Final Official Statement has been duly
authorized, executed and delivered by the City and has
been approved by the City Commission of the City for
use in connection with the sale of the 1993 Bonds;
-..... (H) with respect to the information (other than
financial and statistical data) in the Final Official
Statement contained in Appendix A to such Final
Official Statement and under the headings
"Introduction," "Purpose," "The Existing Combined
Public Utility," "The 1993 Project," "Future Capital
Projects," "Water and Sewer Rates," "Litigation" and
"Authorization and Certification Concerning Official
Statement" and based upon her participation in the
preparation of the Final Official Statement, as of the
date of such document and at all subsequent times up
to and including the date of Closing, such information
did not and does not contain any untrue statement of
a material fact or omit any mate-rial fact required to
be stated therein or necessary to make such information
not misleading; and
(I) all approvals, consents, authorizations and
orders of any governmental authority or agency having
jurisdiction in any matter which would constitute a
.- condition precedent to the performance by the City of
its obligations hereunder and under the Bond Resolution
and the other Bond Documents have been obtained and are
in full force and effect (except that no opinion need
be expressed with respect to approvals, consents,
authorizations and orders relating to the Blue Sky or
legal investment laws of any jurisdiction or with
respect to Federal securities laws) .
All of the above opinions of the City Attorney as to
enforceability of the legal obligations of the City may be
14
¡I ..,.
subject to and limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws, in each case
relating to or affecting the enforcement of creditors rights
generally, and other general principles of equity.
(vi) An opinion of Counsel to the Underwriters, dated
the date of the Closing, addressed to the Underwriters and
in form satisfactory to the Underwriters, to the effect
that:
(A) the 1993 Bonds are not subject to the
registration requirements of the Securities Act of
1933, as amended, and the Bond Resolution is exempt
from qualification pursuant to the Trust Indenture Act
of 1939, as amended;
(B) based upon participation in the preparation
of the Final Official Statement as Counsel to the
Underwri ters and wi thout having undertaken to determine
or verify independently the accuracy, completeness or
fairness of the statements contained in the Final
Official Statement, as of the date of the Closing
nothing has come to the attention of such counsel
causing them to believe that the Final Official
Statement as of its date contained any untrue statement
of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein, in the light of circumstances under
which they were made, not misleading (except for the
financial and statistical information contained in the
Final Official Statement and the information concerning
the Bond Insurer, as to all of which no view need be
expressed) .
(vii) Executed originals of the Consulting Engineer's
Report, included in the Final Official Statement as Appendix
D.
(viii) A letter from Professional Engineering
Consultants, Inc. dated the date of Closing and addressed
to the Underwriters and the City, in the form set forth in
Exhibit C hereto, and a letter from Hazen & Sawyer, dated
the date of the Closing and addressed to the Underwriters
and the City, in the form set forth in Exhibit D hereto.
(ix) A letter from Professional Engineering
Consultants, Inc. dated the date of the Closing and
addressed to the City and the Underwriters, to the effect
as required by Part I, Article III, Section 4G of the 1988
Resolution with respect to the issuance of additional Bonds.
(x) Copies of the fully executed Policy issued by the
Bond Insurer and Surety Bond.
15
" , ,,,.,,
(xi) An opinion of general counsel to the Bond
Insurer and a certificate of an officer of the Bond Insurer,.
dated the date of the Closing and addressed to the
Underwriters and the City, concerning the Bond Insurer, the
Policy and the information relating to the Bond Insurer
contained in the Final Official Statement, in form and
substance satisfactory to the Underwriters.
(xii) Letters from Moody's Investors Service and
Standard & Poor's Corporation confirming that such rating
agencies have issued ratings of "Aaa" and IIAAA,II
respectively, for the 1993 Bonds.
(xiii) the report of Causey Demgen & Moore, as to the
verification of the accuracy of the mathematical computation
of the adequacy of the maturing principal of and interest
on the Government Obligations deposited under the Escrow
Deposit Agreement, to effect the refunding of the Refunded
Bonds and payment thereon when due.
(xiv) Such additional certificates, instruments or
opinions as the City Attorney, Bond Counselor the
Underwriters and its counsel may deem necessary or
desirable.
9. Authority of the Underwriters. The Underwriters hereby
represents to the City that they are registered under the Securities
Exchange Act of 1934, as amended, as a municipal securities dealer.
,
10. Termination. The Underwriters may terminate this Agreement,
without any liability therefor, by notification in writing from the
Underwriters to the City, if at the time of or prior to the Closing (a)
legislation shall be enacted by the Congress of the United States or
adopted by either the United States Senate or House of Representatives
or recommended by the President of the United States to the Congress
for passage or favorably reported for passage to either House of
Congress or any conference committee of the House and Senate or a
decision by a Court of the United States, including the United States
Tax Court, shall be rendered or a ruling, regulation or official
statement by or on behalf of the Treasury Department of the United
States, the Internal Revenue Service, or other governmental agency
shall be made, with respect to federal taxation upon interest on state
and local bonds, such as the 1993 Bonds, or other action or events
shall have occurred which have the purpose or effect, directly or
indirectly, of materially adversely affecting the federal income tax
consequences of ownership of the 1993 Bonds or any of the transactions
contemplated in connection herewith, which in the reasonable opinion
of the Underwriters, materially adversely affects the market for the
1993 Bonds or the sale by the Underwriters of the 1993 Bonds; or (b)
legislation shall be enacted or any action shall be taken by the
Securities and Exchange Commission which, in the reasonable opinion of
the Underwriters and Counsel to the Underwriters, have the effect of
requiring the contemplated distribution of the 1993 Bonds to be
registered under the Securities Act of 1933, as amended, or the Bond
16
" ,.. ,
-
Resolution to be qualified under the Trust Indenture Act of 1939, as
amended, or there shall exist a stop order, ruling or regulation by the
Securities and Exchange Commission the effect of which is that the
issuance, offering or sale of the 1993 Bonds, as contemplated hereby
or by the Final Official Statement, is in violation of any provision
of the Securities Act of 1933, as amended and as then in effect, or of
the Securities Exchange Act of 1934, as amended and as then in effect,
or that the Bond Resolution is not exempt from qualification pursuant
to the Trust Indenture Act of 1939, as amended and as then in effect;
or (c) there shall exist any event which in the reasonable judgment of
the Underwriters either (i) makes untrue or incorrect in any material
respect any statement or information contained in the Final Official
Statement but should be reflect~d therein or in an attachment thereto
in order to make any material statemen~s and information contained
therein not misleading in any material respect; or (d) the City fails
to deliver the Final Official Statement to the Underwriters within
the time period provided in Section 4 hereof if such failure affects
the Underwriters' marketing and sale of the 1993 Bonds or subjects the
Underwriters to possible compliance infractions under Securities and
Exchange Commission or Municipal Securities Rulemaking Board delivery
requirements; or (e) there shall have occurred any outbreak of
hostilities or any national or international calamity or crisis, in the
judgment of the Underwriters, being such as would cause a material
disruption in the municipal bond market, or to materially adversely
affect the marketability of the 1993 Bonds or the sale by the
Underwriters of the 1993 Bonds at the offering prices contemplated
hereunder; or (f) there shall be in force a general suspension of
trading on the New York Stock Exchange or minimum or maximum prices for
trading shall have been fixed and be in force, or maximum ranges for
prices for securities shall have been required and be in force on the
New York Stock Exchange whether by virtue of a determination by the New
York Stock Exchange or by order of the Securities and Exchange
Commission or any other governmental authority having jurisdiction
which, in the judgment of the Underwriters, has the effect of
materially adversely affecting the marketability of the 1993 Bonds, or
the sale by the Underwriters of the 1993 Bonds, at the offering prices
contemplated hereunder; or (g) a general banking moratorium shall have
been declared by either federal, Florida or New York authorities having
jurisdiction and then in force the effect of which on the financial
markets of the United States is such as, in the reasonable judgment of
the Underwriters, would materially adversely affect the market for the
1993 Bonds or the sale by the Underwriters of the 1993 Bonds; or (h)
any litigation shall be instituted or be pending at Closing, to
restrain or enjoin the issuance, sale or delivery of the 1993 Bonds,
or that in any way contests or affects any authority for the validity
of the 1993 Bonds or any of the Bond Documents, the pledge or
application of moneys or securities provided for the payment of the
1993 Bonds, the levy or collecti~n of the Rates and Charges, or the
existence or power of the City; or (i) the City has, after the date
hereof and prior to the Closing, without prior written consent of the
Underwriters, offered or issued any bonds, notes or other obligations
for borrowed money, or incurred any material liability for borrowed
money, or incurred any material liability direct or indirect, or there
has been an adverse change of a material nature in the financial
17
..' ,,, ,
position, results of operation or condition, financial or otherwise,
of the City in all cases other than in the ordinary course of its
business, or other than as contemplated in the Final Official
Statement, which change could materially adversely affect the
transactions contemplated hereby; or (j) any legislation, rule or
regulation shall be introduced in, or be enacted by, any department or
agency in the State, or any decision shall be rendered by a court of
competent jurisdiction within the State which materially affects the
market for the 1993 Bonds or the sale by the Underwriters of the 1993
Bonds at the offering prices contemplated hereunder; or (k) any rating
of the 1993 Bonds shall have been down graded or withdrawn by a
national credit rating service; or (1) the Bond Insurer shall notify
or inform the City or the Underwriters that it will not insure payment
of the principal of or interest of the 1993 Bonds as contemplated in
the Final Official Statement; or (m) any amendment to the Final
Official Statement is proposed by the City or deemed necessary by the
Underwriters pursuant to Section 5 hereof, which materially adversely
affects the market for the 1993 Bonds or the sale by the Underwriters
of the 1993 Bonds at the offering prices contemplated hereunder.
If the City shall be unable to satisfy the conditions to the
obligation of the Underwriters to purchase, to accept delivery of and
to pay for the 1993 Bonds contained in this Agreement and the
Underwriters do not waive such inability in writing, or if the
obligations of the Underwriters shall be terminated for any reason
permitted in the foregoing paragraph or otherwise by this Agreement,
this Agreement shall be terminated and neither the Underwriters nor the
City shall have any further obligations hereunder, except for the
return by the City to the Underwriters of the good faith deposit and
as provided in Section 11 hereof. However, the Underwriters may, in
their discretion, waive, by written notice provided by the
Underwriters, one or more of the conditions imposed by this Agreement
and proceed with the Closing.
11. Expenses.
(a) The Underwriters shall be under no obligation to pay,
and the City shall pay, (i) the City's- engineers, rate
consultants, financial advisor and any other experts, advisors or
consultants retained to assist the City, (ii) the fees and
disbursements of the City Attorney, (iii) all travel and other
out-of-pocket expenses of the City's staff and officials; (iv)
the cost of the preparation, printing and execution of the 1993
Bonds, (v) fees for bond ratings, (vi) the cost of reproducing
all necessary copies of any of the Bond Documents, (vii) the fees
and disbursements of Bond Counsel, (viii) the cost of
preparation, printing and distribution of the Preliminary
Official Statement and Final Official Statement, (ix) the fees
and disbursements of the bond registrar, the paying agent, the
Escrow Trustee, the City's independent certified public
accountants, (x) the costs referred to in Section 5 hereof the
City has agreed to pay, if any; and (xi) the premium for the
Policy and Surety Bondi all such expenses to be paid by the City
as issuance costs.
18
I' '" "
(b) The Underwriters shall pay (i) all underwriting and
advertising expenses in connection with the public offering and
distribution of the 1993 Bonds, ( ii) the fees and disbursements
of Counsel to the Underwriters, (iii) the cost of preparation,
distribution and printing of the blue sky memo~anda and legal
investment survey, (iv) the cost of the preparation and printing
of any selling group agreement and this Bond Purchase Agreement,
and (v) all travel and out-of-pocket expenses of the
Underwriters.
12. Survival of COrltract. The respective agreements,
representations and warranties and other statements of the City, the
Underwriters and their respective officials, officers and partners set
forth in, or made pursuant to, this Bond Purchase Agreement will remain
in full force and effect regardless of any investigation, or statement
as to the results thereof, made by or on behalf of the City, the
Underwriters or any of their respective officials, officers, partners
or directors or any controlling person, and will survive delivery and
payment of the 1993 Bonds.
13. Benefit. This Agreement is made for the benefit of the
parties hereto ( inc 1 uding the successors or assigns of the
Underwriters) . No other person shall acquire or have any right
hereunder or by virtue hereof.
14. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by facsimile signature, all of which
taken together shall be one and the same instrument, and any parties
hereto may execute this Agreement by signing any such counterpart. The
execution of this Agreement has been duly authorized by the City
Commission of the City.
15. Notices. Any notices or other communications to be given
to the City under this Agreement may be given by mailing the same to
the City Manager, City of Delray Beach, 100 N.W. First Avenue, Delray
Beach, Florida 33444, and any such notice or other communication to be
given to the Underwriters may be mailed to Smith Barney, Harris Upham
& Co. Incorporated, 625 North Flagler Drive, West Palm Beach, Florida
33401, Attention: Public Finance Department.
16. Severability. The invalidity or enforceability of any
provision of this Agreement as to anyone or more jurisdictions shall
not affect the validity or enforceability of thE: balance of this
Agreement as to such jurisdiction or jurisdictions, or affect in any
way such validity or enforceability as to any other jurisdiction.
17. Waiver or Modification. No waiver or modification of any
one or more of the terms and conditions of this Agreement shall be
valid unless in writing and signed by the party or parties making such
waiver or agreeing to such modification.
19
'. ,."
·
18. Governinq Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida.
Very truly yours,
SMITH BARNEY. HARRIS UPHAM & CO.
INCORPORATED on behalf of the
Underwriters
By
ACCEPTED on June , 1993
THE CITY OF DELRAY BEACH, FLORIDA
By
Mayor
[SEAL]
Attest:
City Clerk
Approved as to form and legal
sufficiency
City Attorney
:w:dah:delray.bpa
20
., ..,
EXHIBIT A
,,-.
TERMS OF 1993 BONDS
Amounts, Maturities, Interest Rates and Prices or Yields
$21,150,000 1993 A Current Interest Serial Bonds
Price Price
Interest or Interest or
Amount Maturity Rate Yield Amount Maturity Rate Yield
$ 15,000 1998 4.250% 4.35% $2,815,000 2003 5.000% 5.10%
1,805,000 1999 4.500 4.55 2,950,000 2004 5.100 5.20
1,885,000 2000 4.625 4.75 3,105,000 2005 5.200 5.30
2,435,000 2001 4.750 4.95 3,260,000 2006 5.300 5.40
2,675,000 2002 5.000 5.00 100,000 2007 5.400 5.50
105,000 2008 5.400 5.55
(Accrued interest to be added on all Series 1993 A Current Interest Bonds)
$88,997.35 1993 A Capital Appreciation Serial Bonds
Original Maturity Approximate
Due Principal Principal Yield to
October 1 Amount Amount Maturity
2009 $45,759.65 $115,000.00 5.75%
2010 43,237.70 115,000.00 5.75
$980,000 1993 B Current Interest Serial Bonds
Price Price
Interest or Interest or
Amount Maturity Rate Yield Amount Maturity Rate Yield
$100,000 2001 4.750% 4.95% $120,000 2005 5.200% 5.30%
110,000 2002 5.000 5.00 135,000 2006 5.300 5.40
110,000 2003 5.000 5.10 140,000 2007 5.400 5.50
120,000 2004 5.100 5.20 145,000 2008 5.400 5.55
(Accrued interest to be added on all 1993 B Current Interest Bonds)
$5,885,477.25 1993 B Capital Appreciation Serial Bonds
Original Maturity Approximate
Due Principal Principal Yield to
October 1 Amount Amount Maturity
2009 $ 59,686.50 $ 150,000.00 5.75%
2010 56,397.00 150,000.00 5.75
2011 1,575,737.00 4,475,000.00 5.80
2012 1,488,206.00 4,475,000.00 5.80
2013 1,391,725.00 4,475,000.00 5.85
2014 1,313,725.75 4,475,000.00 5.85
" ',1',
General
The 1993 Bonds issued as Current Interest Bonds (the "1993 Current
Interest Bonds") will be dated and will mature in the years, and in the
amounts and bear interest at the rates and be payable on the dates set forth
below. The 1993 Bonds will be issued in fully registered form, in
denominations of $5,000 and integral multiples thereof. The 1993 Current
Interest Bonds will be dated June 1, 1993, shall bear interest payable semi-
annually on April 1 and October 1 of each year commencing October 1, 1993,
(each an "Interest Payment Date") at the rates per annum set forth below,
computed on the basis of a 360-day year consisting of twelve thirty-day
months.
The 1993 B Bonds issued as Capital Appreciation Bonds (the "1993 B
Capital Appreciation Bonds") will be dated the date of initial delivery and
issued in denominations yielding Accreted Values at maturity of $5,000 and
integral multiples thereof. The 1993 B Capital Appreciation Bonds will
mature on October 1 of the years indicated and in amounts corresponding to
the maturity principal amounts set forth in the table below. The
approximate yield to maturity of each 1993 B Capital Appreciation Bond is
also set forth in the table below. No periodic interest will be paid
thereon, and interest will be paid only at maturity or upon earlier
redemption. Interest on the 1993 B Capital Appreciation Bonds will be
compounded beginning on the date of delivery thereof and semiannually
thereafter on April 1 and October 1 of each year. The Accreted Value (the
"Accreted Value") of the 1993 B Capital Appreciation Bonds, is payable upon
maturity or earlier redemption of such 1993 B Capital Appreciation Bonds.
1993 A Current Interest Bonds. The 1993 A Current Interest Bonds,
maturing prior to October I, 2004, are not subject to redemption prior-to
maturity. The 1993 A Current Interest Bonds maturing on or after October
1, 2004 are subject to redemption at the option of the City prior to their
respective dates of maturity on or after October 1, 2003, in whole or in
part at any time, if in part in any order of maturity selected by the City
and by lot within a maturity, at redemption prices (expressed as a
percentage of the principal amount of the 1993 A Current Interest Bonds to
be redeemed) set forth below, together with accrued interest to the date
fixed for redemption:
Redemption Period Redemption
(Both Dates Inclusive) Price
October 1, 2003 to September 30, 2004 102%
October 1, 2004 to September 30, 2005 101
October 1, 2005 and thereafter 100
1993 A Capital Ap~reciation Bonds. The 1993 A Capital Appreciation
Bonds are not subject to redemption prior to maturity.
1993 B Current Interest Bonds. The 1993 B Current Interest Bonds,
maturing prior to October 1, 2004, are not subject to redemption prior to
maturity. The 1993 B Current Interest Bonds maturing on or after October
1, 2004 are subject to redemption at the option of the City prior to their
respective dates of maturity on or after October I, 2003, in whole or in
part at any time, if in part in any order of maturity selected by the City
and by lot within a maturity, at redemption prices (expressed as a
2
., "
percentage of the príncipal amount of the 1993 B Current Interest Bonds to
be redeemed) set forth below, together with accrued interest to the date
fixed for redemption:
Redemption Period Redemption
(Both Dates Inclusive) Price
October 1, 2003 to September 30, 2004 102%
October 1, 2004 to September 30. 2005 101
October 1, 2005 and thereafter 100
1993 B Ca9ital Ap~reciation Bonds. The 1993 B Capital Appreciation
Bonds, are not subject to redemption prior to maturity.
3
., ' ...,>
EXHIBIT B
DISCLOSURE AND TRUTH-IN BONDING STATEMENT
The Honorable Mayor and City Commission
City of Delray Beach
100 N.W. First Avenue
Delray Beach, Florida 33444
June 17, 1993
Re: City of Delray Beach, Florida Water and Sewer
Refunding Re'V'enue Bonds, Series 1993 A and Water
and Sewer Revenue Bonds. Series 1993 B
Ladies and Gentlemen:
Pursuant to Chapter 218.385, Florida Statutes ,and in reference to the
issuance of the above-referenced bonds (the "Bonds"), Smith Barney,
Harris Upham & Co. Incorporated on behalf of Stifel, Nicolaus & Company
and Hanifen, Imhoff Inc. (collectively, the "Underwriters"), hereby
makes the following disclosures to the City:
The Underwriters are acting as underwriters to the City for the public
offering or sale of the Bonds. The total fee to be paid to the
Underwriters pursuant to the Bond Purchase Agreement, dated June 17,
1993, between the Underwriters and the City of Delray Beach, Florida
("City"), is equal to approximately .095% of the total face amount of
the Bonds, or $266,992.51.
(a) Expenses estimated to be incurred by the Underwriters in
connection with the issuance of the Bonds:
(See attached itemization)
(b) Names, addresses and estimated amounts of compensation of any
person who is not regularly employed by, or no~ a partner or
officer of, an underwriter, bank, banker or financial consultant
or advisor and who enters into an understanding with either the
City or the Underwriters, for any paid or promised compensation
or valuable consideration directly, expressly or impliedly, to act
solely as an intermediary between the City and the Underwriters
for the purpose of influencing any t:tansaction in the purchase of
the Bonds:
none
(c) The amount of underwriting spread expected to be realized:
Underwriting $9.50 per $1,000 ($266,992.51)
Take down/Concession approximately $6.65 per thousand
($186,776.00)
I. ... ..
,.-
-
(d) Management fee charged by the Underwriters:
$.53 per thousand ($14,948.56)
(e) Any other fee, bonus and other compènsationestimated to be paid
by the Underwriters in connection with the Bonds to any person not
regularly employed or retained by the Underwriters:
none
(f) The name and address of the Underwriters:
Smith Barney, Harris Upham
& Co. Incorporated
625 North Flagler Drive
West Palm Beach, Florida 33401
Stifel, Nicolaus & Co., Inc.
500 No. Broadway, Suite 1560
St. Louis, Missouri. 63102
Hanifen, Imhoff Inc.
1125 17th Street
Denver, Colorado 80202
(g) The City is proposing to issue $28,104,474.60 of debt or
obligation for the purposes described in the Bond Resolution.
This debt or obligation is expected to be repaid over a period of
21 years. At a forecasted average interest rate of 5.479%
(effective interest cost) , total interest paid over the life of
the debt or obligation will be $11,606,161.67.
(h) The source of repayment or security for this proposal is net
revenues of the City's Combined Utility system.
Very truly yours,
Smith Barney, Harris Upham & Co.
Incorporated on behalf of the
Underwriters
By:
Title:
..
2
., "'1
"-...
-
ESTIMATED EXPENSES
MSRB Fee $ 843.13
PSA Fee 843.13
CUSIP Fee 120.00
Structuring 8,431.34
Federal Funds 3,903.40
Clearance Fee 7,026.12
Travel, Disbursements, Communications 8,810.45
Underwri ters' Counsel Fees and
Out of Pocket Expenses 33,104.47
Day Loan 780.68
'Syndicate Charge 1.405.22
TOTAL $65,267.95 ($2.32/$1,000)
..
