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Res 29-91 RESOLUTION NO. 29-91 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF DELRAY BEACH, FLORIDA, AMENDING AND SUPPLEMENTING RESOLUTIONS NO. 39-88, NO. 46-90, AND NO. 104-90, IN CONNECTION WITH OBTAINING BOND INSURANCE; AUTHORIZING THE NEGOTIATED SATR OF $8,000,000 WATER AND SEWER REVENUE BOND~, SERIES 1991 A, AND $14,585,000 WATER AND SEWER REVENUE BONDS, SERIES 1991 B, OF THE CITY OF DELRAY BEACh, FLORIDA, FOR THE PUR- POSE OF FINANCING T~E COST OF CERTAIN ADDITIONS, EXTENSIONS AND IMPROVEMENTS TO THE CITY'S COMBINED PUBLIC UTILITY; PROVIDING FOR THE TERMS AND OTHER DETAILS OF SUCH BOND~; APPOINTING A PAYING AGENT AND A REGISTRAR FOR SAID BONI)S; APPROVING THE FORM.OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF AN OFFICIAL STATEMENT AND APPROVING, CONFIRMING AND RATIFYING THE PRIOR USE BY THE UNDE~WP~E~S OFT HE PRE- LIMINARY OFFICIAL STATEMENT; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT TO EFFECT THE NEGOTIATED SA[~ OFT HE BOND~; PRO- VIDING THAT THE PAYMENT OF SCHEfK)LED PRINCIPAL AND INTEREST ON ~ BONDS BE GUARANTEED BY A BOND INSURANCE POLICY TO BE ISSUED BY AMBAC INDEMNITY CORPORATION; AUTHORIZING PROPER OFFICIALS OF THE CITY TO DO AT~.OTHERTHINGS DRFg~NECES- SARY OR ADVISABLE IN CONNECTION WITH T~E ISSUANCE, SATaAND DELIVERY OF SAID BONDS; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Commission (the "Commission") of the City of Delray Beach, Florida (the "City"), did on June 28, 1988, adopt Resolution No. 36-88, as amended, restated and supplemented by Resolution No. 39-88, adopted by the Commission on July 12, 1988, as further amended and supplemented by Resolution No. 46-88, adopted by the Commission on August 18, 1988 (collectively called the "Original Resolution"); and WHEREAS, the Original Resolution did authorize the issuance of the city's Water and Sewer Refunding Revenue Bonds, Series 1988, in the aggregate principal amount of not exceeding $30,000,000; and Res. No. 29-91 WHEREAS, the City did, on September 15, 1988, issue $25,135,000 of such Bonds (the "1988 Bonds"); and WHEREAS, the Original Resolution provides the conditions which must be met by the City to issue additional pari passu bonds on parity with the 1988 Bonds; and WHEREAS, the Commission did, on April 24, 1990, adopt Resolution No. 46-90 (the "Series A Resolution") authorizing the issuance of not exceeding $8,000,000 in aggregate principal amount of Water and Sewer Revenue Bonds to be issued on parity with the 1988 Bonds and issued to finance the cost of certain additions, extensions and improvements to the City's Combined Public Utility; and WHEREAS, the City is desirous of issuing $8,000,000 of such Bonds pursuant to the terms and provisions of the Original Resolution and the Series A Resolution (herein called the "Series 1991 A Bonds"); and WHEREAS, the Commission did, on October 23, 1990, adopt Resolution No. 104-90 (the "Series B Resolution") authorizing the issuance of not exceeding $50,000,000 in aggregate principal amount of Water and Sewer Revenue Bonds to be issued on parity with the 1988 Bonds and the Series 1991 A Bonds and issued to finance certain addi- tions, extensions and improvements to the City's Combined Public Utility; and WHEREAS, the City is desirous of issuing $14,585,000 of such Bonds pursuant to the terms and provisions of the Original -2- Res. No. 29-91 Resolution and the Series B Resolution (herein called the "Series 1991 B Bonds"); and WHEREAS, the Series 1991 A Bonds and Series 1991 B Bonds are collectively referred to herein as the "1991 Bonds"; and W}{EREAS, the Series A Resolution and the Series B Resolution are collectively referred to herein as the "1991 Series Resolutions"; and W~{EREAS, the 1991 Series Resolutions provide that certain details of the 1991 Bonds and certain other provisions of the 1991 Series Resolutions shall be determined by subsequent proceedings of the City, which shall be deemed to be supplemental to the Original Resolution and the 1991 Series Resolutions; and WHEREAS, the City has determined the details of the 1991 Bonds; and WMEREAS, there have been prepared with respect to the issu- ance and sale of the 1991 Bonds and submitted to the Commission forms of: (a) a Preliminary official Statement, dated April 9, 1991 (the "Preliminary Official Statement"), attached hereto as Exhibit A; (b) a draft Official Statement, dated April 16, 1991 (the "Official Statement"), attached