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HomeMy WebLinkAboutR-02-0284J-02-294 3113102 0 RESOLUTION NOP 2 284- A RESOLUTION OF THE CITY OF MIAMI, FLORIDA, AUTHORIZING THE ISSUANCE OF (i) NOT TO EXCEED $3$,500,000 IN AGGREGATE PRINCIPAL AMOUNT OF GENERAL OBLIGATION REFUNDING BONDS, SERIES 2002A, FOR THE PURPOSE OF REFUNDING ALL OR A PORTION OF THE CITY'S OUTSTANDING GENERAL OBLIGATION REFUNDING BONDS, SERIES 1991, ITS GENERAL OBLIGATION BONDS, SERIES 1992 (STORM SEWER IMPROVEMENTS), AND ITS GENERAL OBLIGATION BONDS, SERIES 1995 (SANITARY SEWER SYSTEM) AND (ii) NOT TO EXCEED $5,000,000 IN AGGREGATE PRINCIPAL AMOUNT OF GENERAL OBLIGATION REFUNDING BONDS, SERIES 2002E (FORWARD DELIVERY), FOR THE PURPOSE OF REFUNDING A PORTION OF THE CITY'S OUTSTANDING GENERAL OBLIGATION REFUNDING BONDS, SERIES 1992; PROVIDING THAT SUCH GENERAL OBLIGATION REFUNDING BONDS SHALL CONSTITUTE GENERAL OBLIGATIONS OF THE CITY AND THAT THE FULL FAITH, CREDIT AND TAXING POWER OF THE CITY SHALL BE IRREVOCABLY PLEDGED FOR THE PAYMENT OF THE PRINCIPAL OF, REDEMPTION PREMIUM, IF ANY, AND INTEREST ON SUCH BONDS; MAKING CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; DELEGATING TO THE CITY MANAGER THE DETERMINATION OF CERTAIN MATTERS AND DETAILS CONCERNING THE BONDS; AUTHORIZING THE NEGOTIATED SALE OF THE BONDS; APPROVING THE FORMS AND AUTHORIZING THE EXECUTION OF BOND PURCHASE AGREEMENTS IN CONNECTION THEREWITH; APPOINTING A PAYING AGENT AND A BOND REGISTRAR; APPOINTING AN ESCROW AGENT; APPROVING THE FORMS OF ESCROW DEPOSIT AGREEMENTS; APPROVING UNCERTIFICATED, BOOK -ENTRY ONLY REGISTRATION OF SAID BONDS WITH THE DEPOSITORY TRUST COMPANY AND THE EXECUTION OF A BLANKET ISSUER LETTER OF REPRESENTATIONS; DELEGATING TO THE CITY MANAGER AUTHORITY TO NEGOTIATE AND' OBTAIN A MUNICIPAL BOND INSURANCE POLICY TO INSURE SAID BONDS AND TO EXECUTE AND DELIVER ANY RELATED AGREEMENTS; PROVIDING FOR A PRELIMINARY OFFICIAL STATEMENT AND AN OFFICIAL STATEMENT AND THE SELECTION OF A FINANCIAL PRINTER THEREFOR; COVENANTING TO PROVIDE CONTINUING DISCLOSURE IN CONNECTION WITH THE BONDS IN ACCORDANCE WITH SECURITIES AND EXCHANGE COMMISSION RULE 15c2-12 AND AUTHORIZING THE EXECUTION OF A COMMITMENT WITH RESPECT THERETO; PROVIDING FOR THE APPOINTMENT OF A VERIFICATION AGENT; AUTHORIZING ALL REQUIRED ACTIONS; AND PROVIDING AN EFFECTIVE DATE. Section 1. Authori . This Resolution is enacted pursuant to the Charter of the City of Miami, Florida; Sections 132.33 - 132.47, Florida Statutes; the Cons fi4u " oR* %(A Miami; docu rk m k; 8373v5 MEETING MAR 1 h 2002 AaBollition No. 02- 284 Florida, including, but not limited to, Article VII, Section 12, thereof; and other applicable provisions of law. Section 2. Definitions. As used herein, unless the context otherwise requires: "Act" means the Constitution and other applicable laws of the State of Florida, including, but not limited to, Article VII, Section 12 of the Constitution, Chapter 166, Florida Statutes and Sections 132.33-132.47, Florida Statutes; and the Charter of the City. "Authorized Depository" means any bank, trust company, national banking association, savings and loan association, savings bank or other banking association selected by the City as a depository, which is authorized under Florida law to be a depository of municipal funds and which has complied with all applicable state and federal requirements concerning the receipt of City funds. "Bondholder" or "registered owner" means the person in whose name any Series 2002 Bond is registered on the registration books maintained by the Bond Registrar. "Bond Purchase Agreements" means, collectively, the Series 2002A Bond Purchase Agreement and the Series 2002B Bond Purchase Agreement. "Bond Registrar" means, initially, The Bank of New York and, thereafter, any other agent designated from time to time by the City, by resolution, to maintain the registration books for the Series 2002 Bonds issued hereunder or to perform other duties with respect to registering ,X the transfer of the Series 2002 Bonds. "City" means the City of Miami, Florida. "City Commission" means the city commission of the City. "City Manager" means the City Manager or any acting City Manager of the City. "Clerk" means the City Clerk or any acting City Clerk of the City. "Code" means the Internal Revenue Code of 1986, as amended, and all temporary, proposed or permanent implementing regulations promulgated or applicable thereunder. "City Attorney" means the City Attorney of the City or any designated assistant City Attorney. "Escrow Agent" means the bank or trust company at any time serving as Escrow Agent under the Escrow Deposit Agreements, with the initial Escrow Agent being The Bank of New York. "Escrow Deposit Agreements" means, collectively, the Series 2002A Escrow Deposit Agreement and the Series 2002B Escrow Deposit Agreement. "Finance Director" means the Finance Director of the City or his designee. 2 Miami: Document N: 85730 02— 284 "First Union Escrow Agreement" means that certain Escrow Agreement dated as of March 17, 1997, by and among First Union National Bank of Florida (now known as First Union National Bank), The Oversight Board, acting through its committee, the Fiscal Sufficiency Advisory Board, and the City, as the same may be supplemented or amended. "Fiscal Year" means the period commencing on October 1 of each year and ending on the succeeding September 30, or such other consecutive 12 -month period as may hereafter be designated as the fiscal year of the City. "Governing Body" means the city commission of the City. "Government Obligations" means: (a) Direct obligations of, or obligations guaranteed by, the United States of America; (b) Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state (i) which are not callable prior to maturity or as to which irrevocable instructions have been given to the trustee of such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified in such instructions, (ii) which are secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or bonds or other obligations of the character described in clause (a) hereof which fund may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the redemption date or dates specified in the irrevocable instructions referred to in subclause (i) of this clause (b), as appropriate, and (iii) as to which the principal of and interest on the bonds and obligations of the character described in clause (a) hereof which have been deposited in such fund along with any cash on deposit in such fund are sufficient to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this clause (b) on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in subclause (i) of this clause (b), as appropriate; (c) Evidences of indebtedness issued by the Federal Home Loan Banks, Federal Home Loan -Mortgage Corporation (including participation certificates), Federal Financing Banks, or any other agency or instrumentality of the United States of America created by an act of Congress provided that the obligations of such agency or instrumentality are unconditionally guaranteed by the United States of America or any other agency or instrumentality of the United States of America or of any corporation wholly-owned by the United States of America; and (d) Evidences of ownership of proportionate interests in future interest and principal payments on obligations described in (a) held by a bank or trust company as custodian. "Mayor" means the Mayor of the City or, in his absence or inability to perform, such member of the City Commission as may be appointed as acting Mayor of the City. "1991 Refunded Bonds" means all or a portion of the City's outstanding General Obligation Refunding Bonds, Series 1991, originally issued in the aggregate principal amount of 3 Mixu; Docunim C $573v5 02— 2 $16,135,000_ and dated April 1, 1991, with the actual amount of such bonds to be refunded to be determined by the City Manager in accordance with Section 5 of this Resolution. "1992 Forward Refunded Bonds" means the portion of the City's outstanding General Obligation Refunding Bonds, Series 1992, originally issued in the aggregate principal amount of $70,100,000 and dated November 15, 1992, with the actual amount of such bonds to be refunded to be determined by the City Manager in accordance with Section 5 of this Resolution. "1992 Refunded Bonds" means all or a portion of the City's outstanding General Obligation Bonds, Series 1992 (Storm Sewer Improvements), originally issued in the aggregate principal amount of $10,000,000 and dated August 1, 1992, with the actual amount of such bonds to be refunded to be determined by the City Manager in accordance with Section 5 of this Resolution. "1995 Refunded Bonds" means all or a portion of the City's outstanding General Obligation Bonds, Series 1995 (Sanitary Sewer System), originally issued in the aggregate principal amount of $22,500,000 and dated June 15, 1995, with the actual amount of such bonds to be refunded to be determined by the City Manager in accordance with Section 5 of this Resolution. "Official Statement" means that certain Official Statement with respect to the issuance of the Series 2002 Bonds, as such Official Statement shall be approved by the Mayor and the City Manager in accordance with the provisions of this Resolution. "Outstanding" or "Bonds Outstanding" means all Series 2002 Bonds which have been issued pursuant to this Resolution except: (a) Series 2002 Bonds cancelled after purchase in the open market or because of payment at or redemption prior to maturity, (b) Series 2002 Bonds, the payment or redemption for which cash funds or Government Obligations or any combination thereof shall have been theretofore irrevocably set aside in a special account with the Paying Agent, whether upon or prior to the maturity or redemption dine of any such Series 2002 Bond, in an amount which, together with earnings on such Government Obligations, will be sufficient to pay the principal of and interest on such Series 2002 Bonds at maturity or upon their earlier redemption; provided that, if such Series 2002 Bonds are to be redeemed before the maturity thereof, notice of such redemption shall have been given according to the requirements of this Resolution or irrevocable instructions directing the timely publication of such notice and directing the payment of the principal of, redemption premium, if any, and interest on all Series 2002 Bonds at such redemption dates shall have been given to the Paying Agents; (c) Series 2002 Bonds which are deemed paid pursuant to Section 6.F. hereof, and (d) Series 2002 Bonds in exchange for or in lieu of which other Series 2002 Bonds have been authenticated and delivered pursuant to this Resolution. 4 MWY,4 VODUMM #: 857M 02- 284 "Paying Agent" means, initially, The Bank of New York and, thereafter, any other agent which is an Authorized Depository, designated by the City by resolution to serve as a Paying Agent for the Series 2002 Bonds issued hereunder that shall have agreed to arrange for the timely payment of the principal of, redemption premium, if any, and interest on the Series 2002 Bonds to the registered owners thereof, from funds made available therefor by the City, and any successors designated pursuant to this Resolution. "Paying Agent and Registrar Agreement" means the Paying Agent and Registrar Agreement with respect to the Series 2002 Bonds between the City and The Bank of New York, or any successor thereto in its capacity as Paying Agent and Bond Registrar. "Preliminary Official Statement" means the Preliminary Official Statement relating to the Series 2002 Bonds, to be dated as of the date of its distribution. "Refunded Bonds" means, collectively (i) the 1991 Refunded Bonds, the 1992 Refunded Bonds and the 1995 Refunded Bonds, to be refunded with a portion of the proceeds of the Series 2002A Bonds, and (ii) the 1992 Forward Refunded Bonds, to be refunded with a portion of the proceeds of the Series 2002B Bonds. "Series 2002 Bonds" means, collectively, the Series 2002A Bonds and the Series 2002B "Series 2002A Bond Purchase Agreement" means the Bond Purchase Agreement with respect to the Series 2002A Bonds between the Underwriters and the City. . "Series 2002A Bonds" means the City of Miami, Florida General Obligation Refunding Bonds, Series 2002A, authorized to be issued pursuant to this Resolution in the aggregate principal amount of not exceeding $38,500,000. "Series 2002A Escrow Deposit Agreement" means the Escrow Deposit Agreement between the City and the Escrow Agent pursuant to which a portion of the proceeds of the Series 2002A Bonds, together with investment earnings thereon, will be held in irrevocable escrow for the payment of the principal of, redemption premium, if any, and interest on the 1991 Refunded Bonds, the 1992 Refunded Bonds and the 1995 Refunded Bonds. "Series 2002B Bond Purchase Agreement" means the Bond Purchase Agreement with respect to the Series 2002B Bonds between the Underwriters and the City. "Series 2002B Bonds" means the City of Miami, Florida General Obligation Refunding Bonds, Series 2002B, authorized to be issued pursuant to this Resolution in the aggregate principal amount of not exceeding $5,000,000. "Series 2002B Escrow Deposit Agreement" means the Escrow Deposit Agreement between the City and the Escrow Agent pursuant to which a portion of the proceeds of the Series 2002B Bonds, together with investment earnings thereon, will be held in irrevocable escrow for I he payment of the principal of and interest on the 1992 Forward Refunded Bonds. Mj&* Docwnau 0: 8373v5 "Underwriters" means, collectively, J.P. Morgan Securities, Inc., PaineWebber Incorporated, Salomon Smith Barney, Inc., Morgan Stanley & Co. Incorporated, Jackson Securities Inc. and Lehman Brothers. Words in this Resolution importing singular numbers shall include the plural number in each case and vice versa, and words importing persons shall include firms, corporations or other entities including governments or governmental bodies. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Section 3. Findings and Determinations. It is hereby ascertained, determined and declared that: A. The full faith, credit and taxing power of the City are pledged to the payment of the principal of, redemption premium, if any, and interest on the Refunded Bonds. B. It is in the best interest of the City, its citizens and taxpayers to take advantage of the existing favorable market conditions and the prevailing low interest rates through the issuance of the Series 2002 Bonds in order to provide funds to refund the Refunded Bonds. C. The City is authorized under the Act to issue refunding bonds and to deposit the proceeds thereof in escrow to provide for the payment when due of the principal of, redemption premium, if any, and interest on the Refunded Bonds. D. The Series 2002 Bonds shall only be issued at a lower average net interest cost rate than the average net interest cost rate of the Refunded Bonds, and the rate of interest bome by the Series 2002 Bonds shall not exceed the maximum interest rates established pursuant to the terms of Section 215.84, Florida Statutes. It is estimated that the present value of the total debt service savings anticipated to accrue to the City from the issuance of the Series 2002A Bonds and the refunding of the portion of the Refunded Bonds to be refunded with the proceeds of the Series 2002A Bonds, calculated in accordance with Section 132.35(2), Florida Statutes, shall result in a net present value debt service savings of at least three percent (3.0%) of the debt service on the portion of the Refunded Bonds to be refunded with the proceeds of the Series 2002A Bonds. It is estimated that the present value of the total debt service savings anticipated to accrue to the City from the issuance of the Series 2002B Bonds and the refunding of the portion of the Refunded Bonds to be refunded with the proceeds of the Series 2002B Bonds, calculated in accordance with Section 132.35(2), Florida Statutes, shall result in a net present value debt service savings of at least three percent (3A%) of the debt service on the portion of the Refunded Bonds to be refunded with the proceeds of the Series 2002B Bonds. E. The principal amount of the Series 2002A Bonds shall not exceed an amount sufficient to pay the sum of the principal amount of the portion of the Refunded Bonds to be refunded with the proceeds of the Series 2002A Bonds, the aggregate amount of unmatured interest payable on such Refunded Bonds to and including either the applicable maturity date thereof or the date that they are called for redemption, the applicable redemption premium, if any, related to such Refunded Bonds that are called for redemption, and the costs of issuance of the Series 2002A Bonds, including, but not Iimited to, costs of bond insurance, if any, all in accordance with Section 132.35, Florida Statutes. The principal amount of the Series 2002B 6 Miuni; Document q: 8577v5 02- 284 Bonds shall. not exceed an amount sufficient to pay the sum of the principal amount of the portion of the Refunded Bonds to be refunded with the proceeds of the Series 2002B Bonds, the aggregate amount of unmatured interest payable on such Refunded Bonds to and including either the applicable maturity date thereof or the date that they are called for redemption, the applicable redemption premium, if any, related to such Refunded Bonds that are called for redemption, and the costs of issuance of the Series 2002B Bonds, including, but not limited to, costs of bond insurance, if any, all in accordance with Section 132.35, Florida Statutes. F. The sum of the present value of the total payments of principal and interest to become due on the Series 2002A Bonds (excluding all such principal and interest payments as will be made with moneys held by the Escrow Agent under the Series 2002A Escrow Deposit Agreement) and the present value of costs of issuance of the Series 2002A Bonds, if any, not paid with proceeds of the Series 2002A Bonds, will be less than the present value of the principal and interest payments to become due at their stated maturities, or earlier mandatory redemption dates, on the portion of the Refunded Bonds to be refunded with the proceeds of the Series 2002A Bonds. The sum of the present value of the total payments of principal and interest to become due on the Series 2002B Bonds (excluding all such principal and interest payments as will be made with moneys held by the Escrow Agent under the Series 2002B Escrow Deposit Agreement) and the present value of costs of issuance of the Series 2002B Bonds, if any, not paid with proceeds of the Series 2002B Bonds, will be less than the present value; of the principal and interest payments to become due at their stated maturities, or earlier mandatory redemption dates, on the portion of the Refunded Bonds to be refunded with the proceeds of the Series 2002B Bonds. G. The Series 2002A Bonds shall in no event mature Iater than forty (40) years from the date of issuance of the portion of the Refunded Bonds to be refunded with the: proceeds of the Series 2002A Bonds. The Series 2002B Bonds shall in no event mature later than forty (40) years from the date of issuance of the portion of the Refunded Bonds to be refunded with the proceeds of the Series 2002B Bonds. H. The first installment of principal of the Series 2002A Bonds shall mature not later than the first stated maturity of the portion of the Refunded Bonds to be refunded with the proceeds of t�e Series 2002A Bonds occurring after the issuance of the Series 2002A Bonds. The first installment of principal of the Series 2002B Bonds shall mature not later than the first stated maturity of the portion of the Refunded Bonds to be refunded with the proceeds of the Series 2002B Bonds occurring after the issuance of the Series 2002B Bonds. I. The Series 2002A Bonds shall not be issued until such time as the Finance Director of the City shall have filed a certificate with the Governing Body setting forth the present value of the total debt service savings which will result from the issuance of the Series 2002A Bonds to refund the portion of the Refunded Bonds to be refunded with the proceeds of the Series 2002A Bonds, computed in accordance with the terms of Section 132.35, Florida Statutes, and demonstrating mathematically that the Series 2002A Bonds are issued at a lower average net interest cost rate than the portion of the Refunded Bonds to be refunded with the Proceeds of the Series 2002A Bonds. The Series 2002B Bonds shall not be issued until such time as the Finance Director of the City shall have filed a certificate with the Governing Body setting forth the present value of the total debt service savings which will result from the 7 Miami; Documrot a: ss730 02- i�yy Cq 8 /g issuance of the Series 2002B Bonds to refund the portion of the Refunded Bonds to be refunded with the proceeds of the Series 2002B Bonds, computed in accordance with the terms of Section 132.35, Florida Statutes, and demonstrating mathematically that the Series 2002B Bonds are issued at a lower average net interest cost rate than the portion of the Refunded Bonds to be refunded with the proceeds of the Series 2002B Bonds. I In accordance with Section 218.385(1), Florida Statutes, as amended, the City Commission hereby finds, determines and declares, based upon the advice of RBC Dain Rauscher Inc., financial advisor to the City (the "Financial Advisor"), that a negotiated sale of the Series 2002 Bonds is in the best interest of the City for the following reasons: (i) the complex structure and timing of the issuance of the Series 2002 Bonds and the refunding of the Refunded Bonds require extensive planning, and it is not practical for the City and the Financial Advisor to engage in such planning within the time constraints and uncertainties inherent in a competitive bidding process; and (ii) it is necessary to be able to sell the Series 2002 Bonds when market conditions are most favorable in order to attain the most favorable interest rates on the Series 2002 Bonds; the vagaries of the current and near future municipal bond market demand that the Underwriters have the maximum time and flexibility to price and market the Series 2002 Bonds, in order to obtain the most favorable interest rates available. Section 4. Contract. In consideration of the acceptance of the Series 2002 Bonds authorized to be issued hereunder by those who shall hold the same from time to time, this Resolution shall be deemed to be and shall constitute a contract between the City and the Bondholders. The covenants and agreements herein set forth to be performed by the City shall be for the equal benefit, protection and security of the Bondholders, and all Series 2002 Bonds shall be of equal rank and without preference, priority or distinction over any other thereof, except as expressly provided herein. Section 5. Authority for Refunding of Refunded Bonds and Issuance of Series 2002 Bonds. A. The refunding of the 1991 Refunded Bonds, the 1992 Refunded Bonds and the 1995 Refunded Bonds is hereby authorized. Subject and pursuant to the provisions hereof, Series 2002A Bons to be known as "City of Miami, Florida, General Obligation Refunding Bonds, Series 2002A" are hereby authorized to be issued at one time or as needed in one or more series in an aggregate principal amount of not exceeding Thirty -Eight Million Five Hundred Thousand Dollars ($38,500,000), for the purpose of refunding the 1991 Refunded Bonds, the 1992 Refunded Bonds and the 1995 Refunded Bonds and paying the costs of issuance of the Series 2002A Bonds. Prior to the issuance of the Series 2002A Bonds, the City Manager is hereby authorized and directed to determine, upon the advice of the City's Financial Advisor, whether such refunding shall constitute a full or partial refunding as is in the best interest of the City. The Series 2002A Bonds shall not be issued unless the issuance thereof and the refunding of the 1991 Refunded Bonds, the 1992 Refunded Bonds and the 1995 Refunded Bonds results in a net present value savings of at least three percent (3.0%) of the debt service on such Refunded Bonds. 