'f ' ..,.
EXHIBIT C
[CLOSING DATE]
Smith Barney, Harris Upham & Co.
Incorporated
625 North Flagler Drive
West Palm Beach, Florida 33401
City Commission of the City of Delray Beach
100 N.W. First Avenue
Delray Beach, Florida 33444
Re: City of Delray Beach, Florida Water and Sewer
Refunding Revenue Bonds, Series 1993 A and Water
and Sewer Revenue Bonds, Series 1993 B
Ladies and Gentlemen:
At your request, this letter is being delivered to you and the City (as
defined below) pursuant to Section 8 (e) (viii) of the Bond Purchase Agreement
dated June 17, 1993 between the City of Delray Beach, Florida (the "City")
and yourselves with respect to the captioned bonds (the "Bonds") .
We consent to (i) the inclusion in the Preliminary Official Statement
dated June 8, 1993 relating to the Bonds (the "Preliminary Official
Statement"), as Appendix D, our cover letter and Engineering Report relating
to the City's expansion and rehabilitation of its combined water and sewer
utility system (the "Combined Public Utility"), dated June , 1993 (the
"POS Engineering Report") , (ii) the inclusion in the Final Official
Statement dated , relating to the Bonds (the "Final Official
Statement") , as Appendix D, our cover letter and Engineering Report relating
to the expansion and rehabilitation of the Combined Public Utility (the
"1993 Project"), dated (the "Engineering Report") and
(iii) the references to us in the Preliminary Official Statement and the
Final Official Statement. We have reviewed the Preliminary Official
Statement and the Final Official Statement as consulting engineers for the
1993 Project. The POS Engineering Report and the Engineering Report were
prepared in accordance with generally accepted engineering practices.
As of the date of this letter, we know of no change in matters described
in our POS Engineering Report (except for changes contained in the
Engineering Report) or our Engineering Report or matters contained in the
Preliminary Official Statement (except for changes contained in the Final
Official Statement) or the Final Official Statement relating to the 1993
Project, the Combined Public Utility, the Water and Sewer Rates or Future
Capital Projects. We believe that the assumptions used in compiling our POS
Engineering Report and Engineering Report are reasonable.
Further, based upon our participation in the preparation of the
Preliminary Official Statement and the Final Official Statement as
consulting engineers for the 1993 Project but witþout representing that we
have made an independent review of matters outside the scope of our
engagement, and without having undertaken to determine independently the
" ..,..,
-
accuracy, completeness or fairness of the statements contained in the
Preliminary Official Statement and the Final Official Statement, nothing has
come to our attention that would cause us to believe that (A) the
Preliminary Official Statement or the POS Engineering Report, as of the date
of the Preliminary Official Statement, contained any untrue statement of an
adverse material fact or omission of an adverss material fact, or (B) the
Final Official Statement or the Engineering Report as of the date of the
Final Official Statement and as of the date hereof contained or contain any
untrue statement of an adverse material fact or omission of an adverse
material fact.
Very truly yours,
PROFESSIONAL ENGINEERING CONSULTANTS, INC.
2
" ," ,
EXHIBIT D
[CLOSING DATE]
City Commission
City of Delray Beach
100 N.W. First Avenue
Delray Beach, Florida 33444
Smith Barney, Harris Upham & Co.
Incorporated
625 North Flagler Drive
West Palm Beach, Florida 33401
Re: City of Delray Beach, Florida Water and Sewer Refunding Revenue
Bonds, Series 1993 A and Water and Sewer Revenue Bonds, Series 1993
B
Ladies and Gentlemen:
At your request, this letter is being delivered to you and the City (as
defined below) pursuant to Section 8 (e) (viii) of the Bond Purchase Agreement
dated , 1993 between the City of Delray Beach, Florida (the
"City") and yourselves with respect to the City's Water and Sewer Refunding
Revenue Bonds, Series 1993 A and Water and Sewer Revenue Bonds, Series 1993
B (the "Bonds").
We consent to (i) references to us in the Engineering Report dated
, prepared by Professional Engineering Consultants, Inc. (the
"POS Engineering Report") on-<the expansion and rehabilitation of the City's
combined water and sewer utility system (the "Combined Public Utility") and
( ii) references to us in the engineering report on the 1993 Project
(hereinafter defined), dated prepared by Professional
Engineering Consul tants, Inc. (the "Engineering Report 11) . We have reviewed
the POS Engineering Report, the Engineering Report, the Preliminary Official
Statement and the Final Official Statement in our capacity as consulting
engineers for a portion of the expansion and upgrading of the Combined
Public Utility (the "1993 Project") .
Very truly yours,
HAZEN & SAWYER
., ",
Exhibit B
]!~ PREliMINARY OFFICIAL STATEMENT DATED JUNE 8, 1993
.~ '" NEW ISSUE ~o
=C
0'-
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eB
:¡:: cln OF DELRAY BEACH, FLORIDA
:Ë.!
0-
::0 $22,135,000* $6,857,173.75*
OQ)
.~ Cã
D-UI Water and Sewer Refunding Water and Sewer Revenue Bonds,
"C >0
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11.'" Revenue Bonds, Series 1993 A Series 1993 B
81:
~~ Dated: Current Interest Bonds - June 1, 1993 Due: October 1, as shown on the
Q)Q)
.c;¡ Capital Appreciation Bonds - Date of Delivery Inside cover
>0_
.ð~ The 1993 Bonds are being issued by the City of Delray Beach, Florida (the "City") in the form of fully registered bonds without coupons and shall
OUl
- "- be available to the purchasers thereof in the authorized denomination of $5,000 each or integral multiples thereof (in the case of the 1993
"-0
~c Bonds issued as Capital Appreciation Bonds, denominations yielding Accreted Values of $5,000 or integral multiples thereof, at maturity).
0:>; Interest on the 1993 Bonds issued as Current Interest Bonds will be payable by check or draft mailed to registered owners at the address
c'"
",.c appearing on the registration books of the City maintained by First Union National Bank of Florida, having its primary corporate trust
>00
",- office in Jacksonville, Florida, as Registrar and Paying Agent, provided, however, at the written request of any registered owner of at
eQ¡ least $1,000,000 in aggregate principal amount of 1993 Bonds issued as Current Interest Bonds, interest may be payable by wire
"-= .
OOC transfer to the bank account number on file with the Registrar and Paying Agent as of the applicable record date, Interest on the
C c.2
"Ccut) 1993 Bonds issued as Capital Appreciation Bonds will accrue from the date of their original issuance and will be payable at
~'õ~ maturity or upon earlier redemption. Principal of (or Accreted Value with respect to the 1993 Bonds issued as Capital
C'- Appreciation Bonds) and premium, if any, on the 1993 Bonds is payable at maturity or redemption to the registered owner
~ :8 .2-
'õca~ upon presentation and surrender of the 1993 Bonds at the designated corporate trust office of First Union National Bank
c:::~ u of Florida. The remedies of bondholders of 1993 A Bonds and 1993 B Bonds (collectively, the "1993 Bonds") are
u",
>0= UI identical and they are secured on a parity and ranked equally with the Prior Bonds (as herein defined) under the
Ë:¡~
UlQ)", Bond Resolution. The 1993 Bonds are subject to redemption prior to maturity as more fully described herein.
Q)..c_
.- ... 0 This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors must read the entire
:!::....cn
~~ ~ Official Statement to obtain information essential to the making of an informed investment decision.
u- '"
3131-;
CÞ S.!!! The 1993 Bonds are secured on a parity basis with certain other Bonds issued by the City, The 1993 Bonds are being issued pursuant to Chapter
:ß...i: 166, Florida Statutes and other applicable provisions of law and pursuant to the provisions of certain resolutions adopted by the City, as more fully
..c~'"
I-o~ described herein. The proceeds of the 1993 A Bonds together with other funds made available through the refunding program will be used (i) to
"Ë¡: advance refund and defease a portion of the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 1988 and a portion of the City's
~Q);¡ outstanding Water and Sewer Revenue Bonds, Series 1991 A, (ii) to provide a Reserve Account Credit Facility Substitute (as herein defined) or to
-g:ãæ make a deposit into the Debt Service Reserve Account to fund, together with proceeds of the 1993 B Bonds the Debt Service Reserve Requirement
Q):Þ'C for the 1993 Bonds, and (iii) to pay the costs of issuing the 1993 A Bonds. The proceeds of the 1993 B Bonds and other available funds of the City
eUlc
",C'" will be used (i) to provide funds for the acquisition and construction of certain additions, extensions and improvements to the City's Combined Public
"CBg
c:: ...-- Utility (as herein defined), (ii) to provide a Reserve Account Credit Facility Substitute (as herein defined) or to make a deposit into the Debt Service
ca~1ã Reserve Account to fund together with proceeds of the 1993 A Bonds the Debt Service Reserve Requirement for the 1993 Bonds and (iii) to pay the
C e.~
°al:!::: costs of issuing the 1993 B Bonds.
]!Š~
D- en I:T The 1993 Bonds are limited obligations of the City payable solely from the Net Revenues (defined herein), certain funds held
g 1ã ~ under the Bond Resolution and investment income thereon, and money attributable to certain proceeds of the 1993 Bonds. The 1993
u'u C Bonds shall not be deemed to constitute a debt or pledge of the full faith and credit of the City, of Palm Beach County, Florida, of the
S=:8
_0", State of Florida or of any political subdivision thereof within the meaning of any constitutional, legislative or charter provision or
~ ~;¡¡ limitation, and the registered owners thereof shall never have the right, directly or indirectly, to require or compel the exercise of
:D''''.- the ad valorem taxing power of the City, of Palm Beach County, Florida, of the State of Florida or of any political subdivision thereof,
"'.55r
Ule"- or taxation in any fonn on any real or personal property for the payment thereof.
Q).- 0
ft¡ãS-:: Payment of the principal of and interest on the 1993 Bonds will be insured by a municipal bond insurance policy to be issued by AMBAC
.5 à:.g
e.!l c.. Indemnity Corporation simultaneously with the delivery of the 1993 Bonds. See "MUNICIPAL BOND INSURANCE."
.!..c-
-'" AMØAC@
='¡
If
._ UI C
J'!! '" In the opinion of Bond Counsel, under existing law, and assuming continuing compliance by the City with the tax covenants described
g 1: herein, interest on the 1993 Bonds is excluded from gross income for Federal income tax purposes and is not a specific preference
uJ'!!:!;! item for purposes of the Federal alternative minimum tax. Bond Counsel is also of the opinion that interest on the 1993 Bonds
gUls
'i§~ is exempt from taxation under existing laws of the State of Florida, except as to estate taxes and taxes imposed by
ee.!! Chapter 220, Florida Statutes, on interest, income or profits on debt obligations owned by corporations, banks and
~·u m savings associations. See, however, "TAX EXEMPTION" herein regarding certain other tax considerations.
eO'"
.- C 0 The 1993 Bonds will be offered when, as and if issued and received by the Underwriters, subject to the approval of legality hy Mudge Rose
Q),,-c
..cQ)0 Guthrie Alexander & Ferdon, West Palm Beach, Florida, Bond Counsel to the City, and certain other conditions. Certain legal
""'0;;
"CC'"
c::=»:!:: matters will be passed on for the Ci~y by its City Attorney, Susan A. Ruby, Esquire. Certain legal matters will be passed upon
'" Ë·~ for the Underwriters by their counsel, Becker & Poliakoff, P.A" Fort Lauderdale, Florida, It is expected that the 1993
'ë...o
~.2 ~ Bonds in definitive form will he available for delivery in New York, New York on or about June 29, 1993.
Q)-Q)
-"'=
J'!!.5 0
en~..c Smith Barney, Harris Upham & Co.
1ã'- u
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gQ)..c Incorporated
>.~ Stifel, Nicolaus & Co., Inc.
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.501)·- Hanifen, Imhoff Inc.
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-eQ)U
D.. e·- The Date of this Official Statement is ,1993.
UlS"5!
:E J'!! .¡: 'Preliminary, subject to change,
I- en .2.
Amounts, Maturities, Interest Rates and Prices or Yields'
$22,130,000 1993 A Current Interest Serial Bonds
Interest Price or Interest Price or
Amount Maturity Rate Yield Amount Maturity Rate Yield
$ 5,000 1994 % % $2,420,000 2001 % %
10,000 1995 2,665,000 2002
10,000 1996 2,795,000 2003
10,000 1997 2,935,000 2004
410,000 1998 3,090,000 2005
2,220,000 1999 3,245,000 2006
2,315,000 2000
$ % 1993 A Current Interest Term Bonds due October 1, - Price %
$ % 1993 A Current Interest Term Bonds due October 1, - Price %
(Accrued interest to be added on all 1993 A Current Interest Bonds)
$2,360,000 1993 B Current Interest Serial Bonds
Interest Price or Interest Price or
Amount Maturity Rate Yield Amount Maturity Rate Yield
$365,000 1994 % % $70,000 2002 % %
365,000 1995 75,000 2003
380,000 1996 80,000 2004
395,000 1997 80,000 2005
65,000 1998 95,000 2006
65,000 1999 90,000 2007
70,000 2000 95,000 2008
70,000 2001
$ % 1993 B Current Interest Term Bonds due October 1, - Price %
$ % 1993 B Current Interest Term Bonds due October I, - Price %
(Accrued interest to be added on all 1993 B Current Interest Bonds)
$4,497,173.75 1993 B Capital Appreciation Serial Bonds
~ Original Maturity Approximate
Due Principal Principal Yield to
October 1 Amount Amount Maturity
2009 $ 40,107.00 $ 100,000 %
2010 37,598.00 100,000
2011 1,558,131,00 4,425,000
2012 1,471,578.00 4,425,000
2013 1,389,759.75 4,425,000
'Preliminary, subject to change
-
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No dealer, broker, salesman or other person has been authorized by the City to give any information
or to make any representations, other than as 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 the City
or the Underwriters. 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 1993 Bonds by any person in any jurisdiction in which
it is unlawful for such person to make such offer, solicitation or sale. The information contained in this
Official Statement has been obtained from the City, the Bond Insurer and other sources which are
believed to be reliable, but such information is not guaranteed as to accuracy or completeness and is not
to be construed as representations of the Underwriters with respect to the information provided by the
City or the Bond Insurer and is not to be construed as a representation by the City with respect to information
provided by the Bond Insurer and others. 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 offact, and the City expressly makes no representations that such estimates, assumptions and
opinions will be realized or fulfilled. The information and expressions of opinion stated in this Official
Statement are subject to change without notice, and neither the delivery ofthis Official Statement nor any sale
made hereunder shall, under any circumstances, create the implication that there has been no change in the
affairs of the City, since the date hereof.
IN CONNECTION WITH THE OFFERING OF THE 1993 BONDS, THE UNDERWRITERS MAY
OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICES OF THE 1993 BONDS AT LEVELS ABOVE mOSE WIllCH MIGIIT OTHERWISE PREVAIL
IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED
AT ANY TIME.
.
,
. ,
Exh,6¡T C
CITY OJ' DELRAY BEACH, FLORXDA
and
I'IRST UNION NATIONAL BANK OP I'LORIDA
as Escrow Trustee
ESCROW DEPOSIT AGREEMENT
DATED AS OP JUNB 1, 1993
C:\DATA\DBLRA Y.34\ESCROW.F
'.
.
THIS ESCROW DEPOSXT AGREEKENT, made and entered into as
of June 1, 1993, by and between the CITY OF DELRAY BEACH, FLORIDA,
a municipal corporation created under the laws of the state of
Florida, and its successors and assigns (the "City"), and First
Union National Bank of Florida, a national banking association duly
organized and existing under the laws of the united states with its
principal corporate trust office in Jacksonville, Florida, as
escrow trustee hereunder, and its successors and assigns (collec-
tively, the "Escrow Trustee"):
1UTNESSETH:
WHEREAS, any term not defined in the following recitals
shall have the meaning ascribed to such term in Article I hereof;
and
WHEREAS, the City commission of the City of Delray Beach,
Florida (referred to herein as the "City Commission"), did, on
June 12, 1984, adopt Resolution No. 45-84, which was amended and
supplemented on June 26, 1984, and October 17, 1984, authorizing
the issuance of its Water and Sewer Revenue Bonds, Series 1984 (the
"1984 Bonds"); and
WHEREAS, the City commission did, on June 28, 1988, adopt
Resolution No. 36-88, which was amended, supplemented and restated
by Resolution No. 39-88, adopted on July 12, 1988, as further
amended and supplemented (collectively, the "1988 Resolution"),
authorizing the issuance of the City's Water and Sewer Refunding
Revenue Bonds, Series 1988 (the "1988 Bonds"), to refund the City's
1984 Bonds; and
C:\DATA \DBLRA Y .34\ESCROW.F
.
.
.
WHEREAS , the City commission did, on April 24, 1990,
adopt Resolution No. 46-90, as amended and supplemented (the "1991
A Resolution"), which authorized the issuance of $8,000,000 Water
and Sewer Revenue Bonds (the "1991 A Bonds") of the City for the
purpose of financing certain additions, extensions and improvements
to the City's Combined Public utility; and
WHEREAS , the city commission did, on October 23, 1990,
adopt Resolution No. 104-90, as amended and supplemented (the
"1991 B Resolution"), which authorized the issuance of not
exceeding $50,000,000 Water and Sewer Revenue Bonds {the "1991 B
Bonds"} of the City for the purpose of financing certain additions,
extensions and improvements to the City's Combined Public utility;
and
WHEREAS, the City Commission did, on June 8, 1993, adopt
Resolution No. 50-93 (the "1993 A Resolution"), which authorizes
the issuance of not exceeding $30,000,000 Water and Sewer Refunding
Revenue Bonds, Series 1993 A (the "1993 A Bonds") for the purpose
of paying and refunding a portion of the 1988 Bonds, and a portion
of the 1991 A, as more particularly described on Schedule A
attached hereto (the "Refunded Bonds"); and
WHEREAS, the 1988 Resolution, the 1991 A Resolution, and
the 1991 B Resolution are, collectively, referred to as the
"Original Resolution"; and
WHEREAS, the Commission has determined it to be in the
best interest of the City to issue its 1993 A Bonds in an initial
aggregate principal amount of $21,238,997.35 for the purpose of
C:\DATA\DELRA Y.34\F3CROW.P 2
".
,
.
paying and refunding the Refunded Bonds pursuant to the terms of
the Original Resolution, the 1993 A Resolution, and this Agreement;
and
WHEREAS, the 1988 Bonds maturing on October 1, 1996, and
thereafter are subject to optional redemption at the option of the
city, in part, in inverse order of maturities, and by lot within a
maturity, if less than a full maturity, on October 1, 1995, or on
any interest payment date thereafter, from funds legally available
for such purpose including the proceeds of refunding bonds; and
WHEREAS, the 1991 A Bonds maturing on or after October 1,
2002, are subject to optional redemption at the option of the city,
in part, in inverse order of maturities, and by lot within a
maturity, if less than a full maturity, on October 1, 2001, or any
interest payment date thereafter, from funds legally available for
such purpose including the proceeds of refunding bonds; and
WHEREAS, The Original Resolution provides that, among
other things, all Refunded Bonds shall, prior to the maturity or
redemption date thereof, be deemed to have been paid within the
meaning of such resolution if there is deposited moneys or direct
obligations, the payment of principal and interest on which is
unconditionally guaranteed by the united states of America (the
"U. s. Obligations"), the principal of and the interest on which
when due will provide moneys which, together with any other moneys
deposited with the Escrow Trustee, shall be sufficient to pay such
Refunded Bonds, the interest thereon and the redemption premium, if
C:\DATA\DELRA Y.34\ESCROW.F 3
'I
,
.
any, as the same shall become due on the Refunded Bonds on or prior
to the redemption date or maturity date thereof; and
WHEREAS, the city has determined it to be in its best
interest to pay and defease the Refunded Bonds and to call the 1988
Bonds, which have been defeased pursuant to the Original Resolution
and this Agreement for redemption on October 1, 1995, and to call
the 1991 A Bonds, which have been defeased pursuant to the Original
Resolution and this Agreement for redemption on October 1, 2001, as
more particularly described on Schedule A attached hereto, all in
accordance with the terms and provisions of the Original Resolution
and this Agreement; and
WHEREAS, the City has determined to provide for the
payment of the Refunded Bonds by depositing a portion of the
proceeds from the 1993 A Bonds, together with certain other
lawfully available moneys, which shall be used in part to purchase
u. S. Obligations, which such U. S. Obligations and money shall be
sufficient, as verified by Causey, Demgen & Moore, Inc. , in a
letter dated June 29, 1993, to pay the principal of, redemption
premium, if any, and interest on the Refunded Bonds, as the same
shall become due and payable from the date of this Agreement, to
and including October 1, 1995, with respect to the 1988 Bonds,
which have been defeased pursuant to the Original Resolution and
this Agreement, and to and including October 1, 2001, with respect
to the 1991 A Bonds, which have been defeased pursuant to the
Original Resolution and this Agreement, and to pay the outstanding
principal amounts of the then outstanding Refunded Bonds on such
C:\DA TA \DELRA Y.34\ESCR.OW.F 4
,
·
dates, together with interest thereon and a redemption premium of
two percent (2%) of the principal amount of the 1988 Bonds, which
have been defeased pursuant to the Original Resolution and this
Agreement, and which mature on or after October 1, 1998; and
WHEREAS, in connection with the refunding of the Refunded
Bonds, it is necessary for the City and Escrow Trustee to enter
into a Forward Purchase Agreement (as hereinafter defined); and
WHEREAS, in order to provide for the proper and timely
application of the moneys deposited in the trust created herein,
the maturing principal amount of the U. s. Obligations purchased
thereby, and investment income and earnings derived therefrom to
the payment of the Refunded Bonds, it is necessary for the city to
enter into this Escrow Deposit Agreement with the Escrow Trustee on
behalf of the holders from time to time of the Refunded Bonds;
NOW, THEREI'ORE, the City, in consideration of the
foregoing and the mutual covenants herein set forth and in order to
secure the payment of the principal of, redemption premium, if any,
and interest on all of the Refunded Bonds, according to their tenor
and effect, does by these presents hereby grant, warrant, demise,
release, convey, assign, transfer, alienate, pledge, set over and
confirm, unto the Escrow Trustee, and to its successors in the
trusts hereby created, and to it and its assigns forever, all and
singular the property hereinafter described to wit:
DIVISION X
All right, title and interest of the City in and to
$20,763,032.97 derived from the proceeds of the sale of the 1993 A
C:\DATA\DBLRA Y.34\ESCROW.F 5
'.
,
.