hereto as Exhibit B. (c) a Bond Purchase Agreement, attached hereto as Exhibit C; and 3 Res. No. 29-91 WHEREAS, the City's financial advisor has recommended the negotiated sale of the 1991 Bonds in a letter attached hereto as Exhibit D; and WHEREAS, based on the advice of the City's financial advi- sor, it is in the best interest of the City to accept the Bond Purchase Agreement and to award the 1991 Bonds to the Underwriters (as hereinafter defined); and WHEREAS, the City's financial advisor has recommended in a letter, attached hereto as Exhibit D, that the principal and interest on the 1991 Bonds be insured by a municipal bond insurance policy (the "Bond Insurance Policy") issued by AMBAC Indemnity Corporation ("AMBAC"); and WHEREAS, pursuant to Section 218.385(4), of the Florida Statutes, an authorized representative of the Underwriters (as here- inafter defined) has delivered to the Commission a disclosure state- ment attached hereto as Exhibit E; and WHEREAS, as a condition of obtaining the Bond Insurance Policy, it is necessary to amend and supplement certain provisions of the Original Resolution and the 1991 Series Resolutions. NOW, THEREFORE, BE IT RESOLVED BY THE CITY CO~[ISSION OF THE CITY OF DELRAY BEACH, FLORIDA, AS FOLLOWS: SECTION 1. Definitions. That any term not otherwise defined in this Resolution shall have the meaning ascribed to such term in the Original Resolution or the 1991 Series Resolutions, as the case may be, unless the context clearly indicates otherwise. --4-- Res. No. 29-91 SECTION 2. Purpose and Bond Designation. That the City hereby determines (i) to issue $8,000,000 aggregate principal amount of its Series 1991 A Bonds and $14,585,000 in aggregate principal amount of its Series 1991B Bonds, for the purpose of (a) financing the costs of the Projects described in the 1991 Series Resolutions, (b) providing for the payment of the premium for the Bond Insurance Policy, (c) repaying the City's outstanding Water and Sewer Revenue Bond Anticipation Note, Series 1990A, (d) paying the costs of issu- ance of the 1991 Bonds; and (ii) to designate such Bonds as its "Water and Sewer Revenue Bonds, Series 1991 A," and "Water and Sewer Revenue Bonds, Series 1991 B" (collectively referred to herein as the "1991 Bonds"). SECTION 3. Bond Terms. That the 1991 Bonds shall be in registered form, shall be in denominations of $5,000 or in any inte- gral multiple thereof, shall be dated, and shall bear interest from, April 1, 1991, except that subsequently issued Bonds shall bear interest in the manner provided in the 1991 Series Resolutions, shall be numbered in the manner as may be prescribed by the Registrar (as herein defined), shall bear interest payable on October 1, 1991, semiannually thereafter on the first day of April and October of each year, shall bear interest at the rates per annum and maturing on October 1, in the years and amounts as follows: -5- Res. No. 29-91 SERIES 1991 A BONDS Year Amount Interest Year Amount Interest 1991 $70,000 4.95% 1999 $ 105,000 6.10% 1992 70,000 5.15 2000 110 000 6.20 1993 75,000 5.35 2001 120 000 6.30 1994 75,000 5.55 2002 125 000 6.40 1995 85,000 5.65 2003 135 000 6.55 1996 85,000 5.75 2004 145 000 6.65 1997 95,000 5.85 2006 6,210 000 6.80 1998 95,000 5.95 2010 400 000 6.00 SERIES 1991 B BONDS Year Amount Interest 2010 $14,585,000 6.00% SECTION 4. Redemption Provisions. That the 1991 Bonds maturing in the years 1991 to 2001, both inclusive, are not redeem- able prior to their stated dates of maturity. The 1991 Bonds matur- ing on October 1, 2002, and thereafter, are redeemable, without pre- mium, prior to their stated dates of maturity, at the option of the City, from any funds available for such purpose (i) in part, in inverse order of maturities, and by lot within a maturity, if less than a full maturity, on October 1, 2001, or on any interest payment date thereafter, and (ii) as a whole at any time on or after October 1, 2001, at the redemption prices equal to 100% of the prin- cipal amount of the 1991 Bonds to be redeemed, together with accrued interest to the date fixed for redemption. That there is hereby created and established a special sub- account in the Bond Redemption Account created and established under the Original Resolution and continued and maintained under the Series -6- Res. No. 29-91 A Resolution for the purpose of providing for the mandatory sinking fund redemption of the Series 1991 A Bonds maturing on October 