8 Miami; Dommew B: 8573v5 02- 284 B. _ The refunding of the 1992 Forward Refunded Bonds is hereby authorized. Subject and pursuant to the provisions hereof, Series 2002B Bonds to be known as "City of Miami, Florida, General Obligation Refunding Bonds, Series 2002B (Forward Delivery)" are hereby authorized to be issued at one time or as needed in one or more series in an aggregate principal amount of not exceeding Five Million Dollars ($5,000,000), for the purpose of refunding the 1992 Forward Refunded Bonds and paying the costs of issuance of the Series 2002B Bonds. Prior to the issuance of the Series 2002B Bonds, the City Manager is hereby authorized and directed to determine, upon the advice of the City's Financial Advisor, whether such refunding shall constitute a full or partial refunding as is in the best interest of the City. The Series 2002B Bonds shall not be issued unless the issuance thereof and the refunding of the 1992 Forward Refunded Bonds results in a net present value savings of at least three percent (3.0%) of the debt service on such Refunded Bonds. Section 6. Authorization of Series 2002 Bonds, Terms; Redemption and Form of Series 2002 Bonds. A. The City Manager is hereby authorized and directed to award the Series 2002A Bonds to the Underwriters at a purchase price of not less than ninety-nine percent (99%) (inclusive of underwriters' discount, but not inclusive of original issue discount; the original issue discount may be such as is necessary to market and sell the Series 2002A Bonds) of the original principal amount of the Series 2002A Bonds and at a true interest cost rate ("TIC") not to exceed six and two- tenths percent (6.2%) (the "Maximum TIC') per annum. The Series 2002A Bonds shall be dated such date, shall be issued in such principal amount, shall bear interest from the date thereof, payable on the first day of September of each year, commencing on such date, at the rates, and shall mature in accordance with the maturity schedule (which may provide for semiannual principal maturities), set forth in the Series 2002A Bond Purchase Agreement, as such dates, principal amount, rates and maturity schedule may be approved by the City Manager, with the execution and delivery of the Series 2002A Bond Purchase Agreement as described in Section 7 hereof being conclusive evidence of the City's approval, provided that the TIC shall not exceed the Maximum TIC. The City Manager is hereby authorized and directed to award the Series 2002B Bonds to the Underwriters at a purchase price of not less than ninety-nine percent (99%) (inclusive of underwriters discount, but not inclusive of original issue discount; the original issue discount may be such as is necessary to market and sell the Series 2002B Bonds) of the original principal amount of the Series 2002B Bonds and at a true interest cost rate ("TIC") not to exceed five and eight -tenths percent (5.89/o) (the "Maximum TIC") per annum. The Series 2002B Bonds shall be dated such date, shall be issued in such principal amount, shall bear interest from the date thereof, payable on the first day of September of each year, commencing on such date, at the rates, and shall mature in accordance with the maturity schedule (which may provide for semiannual principal maturities), set forth in the Bond Purchase Agreement, as such dates, principal amount, rates and maturity schedule may be approved by the City Manager, with the execution and delivery of the Series 2002B Bond Purchase Agreement as described in Section 7 hereof being conclusive evidence of the City's approval, provided that the TIC shall not exceed the Maximum TIC. VJ The Series 2002 Bonds shall be issued as fully registered, book -entry only bonds in the denomination or $5,000 each or any integral multiple thereof through the book -entry only system Z Miami; Documrni M: 8573v5 02- 284 maintained by The Depository Trust Company, New York, New York4"DTC"), which will act as securities depository for the Series 2002 Bonds, as further described in Section 25 hereof. The Series 2002 Bonds may have endorsed thereon such legends or text as may be necessary or appropriate to conform to any applicable rules and regulations of any governmental authority or any usage or requirement of law with respect thereto. B. Each series of the Series 2002 Bonds shall be numbered consecutively from I upward preceded by the letters "RA" prefixed to the number, in the case of the Series 2002A Bonds, and preceded by the letters "RB" prefixed to the number, in the case of the Series 2002B Bonds. The principal of and redemption premium, if any, on the Series 2002 Bonds shall be payable upon presentation and surrender at the principal office of the Paying Agent. Interest on the Series 2002 Bonds shall be paid by check or draft drawn upon the Paying Agent and mailed to the registered owners of the Series 2002 Bonds at the addresses as they appear on the registration books maintained by the Bond Registrar at the close of business on the 15th day (whether or not a business day) of the month next preceding the interest payment date (the "Record Date"), irrespective of any transfer or exchange of such Series 2002 Bonds subsequent to such Record Date and prior to such interest payment date, unless the City shall be in default in payment of interest due on such interest payment date; provided, however, that (i) if ownership of Series 2002 Bonds is maintained in a book -entry only system by a securities depository, such payment may be made by automatic funds transfer (wire) to such securities depository or its nominee or (ii) if such Series 2002 Bonds are not maintained in a book-entryonly system by a securities depository, upon written request of the holder of $1,000,000 or more in principal amount of Series 2002 Bonds, such payments may be made by wire transfer to the bank and bank account specified in writing by such holder (such bank being a bank within the continental United States), if such holder has advanced to the Paying Agent the amount necessary to pay the cost of such wire transfer or authorized the Paying Agent to deduct the cost of such wire transfer from the payment due such holder. In the event of any default in the payment of interest, such defaulted interest shall be payable to the persons in whose names such Series 2002 Bonds are registered at the close of business on a special record date for the payment of such defaulted interest as established by notice deposited in the U.S. mails, postage prepaid, by the Paying Agent to the registered owners of the Series 2002 Bonds not less than fifteen (15) days preceding such special record date. Such notice shall be mailed to the persons in whose names the Series 2002 Bonds. --are registered at the close of business on the fifth (5th) day (whether or not a business day) preceding the date of mailing. The registration of any Series 2002 Bond may be transferred upon the registration books upon delivery thereof to the principal office of the Bond Registrar accompanied by a written instrument or instruments of transfer in form and with guaranty of signature satisfactory to the Bond Registrar, duly executed by the Bondholder or his attomey-in-fact or legal representative containing written instructions as to the details of the transfer of such Series 2002 Bond, along with the social security number or federal employer identification number of such transferee. In all cases of a transfer of a Series 2002 Bond, the Bond Registrar shall at the earliest practical time in accordance with the terms hereof enter the transfer of ownership in the registration books and shall deliver in the name of the new transferee or transferees a new fully registered Series 2002 Bond or Bonds of the same maturity and of authorized denomination or denominations, for the same aggregate principal amount and payable from the same source of funds. The City and the Bond Registrar may charge the Bondholder for the registration of every transfer or exchange of a Series 2002 Bond an amount sufficient to reimburse them for any tax, fee or any other governmental charge required (other than by the 10 Mimi: Dowumm N: 8573v5 02— 284 City) to be _paid with respect to the registration of such transfer, and may require that such amounts be paid before any such new Series 2002 Bond shall be delivered. The City, the Bond Registrar, and the Paying Agent may treat the registered owner of any Series 2002 Bond as the absolute owner of such Series 2002 Bond for the purpose of receiving payment of the principal thereof and the interest and redemption premium, if any, thereon. Series 2002 Bonds may be exchanged at the office of the Bond Registrar for a like aggregate principal amount of Series 2002 Bonds, or other authorized denominations of the same series and maturity. C. The Series 2002 Bonds shall be executed in the name of the City by the Mayor and the seal of the City shall be imprinted, reproduced or lithographed on the Series 2002 Bonds and attested to and countersigned by the Clerk. In addition, the City Attorney or any Assistant City Attorney shall sign the Series 2002 Bonds, showing approval of the form and correctness thereof. The signatures of the Mayor, the Clerk and the City Attorney or Assistant City Attorney on the Series 2002 Bonds may be by facsimile. If any officer whose signature appears on the Series 2002 Bonds ceases to hold office before the delivery of the Series 2002 Bonds, his signature shall nevertheless be valid and sufficient for all purposes. In addition, any Series 2002 Bond may bear the signature of, or may be signed by, such persons as at the actual time of execution of such Series 2002 Bond shall be the proper officers to sign such Series 2002 Bond, although at the date of such Series 2002 Bond or the date of delivery thereof such persons may not have been such officers. Only such of the Series 2002 Bonds as shall have been endorsed thereon by a certificate of authentication substantially in the form hereinafter set forth in Section 6.J. hereof, duly manually executed by the Bond Registrar, shall be entitled to any right or benefit under this Resolution. No Series 2002 Bond shall be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly manually executed by the Bond Registrar, and such certificate of the Bond Registrar upon any such Series 2002 Bond shall be conclusive evidence that such Series 2002 Bond has been duly authenticated and delivered under this Resolution. The Bond Registrar's certificate of authentication on any Series 2002 Bond shall be deemed to have been duly executed if signed by an authorized officer of the Bond Registrar, but it shall not benecessary that the same officer sign the certificate of authentication on all of the Series 2002 Bonds that may be issued hereunder at any one time. The foregoing notwithstanding, if, at any time, the City serves as the Bond Registrar under this Resolution, any Series 2002 Bonds delivered during such time that the City serves as the Bond Registrar shall be authenticated by the manual signature of the Finance Director, and the registered owner of any Series 2002 Bond so authenticated shall be entitled to the benefits of this Resolution. D. If any Series 2002 Bond is mutilated, destroyed, stolen or lost, the City or its agent may, in its discretion (i) deliver a duplicate replacement Series 2002 Bond, or (ii) pay a Series 2002 Bond that has matured or is about to mature. A mutilated Series 2002 Bond shall be surrendered to and cancelled by the Bond Registrar. The Bondholder must furnish the City or its agent proof of ownership of any destroyed, stolen or lost Series 2002 Bond; post satisfactory indemnity; comply with any reasonable conditions the City or its agent may prescribe; and pay the City's or its agent's reasonable expenses. 11 Miavu Doami N: 8573v5 4� �� 284 84 Any -such duplicate Series 2002 Bond shall constitute an original contractual obligation on the part of the City whether or not the destroyed, stolen or lost Series 2002 Bond be at any time found by anyone, and such duplicate Series 2002 Bond shall be entitled to equal and proportionate benefits and rights as to lien on, and source of payment of and security for payment from, the funds pledged to the payment of the Series 2002 Bond so mutilated, destroyed, or stolen or lost. E. The Series 2002 Bonds may be made subject to redemption prior to their maturity at such times and in such manner as set forth in the Bond Purchase Agreements and approved by the City Manager pursuant to the authority described herein. Notice of redemption shall be given by deposit in the U.S. mails of a copy of a redemption notice, postage prepaid, at least thirty (30) days before the redemption date to all registered owners of the Series 2002 Bonds or portions of the Series 2002 Bonds to be redeemed at their addresses as they appear on the registration books to be maintained in accordance with the provisions hereof. Failure to mail any such notice to a registered owner of a Series 2002 Bond, or any defect therein, shall not affect the validity of the proceedings for redemption of any Series 2002 Bond or portion thereof with respect to which no failure or defect occurred. Such notice shall set forth the date fixed for redemption, the rate of interest borne by each Series 2002 Bond being redeemed, the name and address of the Bond Registrar and Paying Agent, the redemption price to be paid and, if less than all of the Series 2002 Bonds then Outstanding shall be called for redemption, the distinctive numbers and letters, including CUSIP numbers, if any, of such Series 2002 Bonds to be redeemed and, in the case of Series 2002 Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. If any Series 2002 Bond is to be redeemed in part only, the notice of redemption which relates to such Series 2002 Bond shall also state that on or after the redemption date, upon surrender of such Series 2002 Bond, a new Series 2002 Bond or Series 2002 Bonds in a principal amount equal to the unredeemed portion of such Series 2002 Bond will be issued. Any notice mailed as provided in this Section shall be conclusively presumed to have been duly given, whether or not the owner of such Series 2002 Bond receives such notice. The Bond Registrar shall not be required to transfer or exchange any Series 2002 Bond after the mailing of a notice of redemption nor during the period of fifteen (15) days next preceding mailing of a notice of redemption. F. Notice having been given in the manner and under the conditions hereinabove provided, the Series 2002 Bonds or portions of Series 2002 Bonds so called for redemption shall, on the redemption date designated in such notice, become and be due and payable at the redemption price provided for redemption of such Series 2002 Bonds or portions of Series 2002 Bonds on such date. On the date so designated for redemption, moneys for payment ,of the redemption price being held in separate accounts by the Paying Agent in trust for the registered owners of the Series 2002 Bonds or portions thereof to be redeemed, all as provided in this Resolution, interest on the Series 2002 Bonds or portions of Series 2002 Bonds so called for "redemption shall cease to accrue, such Series 2002 Bonds and portions of Series 2002 Bonds shall cease to be entitled to any lien, benefit or security under this Resolution and shall be deemed paid hereunder, and the registered owners of such Series 2002 Bonds or portions of 12 Mkmn DoeumW k: 8573vS 02- t84 Series 2002- Bonds shall have no right in respect thereof except to -receive payment of the redemption price thereof and, to the extent provided in the next subsection, to receive Series 2002 Bonds for any unredeemed portions of the Series 2002 Bonds. G. In case part but not all of an Outstanding fully registered Series 2002 Bond shall be selected for redemption, the registered owners thereof shall present and surrender such Series 2002 Bond to the designated Paying Agent for payment of the principal amount thereof so called for redemption, and the City shall execute and deliver to or upon the order of such registered owner, without charge therefor, for the unredeemed balance of the principal amount of the Series 2002 Bonds so surrendered, a Series 2002 Bond or Series 2002 Bonds fully registered as to principal and interest. H. Series 2002 Bonds or portions of Series 2002 Bonds that have been duly called for redemption under the provisions hereof, and with respect to which amounts sufficient to pay the principal of, redemption premium, if any, and interest to the date fixed for redemption shall be delivered to and held in separate trust accounts by an escrow agent, any Authorized Depository or any Paying Agent (other than the City) in trust for the registered owners thereof, as provided in this Resolution, shall not be deemed to be Outstanding under the provisions of this Resolution and shall cease to be entitled to any lien, benefit or security under this Resolution, except to receive the payment of the redemption price on or after the designated date of redemption from moneys deposited with or held by the escrow agent, Authorized Depository or Paying Agent (other than the City), as the case may be, for such redemption of the Series 2002 Bonds and, to the extent provided in the preceding subsection, to receive Series 2002 Bonds for any unredeemed portion of the Series 2002 Bonds. . I. If the date for payment of the principal of, redemption premium, if any, or interest on the Series 2002 Bonds shall be a Saturday, Sunday, legal holiday or, if the Paying Agent is then an entity other than the City, a day on which banking institutions in the city where the corporate trust office of the Paying Agent is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such day shall have the same force and effect as if made on the nominal date of payment. J. The text of the Series 2002 Bonds, the form of assignment for such Series 2002 Bonds and the authentication certificate to be endorsed thereon shall be substantially in the following form, with such omissions, insertions and variations as may be necessary or desirable and authorized by this Resolution or as may be approved and made by the officers of the City executing the same, such execution to be conclusive evidence of such approval, including, without limitation, such changes as may be required for the issuance of uncertificated public obligations: 13 Mind; DocuuW #: 8573vS 02— 2— 284 [Form of Series 2002 Bond] No. R [A][B]- UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF MIAMI GENERAL OBLIGATION REFUNDING BOND, SERIES 2002[A][B (FORWARD DELIVERY)] Interest Rate REGISTERED OWNER: PRINCIPAL AMOUNT: Original Maturity Date 1, Dated Date , 2002 CUSIP DOLLARS The City of Miami, Florida (hereinafter called the "City"), for value received, hereby Promises to pay to the Registered Owner identified above, or to registered assigns or legal representatives, to the extent and from the sources pledged therefor, as described herein, on the Maturity Date identified above (or earlier as hereinafter provided), the Principal Amount identified above, upon presentation and surrender hereof at the designated office of The Bank of New York, in Jacksonville, Florida, as the Paying Agent for the Bonds, or any successor Paying Agent appointed by the City pursuant to the Resolution hereinafter referred to, and to pay, to the extent and from the sources herein described, interest on the principal sum from the date hereof, or from the most recent interest payment date to which interest has been paid, at the Interest Rate per annum identified above, until payment of the principal sum, or until provision for the payment thereof has been duly provided for, such interest being payable on the first day of March and the first day of September of each year, commencing on , 2002. Interest will be paid by check or draft mailed to the registered owner hereof at his address as it appears on the registration books of the City maintained by The Bank of New York, as Bond Registrar, at the close of business on the fifteenth (15th) day (whether or not a business day) of the month next preceding the interest payment date (the "Record Date"), irrespective of any transfer or exchange of such Bond subsequent to each Record Date and prior to such interest payment date, unless the City shall be in default in payment of interest due on such interest payment