Bonds, $99,500 derived from Facility Fee (as such term is defined
in the Forward Purchase Agreement), and $1,801,570.56 transferred
from the funds and accounts created and established for the
Refunded Bonds and allocable to such Refunded Bonds (herein, the
"Transferred Moneys"), of which $1,430,961.81 is derived from the
proceeds of the 1991 A Bonds and 1991 B Bonds, are hereby
transferred to the Escrow Trustee.
DIVISION II
All right, title and interest of the City in and to all
income, earnings and increment derived from or accruing to the
U. S. Obligations purchased from the money (except for certain
uninvested cash balances) described in Division I hereof and more
particularly described in Schedule B attached hereto and made a
part hereof.
DXVISION XXI
Any and all other property of every kind and nature from
time to time hereafter, by delivery or by writing of any kind,
conveyed, pledged, assigned or transferred as and for additional
security hereunder by the city or by anyone in its behalf to the
Escrow Trustee, which is hereby authorized to receive the same at
any time as additional security hereunder.
DIVISION IV
All property which is by the express provisions of this
Agreement required to be subject to the pledge hereof and any
additional property that may, from time to time hereafter, by
delivery or by writing of any kind, be subject to the pledge
C:\DA TA\DELRA Y .34\ESCR.OW.F 6
'I
,
hereof, by the city or by anyone in its behalf, and the Escrow
Trustee is hereby authorized to receive the same at any time as
additional security hereunder.
TO HAVE AND TO HOLD, all and singular, the Trust Estate
(as such term is hereinafter defined), including all additional
property which by the terms hereof has or may become subject to the
encumbrances of this Agreement, unto the Escrow Trustee, and its
successors and assigns, forever in Trust, however, for the benefit
and security of the holders from time to time of the Refunded
Bonds; but if the Refunded Bonds shall be fully and promptly paid
when due in accordance with the terms thereof and hereof, then this
Agreement shall be and become void and of no further force and
effect; otherwise, the same shall remain in full force and effect,
and upon the trusts and subject to the covenants and conditions
hereinafter set forth.
ARTICLE I
DEFXNXTIONS; pIHDINGS AND DETElUIXNATIONS BY THB CXTY
SECTION 1.01. Definitions. In addition to words and
terms elsewhere defined in this Agreement, the following words and
terms as used in this Agreement shall have the following meanings,
unless some other meaning is plainly intended.
"Act" shall mean the Florida Constitution, Chapter 166,
Florida statutes, as amended and supplemented, and the Charter of
the City of Delray Beach, Florida, as amended and supplemented, and
other applicable provisions of law.
C:\DA T A \DBLRA Y .34\BSCROW.F 7
,
,
"Agreement" shall mean this Escrow Deposit Agreement,
dated as of June 1, 1993, between the City and the Escrow Trustee.
"Annual Debt Service" shall mean, as to the Refunded
Bonds, the maturing principal, principal called, redemption premium
and interest coming due in each year, as shown on Schedule C
attached hereto and hereby made a part hereof.
"Assigned Rights" shall mean (i) the right, title and
interest under this Agreement in and to all earnings derived from
the investment and reinvestment of amounts received upon the
maturing, from time to time, of those certain U. S. Obligations
identified in the Forward Purchase Agreement held in the Escrow
Fund during each period following the date of maturity of such U.
S. Obligations to each relevant date on which the principal or
redemption premium (if applicable) of and interest due or to become
due on the Refunded Bonds are to be paid, and (ii) the right to
substitute, purchase and sell U. S. Obligations, including, without
limitation, the right to give all directions and take all actions
in connection therewith, subject to the satisfaction of the
conditions of this Agreement with respect to the exercise of such
rights during each period following the date of maturity of such
U. S. Obligations to each date on which the principal or redemption
premium (if applicable) of and interest due or to become due on the
Refunded Bonds are to be paid.
"Facility Fee" shall mean $99,500.00, the amount paid by
the Supplier to the City for deposit hereunder in consideration for
C:\DA TA\DELRA Y.34\ESCROW.F 8
.,
·
the Assigned Rights pursuant to the terms and provisions of the
Forward Purchase Agreement.
"Forward Purchase Agreement" shall mean the Forward
Purchase and Assignment Agreement, dated as of June 29, 1993, by
and between the Escrow Trustee and the Supplier, an executed copy
of which is attached hereto as Exhibit B.
"Supplier" shall mean Sakura Global capital, Inc. , as
supplier under the Forward Purchase Agreement.
"Total Debt Service" shall mean, as of any date during
the period from the date of this Agreement until October 1, 2001,
the sum of the Annual Debt Service then remaining unpaid with
respect to the Refunded Bonds, together with the applicable
redemption premium payable on certain of the outstanding principal
amount of 1988 Bonds being called for optional redemption prior to
maturity, all as shown on Schedule C attached hereto and hereby
made a part hereof.
"Trust Estate," "trust estate" or "pledged property"
shall mean the property, rights and interest of the city which are
subject to the lien of this Agreement.
"U. S. Obligations" shall mean direct obligations of, or
obligations the principal of and interest on which are uncondition-
ally guaranteed by, the united States of America, constituting part
of the Trust Estate and described in Schedule B attached hereto.
Words of the masculine gender shall be deemed and
construed to include correlative words of the feminine and neuter
genders. Words importing the singular number shall include the
C:\DA TA\DBLRA Y.34\ESCROW.F 9
'.
plural number and vice versa unless the context shall otherwise
indicate. The word "person" shall include corporations, associa-
tions, natural persons and public bodies unless the context shall
otherwise indicate. Reference to a person other than a natural
person shall include its successors.
ARTICLB II
ESTABLISHMENT 01' TRUST FUND; FLOW 01' I'UNDS
SECTXON 2.01. Creation of Escrow DeDosit Trust J'Und .
There is hereby created and established with the Escrow Trustee a
special and irrevocable trust fund designated the Escrow Deposit
Trust Fund (the "Trust Fund"), to be held in the custody of the
Escrow Trustee and accounted for separate and apart from other
funds of the City or of the Escrow Trustee.
SECTION 2.02. DeDosit of Koneys and PaYment of Refunded
Bonds. Concurrently with the execution of this Agreement, the
City herewith deposits or causes to be deposited with the Escrow
Trustee, and the Escrow Trustee acknowledges receipt of
$22,564,603.63, to be used in part to purchase the U. S. Obliga-
tions, as described on Schedule B in the maturing principal amount
of $28,477,500.61, and the balance of such deposit in the amount of
$198.38 shall be held as immediately available moneys, such
purchase of the U. S. Obligations and cash being derived from the
proceeds of the 1993 A Bonds, and the Transferred Moneys to be
deposited into the Trust Fund will, according to the opinion of
Causey, Demgen & Moore, Inc. , set forth in its letter dated
June 29, 1993, provide moneys sufficient to pay the Total Debt
C:\DA TA \DHLRA Y .34\ESCROW.F 10
"
service on the Refunded Bonds. Money representing beginning cash
balances and any other moneys not directed to be invested hereunder
shall remain uninvested until applied in accordance with the terms
hereof.
SECTXON 2.03. Irrevocable Trust Created. The deposit of
the cash and U. S. Obligations in the Trust Fund shall constitute
an irrevocable deposit of said cash and U. S. Obligations for the
benefit of the holders of the Refunded Bonds, except as provided
herein with respect to amendments permitted under section 4.01
hereof. The holders of the Refunded Bonds shall have a lien on the
principal of and earnings on the U. S. Obligations and the cash
deposited in the Trust Fund until applied in accordance with this
Agreement and the applicable terms and provisions of the original
Resolution. The matured principal of the U. S. Obligations,
together with the interest thereon, if any, and the amount of cash
on deposit shall be held in trust by the Escrow Trustee and shall
be transferred in the necessary amounts and at the necessary times,
as set forth in Schedule C attached hereto, to the paying agents
for the Refunded Bonds, for the payment of the Total Debt Service
on the Refunded Bonds, as the same becomes due and payable.
SECTION 2.04. Purchase of U. s. oblicrations. The City
hereby directs the Escrow Trustee to immediately purchase and the
Escrow Trustee hereby acknowledges the purchase of the U. S.
Obligations listed on Schedule B from the moneys transferred to the
Escrow Trustee from the City in the manner described in
section 2.02 hereof. The Escrow Trustee shall apply the moneys
C:\DA TA \DBLRA Y.34\BSCROW.P 11
"
I
deposited in the Trust Fund and the aforementioned u. S.
Obligations, together with all income or earnings thereon, if any,
in accordance with the provisions hereof and the original
Resolution. The Escrow Trustee shall have no power or duty to
invest or reinvest any moneys held hereunder or to make
substitutions of the u. s. Obligations held hereunder or to sell,
transfer or otherwise dispose of the U. S. Obligations acquired
hereunder except as provided in this Agreement.
The Escrow Trustee, at the written direction and
authorization of the City, which is hereby given to the Escrow
Trustee pursuant to this section, shall enter into the Forward
Purchase Agreement for the purpose of purchasing U. S. Obligations
from the Supplier in the manner, at the times, and in the amounts
set forth in the Forward Purchase Agreement. The Escrow Trustee
and the city acknowledge and agree that, prior to entering into the
Forward Purchase Agreement, the City shall have all right, title
and interest in the Assigned Rights. The city shall assign all of
its right, title and interest in and to the Assigned Rights to the
Supplier pursuant to the Forward Purchase Agreement.
SECTXON 2.05. Failure to Deliver Initial u. S.
Obliaations. In the event that the underwriters for the 1993 A
Bonds (the "Underwriters") shall be unable to deliver any of the
U. S. Obligations, as set forth in Schedule B (the "Initial U. S.
Obligations") hereto, at the time of delivery of the 1993 A Bonds,
the Escrow Trustee is hereby authorized to accept other U. S.
Obligations (the "Substitute Securities") and/or cash in
C:\DATA \DBLRA Y .34\ESCR.OW.P 12
.
I
substitution for the Initial U. S. Obligations. Such substitution
is sUbject to receipt by the City and the Escrow Trustee of an
independent verification by a nationally recognized certified
public accounting firm acceptable to Mudge Rose Guthrie Alexander
& Ferdon that the Substitute Securities and/or cash, together with
any other U. S. Obligations and cash on deposit with the Escrow
Trustee, will be sufficient to meet the requirements for payment of
the principal of, premium, if any, and interest on the Refunded
Bonds in accordance with the terms of this Agreement. At any time
prior to maturity of the Substitute Securities and/or cash, the
City shall have the ability in writing to direct the Escrow Trustee
to exchange any of the Substitute Securities and/or cash delivered
by the Underwriters for all or any part of the Initial U. S.
Obligations. However, such exchange will be subject to the receipt
by the City and the Escrow Trustee of an independent verification
by a nationally recognized independent certified public accounting
firm acceptable to Mudge Rose Guthrie Alexander & Ferdon to the
effect that the substitution of the Substitute Securities and/or
cash for the Initial U. S. Obligations will be sufficient to meet
the requirements for payments of principal of, premium, if any, and
interest on the Refunded Bonds in accordance with the terms of this
Agreement and the applicable provisions of the Original Resolution.
Further, such verification report must indicate that the return of
monies (generated by such Substitute securities), in excess of the
monies that would have been received on the Initial U. S.
Obligations, to the Underwriters for the 1993 A Bonds are not
C:\DA TA \DBLRA Y .34\ESCROW.F 13
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needed to pay the principal of, premium, if any, and interest on
the Refunded Bonds when due in accordance with this Agreement and
the applicable provisions of the original Resolution. In addition,
such return of the Substitute Securities and/or cash and any excess
monies will not, under the statutes, rules and regulations then in
force and applicable to obligations issued on the date of issuance
of the Refunded Bonds and under the Internal Revenue Code of 1986,
as amended (the "Code"), cause the interest on the 1993 A Bonds or
the Refunded Bonds not to be excluded from gross income for Federal
income tax purposes and that such investment is not inconsistent
with the statutes and regulations applicable to the 1993 A Bonds or
the Refunded Bonds.
SECTXON 2.06. Transfers from Trust Fund. As the
principal of the u. S. Obligations listed in Schedule B shall
mature and be paid, and the investment income and earnings thereon,
if any, are paid, the Escrow Trustee shall, no later than each
interest payment date and principal payment date for the Refunded
Bonds transfer from the Trust Fund, in accordance with the schedule
of payments described in Schedule C attached hereto, to the paying
agents for the Refunded Bonds an amount sufficient to pay the
principal of, redemption premium and interest on the Refunded Bonds
coming due on such interest payment date or principal payment date.
The Escrow Trustee has relied on the opinion of Causey, Demgen &
Moore, Inc., set forth in its letter dated June 29, 1993, that the
amount of money and securities on deposit herein and as reinvested
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in accordance with the terms hereof will be sufficient to pay Total
Debt Service on the Refunded Bonds.
SECTXON 2.07. Xnvestment of Konevs remainina in Trust
Pund. Subject to the requirements of this section 2.07, the Escrow
Trustee shall, as directed in writing by the City, invest and
reinvest any moneys remaining from time to time in the Trust Fund,
other than moneys derived from the maturing U. S. Obligations
identified in the Forward Purchase Agreement, until such time as
they are needed. Notwithstanding the provisions of this section
2.07, the Escrow Trustee shall be fully authorized to invest and
reinvest any moneys remaining from time to time in the Escrow Fund
relating to maturing U. S. Obligations identified in the Forward
Purchase Agreement in accordance with the terms of the Forward
Purchase Agreement until such time as they are needed. Such
moneys, other than the moneys identified in the next preceding
sentence, shall be reinvested in direct obligations of, or
obligations fully guaranteed by, the United states of America for
such periods or at such interest rates or yields that the Escrow
Trustee shall be directed in writing to invest by the City, which
securities or periods or interest rates or yields shall be set
forth in an opinion to the City from Mudge Rose Guthrie Alexander
& Ferdon, which opinion shall also be to the effect that such
reinvestment of such moneys will not, under the statutes, rules and
regulations then in force and applicable to obligations issued on
the dates of issuance of the Refunded Bonds and under the Code,
cause the interest on the 1993 A Bonds or the Refunded Bonds not to
C:\DATA \DBLRA Y.34\ESCIlOW.P 15
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be excluded from gross income for Federal income tax purposes and
that such investment is not inconsistent with the statutes and
regulations applicable to the 1993 A Bonds or the Refunded Bonds.
Such reinvestment of moneys is subject to receipt by the City of an
independent verification by a nationally recognized independent
certified public accounting firm acceptable to the Escrow Trustee
and Mudge Rose Guthrie Alexander & Ferdon. Any interest income
resulting from reinvestment of moneys, other than moneys relating
to maturing U. S. Obligations identified in the Forward Purchase
Agreement, pursuant to this section 2.07 shall be promptly
transferred to the City and used for any legally permitted
municipal purpose, if such verification report indicates that such
interest income is not needed for the purposes contemplated by this
Agreement.
SECTION 2.08. Trust Pund. The Trust Fund created and
established pursuant to this Agreement shall be and constitute a
trust fund for the purposes provided in this Agreement and shall be
kept separate and distinct from all other funds of the City and the
Escrow Trustee and used only for the purposes and in the manner
provided in this Agreement.
SECTION 2.09. Transfer of I'unds after all Payments
Reauired bv this Aareement are Kade. After all of the transfers by
the Escrow Trustee to the respective paying agents for payment of
the Total Debt Service on the Refunded Bonds have been made, all
remaining moneys and U. S. Obligations, together with any income
and interest thereon, in the Trust Fund shall be transferred to the
C:\DA TA \DELRA Y .34\ESCROW.F 16
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City by the Escrow Trustee; provided, however, that no such
transfer (except transfers made in accordance with sections 2.07
and 4.01 hereof and transfers pursuant to the terms and provisions
of the Forward Purchase Agreement) to the city shall be made until
the Total Debt Service on the Refunded Bonds has been paid.
ARTXCLE III
CONCERNING THE ESCROW TRUSTBE
SECTXON 3.01. ADDointment of Escrow Trustee. The City
hereby appoints First Union National Bank of Florida, having its
principal corporate trust office in Jacksonville, Florida, as
Escrow Trustee under this Agreement.
SECTXON 3.02. AcceDtance bv Escrow Trustee. By execution
of this Agreement, the Escrow Trustee accepts the duties and
obligations as Escrow Trustee hereunder. The Escrow Trustee
further represents that it has all requisite power, and has taken
all corporate actions necessary, to execute the trust hereby
created.
SECTXON 3.03. Liability of Escrow Trustee. The Escrow
Trustee shall not be liable in connection with the performance of
its duties hereunder except for its own negligence, default or
willful misconduct. The Escrow Trustee shall not be liable for any
loss resulting from any investment made pursuant to the terms and
provisions of this Agreement. The Escrow Trustee shall have no
lien, security interest or right of set-off whatsoever upon any of
the moneys or investments in the Trust Fund for the payment of fees
C:\DA TA \DBLRA Y .34\ESCROW.P 17
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and expenses for services rendered by the Escrow Trustee under this
Agreement.
As long as the Escrow Trustee applies (by transfer to the
respective paying agents) any moneys, the U. S. obligations and the
interest earnings, if any, therefrom to pay the Refunded Bonds, as
provided herein, and complies fully with the terms of this
Agreement, the Escrow Trustee shall not be liable for any deficien-
cies in the amounts necessary to pay the Refunded Bonds. Further,
the Escrow Trustee shall not be liable for the accuracy of the
calculations as to the sufficiency of moneys and of the principal
amount of the U. S. Obligations, and the earnings, if any, thereon,
to pay the Refunded Bonds.
In the event of the Escrow Trustee's failure to account
for any of the U. s. Obligations or moneys received by it, said
U. S. Obligations or moneys shall be and remain the property of the
City in trust for the holders of the Refunded Bonds, as herein
provided, and if for any improper reason such U. S. Obligations or
moneys are not applied as herein provided, the Escrow Trustee shall
be liable for the amount thereof until the required application
shall be made.
SECTXON 3.04. Permitted Acts. The Escrow Trustee and its
affiliates may become the owner of or may deal in the Refunded
Bonds as fully and with the same rights as if it were not the
Escrow Trustee.
SECTION 3.05. Successor Escrow Trustee. The Escrow
Trustee, at the time acting hereunder, may at any time resign and
C:\DA TA \DBLRA Y.34\ESCR.OW.F 18
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be discharged from the trusts hereby created by giving not less
than sixty (60) days' written notice to the city, the respective
paying agents and any rating agency which is then rating the
Refunded Bonds, but no such resignation shall take effect unless a
successor Escrow Trustee shall have been appointed by the holders
of the Refunded Bonds or by the city as hereinafter provided and
such successor Escrow Trustee shall have accepted such appointment,
in which event such resignation shall take effect immediately upon
the appointment and acceptance of a successor Escrow Trustee.
The Escrow Trustee may be removed at any time by an
instrument or concurrent instruments in writing, delivered to the
Escrow Trustee and to the city and signed by the holders of a
majority in principal amount of the Refunded Bonds then
outstanding.
In the event the Escrow Trustee hereunder shall resign or
be removed, or be dissolved, or shall be in the course of dissolu-
tion or liquidation, or otherwise become incapable of acting
hereunder, or in case the Escrow Trustee shall be taken under the
control of any public officer or officers, or of a receiver
appointed by a court, a successor may be appointed by the holders
of a majority in principal amount of the Refunded Bonds then
outstanding by an instrument or concurrent instruments in writing,
signed by such holders, or by their attorneys in fact, duly
authorized in writing; provided, nevertheless, that in any such
event, the City shall appoint a temporary Escrow Trustee to fill
such vacancy until a successor Escrow Trustee shall be appointed by
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the holders of a majority in principal amount of the Refunded Bonds
then outstanding in the manner above provided, and any such
temporary Escrow Trustee so appointed by the city shall immediately
and without further act be superseded by the Escrow Trustee so
appointed by such holders.
In the event that no appointment of a successor Escrow
Trustee or a temporary successor Escrow Trustee shall have been
made by such holders or the city pursuant to the foregoing
provisions of this section within sixty (60) days after written
notice of resignation of the Escrow Trustee has been given to the
city, the holder of any of the Refunded Bonds or any retiring
Escrow Trustee may apply to any court of competent jurisdiction for
the appointment of a successor Escrow Trustee and such court may
thereupon, after such notice, if any, as it shall deem proper,
appoint such successor Escrow Trustee.
No successor Escrow Trustee shall be appointed unless
such successor Escrow Trustee shall be a corporation with trust
powers organized under the banking laws of the United states or any
state, and shall have at the time of appointment capital and
surplus of not less than $50,000,000 or is a member of a bank group
or bank holding company with aggregate capital and surplus of not
less than $50,000,000.
Every successor Escrow Trustee appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the
City, an instrument in writing accepting such appointment hereunder
and thereupon such successor Escrow Trustee, without any further
C:\DA TA \DELRA Y .34\ESCR.OW.F 20
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act, deed or conveyance, shall become fully vested with all the
rights, immunities, powers, trusts, duties and obligations of its
predecessor; but such predecessor shall, nevertheless, on the
written request of such successor Escrow Trustee or the City,
execute and deliver an instrument transferring to such successor
Escrow Trustee all the estates, properties, rights, powers and
trusts of such predecessor hereunder; and every predecessor Escrow
Trustee shall deliver all securities and moneys held by it to its
successor; provided, however, that before any such delivery is
required to be made, all fees, advances and expenses of the
retiring or removed Escrow Trustee shall be paid in full. Should
any transfer, assignment or instrument in writing from the city be
required by any successor Escrow Trustee for more fully and
certainly vesting in such successor Escrow Trustee the estates,
rights, powers and duties hereby vested or intended to be vested in
the predecessor Escrow Trustee, any such transfer, assignment and
instruments in writing shall, on request, be executed, acknowledged
and delivered by the city.
Any corporation into which the Escrow Trustee, or any
successor to it in the trusts created by this Agreement, may be
merged or converted or with which it or any successor to it may be
consolidated, or any corporation resulting from any merger,
conversion, consolidation or reorganization to which the Escrow
Trustee or any successor to it shall be a party shall, if approved
in writing by the City (which approval shall not be unreasonably
withheld) , be the successor Escrow Trustee under this Agreement
C:\DA TA \DELRA Y.34\ESCROW.F 21
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without the execution or filing of any paper or any other act on
the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
SECTXON 3.06. Receipt of Proceedinas. Receipt of true
and correct copies of the proceedings authorizing the issuance of
the Refunded Bonds, including the Original Resolution, are hereby
acknowledged by the Escrow Trustee, and reference herein to or
citation herein of any provision of said documents shall be deemed
to incorporate the same as a part hereof in the same manner and
with the same effect as if they were fully set forth herein.
SECTXON 3.07. [Reserved].