1, 2006, in the amount and at the time set below. Such subaccount is hereby designated as the "Series 1991 A, October 1, 2006, Subaccount." That the Series 1991 A Bonds maturing on October 1, 2006, shall also be subject to mandatory sinking fund redemption prior to maturity by lot, in such manner as the Registrar (as defined herein) may deem appropriate, on October 1, 2005, at a price of par plus accrued interest to the date of redemption, in the amount as follows: Series 1991 A Bonds Maturinq on October 1, 2006 Year Amount 2005 $3,005,000 2006 (Final Maturity) 3,205,000 That there is hereby created and established a special sub- account in the Bond Redemption Account created and established under the Original Resolution and continued and maintained under the Series A Resolution for the purpose of providing for the mandatory sinking fund redemption of the Series 1991 A Bonds maturing on October 1, 2010, in the amounts and at the times set below. Such subaccount is hereby designated as the "Series 1991 A, October 1, 2010, Subaccount." -7- Res. No. 29-91 That the Series 1991 A Bonds maturing on October 1, 2010, shall also be subject to mandatory sinking fund redemption prior to maturity by lot, in such manner as the Registrar (as defined herein) may deem appropriate, on October 1, 2007, and on October 1 of each year thereafter, at a price of par plus accrued interest to the date of redemption, in the years and in the amounts as follows: Series 1991 A Bonds Maturinq on October 1, 2010 Year Amount 2007 $ 90,000 2008 95,000 2009 105,000 2010 (Final Maturity) 110,000 That there is hereby created and established a special sub- account in the Bond Redemption Account created and established under the Original Resolution and continued and maintained under the Series B Resolution for the purpose of providing for the mandatory sinking fund redemption of the Series 1991 B Bonds maturing on October 1, 2010, in the amounts and at the times set below. Such subaccount is hereby designated as the "Series 1991 B, October 1, 2010, Subaccount." That the Series 1991 B Bonds maturing on October 1, 2010, shall also be subject to mandatory sinking fund redemption prior to maturity by lot, in such manner as the Registrar (as defined herein) may deem appropriate, on October 1, 2007, and on October 1 of each year thereafter, at a price of par plus accrued interest to the date of redemption, in the years and in the amounts as follows: --8-- Res. No. 29-91 Series 1991 B Bonds Maturinq on October 1, 2010 Year Amount 2007 $3,335,000 2008 3,535,000 2009 3,745,000 2010 (Final Maturity) 3,970,000 Notice of redemption of the 1991 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 1991 Bonds or portions of 1991 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 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; Attention: Bond Department; provided, however, that such mailing shall not be a con- dition precedent to such redemption and failure so to mail any such notice shall not affect the validity of any proceedings for the redemption of the 1991 Bonds. The Registrar shall also provide notice at the same time notice of redemption is given to the --9-- Res. No. 29-91 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, New York, New York 10004; provided, however, that such mailing shall not be a condition prece- dent to such redemption and failure to mail any such notice shall not affect the validity of any proceedings for the redemption of the 1991 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 1991 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 1991 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 1991 Bonds shall be called for redemption, the distinctive numbers, letters and CUSIP identification numbers, if any, of such 1991 Bonds to be redeemed, (v) in the case of 1991 Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed, and (vi) any other information the City or the Registrar deems relevant. In case any 1991 Bond is to be redeemed in part only, the notice of redemption that relates to such 1991 Bond shall state also that on or after the redemption date, upon surrender of -10- Res. No. 29-91 such 1991 Bond, a new 1991 Bond or 1991 Bonds of the same maturity, bearing interest at the same rate and in aggregate principal amount equal to the unredeemed portion of such 1991 Bond, will be issued. Failure of the registered owner of any 1991 Bonds which are to be redeemed to receive any such