date. In the event of any such default, such defaulted interest shall be payable to the person in whose name such Bond is registered at the close of business on a special record date for the payment of such defaulted interest as established by notice by deposit in the U.S. mails, postage prepaid, by the Bond Registrar to the registered owners of Bonds not less than fifteen (15) days preceding such special record date: Such notice shall be mailed to the persons in whose names the Bonds are registered at the close of business on the fifth (5th) day (whether or not a business day) preceding the date of mailing. This Bond is one of an authorized issue of bonds in the aggregate principal amount of $ of like date, tenor and effect, except as to number, maturity (unless all bonds 14 Miami; Docuumg 0: 8573vS ®2- 284 mature on the same date) and interest rate, issued to provide for the refunding, [on a current basis], of [all or a portion] of the City's General Obligation Bonds, Series , dated and the City's General Obligation Bonds, Series , dated as of (the "Refunded Bonds" ), pursuant to the authority of and in full compliance with the Constitution and laws of the State of Florida, including particularly Article VII, Section 12 of the Constitution, the Charter of the City, Chapter 166, Florida Statutes, Sections 132.33 - 132.47, Florida Statutes, Resolution No. _- duly enacted by the City on March 14, 2002 (the "Resolution"), and other applicable provisions of law. This Bond is subject to all the terms and conditions of the Resolution, and capitalized terms not otherwise defined herein shall have the same meanings ascribed to them in the Resolution. The full faith, credit and taxing power of the City are pledged to the punctual payment of the principal of, redemption premium, if any, and interest on the Bonds, as the same shall become due and payable. Reference is made to the Resolution for the provisions, among others, relating to the terms, lien and security for the Bonds, the custody and application of the proceeds of the Bonds, the rights and remedies of the holders of the Bonds, and the extent of and limitations on the City's rights, duties and obligations, to all of which provisions the registered owner hereof assents by acceptance hereof. [INSERT THE FOLLOWING REDEMPTION PROVISIONS ONLY IF BONDS ARE MADE SUBJECT TO REDEMPTION] [Bonds of this series are subject to mandatory redemption prior to their respective stated dates of maturity [insert mandatory redemption provisions, if any].] [The Bonds of this series scheduled to mature on of the years to shall be further subject to redemption prior to their maturity at the option of the City on or after as a whole or in part at any time (less than all of such maturity to be selected by lot), at the redemption prices (expressed as percentages of principal amount to be redeemed) set forth in the following table, plus accrued interest from the most recent interest payment date to the redemption date:) Redemption Periods Redemption (Dates Inclusive) Prices [Notice of call for redemption is to be given by mailing a copy of the redemption notice by registered or certified mail at least thirty (30) days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed at the address shown on the registration books maintained by the Bond Registrar, or any successor Bond Registrar appointed by the City pursuant to the Resolution. Failure to give such notice by mailing to any Bondholder, or any defect therein, shall not affect the validity of the proceedings for the redemption of any Bond or portion thereof with respect to which no such failure or defect has occurred. All such Bonds 15 Mian Doema t* 85730 02- 284 Q4 called for redemption and for the retirement of which funds are duly provided will cease to bear interest on such redemption date.] This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the Certificate of Authentication endorsed hereon shall have been manually signed by the Bond Registrar. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE SIDE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF FULLY SET FORTH IN THIS PLACE. This Bond is and has all the qualities and incidents of an investment security under the Uniform Commercial Cade -Investment Securities Law of the State of Florida. IN WITNESS WHEREOF, the City of Miami, Florida, has issued this Bond and has caused the same to be signed by its Mayor and attested and countersigned by its City Clerk, either manually or with their facsimile signatures, and its seal to be affixed hereto or a facsimile of its seal to be reproduced hereon, all as of the day of , 2002. CITY OF MIAMI, FLORIDA (SEAL) ATTESTED AND COUNTERSIGNED: Mayor City Clerk APPROVED AS TO FORM AND CORRECTNESS 0 City Attorney 16 Mkakv Domm c N: &573v5 02- 284 84 [CERTIFICATE OF AUTHENTICATION] This Bond is one of the Bonds designated in and executed under the provisions of the within mentioned Resolution. as Bond Registrar Authorized Officer Date of Authentication: [To be printed on the reverse side of Registered Bonds] ADDITIONAL BOND PROVISIONS This Bond may be transferred upon the registration books of the City upon delivery thereof to the principal office of the Bond Registrar accompanied by a written instrument or instruments of transfer in form and with guaranty of signature satisfactory to the Bond Registrar, duly executed by the registered owner of this Bond or by his attorney-in-fact or legal representative, containing written instructions as to the details of transfer of this Bond, along with the social security number or federal employer identification number of such transferee. In all cases of a transfer of a Bond, the Bond Registrar shall at the earliest practical time in accordance with the provisions of the Resolution enter the transfer of ownership in the registration books and shall deliver in the name of the new transferee or transferees a new fully registered Bond or Bonds of the same maturity and of authorized denomination or denominations, for the same aggregate principal amount and payable from the same source of funds. The City and the Bond Registrar may charge the owner of such Bond for the registration of every transfer or exchange of a Bond an amount sufficient to reimburse them for any tax, fee or any other governmental charge required (other than by the City) to be paid with respect to the registration of such transfer, and may require that such amounts be paid before any such new Bond shall be delivered. If the date for payment of the principal of, redemption premium, if any, or interest on this Bond shall be a Saturday, Sunday, legal holiday or, if the Paying Agent is then an entity other than the City, a day on which banking institutions in the city where the corporate trust office of the Paying Agent is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such day shall have the same force and affect as if made on the nominal date of payment. The City has established a book -entry system of registration for the series of Bondy of which this is one. Except as specifically provided otherwise in the Resolution, an agent will hold this Bond on behalf of the beneficial owner hereof. By acceptance of a confirmation of 17 Miw i Dommxu C 8573v5 02- 284 purchase, delivery or transfer, the beneficial owner of this Bond shall be deemed to have agreed to such arrangement. It is hereby certified and recited that this Bond is authorized by and is issued in conformity with the requirements of the Constitution and statutes of the State of Florida; that all acts, conditions and things required to exist, to happen, and to be performed precedent to the issuance of this Bond exist, have happened and have been performed in regular and due form and time as required by the laws and Constitution of the State of Florida applicable hereto; that the issuance of the Bonds of this issue does not violate any constitutional or statutory limitation or provision; that due provision has been made for the levy and collection of an annual tax, wil:hout limitation as to rate or amount, upon all taxable property within the corporate limits of the City (excluding exemptions as provided by applicable law), in addition to all other taxes sufficient to pay the principal of and interest on the Bonds as the same shall become due and payable, which tax shall be assessed, levied and collected at the same time and in the same manner as other taxes are assessed, levied and collected within the corporate limits of the City; and that the full faith, credit and taxing power of the City are pledged to the punctual payment of the principal of, redemption premium, if any, and interest on the Bonds, as the same shall become due and payable. [Form of Abbreviations for Series 2002 Bonds] The following abbreviations, when used in inscription on the face of the within Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN'COM - as tenants in common UNIF GIFT MIN ACT - Custodian _ TEN ENT - as tenants by the (Cust) (Minor) entireties JT TEN - as joint tenants with under Uniform Gifts to Minors right of survivorship Act and not as tenants (State) in common Additional abbreviations may also be used though not in the above list. 18 Mimi; DD=mc t N: 8573v5 02- 284 [Form of Assignment for Series 2002 Bonds] ASSIGNMENT FOR VALUE RECEIVED, the undersigned (the "Transferor") hereby sells, assigns and transfers unto (the "Transferee") PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF TRANSFEREE the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to registrar the transfer of the within Bond on the books kept for registration and registration of the transfer thereof, with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a member firm of any other recognized national securities exchange or a commercial bank or a trust company. q Mono; Document M: 857M NOTICE: No transfer will be registered and no new Bond will be issued in the name of the Transferee, unless the signature(s) to this assignment correspond(s) with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever and the Social Security or Federal Employer Identification Number of the Transferee is supplied. [End of Form of Series 2002 Bond] IM ®2- 284 Section 7. Authorization and Approval of Bond Purchase -Agreements. A. The execution and delivery of the Series 2002A Bond Purchase Agreement is hereby authorized and approved. The City Commission hereby authorizes and directs the City Manager to determine the final provisions of the Series 2002A Bond Purchase Agreement, within the parameters for the Series 2002A Bonds set forth in Section 6.A. of this Resolution. Upon compliance by the Underwriters with the requirements of Section 218.385(2) and (3), Florida Statutes, and Section 218.385(6), Florida Statutes, by filing the "truth -in -bonding statement" and the "disclosure statement" required by said statutory provisions, the Mayor or in the event of the Mayor's unavailability, the City Manager, is hereby authorized to execute and the Clerk is hereby authorized to attest to, seal and deliver the Series 2002A Bond Purchase Agreement in substantially the form approved at this meeting and attached hereto as Exhibit "A", subject to such changes, insertions and omissions and such filling in of blanks therein as hereafter may be approved and made by the City Manager upon the advice of the City Attorney and the City's bond counsel. The execution, attestation and delivery of the Series 2002A Bond Purchase Agreement, as described herein, shall be conclusive evidence of the City's approval of any such determinations, changes, insertions, omissions or filling in of blanks. - B. The execution and delivery of the Series 2002B Bond Purchase Agreement is hereby authorized and approved. The City Commission hereby authorizes and directs the City Manager to determine the final provisions of the Series 2002B Bond Purchase Agreement, within the parameters for the Series 2002B Bonds set forth in Section 6.A. of this Resolution. Upon compliance by the Underwriters with the requirements of Section 218.385(2) and (3), Florida Statutes, and Section 218.385(6), Florida Statutes, by filing the "truth -in -bonding statement" and the "disclosure statement" required by said statutory provisions, the Mayor or in the event of the Mayor's unavailability, the City Manager, is hereby authorized to execute and the Clerk is hereby authorized to attest to, seal and deliver the Series 2002B Bond Purchase Agreement in substantially the form approved at this meeting and attached hereto as Exhibit "A-1", subject to such changes, insertions and omissions and such filling in of blanks therein as hereafter may be approved and made by the City Manager upon the advice of the City Attorney and the City's bond counsel. The execution, attestation and delivery of the Series 2002B Bond Purchase Agreement, as described herein, shall be conclusive evidence of the City's approval of any such determinations, changes, insertions, omissions or filling in of blanks. Section 8. Authorization and-ARRroval of Negotiated Sale of Series 2002 Bonds. Based on the findings set forth in Section 3.J. hereof, the City Commission hereby approves the negotiated sale of the Series 2002 Bonds to the Underwriters, and the Series 2002 Bonds shall be sold and awarded to the Underwriters, upon the terms and conditions set forth herein and as set forth in the Bond Purchase Agreements. Section 9. Application_of _Series 2002 Bond Proceeds. A. The proceeds, including accrued interest and premium, if any, received from the sale of the Series 2002A Bonds shall be applied by the City, simultaneously with delivery of the Series 2002A Bonds, as follows: (1) Accrued interest, if any, shall be deposited in the account designated "City of 'Miami 2002A General Obligation Refunding Bonds Principal and Interest Account'(the "2002A Principal and Interest Account") which is hereby established with the Paying Agent, who shall 20 Miami; Domnwa N: 85730 02- 284 apply such moneys to pay interest on the Series 2002A Bonds as the same becomes due on the first interest payment date therefor. (2) An amount which, together with investment earnings thereon, is equal to the principal of and interest and redemption premium, if any, on the 1991 Refunded Bonds, the 1992 Refunded Bonds and the 1995 Refunded Bonds, when due, in accordance with the schedules to be attached to the Series 2002A Escrow Deposit Agreement, shall be transferred to the Escrow Agent for deposit into the Series 2002A Escrow Deposit Trust Fund established pursuant to the Series 2002A Escrow Deposit Agreement and shall be used and applied pursuant to and in the manner described in the Series 2002A Escrow Deposit Agreement to pay the principal of, redemption premium, if any, and interest on the 1991 Refunded Bonds, the 1992 Refunded Bonds and the 1995 Refunded Bonds. (3) The remainder of the proceeds shall be deposited in a separate account designated "City of Miami 2002A General Obligation Refunding Bonds Cost of Issuance Account" which is hereby established with the City and shall be disbursed for payment of expenses incurred in connection with the issuance of the Series 2002A Bonds (including payment of the expenses of the City). Any balance remaining after payment or provision for payment of such costs and expenses has been made shall be transferred to the 2002A Principal and Interest Account and used solely to pay principal of and interest on the Series 2002A Bonds. B. The proceeds, including accrued interest and premium, if any, received from the sale of the Series 2002B Bonds shall be applied by the City, simultaneously with delivery of the Series 2002B Bonds, as follows: - (1) Accrued interest, if any, shall be deposited in the account designated "City of Miami 2002B General Obligation Refunding Bonds Principal and Interest Account" (the "2002B Principal and Interest Account") which is hereby established with the Paying Agent, who shall apply such moneys to pay interest on the Series 2002B Bonds as the same becomes due on the first interest payment date therefor. (2) An amount which, together with investment earnings thereon, is equal to the principal of and interest and redemption premium, if any, on the 1992 Forward Refunded Bonds when due, in accordance with the schedules to be attached to the Series 2002B Escrow Deposit Agreement, shall be transferred to the Escrow Agent for deposit into the Series 2002B Escrow Deposit Trust Fund established pursuant to the Series 2002B Escrow Deposit Agreement and shall be used and applied pursuant to and in the manner described in the Series 2002B Escrow Deposit Agreement to pay the principal of, redemption premium, if any, and interest on the 1992 Forward Refunded Bonds. (3) The remainder of the proceeds shall be deposited in a separate account designated "City of Miami 2002B General Obligation Refunding Bonds Cost of Issuance Account" which is hereby established with the City and shall be disbursed for payment of expenses incurred in connection with the issuance of the Series 2002B Bonds (including payment of the expenses of the City). Any balance remaining after payment or provision for payment of such costs and expenses has been made shall be transferred to the 2002B Principal and Interest Account and used solely to pay principal of and interest on the Series 2002B Bonds. 21 02- 284 Miami; pocumrnt H; 0730 Section 10. Investment of Proceeds of the Series 2002 Bonds. All proceeds of the Series 2002 Bonds held by the Escrow Agent shall be invested only in Government Obligations, as provided in the respective Escrow Deposit Agreements. Proceeds of the Series 2002 Bonds representing accrued interest on the Series 2002 Bonds transferred to the City pursuant to the provisions of Section 9 above may be invested by the City in such investments as are permitted by applicable law. Section 11. LM of Ad Valorem Tax; PgMent and Pledge. In each Fiscal Year while any of the Series 2002 Bonds are outstanding there shall be assessed, levied and collected a tax, without limitation as to rate or amount, on all taxable property within the corporate limits of the City (excluding exemptions as provided by applicable law), in addition to all other taxes, sufficient in amount to pay the principal of and interest on the Series 2002 Bonds as the same shall become due. The tax assessed, levied and collected for the security and payment of the Series 2002 Bonds shall be assessed, levied and collected in the same manner and at the same time as other taxes are assessed, levied and collected and the proceeds of said tax shall be applied solely to the payment of the principal of, redemption premium, if any, and interest on the Series 2002 Bonds. On or before each interest or principal payment date for the Series 2002 Bonds, the City shall transfer or cause to be transferred to the Paying Agent for deposit in the 2002A Principal and Interest Account and the 2002B Principal and Interest Account an amount sufficient to pay the principal of, redemption premium, if any, and interest on the Series 2002 Bonds then due and payable and the Paying Agent is hereby authorized and directed to apply such funds to said payment. The foregoing notwithstanding, the City shall comply with the deposit requirements of the First Union Escrow Agreement, as such deposit requirements apply to the Series 2002 Bonds, for so long as such First Union Escrow Agreement is in full force and effect. The full faith, credit and taxing power of the City are hereby irrevocably pledged to the punctual payment of the principal of, interest on and redemption premium, if any, with respect to the Series 2002 Bonds as the same shall become due and payable. The City will diligently enforce its right to receive tax revenues and will diligently enforce and collect such taxes. The City will not take any action that will impair or adversely affect its rights to levy, collect and receive said taxes, or impair or adversely affect in any manner the pledge made herein or the rights of the Bondholders. Section 12. Compliance With Tax. Requirements. The City hereby covenants and agrees, for the benefit of the owners from time to time of the Series 2002 Bonds, to comply with the requirements applicable to it contained in the Code to the extent necessary to preserve the exclusion of interest on the Series 2002 Bonds from gross income for federal income tax purposes. Specifically, without intending to limit in any way the generality of the foregoing, the City covenants and agrees: (a) to pay to the United States of America from the funds and sources of revenues pledged to the payment of the Series 2002 Bonds, and from any other legally available funds, at the times required pursuant to Section 148(f) of the Code, the excess of the amount earned on all nonpurpose investments (as defined in Section 148(f)(6) of the Code) over the amount which 22 We* DoMMM N: 8573v5 ®2- 284 would have been earned if such nonpurpose investments were invested at a rate equal to the yield on the Series 2002 Bonds, plus any income attributable to such excess (the "Rebate Amount"); (b) to maintain and retain all records pertaining to and to be responsible for making or causing to be made all determinations and calculations of the Rebate Amount and required payments of the Rebate Amount as shall be necessary to comply with the Code; (c) to refrain from using proceeds from the Series 2002 Bonds in a manner that would cause the Series 2002 Bonds to be classified as private activity bonds under Section 141(a) of the Code; and (d) to refrain from taking any action that would cause the Series 2002 Bonds, or any of them, to become arbitrage bonds under Section 148 of the Code. The City understands that the foregoing covenants impose continuing obligations on the City to comply with the requirements of the Code so long as such requirements are applicable. Section 13. Approval of Forms of Escrow Deposit A eements• A ointment of Escrow Agent. A. The execution and delivery of the Series 2002A Escrow Deposit Agreement is hereby authorized and approved. The City Commission hereby authorizes and directs the City Manager to determine the final provisions of the Series 2002A Escrow Deposit Agreement. The Mayor or in the event of the Mayor's unavailability, the City Manager, is hereby