SECTXON 3.08. Payment to Bscrow Trustee and pavina
Aaents. The City hereby agrees to provide for the payment, from
its own legally available funds, the costs, charges, services and
expenses of the Escrow Trustee incurred in connection with its
duties under this Agreement. The Escrow Trustee hereby acknowledg-
es that it has agreed to accept, and the City agrees to pay, on the
date of execution of this Agreement, the compensation under this
Agreement, as shown on the attached Exhibit C, plus reasonable
expenses. The City hereby agrees to pay the fees and expenses of
the respective paying agents referred to below and any publication
costs borne by such respective paying agents or by the Escrow
Trustee from the City's own legally available moneys.
The paying agent for the 1988 Bonds is NationsBank of
Florida, N.A., having its principal corporate trust office in Fort
Lauderdale, Florida. The paying agent for the 1991 A Bonds is
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comerica Bank & Trust, F.S.B., having its principal corporate trust
office in Fort Lauderdale, Florida.
SECTXON 3.09. Notices of RedemDtion. The City, in the
case of the 1988 Bonds which have been defeased in accordance with
the Original Resolution and this Agreement, irrevocably instructs
the Escrow Trustee to file a copy of the notice of redemption with
the paying agent for the 1988 Bonds not less than forty ( 40) days
prior to October 1, 1995, with instructions to such paying agent to
mail the notice of redemption to the registered owners of the
outstanding 1988 Bonds, which have been defeased in accordance with
the Original Resolution and this Agreement, not less than thirty
(30) days prior to October 1, 1995. The City, in the case of the
1991 A Bonds, which have been defeased in accordance with the
Original Resolution and this Agreement, hereby irrevocably
instructs the Escrow Trustee to file a copy of the notice of
redemption with the paying agent for the 1991 A Bonds not less than
forty (40) days prior to October 1, 2001, with instructions to such
paying agent to mail such notice of optional redemption to the
registered owners of such 1991 A Bonds not less than thirty ( 30)
days prior to October 1, 2001. Such notices of redemption, with
respect to the 1988 Bonds and 1991 A Bonds, shall be in
substantially the forms attached hereto as Exhibit A. The cost of
mailings shall be borne by the city.
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ARTXCLE IV
KISCELLANEOUS
SECTION 4.01. Amendments to this Aareement. This
Agreement is made for the benefit of the City and the holders from
time to time of the Refunded Bonds and it shall not be repealed,
revoked, altered or amended in whole or in part without the written
consent of all affected holders, the Escrow Trustee, the City and
the Supplier if such amendment adversely affects its rights;
provided, however, that the City and the Escrow Trustee may,
without the consent of, or notice to, such holders, enter into such
agreements supplemental to this Agreement as shall not adversely
affect the rights of such holders and as shall not be inconsistent
wi th the terms and provisions of this Agreement, for anyone or
more of the fOllowing purposes:
(a) to cure any ambiguity or formal defect or
omission in this Agreement;
(b) to grant to, or confer upon, the Escrow Trustee,
for the benefit of the holders of the Refunded Bonds, any
additional rights, remedies, powers or authority that may
lawfully be granted to, or conferred upon, such holders
or the Escrow Trustee; and
(c) to subject to this Agreement additional funds,
securities or properties.
The Escrow Trustee shall be entitled to rely exclusively
upon an unqualified opinion of nationally recognized attorneys on
the subject of municipal bonds with respect to compliance with this
C:\DA TA \DBLRA Y .34\ESCROW.F 24
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Section, including the extent, if any, to which any change,
modification, addi tion or elimination affects the rights of the
holders of the Refunded Bonds or that any instrument executed
hereunder complies with the conditions and provisions of this
section.
Notwithstanding the foregoing or any other provision of
this Agreement, but subject to the terms and provisions of the
Forward Purchase Agreement, provided the Supplier is not in default
thereunder, at the written request of the City and upon compliance
with the conditions hereinafter stated, the Escrow Trustee shall
have the power to and shall, in simultaneous transactions, sell,
transfer, otherwise dispose of or request the redemption of the U.
S. Obligations held hereunder and to substitute therefor direct
obligations of, or obligations fully guaranteed by the united
States of America, subject to the conditions that such moneys or
securities held by the Escrow Trustee shall be sufficient to pay
Annual Debt Service on the Refunded Bonds, as the same shall become
due, until the Total Debt Service on the Refunded Bonds has been
paid in accordance with Schedule C attached hereto. The City
hereby covenants and agrees that it will not request the Escrow
Trustee to exercise any of the powers described in the preceding
sentence (i) in any manner which will cause the 1993 A Bonds or the
Refunded Bonds to be "arbitrage bonds" within the meaning of
section 148 of the Code, and the regulations thereunder in effect
on the date of such request and applicable to obligations issued on
the issue date of the 1993 A Bonds and the Refunded Bonds, and
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( ii) without payment of reasonable expenses of the Escrow Trustee
in so doing including but not limited to the cost of securing the
independent verification described below. The Escrow Trustee
shall, as directed in writing by the City, purchase such
substituted securities with the proceeds derived from the maturity,
sale, transfer, disposition or redemption of the U. S. Obligations
held hereunder or from other moneys available. The transactions
may be effected only if there shall have been obtained: (1) an
independent verification by a nationally recognized independent
certified public accounting firm retained by the City concerning
the adequacy of such substituted securities with respect to
principal and the interest thereon and any other moneys or
securities held for such purpose to pay Annual Debt Service on the
Refunded Bonds when due, until the Total Debt Service on the
Refunded Bonds has been paid in accordance with Schedule C attached
hereto; and (2) an opinion from Mudge Rose Guthrie Alexander &
Ferdon, or from any other nationally recognized attorneys on the
subject of municipal bonds, to the City and the Escrow Trustee to
the effect that the disposition and substitution or purchase of
such securities will not, under the statutes, rules and regulations
then in force and applicable to obligations issued on the date of
issuance of the 1993 A Bonds and Refunded Bonds, cause the interest
on such 1993 A Bonds or Refunded Bonds not to be excluded from
gross income for Federal income tax purposes and that such
disposition and substitution or purchase is not inconsistent with
the statutes and regulations applicable to the 1993 A Bonds and the
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Refunded Bonds. Any surplus moneys resulting from the sale,
transfer, other disposition or redemption of the U. S. Obligations
held hereunder and the substitutions therefor of direct obligations
of, or obligations the principal of and interest on which is fully
guaranteed by, the united states of America, shall be released from
the Trust Estate and shall be transferred to the city. The City
shall provide written notice of any such amendment to the rating
agencies then rating the Refunded Bonds prior to the effective date
thereof.
SECTXON 4.02. Severability. If anyone or more of the
covenants or agreements provided in this Agreement on the part of
the City or the Escrow Trustee to be performed should be determined
by a court of competent jurisdiction to be contrary to law, such
covenant or agreement shall be deemed and construed to be severable
from the remaining covenants and agreements herein contained and
shall in no way affect the validity of the remaining provisions of
this Agreement.
SECTXON 4.03. Aareement Bindina. All the covenants,
promises and agreements in this Agreement contained by or on behalf
of the city or by or on behalf of the Escrow Trustee shall bind and
inure to the benefit of their respective successors and assigns,
whether so expressed or not.
SECTXON 4.04. Termination. This Agreement shall
terminate when all transfers and payments required to be made by
the Escrow Trustee under the provisions hereof shall have been
made.
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SECTXON 4.05. Governincr Law. This Agreement shall be
governed by the applicable law of the state of Florida.
SECTION 4.06. Execution bv counterparts. This Agreement
may be executed in several counterparts, all or any of which shall
be regarded for all purposes as one original and shall constitute
and be but one and the same instrument.
SECTXON 4.07. Notices. Until otherwise directed in
writing by any person named below, all notices, reports, or other
communications required or permitted to be given in accordance with
the terms of this Agreement shall be in writing and sent by
registered or certified mail addressed as follows:
(a) As to the City:
City of Delray Beach
Becky O'Connor, Treasurer
City of Delray Beach, Florida
100 N.W. 1st Avenue
Delray Beach, Florida 33444
(407) 243-7120
(b) As to the Escrow Trustee:
First Union National Bank of Florida
Ms. Holly Arencibia
Corporate Trust - FL 6065
First Union Financial Center, 14th Floor
200 South Biscayne Boulevard
Miami, Florida 33131
(305) 789-4685
(c) As to the Supplier:
Sakura Global Capital, Inc.
65 East 55th Street
Park Avenue Tower, 20th Floor
New York, New York 10020
Attention: Municipal Middle Office Manager
( 212 ) 486-8262
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IN WITNESS WHEREOJ', each of the parties hereto has caused
this Agreement to be executed by its duly authorized officers and
its corporate seal to be hereunto affixed and attested as of the
date of execution set forth below.
CITY OJ' DELRAY BEACH, J'LORIDA
(SEAL) By:
Title: Mayor
Date of Execution: June 29, 1993
Attest:
City Clerk
FIRST UNION NATIONAL BANlt 01'
FLORIDA, as Escrow Trustee
(SEAL) By:
Authorized Officer
Date of Execution: June 29, 1993
Attest:
Authorized Officer
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SCHEDULE A
REFUNDED BONDS
1988 BONDS
Maturity Principal Interest
Date Amount Rate
10/1/98 $ 50,000 7.15%
10/1/99 1,845,000 7.30
10/1/00 1,980,000 7.40
10/1/01 2,125,000 7.50
10/1/02 2,285,000 7.60
10/1/03 2,460,000 7.65
10/1/04 2,645,000 7.70
1991 A BONDS
Maturity Principal Interest
Date Amount Rate
10/1/02 $ 125,000 6.40%
10/1/03 135,000 6.55
10/1/04 145,000 6.65
10/1/05 3,005,000 6.80
10/1/06 3,205,000 6.80
10/1/10 400,000 6.00
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SCHEDULE B
U. S. OBLIGATIONS
Purchased from Proceeds of the 1993 A Bonds
Maturity Principal Interest
Date Amount Rate TvDe Purchase Price
9/30/94 $ 209,499.39 8.500 T-NOTE $ 226,317.30
3/31/95 693,000.00 3,875 T-NOTE 698,304.01
8/15/95 14,364,000.00 0.000 STRIPS 13,182,704.64
3/31/96 202,000.00 7.750 T-NOTE 223,272.09
9/30/96 209,000.00 7.000 T-NOTE 227,619.42
3/31/97 217,000.00 6.875 T-NOTE 235,858.55
9/30/97 224,000.00 5.500 T-NOTE 231,719.51
3/31/98 231,000.00 5.125 T-NOTE 234,019.45
8/15/98 236,000.00 0.000 STRIPS 180,457.40
2/15/99 237,000.00 0.000 STRIPS 175,384.74
8/15/99 236,000.00 0.000 STRIPS 168,824.96
2/15/00 236,000.00 0.000 STRIPS 163,007.56
8/15/00 237,000.00 0.000 STRIPS 158,093.22
2/15/01 236,000.00 0.000 STRIPS 152,113.80
8/15/01 7,251,000.00 0.000 STRIPS 4,505,336.34
TOTALS $26,748,000.00 $20,763,032.97
U. S. OBLIGATIONS
Purchased from Proceeds of the Transferred Monevs
Maturity Principal Interest
Date Amount Rate Tvpe Purchase Price
9/30/93 $ 627,000.00 6.125% T-NOTE $ 641,733.86
3/31/94 647,000.00 5.750 T-NOTE 667,571. 75
9/30/94 455,500.61 8.500 T-NOTE 492,066.67
TOTALS $1,729,500.61 $ 1,801,372.28
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SCHEDULE C
Annual Debt Service and Total Debt Service for 1988 Bonds Davable
on each ADril 1 and October 1. as indicated below
Principal Redemption
Year Redeemed Interest Premium Total
October 1993 $504,835 $ 504,835
April 1994 504,835 504,835
October 1994 504,835 504,835
April 1995 504,835 504,835
October 1995 $13,390,000 504,835 $ 267,800 $14,162,635
Annual Debt Service and Total Debt Service for 1991 A Bonds Davable
on each ADril 1 and October 1. as indicated below
Principal
Year Redeemed Interest Total
October 1993 $236,382.50 $ 236,382.50
April 1994 236,382.50 236,382.50
October 1994 236,382.50 236,382.50
April 1995 236,382.50 236,382.50
October 1995 236,382.50 236,382.50
April 1996 236,382.50 236,382.50
October 1996 236,382.50 236,382.50
April 1997 236,382.50 236,382.50
October 1997 236,382.50 236,382.50
April 1998 236,382.50 236,382.50
October 1998 236,382.50 236,382.50
April 1999 236,382.50 236,382.50
October 1999 236,382.50 236,382.50
April 2000 236,382.50 236,382.50
October 2000 236,382.50 236,382.50
April 2001 236,382.50 236,382.50
October 2001 $7,015,000 $236,382.50 $7,251,382.50
C:\DA TA\DELRA Y.34\ESCROW.F 32
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EXHIBIT A
NOTICE OF CALL FOR REDEMPTION
$
CITY OF DELRAY BEACH, FLORIDA
Water and Sewer Refunding Revenue Bonds, Series 1988
Maturing on and after October 1, 1998
NOTICE IS HEREBY GIVEN that, pursuant to Resolution No.
36-88, adopted by the City of Delray Beach, Florida (the "city"),
on June 28, 1988, as amended, supplemented and restated by
Resolution No. 39-88, and Resolution No. 46-88, adopted by the city
on July 12, 1988, and August 18, 1988, respectively (collectively,
the "Resolution"), the City has irrevocably deposited with First
Union National Bank of Florida, as escrow trustee (the "Escrow
Trustee"), in trust, and irrevocably set aside for such payment,
cash and Defeasance Obligations (as such term is defined in the
Resolution) maturing as to principal and interest in such amounts
and at such times as will ensure the availability of sufficient
moneys to pay the principal of, redemption premium, and interest
thereon to the redemption of certain of the outstanding City of
Delray Beach, Florida, Water and Sewer Refunding Revenue Bonds,
Series 1988 (the "Defeased Bonds"), as described below, and that
the Defeased Bonds are deemed to have been paid in accordance with
the terms and provisions of the Resolution, and that the Defeased
Bonds are hereby called for optional redemption on October 1, 1995
(the "Redemption Date"), at a price of 102% of the principal amount
thereof and accrued interest to the Redemption Date.
C:\DATA\DELRA Y .34\ESCROW.F 33
'.
The CUSIP, maturities and principal amounts per maturity to be
redeemed are as follows:
Maturity Principal
Date Amount CUSIP NO.
10/1/98 $ 50,000
10/1/99 1,845,000
10/1/00 1,980,000
10/1/01 2,125,000
10/1/02 2,285,000
10/1/03 2,460,000
10/1/04 2,645,000
The Defeased Bonds subject to optional redemption on the
Redemption Date shall be presented for payment at the principal
corporate trust office of NationsBank of Florida, N .A. , Fort
Lauderdale, Florida, Attention: Corporate Trust Department (the
"Paying Agent"). On or after the Redemption Date, no interest
shall accrue on said Defeased Bonds.
This notice is given in conformity with the provisions of
the Defeased Bonds and the Resolution providing for their issuance,
and the owners of said Defeased Bonds are hereby notified and
requested to present such Defeased Bonds for redemption and payment
as provided above. The Defeased Bonds which have been called for
redemption will be paid from funds irrevocably deposited for this
purpose in an Escrow Deposit Trust Fund established with First
Union National Bank of Florida, as Escrow Trustee for the Defeased
Bonds.
City of Delray Beach, NATIONSBANK OF FLORIDA, N.A.,
Florida, as City as Paying Agent and Bond
Registrar for the Defeased
Bonds
Dated , 1995
C:\DATA\DELRA Y.34\ÐICR.OW.P 34
'f
I
Withholding of 31% of gross redemption proceeds of any payment made
within the united states is required by the Interest and Dividend
Tax Compliance Act of 1983, as amended, unless the paying Agent has
the correct taxpayer identification number (social security or
employer identification number) or exemption certificate of the
payee. Please furnish a properly completed Form W-9 or exemption
certificate or equivalent when presenting your bonds for payment.
*CUSIP numbers have been assigned by Standard & Poor's Corporation
and are included solely for the convenience of the holders.
Neither the city nor the Escrow Trustee shall be responsible for
the selection or use of the CUSIP numbers nor is any representation
made as to their correctness on the Defeased Bonds or as indicated
in any redemption notice.
Instructions to Escrow Trustee:
This notice must be filed by the Escrow Trustee with the Paying
Agent, as provided in section 3.09 of the Escrow Deposit Agreement.
C:\DA TA \DELRA Y .34\ESCROW.F 35
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,
NOTICE OF CALL FOR REDEMPTION
$
CITY OF DELRAY BEACH, FLORIDA
Water and Sewer Revenue Bonds, Series 1991 A
Maturing on and after October 1, 2002
NOTICE IS HEREBY GIVEN that, pursuant to Resolution No.
36-88, adopted by the City of Delray Beach, Florida (the "city"),
on June 28, 1988, as amended, supplemented and restated by
Resolution No. 39-88, adopted by the city on July 12, 1988, as
amended and supplemented by Resolution No. 46-88, adopted by the
city on August 18, 1988, as further amended and supplemented by
Resolution No. 46-96, adopted by the City on April 24, 1990, as
further amended and supplemented (collecti vely, the "Resolution") ,
the City has irrevocably deposited with First Union National Bank
of Florida, as escrow trustee (the "Escrow Trustee"), in trust, and
irrevocably set aside for such payment, cash and Defeasance
Obligations (as such term is defined in the Resolution), maturing
as to principal and interest in such amounts and at such times as
will ensure the availability of sufficient moneys to pay the
principal of and interest thereon to the redemption of certain of
the outstanding City of Delray Beach, Florida, Water and Sewer
Revenue Bonds, Series 1991 A (the "Defeased Bonds"), as described
below, and that the Defeased Bonds are deemed to have been paid in
accordance with the terms and provisions of the Resolution and that
the Defeased Bonds are hereby called for optional redemption on
October 1, 2001 (the "Redemption Date"), at a price of 100% of the
principal amount thereof and accrued interest to the Redemption
Date.
C:\DA TA \DELRA Y .34\ESCR.OW.F 36
'.
,
The CUSIP, maturities and principal amounts per maturity
to be redeemed are as follows:
Maturity Principal
Date Amount CUSIP NO.
10/1/02 $ 125,000
10/1/03 135,000
10/1/04 145,000
10/1/05 3,005,000
10/1/06 3,205,000
10/1/10 400,000
The Defeased Bonds subject to optional redemption on the
Redemption Date shall be presented for payment at the principal
corporate trust office of Midlantic National Bank and Trust
Co./Florida, in Fort Lauderdale, Florida, Attention: Corporate
Trust Department (the "Paying Agent"). On or after the Redemption
Date, no interest shall accrue on said Defeased Bonds.
This notice is given in conformity with the provisions of
the Defeased Bonds and the Resolution providing for their issuance,
and the owners of said Defeased Bonds are hereby notified and
requested to present such Defeased Bonds for redemption and payment
as provided above. The Defeased Bonds which have been called for
redemption will be paid from funds irrevocably deposited for this
purpose in an Escrow Deposit Trust Fund established with First
Union National Bank of Florida, as Escrow Trustee for the Defeased
Bonds.
City of Delray Beach, COMERICA BANK & TRUST, F.S.B., as
as City Paying Agent and Bond Registrar
for the Defeased Bonds
Dated , 1995
C:\DATA\DELRA Y .34\ESCROW.F 37
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·
Withholding of 31% of gross redemption proceeds of any payment made
within the united states is required by the Interest and Dividend
Tax Compliance Act of 1983, as amended, unless the Paying Agent has
the correct taxpayer identification number (social security or
employer identification number) or exemption certificate of the
payee. Please furnish a properly completed Form W-9 or exemption
certificate or equivalent when presenting your bonds for payment.
* CUSIP numbers have been assigned by Standard & Poor's
Corporation and are included solely for the convenience of the
holders. Neither the City nor the Escrow Trustee shall be
responsible for the selection or use of the CUSIP numbers nor
is any representation made as to their correctness on the
Defeased Bonds or as indicated in any redemption notice.
Instructions to Escrow Trustee:
This notice must be filed, by the Escrow Trustee, with the Paying
Agent, as provided in Section 3.09 of the Escrow Deposit Agreement.
C:\DA TA \DELRA Y.34\BSCROW.F 38
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EXHIBIT B
[ATTACH COPY OF SIGNED FORWARD PURCHASE AGREEMENT]
C:\DA TA\DBLRA Y.34\ESCROW.F 39
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·
EXHIBIT C
Acceptance Fee -0-
Eacrow Agent Admini.tration Fe.
(One Time Up Front due at closing) $3,500,00
Miscellaneous
Reimbursement of out-ot-pocket costs including postage,
publication and legal fees if necessary at coat.
Recurrinq: Not expected to exceed $50,00 annually
Forward Purchase Contract Agent
(One Time Up From due at closing $3/500.00
Plu. $50.00 out of pocket expenses on each purchase date
¡.crow Agent/Forward Purchase Contract Counsel $2,500.00
"
,
f ;.)"b, r IJ
PAYING AGBNT AND RBGXSTRAR AGREEKENT
THIS PAYING AGENT AND REGISTRAR AGREEMENT, dated as of
June 1, 1993, by and between the city of Delray Beach, Florida (the
"Issuer"), and First Union National Bank of Florida, a national
banking association, having its principal place of business at 214
Hogan Street, 2nd Floor, Jacksonville, Florida (the "Bank").
Ii 1. ~ Ii .E .s. .s. .E ~ H:
WHEREAS, the Issuer, by the Resolution (as hereinafter
defined), has designated the Bank as Paying Agent and Registrar for
its $ Water and Sewer Refunding Revenue Bonds, Series
1993 A, and $ Water and Sewer Revenue Bonds, Series
1993 B (collectively, the "Bonds"); and
WHEREAS, the Issuer and the Bank desire to set forth the
Bank's duties as Paying Agent and Registrar and the compensation to
be paid the Bank for its services.
NOW, THBREFORB, it is agreed by the parties hereto as
follows:
Section 1. Duties. The Bank agrees to serve as paying
Agent and Registrar for the Bonds and to perform the duties of
Paying Agent and Registrar as specified in or contemplated by a
resolution adopted by the Issuer on July 12, 1988, as amended and
supplemented on October 23, 1990, June 8, 1993, and June 17, 1993,
relating to the issuance of the Bonds (such resolution, as amended
and supplemented herein, collectively, referred to as the
"Resolution").
section 2. DeDosit of Funds. The Issuer shall deposit
or cause to be deposited with the Bank sufficient funds from the
funds pledged for the payment of the Bonds under the Resolution to
pay when due and payable the principal of, premium, if any, and
interest on the Bonds.
section 3. Use of I'unds: Cancelled Bonds. The Bank
shall use the funds received from the Issuer pursuant to section 2
of this Agreement to pay the principal of, premium, if any, and
interest on the Bonds in accordance with the Resolution. The Bank
shall destroy cancelled Bonds and transmit to the Issuer a certifi-
cate of destruction therefor.
section 4. Statements. The Bank shall prepare and shall
send to the Issuer, upon request, written statements of account
relating to all transactions effected by the Bank pursuant to this
Agreement.