notice shall not affect the validity of the proceedings for the redemption of 1991 Bonds for which proper notice has been given. Interest shall cease to accrue on any of the 1991 Bonds duly called for prior redemption if payment of the redemp- tion price has been duly made or provided for. SECTION 5. Paying Agent. That the Commission hereby appoints Barnett Banks Trust Company, N.A., having its principal cor- porate trust office in Jacksonville, Florida, as paying agent (the "Paying Agent") for the 1991 Bonds. By the acceptance of such appointment, Barnett Banks Trust Company, N.A., agrees to comply with the terms and provisions of the Original Resolution, the 1991 Series Resolutions and the Bond Insurance Policy applicable to the Paying Agent. SECTION 6. Registrar. That the Commission hereby appoints Barnett Banks Trust Company, N.A., having its principal cor- porate trust office in Jacksonville, Florida, as registrar (the "Registrar") for the Bonds. By the acceptance of such appointment, Barnett Banks Trust Company, N.A., agrees to comply with the terms and provisions of the Original Resolution, the 1991 Series Resolutions and the Bond Insurance Policy applicable to the Registrar. -ll- Res. No. 29-91 SECTION 7. Application of Bond Proceeds. T h a t a 1 1 moneys received by the City from the sale of the 1991 Bonds shall be disbursed as provided in Section 5 of the 1991 Series Resolutions, except as provided below: The City will transfer a portion of the net proceeds of the Series 1991 A Bonds to the Debt Service Fund created and established under Resolution No. 108-90 for transfer to Sun Bank/South Florida, National Association (the "Bank"), in an amount sufficient for the complete repayment of the Water and Sewer Revenue Bond Anticipation Note, Series 1990A, held by the Bank. SECTION 8. Preliminary and Final Official Stat~,ent. That the execution of the Official Statement of the City, to be dated the date of this Resolution (unless otherwise determined by the Commission), relating to the 1991 Bonds, in substantially the form attached hereto as Exhibit B, with such changes as are necessary to conform to the details of the 1991 Bonds and the requirements of the Bond Purchase Agreement, is hereby approved. The Commission hereby authorizes the execution of the Official Statement, and the Commission hereby authorizes the Official Statement and the informa- tion contained therein to be used by the Underwriters (as hereinafter defined) in connection with the offering and sale of the 1991 Bonds. The Commission hereby ratifies, approves and consents to the use by the Underwriters (as hereinafter defined) of the Preliminary official Statement (attached hereto as Exhibit A) in connection with the public offering of the 1991 Bonds. The Official Statement may be -12- Res. No. 29-91 modified in a manner not inconsistent with the substance thereof as shall be deemed advisable by the Commission and by Bond Counsel to the City. The Mayor and the City Manager are hereby authorized and directed to sign the official Statement and any amendment or supple- ment thereto, in the name of and on behalf of the City and deliver the same and any such amendment or supplement to the Underwriters. SECTION 9. 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 D. The City hereby finds, based on the reasons set forth in such letter, that it would be in the best interest of the City that the 1991 Bonds be sold on a negotiated basis. SECTION 10. Award of the 1991 Bonds. That the Bond Purchase Agreement (attached hereto as Exhibit C) for the 1991 Bonds, dated the date of this Resolution, between the City and Smith Barney, Harris Upham & Co. Incorporated (the "Representative"), acting on behalf of themselves and Smith Mitchell & Associates, Inc., Bear Stearns & Co., Inc., and Southeastern Capital Group, Inc., acting as the underwriters for the 1991 Bonds (collectively referred to herein as the "Underwriters"), as submitted to this meeting, be and the same is hereby approved and accepted. SECTION 11. Bond Purchase Agreement. That in accordance with the terms of the Bond Purchase Agreement, the 1991 Bonds are hereby sold to the Underwriters at a purchase price of -13- Res. No. 29-91 $20,897,153.85, representing original issue discount of $1,402,446.15 and Underwriters' discount of $285,400, plus accrued interest on the 1991 Bonds from April 1, 1991, to the date of payment and delivery therefor, on the terms and conditions set