authorized to execute and the Clerk is hereby authorized to attest to, seal and deliver the Series 2002A Escrow Deposit Agreement in substantially the form approved at this meeting and attached hereto as Exhibit "B", subject to such changes, insertions and omissions and such filling in of blanks therein as hereafter may be approved and made by the City Manager upon the advice of the City Attorney and the City's bond counsel. The execution, attestation and delivery of the Series 2002A Escrow Deposit Agreement, as described herein, shall be conclusive evidence of the City's approval of any such determinations, changes, insertions, omissions or filling in of blanks. The Bank of New York is hereby appointed as Escrow Agent under the Series 2002A Escrow Deposit Agreement. B. The execution and delivery of the Series 2002B Escrow Deposit Agreement is hereby authorized and approved. The City Commission hereby authorizes and directs the City Manager to determine the final provisions of the Series 2002B Escrow Deposit Agreement. The Mayor or in the event of the Mayor's unavailability, the City Manager, is hereby authorized to execute and the Clerk is hereby authorized to attest to, seal and deliver the Series 2002B Escrow Deposit Agreement in substantially the form approved at this meeting and attached hereto as Exhibit "B-1", subject to such changes, insertions and omissions and such filling in of blanks therein as hereafter may be approved and made by the City Manager upon the advice of the City Attorney and the City's bond counsel. The execution, attestation and delivery of the Series 2002B Escrow Deposit Agreement, as described herein, shall be conclusive evidence of the City's approval of any such determinations, changes, insertions, omissions or filling in of blanks. The Bank of New York is hereby appointed as Escrow Agent under the Series 2002B Escrow Deposit Agreement. Section 14. ARproval of Form of Pgying PayingAgent and Registrar Agreement; A ointment of Pa)dmg Agent and Bond Registrar. The execution and delivery of the Paying Agent and Registrar Agreement is hereby authorized and approved. The City Commission hereby authorizes 23 Mimi; D"u r" #: 85730 02- 284 and directs the City Manager to determine the final provisions of the Pairing Agent and Registrar Agreement. The Mayor or in the event of the Mayor's unavailability, the City Manager, is hereby authorized to execute and the Cleric is hereby authorized to attest to, seal and deliver the Paying Agent and Registrar Agreement in substantially the form approved at this meeting and attached hereto as Exhibit "C", subject to such changes, insertions and omissions and such filling in of blanks therein as hereafter may be approved and made by the City Manager upon the advice of the City Attorney and the City's bond counsel. The execution, attestation and delivery of the Paying Agent and Registrar Agreement, as described herein, shall be conclusive evidence of the City's approval of any such determinations, changes, insertions, omissions or filling in of blanks. The Bank of New York is hereby appointed as the initial Paying Agent and the initial Bond Registrar for the Series 2002 Bonds. Section 15. Preliminn Official Statement,• Official Statement. The use of a Preliminary Official Statement in connection with the marketing of the Series 2002 Bonds is hereby authorized. The Preliminary Official Statement in substantially the form attached hereto as Exhibit "D" is hereby approved with such changes, insertions and omissions and such filling in of blanks therein as may be approved by the City Manager. The Mayor is hereby authorized to approve and execute, on behalf of the City, an Official Statement relating to the Series 2002 Bonds with such changes from the Preliminary Official Statement, within the authorizations and limitations contained herein, as the Mayor in consultation with the City Manager, the City Attorney, the City's bond counsel and the City's disclosure counsel in his sole discretion, may approve, such execution to be conclusive evidence of such approval. The City Manager is hereby authorized to deem the Preliminary Official Statement final for the purposes of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"). The City Manager or his designee is hereby authorized to provide for the printing of the Preliminary Official Statement and the Official Statement by the lowest and most responsive bidder therefor and the payment of the cost of such printing is hereby authorized to be paid from the proceeds of the Series 2002 Bonds. There is hereby further authorized to be prepared and delivered on behalf of the City in connection with the issuance and delivery of the Series 2002B Bonds such update to the Official Statement as may be necessary in order to comply with the requirements of the Series 2002B Bond Purchase Agreement. The Mayor is authorized to execute any such update to the Official Statement. Section 16. Election to Call Refunded Bonds; Publication of Notice of Refunding. The City Commission hereby elects to call and redeem the Refunded Bonds as set forth in the Escrow Deposit Agreements. The City will, and hereby authorizes and directs the Escrow Agent to, cause to be given notice of redemption and notice of defeasance of the Refunded Bonds, all as and to the extent required by the authorizing resolutions pursuant to which the Refunded Bonds were issued. Section 17. Continuing Disclosure. For the benefit of the holders and beneficial owners from time to time of the Series 2002 Bonds, the City agrees, in accordance with and as the only obligated person with respect to the Series 2002 Bonds under the Rule, to provide or cause to be provided such financial information and operating data, financial statements and notices, in such manner, as may be required for purposes of paragraph (b)(5) of the Rule. In order to describe 24 Mipni Documew 4: 9573v5 02— 284 and specify certain terms of the City's continuing disclosure agreement, including provisions for enforcement, amendment and termination, the Finance Director is hereby authorized and directed to sign and deliver, in the name and on behalf of the City, one or more Continuing Disclosure Commitments (the "Continuing Disclosure Commitment"), in substantially the form attached hereto as Exhibit "E", with such changes, insertions and omissions and such filling in of blanks therein as may be approved by the Finance Director. The execution of the Continuing Disclosure Commitment, for and on behalf of the City by the Finance Director, shall be deemed conclusive evidence of the City's approval of the Continuing Disclosure Commitment. The agreement formed, collectively, by this paragraph and the Continuing Disclosure Commitment, shall be the City's continuing disclosure agreement for purposes of the Rule, and its performance shall be subject to the availability of funds to meet costs the City would be required to incur to perform it. Notwithstanding any other provisions of this Resolution, any failure by the City to comply with any provisions of the Continuing Disclosure Commitment or this Section 17 shall not constitute a default under this Resolution and the remedies therefor shall be solely as provided in the Continuing Disclosure Commitment. The Finance Director is further authorized and directed to establish, or cause to be established, procedures in order to ensure compliance by the City with the Continuing Disclosure Commitment, including the timely provision of information and notices. Prior to making any filing in accordance with such agreement, the Finance Director shall consult with, as appropriate, the City Attorney, the City's bond counsel or the City's disclosure counsel. The Finance Director, acting in the name and on behalf of the City, shall be entitled to rely upon any legal advice provided by the City Attorney, the City's bond counsel or the City's disclosure counsel in determining whether a filing should be made. Section 18. Municipal_ Bond Insurance. In order to produce the lowest true interest cost possible for the Series 2002 Bonds or any portion thereof, the City Manager is hereby authorized to secure a municipal bond insurance policy or policies with respect to any or all series of the Series 2002 Bonds, if, after consultation with the Finance Director and the Financial Advisor, the City Manager determines that obtaining such municipal bond insurance policy is in the best interests of the City. The City is hereby authorized to provide for the payment of any premium on such municipal bond insurance policy from the proceeds of the issuance of the Series 2002 Bonds and to, enter into such agreement as may be necessary to secure such municipal bond insurance policy, with the City Manager's execution of any such agreement to be conclusive evidence of the City's approval thereof, provided, however, that such agreement shall be in form and substance satisfactory to the Finance Director, the City Attorney and to the City's bond counsel. The provisions of any such agreement shall supersede any inconsistent provision of this Resolution. Section 19. Further Authorizations. The Mayor and the City Manager or either of them and the Clerk, the Finance Director and the City Attorney and such other officers and employees of the City as may be designated by the Mayor and the City Manager or either of them are each designated as agents of the City in connection with the sale, issuance and delivery of the Series 2002 Bonds and are authorized and empowered, collectively or individually, to take all action and steps and to execute all instruments, documents and contracts on behalf of the City, including, but not limited to, the filing of any required subscriptions for United States Treasury Securities — State and Local Government Series and the execution of documentation required in 25 Mimi; Dawarnt p: 8577v5 02- 284 connection with the negotiated sale of the Series 2002 Bonds to the, Underwriters, that are necessary or desirable in connection with the sale, execution and delivery of the Series 2002 Bonds, and which are specifically authorized or are not inconsistent with the terms and provisions of this Resolution, the Bond Purchase Agreements, the Escrow Deposit Agreements, the Continuing Disclosure Commitment or any action relating to the Series 2002 Bonds heretofore taken by the City. Such officers and those so designated are hereby charged with the responsibility for the issuance of the Series 2002 Bonds. Any and all costs incurred in connection with the issuance of the Series 2002 Bonds and/or the refunding of the Refunded Bonds are hereby authorized to be paid from the proceeds of the Series 2002 Bonds. Section 20. Modification or Amendment. This Resolution may be modified and amended by the City from time to time prior to the issuance of the Series 2002 Bonds. Thereafter, no modification or amendment of this Resolution or of any resolution or ordinance amendatory hereof or supplemental hereto materially adverse to the Bondholders may be made without the consent in writing of the owners of not less than a majority in aggregate principal amount of the Outstanding Series 2002 Bonds, but no modification or amendment shall permit a change (a) in the maturity of the Series 2002 Bonds or a reduction in the rate of interest thereon, (b) in the amount of the principal obligation of any Series 2002 Bond, (c) that would affect the unconditional promise of the City to levy and collect taxes as herein provided, or (d) that would reduce such percentage of owners of the Series 2002 Bonds required above for such modifications or amendments, without the consent of all of the Bondholders. For the purpose of Bondholders' voting rights or consents, the Series 2002 Bonds owned by or held for the account of the City, directly or indirectly, shall not be counted. Section 21. Defeasance and Release. If, at any time after the date of issuance of the Series 2002 Bonds (a) all Series 2002 Bonds secured hereby or any maturity thereof shall have become due and payable in accordance with their terms or otherwise as provided in this Resolution, or shall have been duly called for redemption (if applicable), or the City gives the Paying Agent irrevocable instructions directing the payment of the principal of, redemption premium, if any, and interest on such Series 2002 Bonds at maturity or at any earlier redemption date scheduled by the City, or any combination thereof, (b) the full amount of the principal, redemption premium, if any, and the interest so due and payable upon all of such Series 2002 Bonds then ,outstanding or any portion of such Series 2002 Bonds, at maturity or upon redemption (if applicable), shall be paid, or sufficient moneys shall be held by an escrow agent who shall be an Authorized Depository or any Paying Agent (other than the City) in irrevocable trust for the benefit of such Bondholders (whether or not in any accounts created hereby) which, when invested in Government Obligations maturing not later than the maturity or redemption (if applicable) dates of such principal, redemption premium, if any, and interest, will, together with the income realized on such investments, be sufficient to pay all such principal, redemption premium, if any, and interest on said Series 2002 Bonds at the maturity thereof or the date upon which such. Series 2002 Bonds are to be called for redemption (if applicable) prior to maturity, and (c) provision shall also be made for paying all other sums payable hereunder by the City allocable to such Series 2002 Bonds, then and in that case the right, title and interest of such Bondholders hereunder shall thereupon cease, determine and become void; otherwise, this Resolution shall be, continue and remain in full force and effect. Notwithstanding anything in this Section 21 to the contrary, however, the obligations of the City under Section 12 hereof shall remain in full force and effect until such time as such obligations are fully satisfied. 25 Miami; Damun l 0: 95730 02— 2 4 Section 22. Severability. If any one or more of the covenants, agreements or provisions of this Resolution shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from -the remaining covenants, agreements or provisions of this Resolution or of the Series 2002 Bonds issued hereunder. Section 23. No. Third Party Beneficiaries. Except as herein otherwise expressly provided, nothing in this Resolution expressed or implied is intended or shall be construed to confer upon any person, firm or corporation other than the parties hereto and the owners and holders of the Series 2002 Bonds issued under and secured by this Resolution, any right, remedy or claim, legal or equitable, under or by reason of this Resolution or any provision hereof, this Resolution and all its provisions being intended to be and being -for the sole and exclusive benefit of the parties hereto and the owners and holders from time to time of the Series 2002 Bonds issued hereunder. Section 24. Controlling -Law, Members_ of Governing Body of City_ Not Liable. All covenants, stipulations, obligations and agreements of the City contained in this Resolution shall be deemed to be covenants, stipulations, obligations and agreements of the City to the full extent authorized and provided by the Act. No covenant, stipulation, obligation or agreement contained herein shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future member, agent or employee of the Governing Body of the City in his individual capacity, and neither the members of the Governing Body nor any official executing the Series 2002 Bonds shall be liable personally on the Series 2002 Bonds or this Resolution or shall be subject to any personal liability or accountability by reason of the issuance or the execution by the Governing Body or such members thereof. Section 25. Qualification for the Depository Trust Com an . Notwithstanding any other provision hereof, the City, the Bond Registrar and the Paying Agent are hereby authorized to take such actions as may be necessary to qualify the Series 2002 Bonds for deposit with DTC, including, but not limited to, execution and delivery of a Blanket Issuer Letter of Representations from the City to DTC (the "DTC Agreement') and the taking of all actions required by such DTC Agreement, wire transfers of interest and principal payments with respect to the Series 2002 Bonds, utilization of electronic book entry data received from DTC in place of actual delivery of Series 2002 Bonds and provisions of notice with respect to Series 2002 Bonds registered by DTC (or any of its designees identified to the City, the Bond Registrar or the Paying Agent) by overnight delivery, courier service, telegram, telecopy or other similar means of communication. The City Manager is hereby authorized and directed to execute and deliver the DTC Agreement on behalf of the City. Section 26. Appointment of Verification Agent. The City hereby appoints The Arbitrage Group, Inc. as Verification Agent with respect to the Series 2002 Bonds and the refunding of the Refunded Bonds. The fees and expenses of the Verification Agent are hereby authorized to be paid from the proceeds of the Series 2002 Bonds. 27 MM* Domand P MRS 02- 284 • Section 27. Effective Date. This Resolution shall be effective immediately upon its adoption. ADOPTED this 14'h day of March, 2002. Attest: City Clerk Miami; DwwzkmU N. BS73v5 2s Mayor 02_. 284 Section 27. Effective Date. This Resolution shall become effective immediately upon its adoption and signature of the Mayor. 1/ PASSED AND ADOPTED this 14th day of March , 2002. ATTEST: ( ?.4 " " - . & /'/'� /t' -- PRISCILLA A. HOMPSO CITY CLERK �XTNESS: ANUEL A. DIAZ, MAYOR i� If the Mayor does not sign this Resolution, it shall become effective at the end of ten calendar days from the date it was passed and adopted. If the Mayor vetoes this Resolution, it shall become effective immediately upon override of the veto by the City Commission. NK 02- 284 EXHIBIT "A„ - SERIES 2002A BOND PURCHASE AGREEMENT A-1 02W 284 Mmgti; Document k: 8573v4 RMSS&R, P.A. Draft 3/4102 • CITY OF NHANH, FLORIDA GENERAL OBLIGATION REFUNDING BONDS, SERIES 2002A BOND PURCHASE AGREEMENT FTL:857055:1 02- 284 • • • • 0 TABLE OF CONTENTS CJ Pa&e ARTICLEI DEFINITIONS...................................................................................................1 SECTION 1.1. Participants.............................................................................................I SECTION 1.2. Contracts, Instruments and Documents.................................................2 SECTION 1.3. Legal Authorities...................................................................................3 SECTION 1.4. Events, Dates and Places........................................................................3 SECTION 1.5. Other Definitions...................................................................................4 ARTICLE II REPRESENTATIONS AND COVENANTS ....................................................4 SECTION 2.1. Representations and Covenants of City.................................................4 ARTICLE III AGREEMENT TO PURCHASE BONDS........................................................8 SECTION 3.1. Delivery of Documents to Underwriters................................................8 SECTION 3.2. Agreement to Sell and Purchase Series 2002A Bonds ..........................8 SECTION 3.3. Public Offering of Series 2002A Bonds................................................9 SECTION 3.4. Good Faith Check..................................................................................9 ARTICLE IV CLOSING CONDITIONS...............................................................................10 SECTION 4.1. Performance of Obligations.................................................................10 SECTION 4.2. Delivery of Closing Papers..................................................................10 SECTION 4.3. Form of Closing Papers; Waiver of Conditions...................................12 ARTICLE V TERMINATION; PAYMENT OF EXPENSES..............................................13 SECTION 5.1. Termination..........................................................................................13 SECTION 5.2. Payment of Expenses...........................................................................14 ARTICLE VI MISCELLANEOUS........................................................................................14 SECTION 6.1. SECTION 6.2. SECTION 6.3. SECTION 6.4. SECTION 6.5. SECTION 6.6. SECTION 6.7. SECTION 6.8. SECTION 6.9. FTL-857055:1 Parties In Interest; Survival of Representations...................................14 Notices.................................................................................................14 Amendment..........................................................................................15 Governing Law; Venue........................................................................15 Captions...............................................................................................15 Counterparts.........................................................................................15 Severability..........................................................................................15 Rights of Managing Underwriter.........................................................15 Effective Time of this Bond Purchase Agreement...............................16 i 02- 284 • • SCHEDULES AND EXHIBITS — ScheduleA Underwriters........................................................................................... A-1 Exhibit A Maturities, Amounts, Interest Rates and Prices and Yields .................... A-1 Exhibit B Opinion Letter of City Attorney...............................................................B-1 Exhibit C Opinion of Bond Counsel........................................................................0-1 Exhibit D Opinion of Underwriters' Counsel.......................................................... D-1 Exhibit E Underwriter's Truth -in -Bonding and Disclosure Statement ....................E-1 Is t ii FTL:`8'57fl55:1 • • • BOND PURCHASE AGREEMENT - This Bond Purchase Agreement dated '2002 ("Bond Purchase Agreement") is entered into by and among the following parties (hereinafter individually called a "Party" and collectively called the "Parties") - City of Miami, Florida, a municipal corporation of the State of Florida, duly organized and existing under the Constitution and laws of the State of Florida (the "City"); and J.P. Morgan Securities, Inc. (hereinafter called the "Managing Underwriter") and the underwriters listed on the attached Schedule A (hereinafter called a "Participating Underwriter" and, collectively with the Managing Underwriter, sometimes called the "Underwriters"). ARTICLE I DEFINITIONS SECTION 1.1. Participants. In addition, to the Parties, various persons and firms will participate in the financing to which this Bond Purchase Agreement relates. Among them are those identified below (hereinafter collectively called the "Participants"): Bond Counsel: Squire, Sanders & Dempsey, LLP Miami, Florida Counsel to the City: Office of the City Attorney Miami, Florida City's Co -Disclosure Bryant, Miller and Olive, P.A. Counsel: Miami, Florida Manuel Alonso-Poch, P.A. Coral Gables, Florida Ci&s Governing Bo dx: The individuals who are then serving as members of the City Commission of the City Escrow Agent: The Bank of New York New York, New York Underwriters' Counsel: Ruden, McClosky, Smith, Schuster & Russell, P.A. Miami, Florida FTL:857055:1 1 ()2- 284 • • SECTION 1.2. Contracts. Instruments and Documents. Various contracts, instruments and • documents are involved in the financing to which this Bond Purchase Agreement relates. Among them are those identified below: Arbitrage Certificate: The certificate of the City setting forth its reasonable expectations regarding the use of the proceeds of the Bonds, among other matters. 