C:IDATAIDELRA Y.34\RBOISTRA.V2
,
section 5. Oblioation to Act. The Bank shall be
obligated to act only in accordance with the Resolution and any
written instructions received in accordance therewith; provided,
however, that the Bank is authorized hereby to comply with any
orders, jUdgments, or decrees of any court with or without
jurisdiction and shall not be liable as a result of its compliance
with the same.
Section 6. Reliance bv Bank. The Bank may rely
absolutely upon the genuineness and authorization of the signature
and purported signature of any party upon any instruction, notice,
release, request, affidavit, or other document delivered to it
purportedly pursuant to the Resolution.
Section 7. Indemni tv. Only to the extent permitted
under Florida law, the Issuer hereby agrees to indemnify the Bank
and hold it harmless from any and all claims, liabilities, losses,
actions, suits, of character or nature, which it may incur or with
which it may be threatened by reason of its acting as Paying Agent
or Registrar under the Resolution, unless caused by its willful
misconduct or negligence; and in connection therewith, to indemnify
the Bank against any and all expenses, including attorneys' fees
and the costs of defending an action, suit, or proceedings, or
resisting any claim whether or not such claim is actually filed.
The Issuer's obligations hereunder shall survive any termination of
this Agreement.
section 8. Counsel: Limited Liability. The Bank may
consult with counsel of its own choice and shall have sole and
complete authorization and protection for any action taken or
suffered by it under the Resolution in good faith. The Bank shall
otherwise not be liable for any mistakes of fact or errors of
judgment, or for any acts or omissions of any kind unless caused by
its willful misconduct or negligence.
Section 9. Pees and Expenses. In consideration of the
services rendered by the Bank as Paying Agent and Registrar, the
Issuer agrees to and shall pay to the Bank its proper fees and all
expenses, charges, attorney's fees, and other disbursements
incurred by it or its attorneys, agents, and employees in and about
the performance of its powers and duties as Paying Agent and
Registrar, as set forth in the attached Exhibit A. The Bank shall
not be obligated to allow and credit interest upon any unclaimed
moneys in respect of principal, interest or premium, if any, due in
respect of the Bonds, which it shall at any time receive under any
of the provisions of the Resolution or this Agreement.
section 10. J'urnishino Information: Authorization. The
Bank shall, at all times when requested to do so by the Issuer,
furnish full and complete information pertaining to its functions
as the Paying Agent and Registrar with regard to the Bonds and
shall, without further authorization, execute all necessary and
C:\DATA\DELRAY.34\ROOISTRA.V2 2
,
proper deposit slips, checks, certificates and other documents with
reference thereto.
section 11. Cancellation: Termination. Either of the
parties hereto, at its option, may cancel this Agreement after
giving thirty (30) days' written notice to the other party of its
intention to cancel, and this Agreement may be cancelled at any
time by mutual consent of the parties hereto. This Agreement shall
terminate without further action upon final payment of the Bonds
and the interest appertaining thereto. If any Bond shall not be
presented for payment within the period of three years following
the date when such Bond becomes due, whether by maturity or other-
wise, the Paying Agent shall return to the Issuer the funds there-
tofore held by it for payment of such Bond, and such Bond shall,
subject to the defense of any applicable statute of limitation,
thereafter be an unsecured obligation of the Issuer.
section 12. Surrender of Funds. Reaistration Records:
Notification of Bondholders. In the event of a cancellation of
this Agreement, the Issuer shall deliver releases to the Bank (in
a form acceptable to the Bank), upon demand, and the Bank shall
thereafter, upon demand, pay over the funds on deposit with the
Bank, as Paying Agent and Registrar in connection with the Bonds,
and surrender all registration books and related records, and the
Issuer may appoint and name a successor to act as Paying Agent and
Registrar of the Bonds. The Issuer shall, in such event, at its
expense, notify all holders of the Bonds of the appointment and
name of the successor by providing notice in the manner required
for the redemption of the Bonds.
section 13. Nonassiqnabilitv. This Agreement shall not
be assigned by either party without the written consent of the
other party.
section 14. Modification. No Modification of this
Agreement shall be valid unless made by a written agreement,
executed and approved by the parties hereto.
section 15. Severability. Should any action or part of
any section of this Agreement be declared void, invalid, or unen-
forceable by any court of law for any reason, such determination
shall not render void, invalid, or unenforceable any other section
or other part of any section of this Agreement.
section 16. Governina Law. This Agreement shall be
governed by and interpreted in accordance with the laws of the
State of Florida.
section 17. Keraer or Consolidation of the Bank. Any
corporation into which the Bank may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
C:\DATA\DBLRA Y.34\RBOISTRA. V2 3
,
consolidation to which the Bank shall be a party, shall be the
successor Paying Agent and Registrar under this Agreement, without
the execution or filing of any paper or any further act on the part
of the parties hereto.
IN WITNESS WHERBOI', the parties hereto have caused this
Agreement to be executed by their duly authorized officers and
their official seals to be hereunto affixed and attested as of the
date first above written.
(SEAL) CXTY 01' DELRAY BEACH, I'LORXDA
By:
Attest:
By:
(SEAL) FIRST UNION NATIONAL BANK 01' FLORIDA
By:
As its
C:\DATA\DBLRAY.34\REOISTRA.V2 4
EXHIBIT A
Acceptance Fee -0-
~nnual Administration Fee $600.00
PayaDle in advance
Out of Pocket Expenses
One Time: (expenses incurred for attendance at closing)
Recurring: Not expected to exceed $50.00 annually
H.iscellaneous
Reimbursement of out-of-pocket costs including postage,
publication and legal fees if necessary at cost,
"
.
. . E '/.11Ib, T £ - I
GUARANTY AGREEMENT
GUARANTY AGREEMENT dated as of June 29, 1993 by and
between the city of Delray Beach, Florida, a municipal corporation
organized and existing under the laws of the state of Florida(the
issuer, as "Obligor"); and AMBAC Indemnity Corporation ("AMBAC"),
a Wisconsin-domiciled stock insurance company.
WIT N E SSE T H :
WHEREAS, the obligor has issued its Water and Sewer
Revenue Bonds, Series 1991 A and its Water and Sewer Revenue Bonds,
Series 1991 B (collectively, the "Obligations"), pursuant to the
terms of the Resolution; and
WHEREAS, AMBAC will issue its Surety Bond (the "Surety
Bond"), substantially in the form set forth in Annex A to this
Agreement, guaranteeing certain payments by the Obligor subject to
the terms and limitations of the Surety Bond; and
WHEREAS, to induce AMBAC to issue the Surety Bond, the
Obligor has agreed to pay the premium for such Surety Bond and to
reimburse AMBAC for all payments made by AMBAC under the Surety
Bond from Legally Available Funds, all as more fully set forth in
this Agreement; and
WHEREAS, the Obligor understands that AMBAC expressly
requires the delivery of this Agreement as part of the
consideration for the execution by AMBAC of the Surety Bond.
NOW, THEREFORE, in consideration of the premises and of
the agreements herein contained and of the execution of the Surety
Bond, the Obligor and AMBAC agree as follows:
'I
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ARTICLE I
DEFINITIONS; SURETY BOND
Section 1.0l. Definitions. Except as otherwise
expressly provided herein or unless the context otherwise requires,
the terms which are capitalized herein shall have the meanings
specified in Annex B hereto.
section 1.02. Surety Bond.
(a) AMBAC will issue the Surety Bond in accordance with
and subject to the terms and conditions of the Commitment.
(b) The maximum liability of AMBAC under the Surety Bond
and the coverage and term thereof shall be subject to and limited
by the Surety Bond Coverage and the terms and conditions of the
Surety Bond.
(c) Payments made under the Surety Bond will reduce the
Surety Bond Coverage to the extent of that payment, provided that
the Surety Bond Coverage shall be automatically reinstated to the
extent of the reimbursement of principal by the Obligor of any
payment made by AMBAC. AMBAC shall notify the Paying Agent in
writing no later than the fifth (5th) day following the
reimbursement by the Obligor that the Surety Bond has been
reinstated to the extent of such reimbursement.
section 1.03. Premium. In consideration of AMBAC
agreeing to issue the surety Bond hereunder, the obligor hereby
agrees to payor cause to be paid from Legally Available Funds the
premium set forth in the Commitment.
Section 1.04. certain Other Expenses. The Obligor will
pay all reasonable fees and disbursements of AMBAC's counsel
related to any modification of this Agreement or the Surety Bond
requested by the Obligor.
'.
·
ARTICLE II
REIMBURSEMENT OBLIGATIONS OF OBLIGOR AND SECURITY THEREFOR
section 2.01. Reimbursement for Payments Under the
Surety Bond and Expenses.
(a) The Obligor will reimburse AMBAC, from Legally
Available Funds within the Reimbursement Period, without demand or
notice by AMBAC to the Obligor 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, but not including, the
date of the reimbursement by the Obligor at the Effective Interest
Rate. The Obligor agrees that it shall make monthly level
principal repayments for each Surety Bond Payment during the
Reimbursement Period. Interest on each Surety Bond Payment shall
be paid monthly during the Reimbursement Period. To the extent
that interest payments due hereunder are not paid on a monthly
basis, or are not paid as each principal repayment is made,
interest shall accrue on such unpaid amounts at a rate equal to the
Effective Interest Rate.
(b) The Obligor also agrees to reimburse AMBAC, from
Legally Available Funds, immediately and unconditionally upon
demand for all reasonable expenses incurred by AMBAC in connection
with the Surety Bond and the enforcement by AMBAC of the Obligor's
obligations under this Agreement together with interest on all such
expenses from and including the date which is 30 days from the date
a statement for such expenses is received by the Obligor incurred
to, but not including, the date of payment at the Effective
Interest Rate.
section 2.02. Allocation of Payments. AMBAC and the
Obligor hereby agree that each repayment of principal received by
AMBAC from or on behalf of the Obligor as a reimbursement to AMBAC
as required by section 2.01 (a) hereof shall be applied to reinstate
all or a portion of the Surety Bond Coverage to the extent of such
repayment. Any interest payable pursuant to section 2.01 (a) hereof
shall not be applied to the reinstatement of any portion of the
Surety Bond Coverage.
section 2.03. Security for Payments; Instruments of
Further Assurance. To the extent, but only to the extent, that the
Resolution, pledges to the Owners or any paying agent therefor, or
grants a security interest in and lien on the Net Revenues (as such
term is defined in the Resolution) in order to secure the
Obligations or provide a source of payment for the Obligations, the
Obligor hereby grants to AMBAC a security interest in and lien on,
and pledges to AMBAC all of the Net Revenues as security for
payment of all amounts due hereunder, which security interest, lien
and/or pledge created or granted under this section 2.03 shall be
subordinate to the interests of the Owners and any paying agent
"
·
therefor and any other priority established under the Resolution in
such Net Revenues. The Obligor 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 further instruments as may be required by
law or as shall reasonably be requested by AMBAC 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 AMBAC
under this Section 2.03.
Section 2.04. Unconditional obligation. The obligations
of the Obligor hereunder are absolute and unconditional and will be
paid or performed strictly in accordance with this Agreement,
irrespective of:
(a) any exchange, release or nonperfection of any
security interest in property securing the Obligations or this
Agreement or any obligations hereunder;
(b) whether or not such obligations are contingent or
matured, disputed or undisputed, liquidated or unliquidated.
ARTICLE III
EVENTS OF DEFAULT; REMEDIES
section 3.01. Events of Default. The following events
shall constitute Events of Default hereunder:
(a) The Obligor shall fail to pay to AMBAC 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;
(b) Any material representation or warranty made by the
obligor hereunder or under the Resolution or any statement in the
application for the Surety Bond or any report, certificate,
financial statement or other instrument provided in connection with
the Commitment, the Surety Bond or herewith shall have been
materially false at the time when made;
(c) Except as otherwise provided in this section 3.01,
the Obligor shall fail to perform any of its other obligations
hereunder, provided that such failure continues for more than
thirty (30 ) days after receipt by the Obligor of notice of such
failure to perform;
(d) The Obligor 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,
(iii) apply for or consent to the appointment of a receiver, paying
agent, custodian, sequestrator or similar official for the Obligor
or for a substantial part 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 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
(e) 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 Obligor, or of a
substantial part of its property, under the United states
Bankruptcy Code or any Federal, state or foreign bankruptcy,
insolvency or similar law or (ii) the appointment of a receiver,
paying agent, custodian, sequestrator or similar official for the
Obligor or for a substantial part of its property; and such
proceeding or petition shall continue undismissed for sixty (GO)
days or an order or decree approving or ordering any of the
foregoing shall continue unstayed and in effect for thirty (30)
days.
section 3.02. Remedies. If an Event of Default shall
occur and be continuing, then AMBAC 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 any related instrument and any obligation, agreement or covenant
of the Obligor under this Agreement; provided, however, that AMBAC
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. All rights and remedies of AMBAC under this Section
3.02 are cumulative and the exercise of anyone remedy does not
preclude the exercise of one or more of the other available
remedies.
ARTICLE IV
SETTLEMENT
AMBAC shall have the exclusive right to decide and
determine whether any claim, liability, suit or judgment made or
brought against AMBAC on the Surety Bond shall or shall not be
paid, compromised, resisted, defended, tried or appealed, and
AMBAC's decision thereon, if made in good faith, shall be final and
'. '
·
binding upon the Obligor. An itemized statement of payments made
by AMBAC, certified by an officer of AMBAC, or the voucher or
vouchers for such payments, shall be prima facie evidence of the
liability of the obligor, and if the Obligor fails to reimburse
AMBAC, pursuant to subsection (b) of Section 2.01 hereof, upon the
receipt of such statement of payments, interest shall be computed
on such amount from the date of any payment made by AMBAC at the
rate set forth in subsection (a) of section 2.01 hereof.
ARTICLE V
MISCELLANEOUS
section 5.01. Computations. All computations of
premium, interest and fees hereunder shall be made on the basis of
the actual number of days elapsed over a year of 360 days.
section 5.02. Exercise of Rights. No failure or delay
on the part of AMBAC to exercise any right, power or privilege
under this Agreement and no course of dealing between AMBAC and the
Obligor or any other party shall operate as a waiver of any such
right, power or privilege, nor shall any single or partial exercise
of any such right, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which AMBAC
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 without
notice or demand.
section 5.03. Amendment and Waiver. Any provision of
this Agreement may be amended, waived, supplemented, discharged or
terminated only with the prior written consent of the Obligor and
AMBAC. The Obligor hereby agrees that upon the written request of
the Paying Agent, AMBAC 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. AMBAC agrees to deliver to the Obligor and to the company or
companies, if any, rating the Obligations, a copy of such
substituted Surety Bond.
section 5.04. Successors and Assigns; Descriptive
Headings.
(a) This Agreement shall bind, and the benefits thereof
.,
shall inure to, the Obligor and AMBAC and their respective
successors and assigns, so long as the conditions in the Resolution
are satisfied; provided that the Obligor may not transfer or assign
any or all of its rights and obligations hereunder without the
prior written consent of AMBAC.
(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 5.05. Other Sureties. If AMBAC 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
Obligor to enforce this Agreement, and "AMBAC, tI wherever used
herein, shall be deemed to include such reinsuring surety, as its
respective interests may appear. Notwithstanding the foregoing,
however, no such reinsurance arrangement shall operate to release
AMBAC of its liability under the Surety Bond for the full amount of
the Surety Bond Coverage.
Section 5.06. signature on Bond. The Obligor'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 indemnity, nor the return
or exchange of any collateral that may have been obtained.
Section 5.07. Waiver. The Obligor 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 obligor's request and in reliance on the
Obligor's promise to execute this Agreement.
section 5.08. 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
either of the parties hereto or the Paying Agent may hereafter
specify in writing to the others:
If to the Obligor: City of Delray Beach, Florida
100 N.W. First Avenue
Delray Beach, Florida 33444
Att: Director of Finance
Tel: (407) 243-7116
Fax: (407) 243-3774
If to the paying Agent: comerica Bank & Trust, F. S. B.
5401 North Federal Highway
Fort Lauderdale, Florida 33308
"
.
.
Att: Corporate Trust Department
Tel: (3 05)
Fax: (305)
If to AMBAC: AMBAC Indemnity corporation
One state street Plaza
17th Floor
New York, New York 10004
Attention: General Counsel
Tel: (212) 668-0340
Fax: (212) 519-9190
Section 5.09 . Survival of Representations and
Warranties. All representations, warranties and obligations
contained herein shall survive the execution and delivery of this
Agreement and the Surety Bond.
Section 5.10. Governing Law. This Agreement and the
rights and obligations of the parties under this Agreement shall be
governed by and construed and interpreted in accordance with the
laws of the state.
section 5.11. Counterparts. 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
deemed to be an original instrument. Complete counterparts of this
Agreement shall be lodged with the Obligor and AMBAC.
Section 5.12. Severability. In the event any provision
of this Agreement shall be held invalid or unenforceable by any
court of competent jurisdiction, such holding shall not invalidate
or render unenforceable any other provision hereof.
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.
(Seal) city of Delray Beach, Florida
"
Attest: By:
City Clerk
Title:
AMBAC Indemnity Corporation
By:
Title:
..
ANNEX A
SURETY BOND
,
ANNEX B
DEFINITIONS
For all purposes of this Agreement, except as otherwise
expressly provided herein or unless the context otherwise requires,
all capitalized terms shall have the meaning as set out below.
"Agreement" means this Guaranty Agreement.
"AMBAC" has the same meaning as set forth in the first
paragraph of this Agreement.
"Commitment" means the AMBAC Commitment for Surety Bond in
the form attached hereto as Annex C.
"Debt Service Payments" means those payments required to be
made by the Obligor which will be applied to payment of principal
of and interest on the Obligations.
"Effective Interest Rate" means the lesser of the
Reimbursement Rate or the maximum rate of interest permitted by
then applicable law; provided, however, that the Effective Interest
Rate shall in no event be less than the interest rate on the
Obligations.
"Event of Default" shall mean those events of default set
forth in section 3.01 of this Agreement.
"Legally Available Funds" means the Net Revenues of the
obligor.
"Net Revenues" has the meaning assigned to such term in the
Resolution.
"Obligations" has the same meaning as set forth in the second
paragraph of this Agreement.
"Obligor" has the same meaning as set forth in the first
paragraph of this Agreement.
"Owners" means the registered owner of any Obligation as
indicated in the books maintained by the applicable paying agent,
the Obligor or any designee of the Obligor for such purpose. The
term "Owner" shall not include the Obligor or any person or entity
whose obligation or obligations by agreement constitute the
underlying security or source of payment for the Obligations.
"Paying Agent" means Comerica Bank & Trust , F.S.B. and its
successors and assigns, acting as paying agent and registrar for
the Obligations.
"Reimbursement Period" means, with respect to a particular
Surety Bond Payment, the period commencing on the date of such
" '
.
Surety Bond Payment and ending 12 months following such Surety Bond
Payment.
"Reimbursement Rate" means citibank's prime rate plus two (2)
percent per annum, as of the date of such Surety Bond Payment, said
"prime rate" being the rate of interest announced from time to time
by citibank, New York, New York, as its prime rate. The rate of
interest shall be calculated on the basis of a 360-day year.
"Resolution" means collectively, Resolution No. 39-88 and
Resolution No. 104-90, adopted by the obligor on July 12, 1988 and
October 23, 1990, as such resolutions have been amended and
supplemented.
"State" means the State of Florida.
"Surety Bond" means the surety bond issued by AMBAC
substantially in the form attached to this Agreement as Annex A.
"Surety Bond Coverage" means the amount available at any
particular time to be paid to the Paying Agent under the terms of
the Surety Bond, which amount shall never exceed $5,260,000.00.
"Surety Bond Payment" means an amount equal to the Debt
Service Payment less (i) that portion of the Debt Service Payment
paid by the Obligor, and (ii) other funds legally available to the
Paying Agent for payment to the Owners, all as certified by the
Paying Agent in a demand for payment rendered pursuant to the terms
of the Surety Bond.
.
,
ANNEX C
COMMITMENT
"
frij'/6IT £- J
GUARANTY AGREEMENT
GIJAl<.WTy A.GREEMENT <iate<i as of June 29, 1993 by an<i
between the City of Delray Beach, Flori<ia, a municipal corporation
organize<i an<i eXisting un<ier the laws Of the State of Flori<ia(the
issuer, as "Obligor"); an<i il!!BA.C In<iemn i ty Corpora t i on (" il!!BA.C" J
a WisconSin-<iomiCile<i stock insurance Company. ,
WIT N E SSE T H :
WHEREl\s, the Obligor will issue its Water an<i Sewer
Refun<iing Revenue Bon<is, Series 1993 A. an<i its Water an<i SeWer
ReVenue Bon<is, Series 1993 B (COllectively, the "Obligations"),
Pursuant to the terms of the Resolution; an<i
WHEREAS, il!!BA.C will issue its Surety Bon<i (the "Surety
Bon<i"), SUbstantially in the form Set forth in Annex A. to this
A.greement, guaranteeing certain paYments by the Obligor SUbject to
the terms an<i limitations of the Surety Bon<i; an<i
WHEREA.S, to in<iuce il!!BAc to issue the Surety Bon<i, the
Obligor has agree<i to Pay the premium for sUch Surety Bon<i an<i to
reimburse il!!BAc for all paYments ma<ie by il!!BA.c un<ier the Surety
Bon<i from Legally A.vailable Fun<is, all as more fUlly Set forth in
this Agree~ent; and
WHERElIs, the Obligor un<ierstan<is that il!!BA.c expreSsly
requires the <ielivery of this A.greement as part of the
COnsi<ieration for the execution by il!!BA.c of the Surety Bon<i.
NOW, THEREFORE, in COnsi<ieration of the premises an<i Of
the agreements herein Containe<i an<i of the exeCution Of the Surety
Bond, the Obligor an<i il!!BA.C agree as fOllows:
1
I
ARTICLE I
DEFINITIONS; SURETY BOND
Section 1.01. Definitions. Except as otherwise
expressly provided herein or unless the context otherwise requires,
the terms which are capitalized herein shall have the meanings
specified in Annex B hereto.
section 1.02. Surety Bond.
(a) AMBAC will issue the Surety Bond in accordance with
and subject to the terms and conditions of the Commitment.
(b) The maximum liability of AMBAC under the Surety Bond
and the coverage and term thereof shall be subject to and limited
by the Surety Bond Coverage and the terms and conditions of the
Surety Bond.