forth in the Bond Purchase Agreement, and the Mayor, or, in his absence, the Vice-Mayor of the City, each is hereby authorized and directed to execute the Bond Purchase Agreement and any amendment or supplement thereto, in the name of and on behalf of the City, and deliver the same and any such amendment or supplement to the Underwriters, and the City Clerk or Assistant City Clerk is hereby authorized and directed to affix the seal of the City and attest the same, if so required by the terms thereof. SECTION 12. Bond Insurance Policy. That, based on the recommendations of the City's Financial Advisor, set forth in a letter attached hereto as Exhibit D, the Commission finds that obtaining the Bond Insurance Policy from AMBAC is in the best inter- ests of the City, and the Commission hereby directs that the premium due on the Bond Insurance Policy be paid in accordance with the terms thereof. SECTION 13. Disclosure Statement. That the City does hereby find that the Representative on behalf of the Underwriters has submitted the disclosure statement required by Section 218.385(4), Florida Statutes, a copy of which is attached hereto as Exhibit "E". SECTION 14. Amendments to Original Resolution. -14- Res. No. 29-91 A. That the second paragraph of Part I, Article III, Section 4.D.4 of the Original Resolution is hereby amended by deleting such second paragraph thereof and substituting therefor the following text: Notwithstanding the foregoing provisions, in lieu of the deposits of Net Revenues into the Debt Service Reserve Account or a deposit from Bond proceeds, the City may cause to be deposited into the Debt Service Reserve Account a surety bond, an unconditional direct pay letter of credit issued by a bank, a reserve account line of credit or a municipal bond insurance policy issued by a reputable and recognized municipal bond insurer for the benefit of the Bondholders (sometimes referred to herein as a "Reserve Account Credit Facility Substitute") in an amount equal to the difference between the Debt Service Reserve Requirement and the sums then on deposit in the Debt Service Reserve Account, which Reserve Account Credit Facility Substitute shall be payable (upon the giving of notice as required thereunder) on any Interest Payment Date on which a defi- ciency exists which cannot be cured by funds in any other account held pursuant to this Resolution and available for such purpose under the terms and order of priority as established by this Resolution. In addition, the City, at any time by subsequent proceedings of the City Commission, may substitute a Reserve Account Credit Facility Substitute for all moneys on deposit in the Debt Revenue Reserve Account. Under such circumstances, the Reserve Account Credit Facility Substitute shall be in an amount equal to the Debt Service Reserve Requirement. Such municipal bond insurer or bank in the case of a letter of credit or line of credit shall be one whose municipal bond insurance poli- cies or unconditional direct pay letters of credit or other type of credit enhancement insuring or guaranteeing the payment, when due, of the principal of and interest on municipal bond issues results in such issues being rated in the highest rating category by S&P and Moody's. If a dis- bursement is made from a Reserve Account Credit Facility Substitute, provided pursuant to this paragraph, the City shall be obligated to reinstate the maximum limits of such Reserve Account Credit Facility Substitute immediately fol- lowing such disbursement or with the consent of the issuer of the Reserve Account Credit Facility Substitute, to replace such Reserve Account Credit Facility Substitute by depositing into the Debt Service Reserve Account from the -15- Res. No. 29-91 Net Revenues and the Pledged Impact Charges, if any are so pledged, as herein provided, funds in the maximum amount originally payable under such Reserve Account Credit Facility Substitute, or any combination of such alternatives. In the event the Debt Service Reserve Account is funded, both with cash (including Permitted Investments of such cash) and a Reserve Account Credit Facility Substitute in the aforementioned manner, and it is necessary to make payments into the Interest Account, Principal Account or Bond Redemption Account in the Sinking Fund when moneys in the Revenue Fund and the Pledged Impact Charge Fund, to the extent Pledged Impact Charges have been pledged, are insufficient therefor, the City