2002A Basic Documents: This Bond Purchase Agreement, the Series 2002A Bonds, the Continuing Disclosure Certificate and the Escrow Agreement. Closing Papers: Collectively, the certificates, opinions, instruments and other documents described in Section 4.2 of this Bond Purchase Agreement. Continuing Disclosure The Continuing Disclosure Certificate of the Certificate: City dated as of 1, 2002 relating to the Series 2002A Bonds. Escrow Agreement: The Escrow Deposit Agreement dated as of the date of closing of the Series 2002A Bonds between the City and the Escrow Agent. Financial Statements. The audited financial statements for the fiscal year ended September 30, 2001 of the City included in the Official Statement as Appendix B. Official Statement: The Official Statement (including the Appendices thereto), dated the date hereof, summarizing the terms of the Series 2002A Bonds and other related matters. Preliminary Official Statement: The Preliminary Official Statement (including the Appendices thereto), dated 2002, summarizing the terms of the Series 2002A Bonds and related matters. Prior Bonds: The City's outstanding General Obligation Refunding Bonds, Series 1991, General Obligation Bonds, Series 1992 and General Obligation Bonds, Series 1995. 2 a. 284 • • • • • Refunded Bonds: The Prior Bonds to be refunded with proceeds of the Series 2002A Bonds and other legally available funds of the City as set forth in the Escrow Agreement. Series 2002A Bonds: The City's General Obligation Refunding Bonds, Series 2002A SECTION 1.3. Leal Authorities. Various legal authorities are involved in the financing to which this Bond Purchase Agreement relates. Among them are those identified below: Code: The Internal Revenue Code of 1986, as amended through and including the Closing Date and, to the extent applicable, the Internal Revenue Code of 1954, as amended, and, to the extent applicable, the regulations issued or proposed pursuant thereto. Referendum: Collectively, the referenda at which the issuance of the Prior Bonds (or the bonds that were refunded by the Prior Bonds) were approved. Referendum Resolution: Collectively, the resolutions authorizing the issuance of the Prior Bonds (or the bonds that were refunded by the Prior Bonds), subject to the approval of the qualified voters of the City and the resolutions calling the applicable referendums. Resolution: Resolution No. adopted by the City on 2002 authorizing the issuance of the Series 2002A Bonds, among other matters. SECTION 1.4. Events, Dates and Places. Various dates and places are significant in the financing to which this Bond Purchase Agreement relates. Among them are those identified below: FTL:asross:r Closing: The consummation of the transaction at which the Series 2002A Bonds are delivered by the City to the Underwriters, and paid for by the Underwriters, pursuant to this Bond Purchase Agreement. 3 ®2- 284 • Closing Date: Closing Time: Place of Closing: L` 2002, or -such other date as the Parties may agree. r 1:00 p.m. Eastern Daylight Time or such other time as the Parties may agree. [To be determined] SECTION I.S. Other Definitions. All capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Resolution. ARTICLE H REPRESENTATIONS AND COVENANTS SECTION 2.1. Representations and Covenants of City. As an inducement to the other Parties to enter into this Bond Purchase Agreement, the City makes the following representations and covenants: (a) The City is a municipal corporation of the State of Florida, duly validly organized and existing under the Constitution and laws of the State of Florida. (b) Each of the City's Referendum Resolution and Resolution, respectively, was adopted or enacted, as applicable, by the City's Governing Body at meetings duly called and held in open session upon requisite prior public notice pursuant to the laws of the State of Florida and the standing resolutions and rules of procedure of the City's Governing Body. Each of the City's Referendum Resolution and Resolution, respectively, is in full force and effect, and no portions thereof have been supplemented, repealed, rescinded or revoked, except as described in the Official Statement. The Resolution creates a valid pledge of the City's full faith, credit and taxing power to the payment of the Series 2002A Bonds. No further approval of the qualified electors of the City is required for the issuance of the Series 2002A Bonds. (c) The City has full right, power and authority to enter into, execute and deliver the Official Statement and the 2002A Basic Documents and to perform its obligations thereunder and as contemplated thereby and to pledge its full faith, credit and taxing power to payment of the Series 2002A Bonds. All permits, consents or licenses, if any, and all notices to or filings necessary for such performance have been obtained or made. When executed and delivered, the 2002A Basic Documents shall constitute legal, valid and binding obligations of the City. • • (d) The persons executing the 2002A Basic Documents and the Official Statement on behalf of the City are authorized for and in the name of the City to execute, deliver and perform the obligations of the City under the 2002A Basic Documents and as contemplated by the Official Statement and to execute, deliver, file or record such other , 4 FTL:857055:1 02- 284 QA . incidental papers, documents and instruments as shall be necessary -to carry out the intention and purposes of the 2002A Basic Documents and the City's Resolution. (e) No authorization, approval, consent or license of any governmental body or authority, not already obtained, is required for the adoption of the Resolution, enactment of the Ordinance and the valid and lawful execution and delivery by the City of the 2002A Basic Documents and the Official Statement and the City is not aware of any facts or circumstances that would prevent it from obtaining, in due course, any authorization, approval, consent or license of any governmental body or authority required for the adoption of the Referendum Resolution and the Resolution and the valid and lawful performance of the obligations of the City under the 2002A Basic Documents or as contemplated thereby. (f) The adoption of the Referendum Resolution and the Resolution and the execution and delivery by the City of the 2002A Basic Documents and the Official Statement and the performance by the City of its obligations under the 2002A Basic Documents or as contemplated thereby is permitted by and will not conflict with or constitute a breach of or default under any existing law, court or administrative regulation, decree or order or any commitment, indenture, mortgage, lease, contract, agreement or instrument to which the City is a party, or by which it or any of its properties are bound or subject. No event has occurred which, with the lapse of time or the giving of notice or both, would constitute a material event of default (as therein defined) under any of the 2002A Basic Documents. No material event of default has occurred which, with the lapse of time or the giving of notice or both, would constitute an event of default (as therein defined) under the Resolution and the Referendum Resolution and the Resolution are each in full force and effect and have not been amended or modified except as disclosed in the Official Statement. (g) There is no litigation, administrative proceeding or investigation pending (nor, to the knowledge of the City, is any such action threatened) in the Circuit Court of the State of Florida in and for the Eleventh Judicial Circuit or in the United States District Court for the Southern District of Florida or in any other court for which the City has received actual notice which in any way affects, contests, questions or seeks to restrain or enjoin any of the following: (i) the powers or valid existence of the City or the titles of the members of the City's Governing Body or its other officers to their respective offices; (ii) any of the proceedings had or actions taken leading up to the sale, issuance and delivery of the Series 2002A Bonds or the execution, delivery or performance of this Bond Purchase Agreement, including the Referendum; (iii) the delivery, validity or enforceability of the Series 2002A Bonds or any of the 2002A Basic Documents or contesting the power of the City to undertake or consummate the transactions contemplated therein and in the Official Statement; (iv) contesting in any way the completeness or accuracy ofthe Official Statement; (v) wherein an unfavorable decision, ruling or finding would materially and adversely affect the validity or enforceability of the 2002A Basic Documents; or (vi) the pledge of the City's full faith, credit and taxing power to payment of the Series 2002A Bonds. (h) To the knowledge of the City, the City is not on the date hereof, and will not be on the Closing Date, in default under any instrument to which the City is subject or by 5 FTL:857055:1 02- 284 which it or its properties are or may be bound or subject, which -default would (i) have a material adverse effect on the condition of the City, financial or otherwise (other thar. as disclosed in the Official Statement) or (ii) otherwise materially affect its ability to perform its obligations under the 2002A Basic Documents. (i) To the best of the City's knowledge, the City has not been advised by the Commissioner, any District Director or any other official of the Intemal Revenue Service that certifications by the City with respect to arbitrage may not be relied upon. 0) The City will apply the proceeds of the Series 2002A Bonds in the manner described in the Official Statement and the Arbitrage Certificate and will not take or omit to take any action that will in any way cause or result in the proceeds of the sale of the Series 2002A Bonds to be applied in a manner other than as described in the same. (k) The Financial Statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis except for the changes in accounting principles noted therein, if any, and fairly present the financial position of the City, the results of operations and cash flows at the date and for the period indicated. (1) There has been no material adverse change in the business, properties or financial condition of the City from that shown in the Financial Statements for the period ended September 30, 2001. 0 (m) The Preliminary YOfcial Statement andOfficial Statement (including the financial and statistical data included therein and the Appendices thereto) are true, correct and complete and do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading. The City has consented to the use of the Preliminary Official Statement and the Official Statement by the Underwriters in connection with the public offering of the Series 2002A Bonds. (n) The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriters as the Managing Underwriter may reasonably request in order to qualify the Series 2002A Bonds for offer and sale under the Blue Sky or other securities laws or regulations of such states and other jurisdictions of the United States as the Underwriters may designate and to determine the eligibility of the Series 2002A Bonds for investment under the laws of such states and jurisdictions, and will undertake its best efforts to continue such qualifications in effect as long as required for the distribution of any Series 2002A Bonds, provided that the City will not be required to qualify to do business, or be subject to service of process in or subject itself to the jurisdiction of, any state other than the State of Florida. (o) The City has not, since December 31, 1975 been in default in the payment of principal of, premium, if any, or interest on, or otherwise been in default with respect to, any bonds, notes or other obligations which it has issued, assumed or guaranteed as to payment of principal, premium, if any, or interest, nor has any other person been in default with respect 6 FTL-857055:1 02- 284 to payment of principal of, premium, if any, or interest on any bonds, notes or other obligations which it has issued, except, in both cases, as described in the Preliminary Official Statement and the Official Statement and certain conduit issues which the opinion ofthe City would not be considered material by a reasonable investor and therefor do not have to be disclosed in the Official Statement under Rule 3E-400.003, Rules of Government Securities, promulgated under Section 517.051(1), Florida Statutes. (p) If between the date hereof and the date of the Closing any event shall occur which would or might cause the information contained in the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the City shall notify the Managing Underwriter thereof, and if in the reasonable opinion of the Managing Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City will cooperate with the Managing Underwriter in supplementing or amending the Official Statement (the printing of which will be the expense of the City) in such form and manner and at such time or times as maybe reasonably called for by the Managing Underwriter. (q) The City agrees that after the Closing and during the period ended ninety (90) days after the "end of the underwriting period," hereinafter described (i) the City will not adopt any amendment of or supplement to the Official Statement to which, after having been furnished a copy prior to any proposed adoption, the Managing Underwriter shall object in writing or which shall be disapproved by counsel for the Underwriters and (ii) if any event relating to or affecting the City or the Series 2002A Bonds shall occur as a result of which it is necessary, in the opinion of the City, the Managing Underwriter or Underwriters' Counsel, to amend or supplement the Official Statement in order to make the Official Statement not misleading in light of the circumstances existing at the time it is delivered to a purchaser, the City shall, at its expense, forthwith prepare and furnish to the Managing Underwriter a reasonable number of an amendment of or.supplement to the Official Statement (in form and substance satisfactory to the City and the Underwriters) which will amend or supplement the 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 light circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading. The City will promptly notify the Managing Underwriter of the occurrence of any event which, in the City's opinion, is an event described in clause (ii) of the preceding sentence. For purposes of the foregoing, the term "end of the underwriting period" means the date of Closing or the date on which the Underwriters do not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Series 2002A Bonds for sale to the public, which date shall be no later than ninety (90) days after the date of Closing. The Underwriters will promptly notify the City in writing of the end of the underwriting period. (r) The City is in compliance with its continuing disclosure undertakings pursuant to Rule 15c2 -12(b)(5) of the Securities and Exchange Commission in connection 7 02- 284 FTL:857055:1 0 0 with.. all outstanding bond issues for which the City has agreed -to undertake continuing disclosure obligations. 0 ARTICLE III AGREEMENT TO PURCHASE BONDS SECTION 3.1. Delive of Documents to Underwriters. Prior to or simultaneously with the execution and delivery of this Bond Purchase Agreement, the Managing Underwriter shall have delivered the Underwriters' Truth -In -Bonding and Disclosure Statement required by law, as set forth in Exhibit E and the Underwriters shall have received one copy each of drafts of the 2002A Basic Documents, the Preliminary Official Statement and the Official Statement in substantially the respective forms thereof on record with the City's Governing Body at the time of its consideration and adoption of the City's Resolution. As soon as practicable after the date hereof, and in any event, within seven days of the date hereof, or by such earlier date as requested by the Managing Underwriter, as required by paragraph (b)(3) of Rule 15(c)2-12 of the Securities and Exchange Commission ("SEC") or the rules ofthe Municipal Securities Rulemaking Board ("MSRB"), the City shall deliver or cause to be delivered to the Managing Underwriter copies of the Official Statement, dated the date hereof, in sufficient quantities to allow the Underwriters to comply with paragraph (b)(4) of Rule 15(c)2-12 of the SEC and the rules of the MSRB, in substantially the form of the Preliminary Official Statement with only such changes therein as shall have been approved by the City and the Managing Underwriter. References to the Official Statement shall include the cover page and all exhibits, appendices, reports and statements included with or attached to it and any amendments and supplements that may be authorized by the City and to which the Managing Underwriter does not reasonably object, and any amendments and supplements which may be reasonably required by the Managing Underwriter for use with respect to the Series 2002A Bonds. The Official Statement shall be executed on behalf of the City by its duly authorized officer. The City approves the Preliminary Official Statement, and consents to the use of the Preliminary Official Statement and the Official Statement and the information contained therein by the Underwriters. The City deems final the Preliminary Official Statement, as of its date, for purposes of Rule 15(c)(2)-12, with certain omissions therein in connection with the pricing of the Series 2002A Bonds. The Underwriters will cause the final Official Statement to be deposited in various securities depositories as required by law. SECTION 3.2. A eement to Sell and Purchase Series 2002A Bonds. The Series 2002A Bonds shall have the terms specified in the Official Statement, including the maturities, amounts, interest rates, prices or yields and redemption provisions set forth in Exhibit A annexed hereto. Upon the basis of the representations and upon the terms and conditions set forth in this Bond Purchase Agreement, the Underwriters agree to purchase, and the City agrees to issue and to authenticate and deliver to the Underwriters, (i) all (but not less than all) ofthe Series 2002A Bonds for the aggregate purchase price of $ (representing the $ original principal amount of the Series 2002A Bonds, plus $ of original issue discount and less S 8 02- 284 �. FTL:857455:1 , $ of Underwriters' discount plus accrued interest of $ _ through the day immediately preceding the Closing Date on the Series 2002A Bonds) (the "Series 2002A Purchase Price"). Payment of the Series 2002A Purchase Price shall be made by the Underwriters to the order of the City on the Closing Date for the Series 2002A Bonds in immediately available Federal funds and payment of the Series 2002A Purchase Price shall be made by the Underwriters to the order of the City on the Closing Date for the Series 2002A Bonds in immediately available Federal funds. Delivery of the Series 2002A Bonds as aforesaid shall be made to the Paying Agent and Registrar for the Series 2002A Bonds through the FAST system of registration with The Depository Trust Company, New York, New York, or at such other place as may be mutually agreed upon by the City and the Managing Underwriter. One fully registered Series 2002A Bond for each maturity, duly executed and authenticated, shall be delivered to or upon the order of Underwriters, together with the other documents hereinafter mentioned, and subject to the terms and conditions hereof, the Underwriters will accept such delivery and pay the Series 2002A Purchase Price. The Series 2002A Bonds shall be registered in the name of Cede & Co., or in such other names and in such authorized denominations as the Underwriters shall reasonably specify in writing at least three (3) business days prior to the Closing Date. The Series 2002A Bonds shall be available for examination and packaging by the Underwriters at Ieast one (1) business day prior to the Closing Date. SECTION 3.3. Public Offering of Series 2002A Bonds. The Underwriters agree to make a bona fide public offering of the Series 2002A Bonds, solely pursuant to the Official Statement, at the initial offering prices set forth in the Official Statement, reserving, however, the rights to (i) change such initial offering prices as the Managing Underwriter shall deem necessary in connection with the • marketing of the Series 2002A Bonds and (ii) offer and sell the Series 2002A Bonds to certain dealers (including dealers depositing the Series 2002A Bonds into investment trusts) at