(c) Payments made under the Surety Bond will reduce the
Surety Bond Coverage to the extent of that payment, provided that
the Surety Bond Coverage shall be automatically reinstated to the
extent of the reimbursement of principal by the Obligor of any
payment made by AMBAC. AMBAC shall notify the Paying Agent in
writing no later than the fifth (5th) day following the
reimbursement by the Obligor that the Surety Bond has been
reinstated to the extent of such reimbursement.
section 1.03. Premium. In consideration of AMBAC
agreeing to issue the surety Bond hereunder, the Obligor hereby
agrees to payor cause to be paid from Legally Available Funds the
premium set forth in the Commitment.
section 1.04. Certain Other Expenses. The obligor will
pay all reasonable fees and disbursements of AMBAC's counsel
related to any modification of this Agreement or the Surety Bond
requested by the Obligor.
2
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ARTICLE II
REIMBURSEMENT OBLIGATIONS OF OBLIGOR AND SECURITY THEREFOR
Section 2.01. Reimbursement for Payments Under the
Surety Bond and Expenses.
(a) The obligor will reimburse AMBAC, from Legally
Available Funds within the Reimbursement Period, without demand or
notice by AMBAC to the Obligor 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, but not including, the
date of the reimbursement by the Obligor at the Effective Interest
Rate. The Obligor agrees that it shall make monthly level
principal repayments for each Surety Bond Payment during the
Reimbursement Period. Interest on each Surety Bond Payment shall
be paid monthly during the Reimbursement Period. To the extent
that interest payments due hereunder are not paid on a monthly
basis, or are not paid as each principal repayment is made,
interest shall accrue on such unpaid amounts at a rate equal to the
Effective Interest Rate.
(b) The Obligor also agrees to reimburse AMBAC, from
Legally Available Funds, immediately and unconditionally upon
demand for all reasonable expenses incurred by AMBAC in connection
with the Surety Bond and the enforcement by AMBAC of the Obligor's
obligations under this Agreement together with interest on all such
expenses from and including the date which is 30 days from the date
a statement for such expenses is received by the Obligor incurred
to, but not including, the date of payment at the Effective
Interest Rate.
section 2.02. Allocation of Payments. AMBAC and the
Obligor hereby agree that each repayment of principal received by
AMBAC from or on behalf of the Obligor as a reimbursement to AMBAC
as required by section 2.01(a) hereof shall be applied to reinstate
all or a portion of the Surety Bond Coverage to the extent of such
repayment. Any interest payable pursuant to Section 2.01 (a) hereof
shall not be applied to the reinstatement of any portion of the
Surety Bond Coverage.
section 2.03. Security for Payments; Instruments of
Further Assurance. To the extent, but only to the extent, that the
Resolution, pledges to the Owners or any paying agent therefor, or
grants a security interest in and lien on the Net Revenues (as such
term is defined in the Resolution) in order to secure the
Obligations or provide a source of payment for the Obligations, the
Obligor hereby grants to AMBAC a security interest in and lien on,
and pledges to AMBAC all of the Net Revenues as security for
payment of all amounts due hereunder, which security interest, lien
3
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,
(iii) apply for or consent to the appointment of a receiver, paying
agent, custodian, sequestrator or similar official for the Obligor
or for a substantial part 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 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
(e) 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 Obligor, or of a
substantial part of its property, under any Federal, state or
foreign bankruptcy, insolvency or similar law or (ii) the
appointment of a receiver, paying agent, custodian, sequestrator or
similar official for the Obligor or for a substantial part of its
property: and such proceeding or petition shall continue
undismissed for sixty (60) days or an order or decree approving or
ordering any of the foregoing shall continue unstayed and in effect
for thirty (30) days.
section 3.02. Remedies. If an Event of Default shall
occur and be continuing, then AMBAC 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 any related instrument and any obligation, agreement or covenant
of the Obligor under this Agreement; provided, however, that AMBAC
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. All rights and remedies of AMBAC under this section
3.02 are cumulative and the exercise of anyone remedy does not
preclude the exercise of one or more of the other available
remedies.
ARTICLE IV
SETTLEMENT
5
'I
AMBAC shall have the exclusive right to decide and
determine whether any claim, liability, suit or judgment made or
brought against AMBAC on the Surety Bond shall or shall not be
paid, compromised, resisted, defended, tried or appealed, and
AMBAC's decision thereon, if made in good faith, shall be final and
binding upon the obligor. An itemized statement of payments made
by AMBAC, certified by an officer of AMBAC, or the voucher or
vouchers for such payments, shall be prima facie evidence of the
liability of the obligor, and if the Obligor fails to reimburse
AMBAC, pursuant to subsection (b) of section 2.01 hereof, upon the
receipt of such statement of payments, interest shall be computed
on such amount from the date of any payment made by AMBAC at the
rate set forth in subsection (a) of Section 2.01 hereof.
ARTICLE V
MISCELLANEOUS
Section 5.01. Computations. All computations of
premium, interest and fees hereunder shall be made on the basis of
the actual number of days elapsed over a year of 360 days.
Section 5.02. Exercise of Rights. No failure or delay
on the part of AMBAC to exercise any right, power or privilege
under this Agreement and no course of dealing between AMBAC and the
Obligor or any other party shall operate as a waiver of any such
right, power or privilege, nor shall any single or partial exercise
of any such right, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which AMBAC
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 without
notice or demand.
Section 5.03. Amendment and Waiver. Any provision of
this Agreement may be amended, waived, supplemented, discharged or
terminated only with the prior written consent of the Obligor and
AMBAC. The obligor hereby agrees that upon the written request of
the paying Agent, AMBAC 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. AMBAC agrees to deliver to the Obligor and to the company or
6
,
companies, if any, rating the Obligations, a copy of such
substituted Surety Bond.
section 5.04. Successors and Assigns; Descriptive
Headings.
(a) This Agreement shall bind, and the benefits thereof
shall inure to, the obligor and AMBAC and their respective
successors and assigns, so long as the conditions in the Resolution
are satisfied; provided that the obligor may not transfer or assign
any or all of its rights and obligations hereunder without the
prior written consent of AMBAC.
(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 5.05. Other Sureties. If AMBAC 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
Obligor to enforce this Agreement, and "AMBAC," wherever used
herein, shall be deemed to include such reinsuring surety, as its
respective interests may appear. Notwithstanding the foregoing,
however, no such reinsurance arrangement shall operate to release
AMBAC of its liability under the Surety Bond for the full amount of
the Surety Bond Coverage.
section 5.06. Signature on Bond. The Obligor'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 indemnity, nor the return
or exchange of any collateral that may have been obtained.
Section 5.07. Waiver. The Obligor 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 obligor's request and in reliance on the
obligor's promise to execute this Agreement.
Section 5.08. 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
either of the parties hereto or the Paying Agent may hereafter
specify in writing to the others:
If to the Obligor: City of Delray Beach, Florida
7
I
,
100 N.W. First Avenue
Delray Beach, Florida 33444
Att: Director of Finance
Tel: (407 ) 243-7116
Fax: (407) 243-3774
If to the Paying Agent: First Union National Bank of Florida
Corporate Trust - FL 6065
First Union Financial Center, 14th Fl.
200 South Biscayne Blvd.
Miami, Florida 33131
Tel: (305) 984-4685
Fax: (305 ) 789-4778
If to AMBAC: AMBAC Indemnity Corporation
One State street Plaza
17th Floor
New York, New York 10004
Attention: General Counsel
Tel: (212 ) 668-0340
Fax: (212 ) 519-9190
Section 5.09. Survival of Representations and
Warranties. All representations, warranties and obligations
contained herein shall survive the execution and delivery of this
Agreement and the Surety Bond.
section 5.10. Governing Law. This Agreement and the
rights and obligations of the parties under this Agreement shall be
governed by and construed and interpreted in accordance with the
laws of the State.
section 5.1l. Counterparts. 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
deemed to be an original instrument. Complete counterparts of this
Agreement shall be lodged with the Obligor and AMBAC.
Section 5.12. Severability. In the event any provision
of this Agreement shall be held invalid or unenforceable by any
court of competent jurisdiction, such holding shall not invalidate
or render unenforceable any other provision hereof.
8
"
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.
(Seal) City of Delray Beach, Florida
Attest: By:
City Clerk
Title:
AMBAC Indemnity Corporation
By:
Title:
9
"
ANNEX A
SURETY BOND
10
"
ANNEX B
DEFINITIONS
For all purposes of this Agreement, except as otherwise
expressly provided herein or unless the context otherwise requires,
all capitalized terms shall have the meaning as set out below.
"Agreement" means this Guaranty Agreement.
"AMBAC" has the same meaning as set forth in the first
paragraph of this Agreement.
"Commitment" means the AMBAC Commitment for Surety Bond in
the form attached hereto as Annex C.
"Debt Service Payments" means those payments required to be
made by the Obligor which will be applied to payment of principal
of and interest on the Obligations.
"Effective Interest Rate" means the lesser of the
Reimbursement Rate or the maximum rate of interest permitted by
then applicable law: provided, however, that the Effective Interest
Rate shall in no event be less than the interest rate on the
obligations.
"Event of Default" shall mean those events of default set
forth in section 3.01 of this Agreement.
"Legally Available Funds" means the Net Revenues of the
Obligor.
"Net Revenues" has the meaning assigned to such term in the
Resolution.
"Obligations" has the same meaning as set forth in the second
paragraph of this Agreement.
"Obligor" has the same meaning as set forth in the first
paragraph of this Agreement.
"Owners" means the registered owner of any Obligation as
indicated in the books maintained by the applicable paying agent,
the Obligor or any designee of the Obligor for such purpose. The
term "Owner" shall not include the Obligor or any person or entity
whose obligation or obligations by agreement constitute the
underlying security or source of payment for the Obligations.
"Paying Agent" means First Union National Bank of Florida and
its successors and assigns, acting as paying agent and registrar
for the Obligations.
11
,
"Reimbursement period" means, with respect to a particular
Surety Bond Payment, the period commencing on the date of such
Surety Bond Payment and ending 12 months following such Surety Bond
Payment.
"Reimbursement Rate" means citibank's prime rate plus two (2)
percent per annum, as of the date of such Surety Bond Payment, said
"prime rate" being the rate of interest announced from time to time
by citibank, New York, New York, as its prime rate. The rate of
interest shall be calculated on the basis of a 360-day year.
"Resolution" means collectively, Resolution No. 39-88,
Resolution No. 104-90, Resolution No. 50-93, Resolution No. 51-93
and Resolution No. 60-93 adopted by the Obligor on July 12, 1988,
October 23, 1990, June 8, 1993 and June 17, 1993, as such
resolutions have been amended and supplemented.
"State" means the State of Florida.
"Surety Bond" means the surety bond issued by AMBAC
sUbstantially in the form attached to this Agreement as Annex A.
"Surety Bond Coverage" means the amount available at any
particular time to be paid to the Paying Agent under the terms of
the Surety Bond, which amount shall never exceed $5,260,000.00.
"Surety Bond Payment" means an amount equal to the Debt
Service Payment less ( i) that portion of the Debt Service Payment
paid by the Obligor, and (ii) other funds legally available to the
Paying Agent for payment to the Owners, all as certified by the
Paying Agent in a demand for payment rendered pursuant to the terms
of the Surety Bond.
12
'I
ANNEX C
COMMITMENT
13
'I
œmm· ExhibIT f
PUBilC F1NANCIALMANAGEMENr, INC.
P"wancial and tnvcøncm AdVisocs
5900 Entetpdse Parkway
Fort. M~ ~3300S
81~g~7117 ~ 813-993-9384
June 17, 1993
Board of City Commissioners
City of Delray Beach
100 N.W. 1st Avenue
Dehay Beach, FL :33444-
Dear Comrn;ssioners:
In serving in our capacity as financial advísor to the City of Delray Beach on the City's
Water and Sewer.Reventle Refunding Bonds, Series 1993 A, and Water and Sewer Revenue
Bonds, Series 1993 B, we are recommending the use of the negotiated sale process as opposed to
a competitive sale fODDat. We believe that given the complexities of the tr.msaetion, the cmrent
volatility of the market, and the need to purchase government securities for the escrow of the
refunded bonds thà.t the negotiated sale is preferred. Additionally, we are of the opinion that the
use of municipal bond insurance and a surety bond in lieu of the debt service reserve fund both
provide economic benefit for the City and, therefore. recommend the me of each of thetn.
Sincerely.
&JaQQK)It/~
Lavon Wisher
Managing Director
A!Jama. l'brt ~ HiIn:isburg Mcmphi$ New-York. on.ruro pt,.i,Qdtlphla San Pr.mdSCO St3te~
@ An AffiIiaIe of Marini!' Midland Sank, NA
,
CITY OF DELRA Y BEACH, FLORIDA
$21,238,997.35
Water and Sewer Refunding Revenue Bonds,
Series 1993 A
$6,865,477.25
Water and Sewer Revenue Bonds,
Series 1993 B
Financial Advisor's Memorandum
June 17, 1993
I Public Financial Management, Inc.
5900 Enterprise Parkway
Fort Myers, FL. 33905
(813) 693-7117
Atlanta, Austin, Boston, Denver, Fort Myers, Harrisburg, Memphis, New York, Orlando, Philadelphia, Portland, San Francisco
TABLE OF CONTENTS
Financial Advisor's Memorandum
CITY OF DELRAY BEACH, FLORIDA
Water and Sewer Refunding Revenue Bonds,
Series 1993 A
Water and Sewer Revenue Bonds,
Series 1993 B
Page
TAB I
Introduction, Description of the Bonds &
Plan of Finance 1
Market Conditions 6
Pricing of the Series 1993 Bonds 10
Conclusions and Recommendations 11
TAB II
Debt Service Schedule 12
Components of Underwriters' Compensation
Comparison of Underwriting Spreads 18
Cost of Issuance 21
Comparable Municipal Issues 22
II
II
II Report of the Independent Financial Advisor
III Regarding the Issuance of
II $21,238,997.35 Water and Sewer Refunding Revenue Bonds, Series 1993 A
$6,865,477.25 Water and Sewer Revenue Bonds, Series 1993 B
June 17,1993
Public Financial Management, Inc.
The purpose of this report is to summarize the plan of finance. market conditions. and
credit factors related to the issuance by the City of Delray Beach (the "City") of $21,238,997.35
Water and Sewer Refunding Revenue Bonds, Series 1993 A and $6,865,477.25 Water and Sewer
Revenue Bonds, Series 1993 B (the "Series 1993 Bonds"). This report is a record for the City
regarding the acceptability of the Bond Purchase Agreement ("BPA") presented to the City by
Smith Barney, Harris Upham & Co., Stifel, Nicolaus & Co., Inc. and Hanifen, Imhoff Inc. (the
"Underwriters"). This report is the recommendation from Public Financial Management, Inc.
("PFM"), the independent financial advisor to the City, with respect to the sale of the Series 1993
Bonds.
The Series 1993 Bonds
The City began exploring the possibility of refunding the Water and Sewer Refunding
Revenue Bonds, Series 1988 (the "Series 1988 Bonds") and the Water and Sewer Revenue
Bonds, Series 1991 A & B (the "Series 1991 Bonds") in April 1993. Currently low interest rates
allowed the City to take advantage of the lower cost of capital and refinance a portion of the
Series 1988 and a portion of the Series 1991 Bonds. Additionally, the City required $6,674,000
for new capital projects that was combined with this bond issue.
The Financing Program
The Purpose: The proceeds of the 1993 A Bonds together with other funds of the City
will be used (i) to advance refund and defease a portion of the City's outstanding Water and
Sewer Refunding Revenue Bonds, Series 1988 and a portion of the City's outstanding Water and
Sewer Revenue Bond, Series 1991 A, (ü) to provide a Reserve Account Credit Facility Substitute
or make a deposit into the Debt Service Reserve Account to fund, together with proceeds of the
Series 1993 B Bonds the Debt Service Reserve Fund Requirement, (iii) to pay the cost of issuing
the 1993 A Bonds. The proceeds of the 1993 B Bonds and other available funds of the City will
be used to (i) to provide funds for the acquisition and construction of certain additions, extcnsion
1 Public Financial Management, Inc. Page 1
I
II
I
I
I and improvements to the City's Combined Public Utility, (ii) to provide a Reserve Account
Credit Facility Substitute or to make a deposit into the Debt Serve Reserve Account to fund
I together with proceeds to the 1993 A Bonds the Debt Serve Reserve Requirement for the 1993
Bonds and (ill) to pay costs of issuing the 1993 B Bonds.
I The 1993 Project: The City has identified the primary use for the 1993 B proceeds for
the acquisition, construction and installation of certain additions, extensions and improvements
to the Combined Public Utility, which will include (i) two golf course wells and mains, (ii) land
acquisition associated with the southwest storage tank, (iii) Northeast storage tank
I improvements, (iv) installation of six 12" water mains and (v) production wells and associated
piping for the Morikami production wells, (vi) high service pumps for the North storage tank and
(vii) other projects referenced in the resolution relating to the issuance of the 1991 B Bonds
I which were not finance with the proceeds thereof.
Structure of the Bonds: The principal repayment schedule for the Series 1993 Bonds
has been structured to create level debt service (inclusive of all water and sewer debt) from 1993
I through 2000 reducing annual debt during that time, with an increase from 2001 through 2014.
Annual principal payments will commence on October 1, 1998 for the Series A Bonds and
October 1,2001 for the Series B Bonds. The final maturity of the Series A Bonds is October 1,
I 2010 and the final maturity for the Series 1993 B Bonds is October 1, 2014. Interest on the
Series 1993 Bonds is payable semiannually on April 1 and October 1 of each year commencing
October 1, 1993.
I The current interest bonds are dated June 1, 1993 and the capital appreciation bonds are
dated with the delivery date (anticipated June 29, 1993). The Series 1993 Bonds are being issued
in fully registered, certificated form in initial denominations of $5,000 or multiples of $5,000.
I The annual debt service schedule is provided behind Tab II.
I Security: The Series 1993 Bonds are limited obligations of the City, payable solely from
and secured by a lien on the Net Revenue and certain funds held under the Bond Resolution and
investment income thereon, and money attributable to certain proceeds of the 1993 Bonds..
Additionally, payment of principal and interest when due is guaranteed by municipal bond
I insurance policy to be issued simultaneously with the delivery of the 1993 Bonds by AMBAC
Indemnity Corporation.
Rates: The City has covenanted to fix, establish and maintain such rates and collect such
I fees, rental or other charges for the use of the services of the facilities of its Combined Public
Utility, and revise the same from time to time whenever necessary, as will always provide in
each Fiscal Year Net Revenues, at least adequate to pay at least 110% of the Annual Debt
Service Requirement of the Bonds, and that such Net Revenue Will be sufficient to make all the
payments required by the terms of the Bond Resolution. The City has also covenanted that the
Net Revenue will be sufficient to make all payments required by the Bond Resolution and that
such rates, fees, rentals and other charges shall not be so reduced as to be insufficient for such
purposes.
The Refunding Plan: The City determined it was in their best interest to refund a
portion of the Water and Sewer Refunding Revenue Bonds, Series 1988 (the "Series 1988
Bonds") and the Water and Sewer Revenue Bonds, Series 1991 (the "Series 1991 Bonds"). Upon
delivery of the 1993 A Bonds, the City will deposit a portion of the proceeds from the sale of the
Series 1993 A Bonds along with certain other funds made available through the refunding in an
irrevocable escrow account. The amount deposited will be held by the Escrow Agent for the
holders of the Refunded Bonds and will be invested in securities that are direct obligations-of the
Public Financial Management, Inc. Page 2
United States and will mature at the necessary times to pay principal of, redemption premium, if
any, and interest on the Refunded Bonds,
The City approved the purchase the securities for the escrow by Stifel Nicholas & Co.,
Inc. The fee agreed upon with the City was a four basis point (.04%) of yield on a portion of the
securities.
Tax Law Constraints. Due to the fact the Series 1988 Bonds were refunding bonds
there were complex tax law considerations to analyze for this refunding. The allocation of
"refundable" bonds was based on a fonnula scheduled to be changed by the new federal
regulations expected to be released June 11, 1993 and effective July 1, 1993. This would have
significantly decreased the level of savings available to the City through the refunding. The
fmancing team worked to assure the City could close the bond issue no later than June 30, 1993.
On June 14, 1993 the new regulations were released and the current regulations were extended
until August 15, 1993. This gave the financing team the ability to postpone the sale of the bonds
if the market conditions were not favorable to the City.
Sources and Uses of Funds: The estimated sources and uses of funds for the Series
1993 Bonds is provided below.
Sources of Funds Refunding New Money TOTAL
Par Amount of Bonds 21,238,997.35 6,865,477.25 28,104,474.60
Sinking Fund 370,608.75 0.00 370,608.75
~ Debt Service Reserve Fund (Existing) 0.00 0.00 0.00
Accrued Interest 82,052.93 3,939.83 85,992.76
Existing Debt Service Reserve Fund 1.470,670.00 0.00 1,470,670.00
Original Issue Discount (161,523.70) (9,230.95) (170,754.65)
Total 23,000,805.33 6,860,186.13 29,860,991.46
Uses of Funds
Estimated Cost of the Escrow (1 ) 22.465,103.63 0.00 22,465,103.63
Construction Fund Deposit 0.00 6,674,000.00 6,674,000.00
Accrued Interest 82,052.93 3,939.83 85,992.76
1991 Debt Service Reserve Fund Surety 2.700% 10,056.17 3,250.64 13,306.82
1993 Debt Service Reserve Fund Surety 2.700% 39,708.09 0.00 39,708.09
Underwriter's Discount 0.950% 201,770.47 65,222.03 266,992.51
Costs of Issuance 109,578.80 35,421.20 145,000.00
Bond Insurance 89,012.75 74,242.09 163,254.83
Contingency 3,522.49 4,110.34 7,632.82
Total 23,000,805.33 6,860,186.13 29,860,991.46
Original Issue Discount: The Series 1993 Bonds were structured to include an original
issue discount ("OlD") in order to improve their marketability and, therefore, produce a lower
overall borrowing cost. Under the OlD structure, certain maturities of the Series 1993 Bonds
were sold at a coupon or interest rate which is below current market interest rates. In order to
II Public Financial Management, Inc. Page 3
I
I
I give the investor an actual rate of return or "yield" which is equal to the current market interest
rates, these maturities were sold at a discount below par value.
I While an OID structure results in interest payments which are lower over the life of the
issue, the fact that the bonds are sold at a discount means that a greater principal amount of
I bonds must be sold in order to achieve the amount of proceeds which would have been provided
under a par offering. The difference between the total par amount of the Series 1993 Bonds and
the OlD represents the net amount of bond proceeds which were received by the City.
I Capital Appreciation Bonds The Series 1993 Bonds include a number of Capital
Appreciation Bonds or "Zero Coupon" bonds. This debt instrument is a bond that does not pay
interest semi-annually but is sold at a deep discount and pays all interest at maturity. This tool
I was effective for the City's debt structuring to "wrap-around" the existing debt and minimize the
rate impact of the current customers.