covenants to deposit the cash (including Permitted Investments of such cash) on deposit in the Debt Service Reserve Account into such accounts in the Sinking Fund prior to any disburse- ments made from the Reserve Account Credit Facility Substitute. B. That subparagraph (3) of Part I, Article III, Section 4.G of the Original Resolution is hereby amended by deleting such subparagraph (3) thereof and substituting therefor the following text: (3) In the event any pari passu additional Bonds are issued for the purpose of refunding any Bonds then Outstanding, the condition of (2) above shall not apply, provided that the issuance of such pari passu additional Bonds shall result in a reduction or shall not increase the annual debt service payments over the life of the Bonds so refunded and such refunding will achieve present value savings. C. The following paragraph of Part I, Article III, Section 4.G of the Original Resolution is hereby deleted in its entirety: For the purpose of this Section 4.G, the phrase "twelve (12) consecutive months of the eighteen (18) months immediately preceding the issuance of said pari passu addi- tional Bonds" shall be sometimes referred to as "twelve (12) consecutive months." -16- Res. No. 29-91 SECTION 15. Amendments to Series A Resolution. That the second paragraph of Article III, Section 6.D.4 of the Series A Resolution, is hereby amended by deleting such second paragraph thereof and substituting thereof the following text: Notwithstanding the foregoing provisions, in lieu of the deposits of Net Revenues into the Debt Service Reserve Account or a deposit from Bond proceeds, the city may cause to be deposited into the Debt Service Reserve Account a surety bond, an unconditional direct pay letter of credit issued by a bank, a reserve account line of credit or a municipal bond insurance policy issued by a reputable and recognized municipal bond insurer for the benefit of the Bondholders (sometimes referred to herein as a "Reserve Account Credit Facility Substitute") in an amount equal to the difference between the Debt Service Reserve Requirement and the sums then on deposit in the Debt Service Reserve Account, which Reserve Account Credit Facility Substitute shall be payable (upon the giving of notice as required thereunder) on any Interest Payment Date on which a defi- ciency exists which cannot be cured by funds in any other account held pursuant to this Resolution and available for such purpose under the terms and order of priority as established by this Resolution. In addition, the City, at any time by subsequent proceedings of the City Commission, may substitute a Reserve Account Credit Facility Substitute for all moneys on deposit in the Debt Revenue Reserve Account. Under such circumstances, the Reserve Account Credit Facility Substitute shall be in an amount equal to the Debt Service Reserve Requirement. Such municipal bond insurer or bank in the case of a letter of credit or line of credit shall be one whose municipal bond insurance poli- cies or unconditional direct pay letters of credit or other type of credit enhancement insuring or guaranteeing the payment, when due, of the principal of and interest on municipal bond issues results in such issues being rated in the highest rating category by S&P and Moody's. If a dis- bursement is made from a Reserve Account Credit Facility Substitute, provided pursuant to this paragraph, the City shall be obligated to reinstate the maximum limits of such Reserve Account Credit Facility Substitute immediately fol- lowing such disbursement or with the consent of the issuer of the Reserve Account Credit Facility Substitute, to replace such Reserve Account Credit Facility Substitute by depositing into the Debt Service Reserve Account from the -17- Res. No. 29-91 Net Revenues and the Pledged Impact Charges, if any are so pledged, as herein provided, funds in the maximum amount originally payable under such Reserve Account Credit Facility Substitute, or any combination of such alternatives. In the event the Debt Service Reserve Account is funded, both with cash (including Permitted Investments of such cash) and a Reserve Account Credit Facility Substitute in the aforementioned manner, and it is necessary to make payments into the Interest Account, Principal Account or Bond Redemption Account in the Sinking Fund when moneys in the Revenue Fund and the Pledged Impact Charge Fund, to the extent Pledged Impact Charges have been