concessions to be determined by the Managing Underwriter. The Underwriters also reserve the right to over -allot or effect transactions that stabilize or maintain the market prices of the Series 2002A Bonds at levels above that which might otherwise prevail in the open market and to discontinue such stabilizing, if commenced, at any time. SECTION 3.d. Good Faith Deposit. The City hereby acknowledges receipt of a wire transfer in an amount equal to $ (the "Good Faith Deposit") as security for the performance by the Underwriters of their obligation to accept and pay for the Series 2002A Bonds on the Closing Date in accordance with the provisions of this Bond Purchase Agreement. The City shall retain the Good Faith Deposit, except under the circumstances hereinafter set forth. In the event the City fails to deliver the Series 2002A Bonds at the Closing thereof, or if the City shall be unable to satisfy the conditions to the obligations of the Underwriters contained in this Bond Purchase Agreement or if such obligations shall be terminated for any reason permitted by this Bond Purchase Agreement, the City shall be obligated to immediately return the Good Faith Deposit to the Underwriters. In the event the Underwriters accept and pay for the Series 2002A Bonds on the Closing Date, the Good Faith Deposit shall be applied as a credit against payment by the Underwriters of the Series 2002A Purchase Price at Closing. In the event the Underwriters fail (other than for a reason permitted under this Bond Purchase Agreement) to accept and pay for the Series 2002A Bonds on the Closing Date, the Good Faith Deposit may be retained by the City as and for full liquidated damages for such failure, and not as a penalty, and for any and all defaults hereunder on the part of the Underwriters, • and thereupon, all claims and rights hereunder against the Underwriters shall be fully released and 9 FTL:857055:1 02- 2- 28A • • discharged, it being understood by the City and the Underwriters that. -actual damages in such • circumstances may be difficult or impossible to compute. ARTICLE IV CLOSING CONDITIONS SECTION 4.1. Performance_ of Obligations. The obligations and agreements of the Underwriters under this Bond Purchase Agreement are expressly made subject to the due performance by the City at or prior to the Closing Time of their respective obligations and undertakings pursuant to this Bond Purchase Agreement. SECTION 4.2. Delivery of Closing Papers. The obligations and agreements of the Underwriters under this Bond Purchase Agreement are expressly made subject to the condition that, at or prior to the Closing Time, there shall have been delivered to the Underwriters each of the following which the City agrees to do: (a) Basic Documents: (i) One executed copy of each of the 2002A Basic Documents in the respective forms thereof delivered to the Underwriters pursuant to Section 3.1 of this Bond Purchase Agreement, which documents shall be in full force and effect, with only such revisions therein or additions thereto as shall have been required to incorporate terms specified in this Bond Purchase Agreement or as shall be 40 satisfactory to the Managing Underwriter. (ii) Ten executed copies of the Official Statement with the Appendices attached. (b) Closing Papers to be Furnished by the City: (i) One copy of each of the City's Referendum Resolution, the Resolution and the action by the City certifying the results of the Referendum, certified by the appropriate City official to be true and correct copies thereof as adopted and as in full force and effect as of the Closing Date. . (ii) One executed copy of a certificate of an authorized party on behalf of the City, dated the Closing Date, (A) confirming that each of the representations of the City contained in Section 2.1 of this Bond Purchase Agreement was true and accurate in all material respects on the date when made, has been true and accurate in all material respects at all times since, and continues to be true and accurate in all material respects on the Closing Date as if such representations were made at the Closing Time, (B) stating that there has been no material adverse change in the business or financial condition of the City from that shown in the Financial Statements, (C) stating that to its best knowledge no event affecting the City has i 10 FTL:857055:1 02- 284 • occurred since the date of the Preliminary Official Statement which should be disclosed in the Official Statement for the purpose for which it is used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect as of the Closing Date; and (D) certifying that the City's Referendum Resolution and Resolution have not been supplemented, modified, amended or repealed, except as described in the Official Statement. (iii) One executed original of a customary incumbency and no -litigation certificate, in form prepared by and reasonably acceptable to Bond Counsel, the Office of the City Attorney and Underwriters' Counsel, dated the Closing Date and signed by an authorized member of the City's Governing Body. (iv) One executed copy of the Arbitrage Certificate, in form satisfactory to Bond Counsel, dated the Closing Date, signed by an authorized party on behalf of the City. (v) One executed copy of the final approving opinions of the City's Bond Counsel, in substantially the form contained in an Appendix to the Official Statement, and one executed copy of the supplemental legal opinions of Bond Counsel, dated the Closing Date, in the form as set forth in Exhibit C hereto. (vi) One executed copy of the opinion of the City Attorney in the form as set forth in Exhibit B hereto. (vii) One executed copy of the opinion of the City's Co -Disclosure Counsel as set forth in the attached Exhibit D. (viii) A copy of the municipal bond insurance policy (the "Policy") insuring the Series 2002A Bonds issued by (the "Insurer"), together with a customary opinion of counsel to the insurer as to the binding nature of the Policy, a no default certificate of the Insurer and a certificate as to the accuracy of the information in the Official Statement relating to the Insurer. (ix) Letters of Confirmation with respect to the insured ratings of the Series 2002A Bonds from Moody's Investors Service, Standard & Poor's Ratings Service and Fitch, Inc. of Aal, AA+ and AA+, respectively, based on the Policy, and of the underlying ratings of the Series 2002A Bonds from Moody's investors Service, Standard & Poor's Ratings Service and Fitch, Inc. of and respectively. (x) An executed copy of the Letter of Representation to the Depository Trust Company. • (xi) A certificate of the Escrow Agent, together with an opinion of counsel to the Escrow Agent, to the effect that the Escrow Agent has all requisite authority FTL:857055:7 11 02- 284 and power to execute and perform its functions under the -Escrow Agreement; the • acceptance by the Escrow Agent of its duties and obligations thereunder, and compliance with the provisions thereof will not conflict with or constitute a breach of or default under any law or administrative regulation or, to the knowledge of such counsel, any agreement or instrument to which the Escrow Agent is subject or violate the organizational documents of the Escrow Agent; all approvals, consents and orders of any governmental authority or agency having jurisdiction in the matter which would constitute a condition precedent to the performance by the Escrow Agent of its obligations under the Escrow Agreement have been obtained and are in full force and effect; there is no litigation, proceeding or investigation relating to the Escrow Agent before or by any court, public board or body pending or threatened against or affecting the Escrow Agent challenging the validity of, or in which an unfavorable decision, ruling or finding would materially adversely affect the Escrow Agent's ability to perform under the Escrow Agreement or the transactions contemplated thereby; and the duties and obligations of the Escrow Agent under the Escrow Agreement have been duly accepted by the Escrow Agent. (xii) The Verification Report of the Arbitrage Group relating to the Refunded Bonds. (xiii) Written consent to the inclusion of the City's audited financial statements as appendices in the Preliminary Official Statement and Official Statement from KPMG LLP (the "Auditor") and to the references to the Auditor in the Preliminary Official Statement and Official Statement, together with a copy of the Auditor's engagement letter to the City in connection with providing such consent. (d) Other Assurances: Such additional opinions, certificates, proceedings, instruments and other documents as the Underwriters, Underwriters' Counsel or Bond Counsel may reasonably request to verify or evidence (i) compliance by the Parties with applicable legal requirements, (ii) the truth and accuracy of the representations or opinions of the Parties contained in this Bond Purchase Agreement or in any Closing Paper, or (iii) the due performance of all agreements and the satisfaction of all conditions required to be performed or satisfied at or prior to the Closing Time. SECTION 4.3. Form of Closing Papers; Waiver of Conditions. The Closing Papers to be delivered to the Underwriters pursuant to this Bond Purchase Agreement shall be deemed to be in compliance with the conditions of this Bond Purchase Agreement if, but only if, in the reasonable judgment of the Underwriters, they are satisfactory in form and substance. The legal opinions and certificates described in Section 4.2 shall be addressed to the Underwriters or a reliance letter with respect thereto shall be addressed to the Underwriters. No condition hereof shall be deemed to have been waived by the Underwriters unless expressed specifically in a writing signed by the Managing Underwriter. • 12 FTL:857055:1 02- 284 • 0 • ARTICLE V TERMINATION; PAYMENT OF EXPENSES SECTION 5.1. Termination. This Bond Purchase Agreement may be terminated by the Underwriters without liability on the part of the Underwriters, if, at or prior to the Closing Time: (a) The Referendum, the City's Referendum Resolution, the Resolution or this Bond Purchase Agreement shall not be in full force and effect or shall have been supplemented, modified, amended or repealed, without the prior written consent of the Underwriters. (b) Any representation of the City contained in this Bond Purchase Agreement or in any Closing Paper shall prove to be or to have been false in any material respect; (c) There shall be a material failure of any one or more of the conditions set forth in Sections 4.1, 4.2 or 4.3 of this Bond Purchase Agreement; (d) Litigation or an administrative proceeding or investigation shall be pending or threatened affecting, contesting, questioning or seeking to restrain or enjoin (i) the powers or the valid existence of the City or the titles of its officers to their respective offices, or (ii) the pledge of the City's full faith, credit and taxing power to the payment of the Series 2002A Bonds, or (iii) contesting the validity or effecting the enforceability of the Series 2002A Bonds, the 2002A Basic Documents or contesting the power of either the City to execute and deliver such documents (to the extent applicable) or to consummate the transactions contemplated therein or in the Official Statement, or (iv) contesting in any way the completeness or accuracy of the Official Statement, or (v) wherein an unfavorable decision, ruling or finding would, in the judgment of the Underwriters, materially and adversely affect the validity or enforceability of the 2002A Basic Documents; (e) Any legislative, executive or regulatory action or any court decision shall occur which, in the judgment of the Underwriters, casts sufficient doubt on the legality of, or the exclusion from gross income for Federal income tax purposes of interest on, obligations of the general kind and character as the Series 2002A Bonds so as to impair materially the marketability, or to reduce materially the market price of, such obligations; (f) Any action by the Securities and Exchange Commission or a court shall occur which would require registration of any Series 2002A Bonds under the Securities Act of 1933, as amended, or the qualification of the Resolution under the Trust Indenture Act of 1939, as amended; (g) Any material restriction not presently in force on trading in securities generally, or any banking moratorium shall occur, which, in the judgment of the Managing Underwriter, substantially impairs the marketability of the Series 2002A Bonds; 13 FTL:857055:1 02- 284 .. (h) The outbreak or escalation of hostilities involving -the United States or the declaration by the United States of a national emergency or war -shall occur, if the effect of any such event, in the judgment of the Managing Underwriter materially and adversely affects the public offering or the delivery of the Series 2002A Bonds; (i) There shall occur any adverse change in the operations, properties or financial condition of the City from that described in the Official Statement, which, in the judgment of the Underwriters, is material and makes it inadvisable to proceed with the sale of the Series 2002A Bonds; or 0) Any event or condition shall occur which, in the judgment of the Underwriters, renders untrue or incorrect, in any material respect as of the time to which the same purports to relate, the information contained in the Official Statement or which requires that information not reflected therein be included therein in order to make the statements and information contained therein not misleading in any material respect as of such time. SECTION 5.2. Payment of Expenses. The following costs and expenses relating to the transactions contemplated or described in this Bond Purchase Agreement shall be borne and paid by the City regardless of whether the transactions herein contemplated shall close: printing of Series 2002A Bonds; printing and photocopying of Closing Papers (including the Preliminary Official Statement and the Official Statement) in such reasonable quantities as the Underwriters may request; fees and disbursements of Bond Counsel, the City's Co -Disclosure Counsel, Auditor and financial advisor; and fees of the rating agencies, the Insurer, the Escrow Agent and The Arbitrage Group or . other verification agent. The Underwriters shall pay (i) the fees and disbursements of Underwriters' Counsel; (ii) all advertising expenses in connection with the public offering of the Series 2002A Bonds; and (iii) all other expenses incurred by them in connection with their public offering and distribution of the Series 2002A Bonds. Except as otherwise provided above, the City and the Underwriters shall each bear the costs and expenses incident to the performance of their respective obligations under this Bond Purchase Agreement. ARTICLE VI WSCELLANEOUS SECTION 6.1. Parties In Interest; Survival of Representations. This Bond Purchase Agreement is made solely for the benefit of the City and the Underwriters and no other person, partnership, association or corporation, including but not limited to owners of Series 2002A Bonds or beneficial interests therein, shall acquire or have any rights hereunder or by virtue hereof. All representations and agreements in this Bond Purchase Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any Party and shall survive the delivery of and payment for the Series 2002A Bonds. SECTION 6.2. Notices. All notices, demands, certificates or other communications (other • 14 02-- 284 F7'L:$57055:1 • than the Closing Papers) under this Bond Purchase Agreement shall be sufficiently given and shall be deemed given when hand delivered or when mailed by certified or registered mail, postage prepaid, or by prepaid telegram, or by electronic communications with the original forwarded by certified or registered mail, postage prepaid, with proper address as indicated below: To the City: To the Underwriters: City Commission 444 S.W. 2nd Avenue Miami, Florida 33130 Attention: Chair J.P. Morgan Securities, Inc. 5201 Blue Lagoon Drive Suite 800 Miami, Florida 33126 Attention: Percy Aguila, Vice President SECTION 6.3. Amendment. No modification, alteration or amendment to this Bond Purchase Agreement shall be binding upon any Party until such modification, alteration or amendment is reduced to writing and executed by all Parties. SECTION 6.4. Governing Law: Venue. The laws of the State of Florida shall govern this Bond Purchase Agreement. Venue shall be in Miami -Dade County, Florida. SECTION 6.5. Cations. The captions or headings in this Bond Purchase Agreement are for convenience only and in no way define, limit or describe the scope or intent of any of the provisions of this Bond Purchase Agreement. SECTION 6.6. Counterparts. This Bond Purchase Agreement maybe signed in any number of counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument. SECTION 6.7. Severabilitv. If any provisions of this Bond Purchase Agreement shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions, or in all cases because it conflicts with any other provision or provisions hereof or any constitution or statute or rule of public policy, or for any other reason, such circumstance shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatever. The invalidity of any one or more phrases, sentences, clauses or Sections in this Bond Purchase Agreement contained, shall not affect the remaining portions of this Bond Purchase Agreement, or any part thereof. SECTION 6.8. Rights of Managing Underwriter. The Managing Underwriter, on behalf of the Underwriters, being duly authorized so to do, shall have the power to enter into this Bond 15 FTL:857055:1 02- 284 r� • Purchase Agreement, to consent to any amendments hereto, to agree to -the interpretation of the provisions hereof and to waive any preconditions to Closing hereunder: 0 SECTION 6.9. Effective Time of this Bond Purchase Aereement. This Bond Purchase Agreement shall be effective and binding upon its execution and delivery. [Signatures To Follow] • 0 16 FTL $57055:1,.., 02— 2` 2 S �J • IN WITNES S WHEREOF, the parties hereto have executed this Agreement as of the day and year set forth beneath each signature. [SEAL] ATTEST: The City: CITY OF MIAMI, FLORIDA By: By: Its; City Manager Its: FTL:857055:1 Date: 12002 The Underwriters: J.P. MORGAN SECURITIES, INC. on behalf of itself and the other Underwriters listed on Schedule A hereto. By: Its: Date: , 2002 17 02- 284 SCHEDULE A _ 0 UNDERWRITERS PaineWebber Incorporated Salomon Smith Barney Morgan Stanley & Co. Incorporated Jackson Securities, Inc. Lehman Brothers • u Schedule A-1 FTL:857055:1 EXHIBIT A MATURITIES, AMOUNTS, INTEREST RATES AND PRICES AND YIELDS Series 2002A Bonds Year Principal Interest (_ 1 ) Amount Rate Yield Price i (plus accrued interest from 1, 2002) Exhibit A-1 FFL•857055:1 02- 284 REDEMPTION PROVISIONS r] • Exhibit A-2 FiL:857455:1 02- 2j:3 0 EXHIBIT B 2002 City Commission City of Miami Miami, Florida J.P. Morgan Securities, Inc. as representative of the underwriters Miami, Florida Re: $ City of Miami, Florida General Obligation Refunding Bonds, Series 2002A Ladies and Gentlemen: I am City Attorney for the City of Miami, Florida (the "City") and have served in such capacity in connection with the issuance of the above -captioned bonds (the "Series 2002A Bonds") . and related transactions. This opinion is furnished pursuant to the Bond Purchase Agreement dated , 2002 (the "Purchase Agreement") among the City, J.P. Morgan Securities, Inc. and the Participating Underwriters named therein (J.P. Morgan Securities, Inc. and said Participating Underwriters are referred to collectively as the "Underwriters"). All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Purchase Agreement. u The Office of the City Attorney has examined such documents and instruments as we deemed necessary to render the requested opinion. Based upon examination of such documents and matters of law as the Office of the City Attorney has determined relevant for the purposes of rendering this opinion, and subject to the reservations set forth herein, I am of the opinion that: I . The City is a municipal corporation of the State of Florida, duly organized and validly existing under the constitution and laws of the State of Florida. 2. The City is authorized by the laws of the State of Florida to pledge the full faith credit and taxing power of the City to the Series 2002A Bonds, to execute and deliver the 2002A Basic Documents and the Official Statement and to perform its obligations under the 2002A Basic Documents or as described therein. The Series 2002A Bonds are payable from ad valorem taxes levied without limitation as to rate or amount on all taxable property within the City, sufficient to pay the principal of and interest on the Series 2002A Bonds. FTL:857055:1 Exhibit B-1 02-- 284 3. The City's Referendum Resolution and Resolution -have been duly adopted and the execution and delivery by the City of the 2002A Basic Documents and the Official Statement, and the performance of its obligations thereunder or as described therein, for and in the name of the City, have been duly authorized by the City and, with respect to the Prior Bonds (or the bonds refunded by the Prior Bonds), by the qualified electors of the City as required by applicable law. Except for the Referendum, no additional referenda are required by applicable law to permit the issuance of the Series 2002A Bonds. 4. The City has duly authorized the distribution of the Preliminary Official Statement by the Underwriters, has duly approved and executed the Official Statement and has duly authorized the distribution thereof by the Underwriters in connection with the public offering of the Series 2002A Bonds. S. The 2002A Basic Documents, the Official Statement and the certificates of the City delivered on this date have been duly authorized, executed and delivered by the City and constitute valid and legally binding obligations of the City enforceable against the City in accordance with their respective terms. The Referendum Resolution, the Resolution and the 2002A Basic Documents are in full force and effect and have not been modified or amended except as disclosed in the Official Statement. 