Municipal Bond Insurance: Concurrent with the issuance of the Series 1993 Bonds,
I AMBAC Indemnity Corporation issued its Municipal Bond Insurance Policy for the Series 1993
Bonds (the "Policy"). The Policy unconditionally guarantees the payment of that portion of the
principal of and interest on the Series 1993 Bonds.
I PFM assisted the City in submitting a comprehensive insurance package to the three
major bond insurers. The City received bids from all three insurers. The estimated range of
I savings the City received by competitively bidding the insurance is $20,000 to $60,000 based on
the other bids received.
Municipal Bond Ratings: The Series 1993 Bonds are assigned ratings by Moody's
I Investors Service, Inc. ("Moody's") and Standard and Poor's Corporation of Aaa and AAA,
respectively, with the understanding that upon delivery of the Series 1993 Bonds a policy
insuring the payment when due the principal of and interest on the Series 1993 Bonds will be
I issued by AMBAC. The City applied for and received an "underlying" rating of A from
Moody's, This underlying rating illustrates the very strong credit strength of the City's
Combined Public Utility System and provides additional markets for the City's bonds due to the
fact some bond investors require an underlying rating of an A or better to invest.
I Debt Service Reserve Fund: The debt service reserve fund requirement is the lesser of
(i) maximum Annual Debt Service Requirement, (ii) 125% of the average annual Debt Service
I Requirement, or (iii) 10% of the proceeds of all Outstanding Bonds. The City has the option of
using a debt service reserve fund insurance policy (the "Surety") rather than funding the debt
service reserve fund with bond proceeds. AMBAC agreed to issue a Surety for both the Series
I 1993 and the City's outstanding 1991 Bonds. This will allow the City to release the $1,470,670
in the existing debt service reserve fund and reduce the borrowing requirements of the City.
Limited Obligations: The 1993 Bonds are limited obligations of the City payable solely
I from the Net Revenue (defined herein), certain funds held under the Bond Resolution and
investment income thereon, an money attributable to certain proceeds of the 1993 Bonds. The
1993 Bonds shall not be deemed to constitute a debt or pledge of the full faith and credit of the
II City, of Palm Beach County, Florida of the State of Florida or of any political subdivision
thereof within the meaning of any constitutional, legislative or charter provisions or limitation,
and the registered owners thereof shall never have the right, directly or indirectly, or required or
I compel the exercise of the ad valorem taxing power of the City, of Palm Beach County, Florida,
the State of any political subdivision thereof, or taxation in any form on any real or personal
property for the payment thereof.
I
II Public Financial Management, Inc. Page 4
I
II
I Optional Redemption
I 1993 A Current Interest Bonds. The 1993 A Current Interest Bonds, Maturing prior to
October 1,2003 are not subject to redemption prior to maturity. The 1993 A Current Interest
Bonds maturing on or after October 1, 2003 are subject to redemption at the option of the City
I prior to their respective date of maturity on or after October 1, 2003, in whole or in part at any
time, if in part in any order of maturity selected by the City and by lot within a maturity, at
redemption prices (expressed as a percentage of the principal amount of the 1993 a Current
Interest Bonds to be redeemed) set forth below, together with accrued interest to the dated fixed
I for redemption:
Redemption Period (both dates inclusiv~) Redemption Price
I October 1, 2oo3.to September 30, 2004 102%
October 1, 2004 to September 30, 2005 101%
October 1, 2005 and thereafter 100%
I 1993 B Current Interest Bonds. The 1993 B Current Interest Bonds, Maturing prior to
October 1, 2003 are not subject to redemption prior to maturity. The 1993 B Current Interest
I Bonds maturing on or after October 1,2003 are subject to redemption at the option of the City
prior to their respective date of maturity on or after October 1, 2003, in whole or in part at any
time, if in part in any order of maturity selected by the City and by lot within a maturity, at
I redemption prices (expressed as a percentage of the principal amount of the 1993 B Current
Interest Bonds to be redeemed) set forth below, together with accrued interest to the dated fixed
for redemption:
I Redemption Period (both dates inclusive) Redemption Price
October 1, 2003 to September 30, 2004 102%
I October 1, 2004 to September 30, 2005 101%
October 1, 2005 and thereafter 100%
I 1993 B Capital Appreciation Bonds, The 1993 B Capital Appreciation Bonds are not subject
to redemption prior to maturity
i
,
I
I
Public Financial Management, Inc. Page 5
,
Optional Redemption
1993 A Current Interest Bonds. The 1993 A Current Interest Bonds, Maturing prior to
October 1, 2003 are not subject to redemption prior to maturity. The 1993 A Current Interest
Bonds maturing on or after October 1, 2003 are subject to redemption at the option of the City
prior to their respective date of maturity on or after October 1, 2003, in whole or in part at any
time, if in part in any order of maturity selected by the City and by lot within a maturity, at
redemption prices (expressed as a percentage of the principal amount of the 1993 a Current
Interest Bonds to be redeemed) set fonh below, together with accrued interest to the dated fixed
for redemption:
Redemption Period (both dates inclusive) Redemption Price
October 1, 2003 to September 30, 2004 102%
October 1, 2004 to September 30, 2005 101%
October 1, 2005 and thereafter 100%
1993 B Current Interest Bonds. The 1993 B Current Interest Bonds, Maturing prior to
October 1, 2003 are not subject to redemption prior to maturity. The 1993 B Current Interest
Bonds maturing on or after October 1, 2003 are subject to redemption at the option of the City
prior to their respective date of maturity on or after October 1, 2003, in whole or in part at any
time, if in part in any order of maturity selected by the City and by lot within a maturity, at
redemption prices (expressed as a percentage of the principal amount of the 1993 B Current
Interest Bonds to be redeemed) set forth below, together with accrued interest to the dated fixed
for redemption:
Redemption Period (both dates inclusive) Redemption Price
October 1,2003 to September 30,2004 102%
October 1, 2004 to September 30, 2005 101%
October 1, 2005 and thereafter 100%
1993 B Capital Appreciation Bonds. The 1993 B Capital Appreciation Bonds are not subject
to redemption prior to maturity
Public Financial Management, Inc. Page 5
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,
Current Market Conditions
To prepare for the pricing of the City's Bonds, PFM has closely followed trends of interest
rates, debt offerings and inventory, and other matters affecting municipal debt issues. The
following is a summary of municipal credit market conditions during the most recent month.
The summary tracks a number of interest rate indicators, including (i) long-tenn 30 year
Treasury bond yields, (ii) short-tenn Treasury rates, (ii) The Bond Buyer 25-Bond Revenue
Index (the "Revenue Index"), which is an index of the average yield to maturity of 25 "A" rated
tax-exempt revenue bonds which mature in 30 years, and (iii) The Bond Buyer 30-Day Visible
Supply which measures the expected future volume of tax-exempt new issues.
*****
The Week Ending May 21, 1993: Municipals suffered losses throughout the week with a
slight recovery on Wednesday. As a result of the drop in Treasury prices last week, spurred after
reports of increasing inflation, the Municipal market was unable to recover losses during early
week trading. The Treasury 30-year bond exceeded 7% early in the week when approximately
$3 billion of tax-exempt deals hit the street. The $6.6 billion anticipated supply of new issues
and overall uneasiness with the municipal market forced many deals to be delayed. Although the
Treasury gained back some losses mid week, due to reports of lowering gold prices, Municipals
stabilized only for a short period and ended the week with losses for the 13th Friday in a row,
The Bond Buyer's 30-Day Visible Supply was estimated at $7.89 billion on Friday. The
yield on the Treasury's 30 year bonds was 6.99% and the yield on 3 month notes was 3.04% at
week's end, The Bond Buyer calculated the 25 Bond Revenue index at 5.97%.
The Week Ending May 28, 1993: Both Treasury and Municipal markets finned with
optimism about the chances for deficit reduction that would come with passage of the budget by
the House of Representatives. However, as concerns surfaced about the outcome of the House
budget vote, the 30-year bond slightly lowered, reversing the positive tone, To further suppress
short tenn prices was a CNBC report that the Federal Open Market Committee voted almost
unanimously to lean toward tightening monetary policy last week. Tax-exempt trading was light
on Friday due to the pending holiday, keeping municipals from reacting to the Treasury market's
negative reaction to signs of higher inflation.
The Bond Buyer's 30-Day Visible Supply was estimated at $8,66 billion on Friday. The
yield on the Treasury's 30 year bonds was 6.93% and the yield on 3 month notes was 3.15% at
week's end, The Bond Buyer calculated the 25 Bond Revenue index at 5.94%.
The Week Ending June 4,1993: The President's budget plan received narrow passage and
was no a definitive indication for the prospects of deficit reduction. Prices began to move higher
Tuesday as light volume accentuated the market's improving tone. While mid-week saw a slight
improvement with a wait and see attitude regarding the employment figures to be released on
June 4, 1993. Friday's announcement of improved employment figures impacted the
governmental market by pushing prices lower and yields higher. The Bureau of Labor came out
with benchmark revisions for the year which makes the employment figures looks very positive
(more small business hiring) and hourly earnings up 6/lOth of one percent focusing on inflation
Public Financial Management, Inc. Page 6
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,
and making the market. The news caught the credit markets off guard and Treasury prices
plummeted as much as 7/8 point on Friday.
Municipal market dropped only 1/4 to 1/2 based on the jobs news. Traders said illiquidity
may have assisted in holding prices, however noted that the market had solid underlying
strength.
The Bond Buyer's 30-Day Visible Supply was estimated at $7.78 billion on Friday. The
yield on the Treasury's 30 year bonds was 6.86% and the yield on 3 month notes was 3.10% at
week's end. The Bond Buyer calculated the 25 Bond Revenue index at 5.91 %.
The Week Ending June 11, 1993: The beginning of the week began on a cautious but fIrm
tone with prices mixed. Municipals opened higher in areas thanks to the modest market gains of
Treasuries. Slightly over $2 billion new issue hit the market yesterday, and prices were quoted
slightly lower. At the top the negotiated transactions nationwide on Tuesday was the $564
million Orlando-Orange County Expressway Authority bond issue. Prices remained unchanged
on Wednesday with tax-exempt traders reporting sluggish action for the third consecutive
seSSIon. Investor fear that the Federal Reserve will tighten monetary policy if any signs of
inflation emerge. The Friday inflation report provided a market rally with the long treasury bond
dropping 8 basis points. While the inflation report provided good news for the consumers it
lowered the yield and increased prices for the securities the City will be required to purchase for
the escrow.
Public Financial Management, Inc. Page 7
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Public Financial Management, Inc. Page 9
'.
Pricin2 of the Series 1993 Bonds
To prepare for the pricing/sale process, PFM analyzed interest rates of both national and
Florida insured bond issues. A summary of comparable pricing scales is shown on pages 22 and
23 and gross spread Comparables for Florida Revenue issues between $15 million and $50
million are shown on page 20. In addition, we have closely followed the recent trends of interest
rates, municipal offerings and inventory and other matters we consider relevant and appropriate.
The City, PFM and the Underwriters began monitoring the market June 11, 1993. There
was some concern regarding the volume of Florida bond issues being priced during the week of
June 14, 1993.
The City and PFM received a initial scale from the Underwriter in the morning of June
16, 1993, The initial scale as outlined below was presented at that time. The City, based upon
PFM's recommendation, approved the marketing of the bonds with the initial scale. The group
agreed to an order period until 1:00 pm. The group reconvened at approximately 2:30 pm to
discuss the order period and the status of the bonds. The order period proved to be quite
successful in some maturities and not successful in others. The Underwriters proposed
increasing the yield in the 2001, 2005 and 2006. The group also discussed the possibility of
reducing the yield on the maturities from 2002 to 2004 or in 2013 and 2014. The Underwriter
explained that reducing any of those would cause a deficit due to the fact that they were over
subscribed with two to three large orders. PFM and the City requested that the Underwriters
provide a proposal that had less impact to transaction than increasing all three maturities. After
conferring with their trading desk the Underwriters agreed to commit to the issue with only one
change in the 2001 maturity. The final pricing was accepted by the City.
Initial Pricing Bonds Final Pricing
Coun/Yield Remainin~** Coun/Yield
1997 4.000/4.150% 4.000/4.150%
1998 4.250/4.350% 4.250/4.350%
1999 4.500/4.550% 1,200 4.500/4.550%
2000 4.625/4.750% 1,500 4.625/4.750%
2001 4.800/4.900% 2,300 4.750/4.950%
2002 5.000/5.000% (1,000) 5.000/5.000%
2003 5.000/5.100% (1,400) 5.000/5.100%
2004 5.100/5.200% (2,800) 5.100/5.200%
2005 5.200/5.300% 3,100 5.200/5.300%
2006 5.300/5.400% 3,000 5.300/5.400%
2007 5.400/5,500% 0 5.400/5.500%
2008 5.400/5.550% 800 5.400/5.550%
2009 0.000/5.750% 160 0.000/5.750%
2010 0.000/5.750% 155 0.000/5.750%
2011 0.000/5.800% 0 0.000/5.800%
2012 0.000/5.800% 0 0.000/5.800%
2013 0,000/5.850% (4,400) 0.000/5.850%
2014 0.000/5.850% (4,400) 0.000/5.850%
**Numbers reported in thousands
Public Financial Management, Inc. Page 10
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The final pricing structure proposed by the Underwriters and embodied in the Bond
Purchase Agreement being considered by the City results in the following:
Total Par Amount for Series 1993 A Bonds $21,238,997.35
Total Par Amount for Series 1993 B Bonds 6,865,477.25
Redemption for Series 1993 Bonds 10 years @ 102%
Gross Debt Service Savings 3,515,618.33
Net Present Value Savings 1,191,441.72
Percent of Refunded Principal 5.839%
A breakdown of the cost of issuance and gross spread comparison is provided behind Tab
II.
Conclusions and Recommendations
Based on the foregoing and our knowledge and experience in the issuance of tax-exempt
debt, it was our opinion that the interest rates and the underwriting (gross) spread, which
constitute the pricing, were favorable to the City. The final pricing and sale negotiations for the
Series 1993 Bonds resulted in a gross underwriting spread of $9.50 per $1,000 and a arbitrage
yield of 5.479% (assuming the recovery of the Original Issue Discount, Bond Insurance and
Surety), which was appropriate and fair. In conclusion, PFM recommended that the City
approve the Bond Purchase Agreement and award the sale of the Series 1993 Bonds to the
Underwriters.
Public Financial Management, Inc. Page 11
"
,
CITY OF DELRA Y, FLORIDA
Water and S4twttr R4tfundlng Revenue Bonds, Series 1993
Sources and U_ of Funds
Sources of Funds Refunding New Money TOTAL
Par An1Ountof Bonds 21,238,997.35 6,865,477.25 28,104,474.60
Sinking Fund 370,608.75 0.00 370,608.75
Debt Service Reserve Fund (Existing) 0.00 0.00 0.00
Accrued Interest 82,052.93 3,939.83 85,992.76
Existing Debt Service Reserve Fund 1,470,670.00 0.00 1,470,670.00
Original Issue Discount (161,523.70) (9,230.95) (170,754.65)
Total 23,000,805.33 6,860,186.13 29,860,991.46
U_ of Funds
Estimated Cost of the Escrow (1) 22,465,103.63 0.00 22,465,103.63
Construction Fund Deposit 0.00 6,674,000.00 6,674,000.00
Accrued Interest 82,052.93 3,939.83 85,992.76
1991 Debt Service Reserve Fund Surety 2.700% 10,056.17 3,250.64 13,306.82
1993 Debt Service Reserve Fund Surety 2.700% 39,708.09 0.00 39,708.09
Underwrite(s Discount 0.950% 201,770.47 65,222.03 266,992.51
Costs of Issuance 109,578.80 35,421.20 145,000.00
Bond Insurance 89,012.75 74,242.09 163,254.83
Contingency 3,522.49 4,110.34 7,632.82
Total 23,000,805.33 6,860,186.13 29,860,991.46
(1) Cost of Escrow (Ïmal cost may change by pennies due to rounding)
Bond Proceeds 20,763,032.97
Non-Bond Proceeds 1,801,372.28
Cash 198.38
Sub-Total 22,564,603.63
Less: Forward Purchase Premium (99,500.00)
22,465,103.63
(2) Debt Service Reserve Fund Requirements
1988 Surety Coverage 2,513,500.00
1991 Cash 1,470,670.00
3,984,170.00
TOTAL DEBT SERVIæ REQUIREMENT 4,477,015.00
(Lesser of 125% of total aggregate debt or maximum annual debt)
1993 Debt Service Reserve Requirement 492,845.00
Public Financial Management, Inc. Page 12
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CITY OF DELRAY, FLORIDA
Water and Sewer Refunding Revenue Bonds, Series 1993 A
Debt Servk:e Sc:hedule
Refunding Debt Service
Annual
Date Principal Coupon ~ Price Proceeds Interest Interest Debt Servk:e Annual
10/01/93 0.00 0.00 351,655.42 351,655.42 351,655.42 351,655.42
04/01/94 527,483.13 527,483.13
10/01/94 0.00 0.00 0.00 100.00 0.00 527,483.13 1,054,966.25 527,483.13 1,054,966.25
04/01/95 527,483.13 527,483.13
10/01/95 O.lXJ 0.00 0.00 100.00 0.00 527,483.13 1,054,966.25 527.483.13 1.054,966.25
04/0 1/96 527,483.13 527,483.13
10/01/96 0.00 0.00 0.00 100.00 0.00 527,483.13 1,054.966.25 527,483.13 1,054,966.25
04/01/97 527,483.13 527,483.13
10/01/97 0.00 0.00 0.00 100.00 0.00 527,483.13 1,054,966.25 527,483.13 1,054,966.25
04/0 1/98 527,483.13 527,483.13
1 % 1/98 15,000.00 4.25 4.35 99.53 14,929.20 527,483.13 1,054,966.25 542,483.13 1,069,966.25
04101/99 527,164.38 527,164.38
1 % 1/99 1,805,000.00 4.50 4.55 99.72 1,800,018.20 527,164.38 1,054,328.75 2,332,164.38 2,859,328.75
04/01/00 486,551.88 486,551.88
10/01/00 1,885,000.00 4.63 4.75 99.23 1,870,542.05 486,551.88 973,103.75 2,371,551.88 2,858,103.75
04/01/01 442,961.25 442,961.25
10/01/01 2,435,000.00 4.75 4.95 98.65 2,402,127.50 442,961.25 885,922.50 2,877,961.25 3,320,922.50
04/01/02 385,130.00 385,130.00
10/01/02 2,675,000.00 5.00 5.00 100.00 2,675,000.00 385,130.00 770,260.00 3,060,130.00 3,445,260.00
04/01/03 318,255.00 318,255.00
10/01/03 2,815,000.00 5.00 5.10 99.20 2,792,508.15 318,255.00 636,510.00 3,133,255.00 3,451,510.00
04/01/04 247,880.00 247,880.00
1 % 1/04 2,950,000.00 5.10 5.20 99.15 2,924,836.50 247,880.00 495,760.00 3,197,880.00 3,445,760.00
04/01/05 172,655.00 172,655.00
10/01/05 3,105,000.00 5.20 5.30 99.10 3,076,992.90 172,655.00 345,310.00 3,277.655.00 3,450,310.00
04/01/06 91,925.00 91,925.00
10/01/06 3,260,000.00 5.30 5.40 99.05 3,229,127.80 91,925.00 183,850.00 3,351,925.00 3,443,850.00
04/01/07 5,535.00 5,535.00
10/01/07 100,000.00 5.40 5.50 99.01 99,011.00 5,535.00 11,070.00 105,535.00 111,070.00
04/01/08 2,835.00 2,835.00
10/01/08 105,000.00 5.40 5.55 98.46 103,383.00 2,835.00 5,670.00 107,835.00 110,670.00
04/01109 0.00 0.00
10/01/09 115,000.00 0.00 5.75 39.79 45,759.65 0.00 0.00 115,000.00 115,000.00