pledged, are insufficient therefor, the City covenants to deposit the cash (including Permitted Investments of such cash) on deposit in the Debt Service Reserve Account into such accounts in the Sinking Fund prior to any disburse- ments made from the Reserve Account Credit Facility Substitute. SECTION 16. Amendments to 1991 B Resolution. That the second paragraph of Article III, Section 6.D.4 of the Series B Resolution is hereby amended by deleting such second paragraph thereof and substituting thereof the following text: Notwithstanding the foregoing provisions, in lieu of the deposits of Net Revenues into the Debt Service Reserve Account or a deposit from Bond proceeds, the City may cause to be deposited into the Debt Service Reserve Account a surety bond, an unconditional direct pay letter of credit issued by a bank, a reserve account line of credit or a municipal bond insurance policy issued by a reputable and recognized municipal bond insurer for the benefit of the Bondholders (sometimes referred to herein as a "Reserve Account Credit Facility Substitute") in an amount equal to the difference between the Debt Service Reserve Requirement and the sums then on deposit in the Debt Service Reserve Account, which Reserve Account Credit Facility Substitute shall be payable (upon the giving of notice as required thereunder) on any Interest Payment Date on which a defi- ciency exists which cannot be cured by funds in any other account held pursuant to this Resolution and available for such purpose under the terms and order of priority as established by this Resolution. In addition, the City, at any time by subsequent proceedings of the City Commission, may substitute a Reserve Account Credit Facility Substitute -18- Res. No. 29-91 for all moneys on deposit in the Debt Revenue Reserve Account. Under such circumstances, the Reserve Account Credit Facility Substitute shall be in an amount equal to the Debt Service Reserve Requirement. Such municipal bond insurer or bank in the case of a letter of credit or line of credit shall be one whose municipal bond insurance poli- cies or unconditional direct pay letters of credit or other type of credit enhancement insuring or guaranteeing the payment, when due, of the principal of and interest on municipal bond issues results in such issues being rated in the highest rating category by S&P and Moody's. If a dis- bursement is made from a Reserve Account Credit Facility Substitute, provided pursuant to this paragraph, the City shall be obligated to reinstate the maximum limits of such Reserve Account Credit Facility Substitute immediately fol- lowing such disbursement or with the consent of the issuer of the Reserve Account Credit Facility Substitute, to replace such Reserve Account Credit Facility Substitute by depositing into the Debt Service Reserve Account from the Net Revenues and the Pledged Impact Charges, if any are so pledged, as herein provided, funds in the maximum amount originally payable under such Reserve Account Credit Facility Substitute, or any combination of such alternatives. In the event the Debt Service Reserve Account is funded, both with cash (including Permitted Investments of such cash) and a Reserve Account Credit Facility Substitute in the aforementioned manner, and it is necessary to make payments into the Interest Account, Principal Account or Bond Redemption Account in the Sinking Fund when moneys in the Revenue Fund and the Pledged Impact Charge Fund, to the extent Pledged Impact Charges have been pledged, are insufficient therefor, the City covenants to deposit the cash (including Permitted Investments of such cash) on deposit in the Debt Service Reserve Account into such accounts in the Sinking Fund prior to any disburse- ments made from the Reserve Account Credit Facility Substitute. B. The third paragraph of Section 1, Article IV of the Series B Resolution is hereby amended by deleting such third para- graph thereof and substituting therefore the following text: For purposes of this Section 1 of Article IV, to the extent the Bonds are insured by a Bond Insurance Policy and such Bonds are then rated in as high a rating category in which such Bonds were rated at the time of initial issuance -19- Res. No. 29-91 and delivery thereof, by the Rating Agency or Agencies, then the consent of the Bond Insurer shall constitute the consent of the Holders of the Bonds under the terms and conditions such Bond Insurance is