6. To the best of my knowledge, no authorization, approval, consent, license or other action of any court or public or governmental or regulatory authority having jurisdiction over the City that has not been obtained is or will be required for adoption of the • Referendum Resolution and the Resolution, respectively, the issuance and sale of the Series 2002A Bonds or the valid and lawful authorization, execution and delivery of, or consummation by the City of the other transactions contemplated by, the 2002A Basic Documents and the Official Statement. 7. The adoption by the City of the City's Referendum Resolution and Resolution and the execution and delivery by the City of the 2002A Basic Documents and the Official Statement and compliance on the City's part with the provisions contained or described therein, will not conflict with, violate or constitute a breach of or a default under (a) any existing law, court or administrative regulation, order or decree, or (b) any commitment, mortgage, lease, indenture, agreement, contract or instrument to which the Cityis a party or by which it or any of its properties is bound. 8. To the best of my knowledge, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by the Circuit Court of the State of Florida in and for the Eleventh Judicial Circuit or in the United States District Court for the Southern District of Florida or any other court, governmental agency, public board or body for which the City has received actual notice, pending or, to the best of my knowledge, after due investigation, threatened against the City which in any way affects, contests, questions or seeks to restrain or enjoin any of the following: (a) the powers or valid existence of the Cityor the titles of the members of the City's Governing Body or its other officers to their 0 FTL;857055:1 Exhibit B-2 0,,94,P-- �� -_ 2.8.4 . respective offices; (b) any of the proceedings had or actions taken leading up to the sale, issuance and delivery of the Series 2002A Bonds or the execution, delivery or performance of the Purchase Agreement, including the Referendum; (c) the delivery, validity or enforceability of the Series 2002A Bonds or any of the other 2002A Basic Documents or contesting the power of the City to undertake or consummate the transactions contemplated therein and in the Official Statement; (d) contesting in any way the completeness or accuracy of the Official Statement; (e) wherein an unfavorable decision, ruling or finding would materially and adversely affect the validity or enforceability of the 2002A Basic Documents; or (f) the pledge of the City's full faith, credit and taxing power to payment of the Series 2002A Bonds. 9. The statements and information relating to the City, the Referendum Resolution, Referendum, the Resolution and the other 2002A Basic Documents and the information under the caption "Ad Valorem Taxation," in each case as set forth in the Preliminary Official Statement and the Official Statement (except for the Financial Statements and other financial and statistical data included therein as to which no view is expressed) did not on the respective dates of the Preliminary Official Statement and the Official Statement, and do not on the date hereof, contain any untrue statement of 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 misleading. Without undertaken to determine independently the accuracy or completeness of the information in the Preliminary Official Statement and the Official Statement except as to the information noted in the preceding sentence, nothing has come to my attention that would lead me to believe that the Preliminary Official Statement and the Official Statement contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein not misleading (excluding the financial statements and financial and statistical data included therein as to which no view is expressed). All opinions as to the enforceability of the legal obligations of the City set forth herein are 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 subject to the enforceability thereof, to the exercise of judicial discretion in accordance with the general principles of equity. I am qualified to practice law in the State of Florida and for the purpose of this opinion, I do not purport to be an expert on, or to express an opinion herein concerning, the laws of any other jurisdiction (including any such laws which may be applicable by virtue of the application of the choice of law provisions under Florida law) except the laws of the United States to the extent set forth herein. No one, other than the addressees named above, is entitled to rely upon the statements made, and conclusions expressed, within this opinion. Very truly yours, • Exhibit B-3 FTL:857055:1 02- 284 OFFICE OF THE CITY ATCORNEY • • Exhibit B4 FTL:857055:1 02- 284 • • 0 • J.P. Morgan Securities, Inc. and Participating Underwriters Miami, Florida Re: $ 2002A Ladies and Gentlemen: El EXHIBIT C , 2002 City of Miami, Florida General Obligation Refunding Bonds, Series We have acted as Bond Counsel in connection with the issuance of the above -captioned bonds (the "Series 2002A Bonds") and related transactions. This opinion is furnished pursuant to the Bond Purchase Agreement dated , 2002 (the "Purchase Agreement") among the City of Miami, Florida (the "City"), J.P. Morgan Securities, Inc. and the Participating Underwriters named therein (J.P. Morgan Securities, Inc. and said Participating Underwriters are referred to collectively as the "Underwriters"). All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Purchase Agreement. We have examined such documents and instruments as we deemed necessary to render the requested opinion. It is our opinion that: 1. The Series 2002A Bonds, the Continuing Disclosure Certificate and the Escrow Agreement have been duly authorized, executed and delivered on behalf of the City and constitute binding and enforceable agreements of the City, enforceable in accordance with their respective terms. 2. The Resolution has been duly adopted by the City and has not been amended or repealed, except as disclosed in the Official Statement. 3. The information and statements in the Official Statement under the headings "INTRODUCTION," "PURPOSE OF THE ISSUE," "DESCRIPTION OF THE SERIES 2002A BONDS" (except the subsection therein entitled "Book -Entry Only System"), "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2002A BONDS," "LEGAL MATTERS," "ENFORCEABILITY OF REMEDIES," "CONTINUING DISCLOSURE," "APPENDIX B — FORM OF THE BOND RESOLUTION" and "APPENDIX D — FORM OF BOND COUNSEL OPINION," and APPENDIX F -- Form of Continuing Disclosure Certificate," insofar as such information and statements constitute summaries of the Referendum Resolution, the Resolution, the Referendum, the Continuing Disclosure Certificate and the Series 2002A Bonds or the law referred to therein, constitute fair and accurate summaries of such matters. We are further of the opinion that the FTL:857055:1 Exhibit C-1 02- 284 statements contained under the heading "TAX MATTERS" are correct as to matters of law and fairly and accurately reflect the information purported to be presented therein. 0 4. The Series 2002A Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended and the Referendum Resolution and the Resolution are each exempt from qualification under the Trust Indenture Act of 1939, as amended. 5. Assuming the proper execution and deliver of the Escrow Agreement by the Issuer and the Escrow Agent, the right, title and interest of the holders of the Refunded Bonds under Resolution Nos. _ adopted by the City on , 1992 pursuant to which the Refunded Bonds were issued (the "Refunded Bonds Resolution") has ceased, determined and become void and the Refunded Bonds are no longer outstanding under the Refunded Bonds Resolution. In rendering this opinion we have relied upon the arithmetical accuracy of certain computations prepared by the Underwriters and verified by The Arbitrage Group. This opinion is supplemental to our approving opinion dated as of the date hereof with respect to the Series 2002A Bonds. You may rely on our approving opinion as if it were addressed to you. Respectfully Submitted, • u Exhibit C-2 FTL:$57055:1 02- 284 • t • 0 City Commission City of Miami Miami, Florida J.P. Morgan Securities, Inc. and Participating Underwriters Clearwater, Florida Re: S Series 2002A Ladies and Gentlemen: • EXHIBIT D , 2002 City of Miami, Florida General Obligation Refunding Bonds, We have acted as Co -Disclosure Counsel to the City of Miami, Florida (the "City") in connection with their purchase of the above -captioned bonds (the "Series 2002A Bonds") pursuant to the Bond Purchase Agreement dated '2002 (the 'Bond Purchase Agreement") among J.P. Morgan Securities, Inc., the Participating Underwriters named therein and the City. In that capacity, we hereby deliver the following opinions. I . Based upon our participation in the preparation of the Preliminary Official Statement and Official Statement relating to the Series 2002A Bonds, nothing has come to our attention that would lead us to believe that either the Preliminary Official Statement or the Official Statement (excluding therefrom the Financial Statements and financial, demographic and statistical data included therein and the information contained under the caption "Book -Entry Only System" and "Municipal Bond Insurance" as to which we express no opinion) as of their respective dates contain any untrue statement of material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 2. The Continuing Disclosure Certificate dated , 2002 delivered by the Issuer in connection with the Series 2002A Bonds complies, in all material respects, with the requirements of Rule 15(c)2 -12(b)(5) adopted by the United States Securities and Exchange Commission under the Securities Exchange Act of 1934. This opinion may be relied upon solely by you. FTL:857055:1 Very truly yours, Exhibit D-1 02- 284 EXHIBIT E UNDERWRITERS' TRUTH -IN -BONDING AND DISCLOSURE STATEMENT _,2002 City Commission City of Miami Miami, Florida Re: $ City of Miami, Florida General Obligation Refunding Bonds, Series 2002A Ladies and Gentlemen: The City of Miami, Florida (the "City") is proposing to cause to be issued its $ City of Miami, Florida General Obligation Refimding Bonds, Series 2002A (the "Bonds"). The Bonds are expected to be repaid over a period of approximately years. At a forecasted true interest rate of %, total interest paid over the life of the Bonds will be $ The source of repayment for the Bonds consists primarily of ad valorem taxes levied by the City solely for the purpose of paying debt service on the Bonds. These ad valorem taxes can not be used for any other purpose of the City. In addition, pursuant to the provisions of Sections 21$.3 $5(4), Florida Statutes, the following disclosure is made: (a) The nature and estimated amounts of expenses to be incurred by (collectively, the "Underwriters") in connection with the purchase and re- offering of the Bonds are set forth in Exhibit A attached hereto. (b) No person has entered into an understanding with the Underwriters, or to the knowledge of the Underwriters with the City, for any paid or promised compensation or valuable consideration, directly or indirectly, expressly or implied, to act solely as an intermediary between the City and the Underwriters for the purpose of influencing any transaction in the purchase of the Bonds. (c) The underwriting spread (i.e., the difference between the price at which the Bonds will be initially offered to the public by the Underwriters and the price to be paid to the City for the Bonds, exclusive of accrued interest in both cases) will be _ % of the principal amount of the Bonds. Exhibit E-1 FTL:857055.1 02— 284 • C (d) The underwriting spread set forth in paragraph (c) above, includes a management fee of $ (e) No other fee, bonus or other compensation is estimated to be paid by the Underwriters in connection with the issuance of the Bonds to any person not regularly employed or retained by the Underwriters (including any "finder" as defined in Section 218.386(1)(a), Florida Statutes), except as specifically enumerated as expenses to be incurred by the Underwriters as set forth in Exhibit A. (f) The name and address of each of the Underwriters is: J.P. Morgan Securities, Inc. 5201 Blue Lagoon Drive Miami, FL 33126 PaineWebber Incorporated One International Plaza, Suite 1600 Miami, FL 33131 Salomon Smith Barney 110 East Broward Boulevard, Suite 1850 Fort Lauderdale, FL 33301 Morgan Stanley & Co. Incorporated Sun Bank Center 200 South Orange Avenue, Suite 1440 Orlando, FL 32801 Jackson Securities, Inc. 801 Brickell Avenue, Suite 934 Miami, FL 33131 Lehman Brothers 1111 Brickell Avenue Miami, FL 33131 Exhibit E-2 FTL:857455:1 �� • • We understand that you do not require any further disclosure from the Underwriters pursuant to Section 218.385(4), Florida Statutes. 0 FTL:857055:1 Very truly yours, J.P. Morgan Securities, Inc., as Representative for the Underwriters By: Its: Date: , 2002 Exhibit E-3 02-- 2.- 284 • • SCHEDULE A UNDERWRITERS' EXPENSES Exhibit E-4 FTL:857055:1 02. 284 - EXHIBIT "A -I". ; • SERIES 2002B BOND PURCHASE AGREEMENT A-1-1 02- 284 Mimi; Docuobmt At. 8573W • • • RMSS&R,P.A. Draft 3/4/02 S CITY OF MIAAH, FLORIDA " GENERAL OBLIGATION REFUNDING BONDS, SERIES 2002B OBOND PURCHASE AGREEMENT • ®2 284 FTL:859278:1 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS ...............................................................................................1 SECTION 1.1. .. Participants.....................................................:............... ....... ............. I SECTION 1.2. Contracts, Instruments and Documents ................................................. 2 SECTION 1.3. Legal Authorities...................................................................................3 SECTION1.4. Events, Dates and Places........................................................................4 SECTION 1.5. Other Definitions..........:........................................................................4 ARTICLE II REPRESENTATIONS AND COVENANTS....................................................4 SECTION 2.1. Representations and Covenants of City .................................................4 ARTICLE III AGREEMENT TO PURCHASE BONDS........................................................8 SECTION 3.1. Delivery of Documents to Underwriters................................................8 SECTION 3.2. Agreement to Sell and Purchase Series 2002B Bonds ...........................9 SECTION 3.3. Public Offering of Series 2002B Bonds...............................................10 SECTION 3.4. Good Faith Check................................................................................10 ARTICLE IV CLOSING CONDITIONS...............................................................................10 SECTION 4.1. Performance of Obligations.................................................................10 SECTION 4.2. Delivery of Closing Papers...............................................................11 SECTION 4.3. Form of Closing Papers; Waiver of Conditions...................................13 ARTICLE -V. TERMINATION; PAYMENT OF EXPENSES..............................................14 SECTION5.1. Termination..........................................................................................14 SECTION 5.2. Payment of Expenses...........................................................................15 ARTICLE VI MISCELLANEOUS .................... ................................................................15 SECTION 6.1. Parties In Interest; Survival of Representations...................................15 SECTION6.2. Notices.................................................................................................16 SECTION6.3. Amendment..........................................................................................16 SECTION 6.4. Governing Law; Venue........................................................................16 SECTION6.5. Captions...............................................................................................16 SECTION6.6. Counterparts.........................................................................................16 SECTION6.7. Severability ..........................................................................................16 SECTION 6.8. Rights of Managing Underwriter.........................................................17 SECTION 6.9. Effective Time of this Bond Purchase Agreement...............................17 FTL:859278:1 • • C7 • • • SCHEDULES AND EXHIBITS Schedule A Underwriters........................................................................................... A-1 Exhibit A Maturities, Amounts, Interest Rates and Prices and Yields .................... A-1 Exhibit B Opinion Letter of City Attorney .......................... :.................................... B-1 Exhibit C Opinion of Bond Counsel........................................................................0-1 Exhibit D Opinion of Underwriters' Counsel.......................................................... D-1 Exhibit E Underwriter's Truth -in -Bonding and Disclosure Statement ....................E-1 FTL-859276: a ii 0- 284 BOND PURCHASE AGREEMENT T This Bond Purchase Agreement dated , 2002 (`Bond Purchase Agreement") is entered into by and among the following parties (hereinafter individually called a "Party" and collectively called the "Parties"): City of Miami, Florida, a municipal corporation of the State of Florida, duly organized and existing under the Constitution and -laws of the State of Florida (the "City"); and J.P. Morgan Securities, Inc. (hereinafter called the "Managing Underwriter") and the underwriters listed on the attached Schedule A (hereinafter called a "Participating Underwriter" and, collectively with the Managing Underwriter, sometimes called the "Underwriters"). ARTICLE I DEFINITIONS SECTION I.I. Participants. In addition to the Parties, various persons and firms will participate in the financing to which this Bond Purchase Agreement relates. Among them are those identified below (hereinafter collectively called the "Participants"): Bond Counsel: Squire, Sanders & Dempsey, LLP Miami, Florida Counsel to the City: Office of the City Attorney Miami, Florida City's Co -Disclosure Bryant, Miller and Olive, P.A. Counsel: Miami, Florida Manuel Alonso-Poch, P.A. Coral Gables, Florida Ci s Governing Body: The individuals who are then serving as members of the City Commission of the City Escrow Agent: The Bank of New York New York, New York Underwriters' Counsel: Ruden, McClosky, Smith, Schuster & Russell, P.A. Miami, Florida FTL-859278:1 02- 284 • SECTION 1.2. Contracts, Instruments and Documents. Various contracts, instruments and documents are involved in the financing to which this Bond Purchase Agreement relates. Among them are those identified below: FTLIA9279:1 Arbitrage Certificate: The certificate of the City setting forth its reasonable expectations regarding the use of the proceeds of the Bonds, among other matters. 2002B Basic Documents: This Bond Purchase Agreement, the Series 2002B Bonds, the Continuing Disclosure Certificate and the Escrow Agreement. Closing Papers: Collectively, the certificates, opinions, instruments and other documents described in Section 4.2 of this Bond Purchase Agreement. Continuing Disclosure The Continuing Disclosure Certificate of the Certificate: City dated as of 1, 2002 relating to the Series 2002B Bonds. • Escrow Agreement: The Escrow Deposit Agreement dated as of the date of closing of the Series 2002B Bonds between the City and the Escrow Agent. Financial Statements: The audited financial statements for the fiscal year ended September 30, 2001 of the City included in the Official Statement ' as Appendix B. Final Official Statement: The Official Statement and the Supplement. Official Statement: The Official Statement (including the Appendices thereto), dated the date hereof, summarizing the terms of the Series 2002B Bonds and other related matters. 2 o ., 284 • Preliminary Official Statement: Prior Bonds: 0 The Preliminary Official Statement (including the Appendices thereto), dated , 2002, summarizing the terms of the Series 2002B Bonds and related matters. The City's outstanding General Obligation Refunding Bonds, Series 1992. Refunded Bonds: The Prior Bonds to be refunded with proceeds of the Series 2002B Bonds and other legally available funds of the City as set forth in the Escrow Agreement. Series 2002B Bonds: The City's General Obligation Refunding Bonds, Series 2002B Su cement: The supplement to the Official Statement dated no more than twenty-five days and no less than fifteen days prior to the date of Closing, which updates the information in the Official Statement. SECTION 1.3. Legal Authorities. Various legal authorities are involved in the financing to which this Bond Purchase Agreement relates. Among them are those identified below: Code: The Internal Revenue Code of 1986, • as amended through and including the Closing Date and, to the extent applicable, the Internal Revenue Code of 1954, as amended, and, to the extent applicable, the regulations issued or proposed pursuant thereto. Referendum: Collectively, the referenda at which the issuance of the Prior Bonds (or the bonds that were refunded by the Prior Bonds) were approved. Referendum Resolution: Collectively, the resolutions authorizing the issuance of the Prior Bonds (or the bonds that were refunded by the Prior Bonds), subject to the approval of the qualified voters of the City and the resolutions calling the applicable referendums. 3 FTL;859278:1 _ 284 b� C] • C1 J Resolution: Resolution No. adopted by the City on 2002 authorizing the issuance of the Series 2002B Bonds, among other matters. SECTION 1.4. Events, Dates and Places. Various dates and places are significant in the financing to which this Bond Purchase Agreement relates. Among them are those identified below: Closing: Closing Date: Closing Time: Place of Closing: The consummation of the transaction at which the Series 2002B Bonds are delivered by the City to the Underwriters, and paid for by the Underwriters, pursuant to this Bond Purchase Agreement. , 2002, or such other date as the Parties may agree. 