04/01/10 0.00 0.00
10/01/10 115,000.00 0.00 5.75 37.60 43,237.70 0.00 0.00 115,000.00 115,000.00
21,380,000.00 21,077,473.65 10,988,271.67 10,988,271.67 32,368,271.67 32,368,271.67
Target Annual Savings 56,500.00
Original Issue Discount (161,523.70)
Dated Date 06101/93
Delivery Date 06129/93
First Interest Payment Date 10101/93
Accrued Interest 82,052.93
Arbitrage Yield 5.479157
Public Financial Management, Inc. Page 13
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CITY OF DELRA Y, FLORIDA
Water and S-r Refunding Revenue Bonds. Series 1993 B}
Debt Service Schedule
New Money Debt Service
Annual
Date Principal Coupon Yield Price Proceeds Interest Interest Debt Service Annual
10/01/93 0.00 16,885.00 16,885.00 16,885.00 16,885.00
04/01/94 25,327.50 25,327.50
10/01/94 0.00 0.00 0.00 100.00 0.00 25,327.50 50,655.00 25,327.50 50,655.00
04/01/95 25,327.50 25,327.50
10/01/95 0.00 0.00 0.00 100.00 0.00 25,327.50 50,655.00 25,327.50 50,655.00
04/01/96 25,327.50 25,327.50
10/01/96 0.00 0.00 0.00 100.00 0.00 25,327.50 50,655.00 25,327.50 50,655.00
04/01/97 25,327.50 25,327.50
10/01/97 0.00 0.00 0.00 100.00 0.00 25,327.50 50,655.00 25,327.50 50,655.00
04/01/98 25,327.50 25,327.50
10/01/98 0.00 4.25 4.35 99.53 0.00 25,327.50 50,655.00 25,327.50 50,655.00
04/01/99 25,327.50 25,327.50
10/01/99 0.00 4.50 4.55 99.72 0.00 25,327.50 50,655.00 25,327.50 50,655.00
04/01/00 25,327.50 25,327.50
10/01/00 0.00 4.63 4.75 99.23 0.00 25,327.50 50,655.00 25,327.50 50,655.00
04/01/01 25,327.50 25,327.50
10/01/01 100,000.00 4.75 4.95 98.65 98,650.00 25,327.50 50,655.00 125,327.50 150,655.00
04/01/02 22,952.50 22,952.50
10/01/02 110,000.00 5.00 5.00 100.00 110,000.00 22,952.50 45,905.00 132,952.50 155,905.00
04/01/03 20,202.50 20,202.50
10/01/03 110,000.00 5.00 5.10 99.20 109,121.10 20,202.50 40,405.00 130,202.50 150,405.00
04/01/04 17,452.50 17,452.50
1 0/01/04 120,000.00 5.10 5.20 99.15 118,976.40 17,452.50 34,905.00 137,452.50 154,905.00
04/01/05 14,392.50 14,392.50
10/01/05 120,000.00 5.20 5.30 99.10 118,917.60 14,392.50 28,785.00 134,392.50 148,785.00
04/01/06 11,272.50 11,272.50
10/01106 135,000.00 5.30 5.40 99.05 133,721.55 11,272.50 22,545.00 146,272.50 157,545.00
04/01/07 7,695.00 7,695.00
10/01/07 140,000.00 5.40 5.50 99.01 138,615.40 7,695.00 15,390.00 147,695.00 155,390.00
04/01/08 3,915.00 3,915.00
10/01/08 145,000.00 5.40 5.55 98.46 142,767.00 3,915.00 7,830.00 148,915.00 152,830.00
04/01/09 0.00 0.00
1 0/01 /09 150,000.00 0.00 5.75 39.79 59,686.50 0.00 0.00 150,000.00 150,000.00
04/01/10 0.00 0.00
10/01/10 150,000.00 0.00 5.75 37.60 56,397.00 0.00 0.00 150,000.00 150,000.00
04/01/11 0.00 0.00
10/01/11 4,475,000.00 0.00 5.80 35.21 1,575,737.00 0.00 0.00 4,475,000.00 4,475,000.00
04/01/12 0.00 0.00
10/01/12 4,475,000.00 0.00 5.80 33.26 1,488,206.00 0.00 0.00 4,475,000.00 4,475,000.00
04/01/13 0.00 0.00
10/01/13 4,475.000.00 0.00 5.85 31.10 1,391,725.00 0.00 0.00 4,475,000.00 4,475,000.00
04/01/14 0.00 0.00
10/01/14 4,475,000.00 0.00 5.85 29.36 1,313,725.75 0.00 0.00 4,475,000.00 4,475,000.00
19,180,000.00 6,856,246.30 617,890.00 617,890.00 19,797,890.00 19,797,890.00
Original Issue Discount (9,230.95)
Accrued Interest 3,939.83
Public Financial Management, Inc. Page 14
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CITY OF DELRA Y. FLORIDA
Wat8t' and Sewer Refunding Revenue Bonds, Series 1993 A & B
Debt Service Schedule
TOTAL 1993 oeBT SERVICE
Annual
Date Principal Coupon Yield Price Proceeds Interest Interest Debt Service Annual
10101193 0.00 368,540.42 368,540.42 368,540.42 368,540.42
04101194 552,810.63 552,810.63
10/01194 0.00 100.000 0.00 552,810.63 1,105,621.25 552,810.63 1,105,621.25
04101195 552,810.63 552,810.63
10/01195 0.00 100.000 0.00 552,810.63 1,105,621.25 552,810.63 1,105,621.25
04101196 552,810.63 552,810.63
10101196 0.00 100.000 0.00 552,810.63 1,105,621.25 552,810.63 1,105,621.25
04101197 552,810.63 552,810.63
10101197 0.00 100.000 0.00 552,810.63 1,105,621.25 552,810.63 1,105,621.25
04101198 552,810.63 552,810.63
10101198 15,000.00 4.250 4.350 99.528 14,929.20 552,810.63 1,105,621.25 567,810.63 1,120,621.25
04101199 552,491.88 552,491.88
1010 1 J99 1,805,000.00 4.500 4.550 99.724 1,800,018.20 552,491.88 1,104,983.75 2,357,491.88 2,909,983.75
04101100 511,879.38 511,879.38
10101/00 1,885,000.00 4.625 4.750 99.233 1,870,542.05 511,879.38 1,023,758.75 2,396,879.38 2,908,758.75
04101101 468,288.75 468,288.75
10101101 2,535,000.00 4.750 4.950 98.650 2,500,777.50 468,288.75 936,577.50 3,003,288.75 3,471,577.50
04/01102 408,082.50 408,082.50
10/01102 2,785,000.00 5.000 5.000 100.000 2,785,000.00 408,082.50 816,165.00 3,193,082.50 3,601,165.00
04101103 338,457.50 338,457.50
10101103 2,925,000.00 5.000 5.100 99.201 2,901,629.25 338,457.50 676,915.00 3,263,457.50 3,601,915.00
04/01104 265,332.50 265,332.50
10101104 3,070,000.00 5.100 5.200 99.147 3,043,812.90 265,332.50 530,665.00 3,335,332.50 3,600,665.00
04101105 187,047.50 187,047.50
10101105 3,225,000.00 5.200 5.300 99.098 3,195,910.50 187,047.50 374,095.00 3,412,047.50 3,599,095.00
04/01106 103,197.50 103,197.50
10/01106 3,395,000.00 5.300 5.400 99.053 3,362,849.35 103,197.50 206,395.00 3,498,197.50 3,601,395.00
04101107 13,230.00 13,230.00
10/01107 240,000.00 5.400 5.500 99.011 237,626.40 13,230.00 26,460.00 253,230.00 266,460.00
04/01108 6,750.00 6,750.00
10/01108 250,000.00 5.400 5.550 98.460 246,150.00 6,750.00 13,500.00 256,750.00 263,500.00
04101109 0.00 0.00
10101109 265,000.00 0.000 5.750 39.791 105,446.15 0.00 0.00 265,000.00 265,000.00
04/01/10 0.00 0.00
10/01/10 265,000.00 0.000 5.750 37.598 99,634.70 0.00 0.00 265,000.00 265,000.00
04101/11 0.00 0.00
10/01/11 4,475,000.00 0.000 5.800 35.212 1,575,737.00 0.00 0.00 4,475,000.00 4,475,000.00
04101/12 0.00 0.00
10101/12 4,475,000.00 0.000 5.800 33.256 1,488,206.00 0.00 0.00 4,475,000.00 4,475,000.00
04101/13 0.00 0.00
10101/13 4,475,000.00 0.000 5.850 31.1 00 1,391,725.00 0.00 0.00 4,475,000.00 4,475,000.00
04101/14 0.00 0.00
10101/14 4,475,000.00 0.000 5.850 29.357 1,313,725.75 0.00 0.00 4,475,000.00 4,475,000.00
40,560,000.00 27,933,719.95 11,606,161.67 11,606,161.67 52,166,161.67 52,166,161.67
Public Financial Management, Inc. Page 15
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CITY OF DELRA Y. FLORIDA
Water and Sewer Refunding Revenue Bonds, Series 1993
Savings Repan
New N_ Annual Old Old Annual Annual Present Value Present
Date Debt Service Debt Service Debt Service Debt Service Savings Savings Factor (a) Value Savings
10101/93 351,655.42 351,655.42 741,217.50 741,217.50 389,562.08 389,562.08 0.98628105 384,217.70
04101/94 527,483.13 741,217.50 213,734.38 0.95998160 205,181.07
10/01/94 527,483.13 1,054,966.25 741,217.50 1,482,435.00 213,734.38 427,468.75 0.93438344 199,709.86
04/01/95 527,483.13 741,217.50 213,734.38 0.90946785 194,384.54
10101/95 527,483.13 1,054,966.25 741,217.50 1,482,435.00 213,734.38 427,468.75 0.88521665 189,201.23
04101/96 527,483.13 741,217.50 213,734.38 0.86161211 184,156.13
10101/96 527,483.13 1,054,966.25 741,217.50 1,482,435.00 213,734.38 427,468.75 0.83863699 179,245.55
04101/97 527,483.13 741,217.50 213,734.38 0.81627451 174,465.92
10/01/97 527,483.13 1,054,966.25 741,217.50 1,482,435.00 213,734.38 427,468.75 0.79450833 169,813.74
04101/98 527,483.13 741,217.50 213,734.38 0.77332255 165,285.61
10101/98 542,483.13 1,069,966.25 791,217.50 1,532,435.00 248,734.38 462,468.75 0.75270170 187,222.79
04101/99 527,164.38 739,430.00 212,265.63 0.73263071 155,512.31
10/01/99 2,332,164.38 2,859,328.75 2,584,430.00 3,323,860.00 252,265.63 464,531.25 0.71309491 179,889.33
04/01/00 486,551.88 672,087.50 185,535.63 0.69408004 128,776.57
10/01/00 2,371,551.88 2,858,103.75 2,652,087.50 3,324,175.00 280,535.63 466,071.25 0.67557221 189,522.07
04/01/01 442,961.25 598,827.50 155,866.25 0.65755790 102,491.08
10/01/01 2,877,961.25 3,320,922.50 2,723,827.50 3,322,655.00 (154,133.75) 1,732.50 0.64002394 (98,649.29)
04/01/02 385,130.00 519,140.00 134,010.00 0.62295753 83,482.54
10101/02 3,060,130.00 3,445,260.00 2,929,140.00 3,448,280.00 (130,990.00) 3,020.00 0.60634620 (79,425.29)
04/01/03 318,255.00 428,310.00 110,055.00 0.59017782 64,952.02
10101/03 3,133,255.00 3,451,510.00 3,023,310.00 3,451,620.00 (109,945.00) 110.00 0.57444057 (63,156.87)
04101104 247,880.00 329,793.75 81,913.75 0.55912295 45,799.86
10101/04 3,197,880.00 3,445,760.00 3,119,793.75 3,449,587.50 (78,086.25) 3,827.50 0.54421379 (42,495.61)
04101/05 172,655.00 223,140.00 50,485.00 0.52970218 26,742.01
10/01/05 3,277,655.00 3,450,310.00 3,228,140.00 3,451,280.00 (49,515.00) 970.00 0.51557753 (25,528.82)
04101/06 91,925.00 120,970.00 29,045.00 0.50182952 14,575.64
10101/06 3,351,925.00 3,443,850.00 3,325,970.00 3,446,940.00 (25,955.00) 3,090.00 0.48844810 (12,677.67)
04/01107 5,535.00 12,000.00 6,465.00 0.47542350 3,073.61
10/01/07 105,535.00 111,070.00 102,000.00 114,000.00 (3,535.00) 2,930.00 0.46274620 (1,635.81)
04/01/08 2,835.00 9,300.00 6,465.00 . 0.45040695 2,911.88
10/01/08 107,835.00 110,670.00 104,300.00 113,600.00 (3,535.00) 2,930.00 0.43839673 (1,549.73)
04/01109 0.00 6,450.00 6,450.00 0.42670676 2,752.26
10101/09 115,000.00 115,000.00 111,450.00 117,900.00 (3,550.00) 2,900.00 0.41532851 (1,474.42)
04/01/10 0.00 3,300.00 3,300.00 0.40425367 1,334.04
10/01/10 115,000.00 115,000.00 113,300.00 116,600.00 (1,700.00) 1,600.00 0.39347413 (668.91)
32,368,271.67 32,368,271.67 35,883,890.00 35,883,890.00 3,515,618.33 3,515,618.33 2,907,436.96
Gross Present Value Savings at Arbitrage Yield: 2,907,436.96
Plus: Accrued Interest & Rounding 85,575.42
Less: Sinking Fund and DSRF Moneys Used 1,801,570.66
Net Savings: 1,191,441.72
Net Savings as a Percentage of Refunded Principal: 5.839%
Public Financial Management, Inc. Page 16
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CITY OF DELRAY, FLORIDA
Wat... and Sewer Refunding Revenue Bonds, Series 1993 A & B
1988 1991 A& B TOTAL
Unrefunded Unrefunded 1993 A 1993 B TOTAL ANNUAL
Date Bonds Bonds Bonds Bonds DEBT DEBT
10101/93 1,540,62250 537,480.00 351,655.42 16,885.00 2,446,64292 2,446,642.92
0410 1/94 260,322.50 460,473.75 527,483.13 25,327.50 1,273,606.88
10101/94 1,585,32250 535,473.75 527,483.13 25,327.50 2,673,606.88 3,947,213.75
04101/95 216,266.25 458,392.50 527,483.13 25,327.50 1,227,469.38
10101/95 1,626,266.25 543,392.50 527,483.13 25,327.50 2,722,469.38 3,949,938.75
04101/96 168,326.25 455,991.25 527,483.13 25,327.50 1,177,128.13
10101/96 1,678,326.25 540,991.25 527,483.13 25,327.50 2,772,128.13 3,949,256.25
04101/97 116,23 1.25 453,547.50 527,483.13 25,327.50 1,122,589.38
10101/97 1,726,231.25 548,547.50 527,483.13 25,327.50 2,827,589.38 3,950,178.75
04101/98 59,881.25 450,768.75 527,483.13 25,327.50 1,063,460.63
10101/98 1,734,881.25 545,768.75 542,483.13 25,327.50 2,848,460.63 3,911,921.25
04101/99 447,942.50 527,164.38 25,327.50 1,000,434.38
10101/99 552,942.50 2,332,164.38 25,327.50 2,910,434.38 3,910,868.75
04101/00 444,740.00 486,551.88 25,327.50 956,619.38
10101/00 554,740.00 2,371,551.88 25,327.50 2,951,619.38 3,908,238.75
04101101 441,330.00 442,961.25 25,327.50 909,618.75
10101/01 561,330.00 2,877,%1.25 125,327.50 3,564,618.75 4,474,237.50
04101102 437,550.00 385,130.00 22,952.50 845,632.50
10101102 437,550.00 3,060,130.00 132,95250 3,630,63250 4,476,265.00
04101103 437,550.00 318,255.00 20,202.50 776,007.50
10101/03 437,550.00 3,133,255.00 130,202.50 3,701,007.50 4,477,015.00
04101/04 437,550.00 247,880.00 17,452.50 702,882.50
10101104 437,550.00 3,197,880.00 137,452.50 3,772,88250 4,475,765.00
04101105 437,550.00 172,655.00 14,392.50 624,597.50
10101105 437,550.00 3,277,655.00 134,392.50 3,849,597.50 4,474,195.00
04101/06 437,550.00 91,925.00 11,272.50 540,747.50
10/01/06 437,550.00 3,351,925.00 146,272.50 3,935,747.50 4,476,495.00
04101/07 437,550.00 5,535.00 7,695.00 450,780.00
10101/07 3,772,550.00 105,535.00 147,695.00 4,025,780.00 4,476,560.00
04101108 337,500.00 2,835.00 3,915.00 344,250.00
10101/08 3,872,500.00 107,835.00 148,915.00 4,129,250.00 4,473,500.00
04101109 231,450.00 0.00 0.00 231,450.00
10101109 3,976,450.00 115,000.00 150,000.00 4,241,450.00 4,472,900.00
04101/10 119,100.00 0.00 0.00 119,100.00
10101/10 4,089,100.00 115,000.00 150,000.00 4,354,100.00 4,473,200.00
04101/11 0.00 0.00
10101/11 4,475,000.00 4,475,000.00 4,475,000.00
04101/12 0.00 0.00
10101/12 4,475,000.00 4,475,000.00 4,475,000.00
04101/13 0.00 0.00
10101/13 4,475,000.00 4,475,000.00 4,475,000.00
04101/14 0.00 0.00
10101/14 4,475,000.00 4,475,000.00 4,475,000.00
10,712,677.50 29,745,552.50 32,368,271.67 19,797,890.00 92,624,391.67 92,624,391.67
Public Financial Management, Inc. Page 17
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Components of Underwriters' Compensation
There are four components of the Underwriters' Discount or "gross spread." Each of these is
negotiable either separately and/or in the aggregate, as described below. Tables gross spreads for
other deals with the management fee are provided on the following pages.
The Management Fee is the portion of the gross spread paid to the Underwriters. It
compensates the fIrm for their activities in structuring, documenting and preparing the issue for
the market. The management fee can be calculated either as a per Bonds amount or as a flat fee,
For "project" financings, which require a signifIcantly greater level of structuring and computer
analysis by the Underwriter than required for a "plain vanilla" financings, compensation for
additional services may be included separately as a part of the underwriters' expenses as
discussed below.
A portion of the gross spread is used to reimburse the Underwriters for certain direct
Expenses in preparing and marketing the issue. Among the components of expenses which are
usually subject to reimbursement are the following: travel costs, computer charges, printing
charges, clearance fees (paid for processing the orders for the Bonds and packaging the Bonds
for distribution to members of the underwriting account), the fees of the Underwriters' legal
counsel, investors meetings, advertising, etc. To the maximum extent possible, expenses should
be reimbursed based on actual costs incurred, Often, certain costs of the issuer are paid by the
Underwriters and reimbursed through this component of the spread.
The Takedown is the fee paid to the fIrm for actually selling or distributing the Bonds. The
amount paid is usually stated in terms of a dollar amount per $1,000 par value of the Bonds
"taken down" from the account and actually sold to retail or institutional investors. The amount
of takedown varies as a function of the size of the issue, the term or maturity of Bonds, rating of
the issue and the competition for attention of the sales force imposed by other issues. Takedown
typically represents the largest portion of the gross spread.
The Underwriting Risk is the fee paid for the Underwriters' willingness to risk their fIrms'
capital to underwrite a specifIed portion of the issue should market conditions and selling efforts
warrant and require such underwriting to take place. This component of the spread is paid to
each manager and syndicate member whether Bonds are underwritten or not. Underwriting risk
provides additional cushion to the Underwriters should market conditions deteriorate after the
bond purchase agreement is signed but while unsold Bonds remain in the account.
To provide the City with comparable bond issues PFM has assembled tables containing
Florida bond issues.
Public Financial Management, Inc. Page 18
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CITY OF DELRA Y BEACH, FLORIDA
WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 1993 A
WATER AND SEWER REVENUE BONDS, SERIES 1993 B
Based on $28,104,474.60 Par Amount
FINAL GROSS SPREAD BREAKDOWN
Component Fee Per Bond
Management Fee 0.53
Takedown (Sales Credit) 6.65
Underwriting Risk 0.00
Expenses (see chart below) 2.32
Total Gross Spread 9.50
Total Underwriters' Discount $266,992.51
Expenses
Underwriters' Counsel 1.000
Expenses 0.036
Blue Sky 0.142
Travel & Disbursement 0.100
Communications 0.071
Clearance 0.250
Structuring 0.300
Federal Funds 0.139
Day Loan 0.028
PSA 0.030
MSRB 0.030
CUSIP 0.004
Syndicate Charge 0,050
Closing 0.142
Total Expenses 2.322
Public Financial Management, Inc. Page 19 .
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Public Financial Management, Inc. Page 20
'.
--
Bond Counsel 50,000.00 Negotiated
Expenses 4,000.00 Not to exceed Estimate
Financial Advisor 22,500.00 Contract
Expenses 5,000.00 Estimate
Moodys 16,000.00 Quote
S&P 12,800.00 Quote
Printing 6,082.00 Quote
Shipping 2,500.00 Estimate
Paying/Escrow Agent 4,150.00 Quote
Forward Purchase Contract Cost 6,000.00 Quote
Verification Agent 3,250.00 Quote
Bond Printing 5,000.00 Estimate
Auditor Fee 3,000.00 City provided estimate
City Misc. 4,718.00
TOTAL 145,000.00
Public Financial Management, Inc. Page 21
,
_\1\-'-
Date 06/16f)3 06/16f)3
Amount $28,104,474.60 $65,000,000
Issuer City of Delray Beach Brevard County
Type Water and Sewer Water and Sewer
Refunding Revenue Refunding Revenue
Series Series 1993 A & B Series 1993
Rating AAN Aaa (AMBAC) AANAaa (AMBAC)
Underwriter Smith Barney Morgan Stanley & Hough
Sale Negotiated Negotiated
Maturity CouponjYield Takedown Yield Takedown
1993
1994 2.900 1/4
'-:tW5" '::::::::::ª-:¡lQþb,:::::::&'::::':,::'::~îI::::@::'i:::
......... . ......
,......... . .....
:~ttt~{.~::.;::.:::.:::.: ~:~:~:}:
1996 3.80013.850 1(2
1997 4.000/4.100 1(2
1998 4.250/4.350 3/8 4.250/4.350 1(2
1999 4.500/4.550 1(2 4.500/4.550 518
?tt&ööØa:t :::'::4i:§ª141.1$Ø::' m:m.,m:~îI:::ta '
.........................
... .. .........
2001 4.875/4.950 518
2002 5.000/5.050 518
2003 5.000/5.150 518
2004 5.125/5.250 518
::'mm!003mt :::@i~øm~¡$Øm:: : ,::::~îI'@mti:
......................
2006 5.250/5.450 518
2007 5.250/5.500 518
2008 5.250/5.550 518
2009
t:',i2Qlöt'm
. ........................
2011 0.000/5.800 1.0
2012 0.000/5.850 1.0
2013 0.000/5.850 1.0
2014 5.200/5.670 3/4
2016
2017
2018
2019
:i1ö~:t
.......................
2021
2022
2023
2023
Call 10/1103 @ 102
Features DTP2004
Public Financial Management, Inc. Page 22
.,
.
~ii~~~!11:)'
Date 06/14193 06/15193 06/14193
Amount $15,200,000 $23,000,000 $10,980,000
Issuer Pembroke Pines City of Cocoa Beach City of Cape Coral
Type Public Improvement Water and Sewer Water and Sewer
Refunding Revenue Refunding Refunding Revenue
Series Series 1993 Series 1993 Series 1993
Rating AAA/Aaa (AMBAC) AAA/Aaa (MBIA) AANAaa (MBIA)
Underwriter William R. Hough William R. Hough Stifel, Nicolaus
Sale Negotiated Negotiated Negotiated
Maturity Coupon Yield Coupon Yield Coupon Yield
1993 2.600 2.600
1994 2.750 2.750 3.000 3.000
'·":-'·"""1~'·'·'·'·'·'·'·' i:m::::::::::q,im&:}!::',:::~Hf$Ø!:::::~;~::i:':?l.~:!i:::,,:}'i;:"
......... " ........
~~??~tr.;::.:::.:.::;::.?~~??:~
1996 3.800 3.900 3.900 3.900
1997 4.000 4.150 4.000 4.150 4.200 4.200
1998 4.250 4.350 4.250 4.350 4.400 4.400
1999 4.375 4.550 4.500 4.550 4.600 4.600
<'g~r)
2001 4.875 5.000 4.800 4.900 4.950 4.950
2002 5.000 5.100 5.000 5.000 5.000 5.050
2003 5.000 5.100 5.050 5.150
2004 5.100 5.200 5.150 5.250
.:'žOO$::
. ............ .....
2006
2007
2008
2009
.............. '·$$00······· ...................,.....~.î:iõõ.............
....... ... ..... ..."...... ,.". ..........
.. ... -. . . .... ............. ," .........
. .. .. . ........... ,-.... . ,..........
....... ..... . .... ............... .........
;:::;::;:::::: ::::;::.::~.::.::::......:::::::;: ::::::::::::::::::::\:::,:,,:~;,,:,,;,:,;,,::::::::::::::::::;:
2011
2012
2013 5.500 5.650
2014
2016 6.000 25.203
2017 6.050 23.562
2018 6.050 22.199
2019
2021
2022
2023
2023
Call 11/1/03 @ 102 10/1/03 @ 102
Features DTP 2005 DTP 2005
Public Financial Management, Inc. Page 23
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