provided; provided, how- ever, that such Bond Insurer is not in default under the Bond Insurance Policy. SECTION 17. Payment Procedures of Municipal Bond Insurance Policy. As long as the Bond Insurance Policy shall be in full force and effect, the city, the Registrar and the Paying Agent agree to comply with the following provisions: (a) At least five (5) days 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 1991 Series Resolutions, and available to pay debt service on the 1991 Bonds (herein, the "Funds and Accounts"), to pay the principal of or interest on the 1991 Bonds on such Interest Payment Date. If the city or the Paying Agent determines that there will be insufficient 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 1991 Bonds to which such deficiency is applicable and whether such 1991 Bonds will be defi- cient as to principal or interest, or both. If the City or the Paying Agent has not so notified AMBAC -20- Res. No. 29-91 five (5) days prior to an Interest Payment Date, AMBAC will make payments of principal or interest due on the 1991 Bonds on or before the fifth (5th) day next fol- lowing 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 as provided in (a) above has been given, make avail- able to 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 the 1991 Series Resolutions. (c) The Paying Agent shall provide AMBAC and the Insurance Trustee with a list of registered owners of the 1991 Bonds entitled to receive principal or inter- est 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 1991 Bonds entitled to receive full or partial interest payments from AMBAC, and (ii) to pay principal upon the 1991 Bonds -21- Res. No. 29-91 surrendered to the Insurance Trustee by the registered owners of the 1991 Bonds entitled to receive full or partial principal payments from AMBAC. (d) The Paying Agent shall, at the time notice to AMBAC pursuant to (a) above has been provided, notify registered owners of the 1991 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 a part of the interest payments next coming due upon proof of Bondholder entitlement to interest payments and deliv- ery 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 1991 Bonds (along with an appropriate instrument of assign- ment in form satisfactory to the Insurance Trustee to permit ownership of such 1991 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 1991 Bonds for payment thereon, first, to the Paying Agent who shall note on such 1991 Bonds the -22- Res. No. 29-91 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 1991 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 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 juris- diction, 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 to payment from AMBAC to the extent of such recovery if sufficient funds are not otherwise avail- able, and the Paying Agent shall furnish to AMBAC its records evidencing the payments of principal of and interest on the 1991 Bonds which have been made by the Paying Agent and subsequently recovered from -23- Res. No. 29-91 registered owners and the dates on which such payments were made. (f) In addition to those rights granted AMBAC under this Resolution and the 1991 Series Resolutions, AMBAC shall, to the extent it makes payment of princi- pal of or interest on the 1991 Bonds, become subro- gated 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 inter- est, the Registrar shall note AMBAC's rights as sub- rogee on the registration books of the City maintained by the Registrar upon receipt from AMBAC of proof of the payment of interest thereon to the registered owners of the 1991 Bonds, and (ii) in the case of sub- rogation 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 1991 Bonds by the reg- istered owners thereof, together with proof of the payment of principal thereon. SECTION 18. Further 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 -24- Res. No. 29-91 all documents and instruments, including but not limited to any commitment to obtain the Bond Insurance Policy and any Registrar and Paying Agent Agreement acceptable to the City Attorney and Bond Counsel, and to do and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated by this Resolution. SECTION 19. Effective Date. That this Resolution shall take effect immediately upon its passage. PASSED AND ADOPTED in special session on this the 16th day of April, 1991. CITY OF DELRAY BEACH, FLORIDA Attest: v - ~C i-t~- C-~e r k' -25- Res. No. 29-91