1:00 p.m. Eastern Daylight Time or such other time as the Parties may agree. [To be determined] SECTION 1.5. Other Definitions. All capitalized terms used and not otherwise defined' herein shall have the meanings ascribed thereto in the Resolution. ARTICLE II REPRESENTATIONS AND COVENANTS SECTION 2.1. _Representations and Covenants of City. As an inducement to the other Parties to enter into this Bond Purchase Agreement, the City makes the following representations and covenants (as more fully provided in Section 4.2(b)(ii) hereof, each of such representations and warranties shall be confirmed in a certificate deliveredby the City at Closing, and any representation and warranty related to the Official Statement shall be expanded in such certificate to also include the Supplement, to the extent the Supplement is not addressed below):: (a) The City is a municipal corporation of the State of Florida, duly validly organized and existing under the Constitution and laws of the State of Florida. (b) Each of the City's Referendum Resolution and Resolution, respectively, was adopted or enacted, as applicable, by the City's Governing Body at meetings duly called and held in open session upon requisite prior public notice pursuant to the laws of the State of Florida and the standing resolutions and rules of procedure of the City's Governing Body. Each of the City's Referendum Resolution and Resolution, respectively, is in full force and FTL:859278:1 n W 02- 2.84 effect, and no portions thereof have been supplemented, repealed, rescinded or revoked, except as described in the Official Statement. The Resolution creates a valid pledge of the City's full faith, credit and taxing power to the payment of the Series 2002B Bonds. No further approval of the qualified electors of the City is required for the issuance of the Series 2002B Bonds. (c) The City has full right, power and authority to enter into, execute and deliver the Official Statement, the Supplement and the 2002B Basic Documents and to perform its obligations thereunder and as contemplated thereby and to pledge its full faith, credit and taxing power to payment of the Series 2002B Bonds. All permits, consents or licenses, if any, and all notices to or flings necessary for such performance have been obtained or made. When executed and delivered, the 2002B Basic Documents shall constitute legal, valid and binding obligations of the City. (d) The persons executing the 2002B Basic Documents, the Official Statement and the Supplement on behalf of the -City are authorized for and in the name of the City to execute, deliver and perform the obligations of the City under the 2002B Basic Documents and as contemplated by the Final Official Statement and to execute, deliver, file or record such other incidental papers, documents and instruments as shall be necessary to carry out the intention and purposes of the 2002B Basic Documents and the City's Resolution. (e) No authorization, approval, consent or license of any governmental body or authority, not already obtained, is required for the adoption of the Resolution, enactment of the Ordinance and the valid and lawful execution and delivery by the City ofthe 2002B Basic - Documents, the Official Statement and the Supplement and the City is not aware of any facts or circumstances that would prevent it from obtaining, in due course, any authorization, approval, consent or license of any governmental body or authorityrequired for the adoption of the Referendum Resolution and the Resolution and the valid and lawful performance of the obligations of the City under the 2002B Basic Documents or as contemplated thereby. (f) The adoption of the Referendum Resolution and the Resolution and the execution and delivery by the City of the 2002B Basic Documents, the Official Statement and the Supplement and the performance by the City of its obligations under the 2002B Basic Documents or as contemplated thereby is permitted by and will not conflict with or constitute a breach of or default under any existing law,* court or administrative regulation, decree or order or any commitment, indenture, mortgage, lease, contract, agreement or instrument to which the City is a party, or by which it or any of its properties, are bound or subject. No event has occurred which, with the lapse of time or the giving of notice or both, would constitute a material event of default (as therein defined) under any of the 2002B Basic Documents. No material event of default has occurred which, with the lapse of time or the giving of notice or both, would constitute an event of default (as therein defined) under the Resolution and the Referendum Resolution and the Resolution are each in full force and effect and have not been amended or modified except as disclosed in the Official Statement. FTL:859278: i ' 5 02- 284 �J (g) There is no litigation, administrative proceeding or investigation pending (nor, to the knowledge of the City, is any such action threatened) in the Circuit Court of the State of Florida in and for the Eleventh Judicial Circuit or in the United States District Court for the Southern District of Florida or in any other court for which the City has received actual notice which in any way affects, contests, questions or seeks to restrain or enjoin any of the following. (i) the powers or valid existence of the City or the titles of the members of the City's Governing Body or its other officers to their respective offices; (ii) any of the proceedings had or actions taken leading up to the sale, issuance and delivery of the Series 2002B Bonds or the execution, delivery or performance of this Bond Purchase Agreement, including the Referendum; (iii) the delivery, validity or enforceability of the Series 2002B Bonds or any of the 2002B Basic Documents or contesting the power of the City to undertake or consummate the transactions contemplated therein and in the Official Statement; (iv) contesting in any way the completeness or accuracy of the Official Statement; (v) wherein an unfavorable decision, ruling or finding would materially and adversely affect the validity or enforceability of the 2002B Basic Documents; or (vi) the pledge of the City's full faith, credit and taxing power to payment of the Series 2002B Bonds. (h) To the knowledge of the City, the City is not on the date hereof, and will not be on the Closing Date, in default under any instrument to which the City is subject or by which it or its properties are or may be bound or subject, which default would (i) have a material adverse effect on the condition of the City, financial or otherwise (other than as disclosed in the Official Statement) or (ii) otherwise materially affect its ability to perform its obligations under the 2002B Basic Documents. (i) To the best of the City's knowledge, the City has not been advised by the Commissioner, any District Director or any other official of the Internal Revenue Service that certifications by the City with respect to arbitrage may not be relied upon. (j) The City will apply the proceeds of the Series 2002B Bonds in the manner described in the Official Statement, the Supplement and the Arbitrage Certificate and will not take or omit to take any action that will in any way cause or result in the proceeds of the sale of the Series 2002B Bonds to be applied in a manner other than as described in the same. (k) The Financial Statements have been prepared in accordance with generally accepted accounting principles applied on a- consistent basis except for the changes in accounting principles noted therein, if any, and fairly present the financial position of the City, the results of operations and cash flows at the date and for the period indicated. (1) There has been no material adverse change in the business, properties or financial condition of the City from that shown in the Financial Statements for the period ended September 30, 2001. (m) The Preliminary Official Statement and Official- Statement (including the financial and statistical data included therein and the Appendices thereto) are true, correct and complete and do not contain any untrue statement of a material fact or omit to state any N FTL:859278:1 02- 284 material fact necessary to make the statements therein not misleading. The City has consented to the use of the Preliminary Official Statement, the Official Statement and the Supplement by the Underwriters in connection with the public offering of the Series 2002B Bonds. (n) The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriters as the Managing Underwriter may reasonably request in order to qualify the Series 2002B Bonds for offer and sale under the Blue Sky or other securities laws or regulations of such states and other jurisdictions of the United States as the Underwriters may designate and to determine the eligibility of the Series 2002B Bonds for investment under the laws of such states and jurisdictions, and will undertake its best efforts to continue such qualifications in effect as long as required for the distribution of any Series 2002B Bonds, provided that the City will not be required to qualify to do business, or be subject to service of process in or subject itself to the jurisdiction of, any state other than the State of Florida. (oy The City has not, since December 31, 1975 been in default in the payment of principal of, premium, if any, or interest on, or otherwise been in default with respect to, any bonds, notes or other obligations which it has issued, assumed or guaranteed as to payment of principal, premium, if any, or interest, nor has any other person been in default with respect to payment of principal of, premium, if any, or interest on any bonds, notes or other obligations which it has issued, except, in both cases, as described in the Preliminary Official Statement and the Official Statement and certain conduit issues which the opinion of the City would not be considered material by a reasonable investor and therefor do not have to be disclosed in the Official Statement under Rule 3E-400.003, Rules of Government Securities, promulgated under Section 517.051 (1), Florida Statutes. (p) If between the date hereof and the date of the Closing any event shall occur which would or might cause the information contained in the Official Statement or the Supplement, as each is then supplemented or amended, to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the City shall notify the Managing Underwriter thereof, and if bt the reasonable opinion of the.Managing Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement or Supplement, as applicable, the City will cooperate with the Managing Underwriter in supplementing or amending the Official Statement or Supplement, as applicable (the printing of which will be the expense of the City) in such form and manner and at such time or times as may be reasonably called for by the Managing Underwriter. (q) The City agrees that after the Closing and during the period ended ninety (90) days after the "end of the underwriting period," hereinafter described (i) the City will not adopt any amendment of or supplement to the Final Official Statement to which, after having been famished a copy prior to any proposed adoption, the Managing Underwriter shall object in writing or which shall be disapproved by counsel for the Underwriters and (ii) if any event 7 FTL:859278:1 02- 284 �7 C relafing to or affecting the City or the Series 2002B Bonds shall occur as a result of which it is necessary, in the opinion of the City, the Managing Underwriter or Underwriters' Counsel, to amend or supplement the Official Statement or Supplement in order to make the Official Statement or Supplement not misleading in light of the circumstances existing at the time it is delivered to a purchaser, the City shall, at its expense, forthwith prepare and furnish to the Managing Underwriter a reasonable number of an amendment of or supplement to the Official Statement or Supplement, as applicable, (in form and substance satisfactory to the City and the Underwriters) which will amend or supplement the Official Statement or Supplement, as applicable, 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 Iight circumstances existing at the time the Offcial Statement or Supplement is delivered to a purchaser, not misleading. The City will promptly notify the Managing Underwriter of the occurrence of any event which, in the City's opinion, is an event described in clause (ii) of the preceding sentence. For purposes of the foregoing, the term "end of the underwriting period" means the date of Closing or the date on which the Underwriters do not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Series 2002B Bonds for'sale to the public, which date shall be no later than ninety (90) days after the date of Closing. The Underwriters will promptly notify the City in writing of the end of the underwriting period. (r) The City is in compliance with its continuing disclosure undertakings • pursuant to Rule 15c2 -12(b)(5) of the Securities and Exchange Commission in connection with all outstanding bond issues for which the City has agreed to undertake continuing disclosure obligations. ARTICLE III AGREEMENT TO PURCHASE BONDS SECTION 3.1. Delivery of Documents to Underwriters. Prior to or simultaneously with the execution and delivery of this Bond Purchase Agreement, the Managing Underwriter shall have delivered the Underwriters' Truth -In -Bonding and Disclosure Statement required by law, as set forth in Exhibit E and the Underwriters shall have received one copy each of drafts of the 2002B Basic Documents, the Preliminary Official Statement and the Official Statement in substantially the respective forms thereof on record with the City's Governing Body at the time of its consideration and adoption of the City's Resolution. As soon as practicable after the date hereof, and in any event, within seven days of the date hereof, or by such earlier date as requested by the Managing Underwriter, as required by paragraph (b)(3) of Rule 15(c)2-12 of the Securities and Exchange Commission ("SEC") or the rules of the Municipal Securities Rulemaking Board ("MSRB"), the City shall deliver or cause to be delivered to the Managing Underwriter copies of the Official Statement, dated the date hereof, in sufficient quantities to allow the Underwritersto comply with paragraph (b)(4) of Rule 15(c)2-12 of the SEC and the rules of the MSRB, in substantially the form of the Preliminary Official Statement with only such changes therein as shall Have been approved by the City and the Managing Underwriter. References to the Official Statement shall include the cover page and all exhibits, appendices, reports and statements included with or attached to it and any 8 02— 284 M.1859278.1 amendments and supplements that may be authorized by. the City ancFto which the Managing Underwriter does not reasonably object, and any amendments and supplements which may be 0 reasonably required by the Managing Underwriter for use with respect to the Series 2002B Bonds. The Official Statement shall be executed on behalf of the City by its duly authorized officer. The City approves the Preliminary Official Statement, and consents to the use of the Preliminary Official Statement and the Official Statement and the information contained therein by the Underwriters. The City deems final the Preliminary Official Statement, as of its date, for purposes of Rule 15(c)(2)-12, with certain omissions therein in connection with the pricing of the Series 2002B Bonds. No more than twenty-five days and no less than fifteen days prior to the date of Closing, and in any event, by such other date as requested by the Managing Underwriter, as required by paragraph (b)(3) of Rule 15(c)2-12 of the Securities and Exchange Commission ("SEC") or the rules of the Municipal Securities Rulemaking Board ("MSRB"), the City shall deliver or cause to be delivered to the Managing Underwriter copies of the Supplement, dated the date of delivery thereof, in sufficient quantities to allow the Underwriters to comply with paragraph (b)(4) of Rule 15(c)2-12 of the SEC and the rules of the MSRB, in substantially the form as shall have been approved by the City and the Managing Underwriter. References to the Supplement shall include the cover page and all exhibits, appendices, reports and statements included with or attached to it and any amendments and supplements that may be authorized by the City and to which the Managing Underwriter does not reasonably object, and any amendments and supplements which may be reasonably required by the Managing Underwriter for use with respect to the Series 2002B Bonds. The Supplement shall be executed on behalf of the City by its duly authorized officer. The Underwriters will cause the Final Official Statement to be deposited in various securities depositories as required by law. SECTION 3.2. A cement to Sell and Purchase Series 2002B Bonds. The Series 2002B Bonds shall have the terms specified in the Official Statement, including the mattuities, amounts, interest rates, prices or yields and redemption provisions set forth in Exhibit A annexed hereto. Upon the basis of the representations and upon the terms and conditions set forth in this Bond Purchase Agreement, the Underwriters agree to purchase, and the City agrees'to issue and to authenticate and deliver to the Underwriters, (i) all (but not less than all) of the Series 2002B Bonds for the aggregate purchase price of $ (representing the $ original principal amount of the Series 2002B Bonds, plus $ of original issue discount and less $ of Underwriters' discount plus accrued interest of $ through the day immediately preceding the Closing Date on the Series 2002B Bonds) (the "Series 2002B Purchase Price"). Payment of the Series 2002B Purchase Price shall be made by the Underwriters to the order of the City on the Closing Date for the Series 2002B Bonds in immediately available Federal funds and payment of the Series 2002B Purchase Price shall be made by the Underwriters to the order of the City on the Closing Date for the Series 2002B Bonds in immediately available Federal funds. Delivery of the Series 2002B Bonds as aforesaid shall be made to the Paying Agent and Registrar for the Series 2002B Bonds through the FAST system of registration with The Depository Trost Company, New York, New York, or at such other place as may be mutually agreed upon by the City 9 FTL:859278:1 02- 284 • and the Managing Underwriter. One fully registered Series 2002B Bond -for each maturity, duly executed and authenticated, shall be delivered to or upon the order of Underwriters, together with the other documents hereinafter mentioned, and subject to the terms and conditions hereof, the Underwriters will accept such delivery and pay the Series 2002B Purchase Price. The Series 2002B Bonds shall be registered in the name of Cede & Co., or in such other names and in such authorized denominations as the Underwriters shall reasonably specify in writing at least three (3) business days prior to the Closing Date. The Series 2002B Bonds shall be available for examination and packaging by the Underwriters at least one (1) business day prior to the Closing Date. SECTION 3.3. Public Offering of Series 2002B Bonds. The Underwriters agree to make a bona fide public offering of the Series 2002B Bonds, solely pursuant to the Final Official Statement, at the initial offering prices set forth in the Official Statement, reserving, however, the rights to (i) change such initial offering prices as the Managing Underwriter shall deem necessary in connection with the marketing of the Series 2002B Bonds and (ii) offer and sell the Series 2002B Bonds to certain dealers (including dealers depositing the Series 2002B Bonds into investment trusts) at concessions to be determined by the Managing Underwriter. The Underwriters also reserve the right to over -allot or effgct transactions that stabilize or maintain the market prices of the Series 2002B Bonds at levels above that which might otherwise prevail in the open market and to discontinue such stabilizing, if commenced, at any time. SECTION 3.4. Good Faith Deposit. The City hereby acknowledges receipt of a wire transfer in an amount equal to $ (the "Good Faith Deposit") as security for the performance by • the Underwriters of their obligation to accept and pay for the Series 2002B Bonds on the Closing Date in accordance with the provisions of this Bond Purchase Agreement. The City shall retain the Good Faith Deposit, except under the circumstances hereinafter set forth. In the event the City fails to deliver the Series 2002B Bonds at the Closing thereof, or if the City shall be unable to satisfy the conditions to the obligations of the Underwriters contained in this Bond Purchase Agreement or if such obligations shall be terminated for any reason permitted by this Bond Purchase Agreement, the City shall be obligated to immediately return the Good Faith Deposit to the Underwriters. In the event the Underwriters accept and pay for the Series 2002B Bonds on the Closing Date, the Good Faith Deposit shall be applied as a credit against payment by the Underwriters of the Series 2002B Purchase Price at Closing. In the event the Underwriters fail (other than for a reason permitted under this Bond Purchase Agreement) to accept and pay for the Series 2002B Bonds on the Closing Date, the Good Faith Deposit may be retained by the City as and for full liquidated damages for such failure, and not as a penalty, and for any and all defaults hereunder on the part of the Underwriters, and thereupon, all claims and rights hereunder against the Underwriters shall be fully released and discharged, it being understood by the City and the Underwriters that actual damages in such circumstances may be difficult or impossible to compute. ARTICLE IV CLOSING CONDITIONS SECTION 4.1. Performance of Obliaations. The obligations and agreements of the Underwriters under this Bond Purchase Agreement are expressly made subject to the due 10 02- 284 F71.:$59278:1 performance by the City at or prior to the Closing Time of their_ respective: obligations and undertakings pursuant to this Bond Purchase Agreement. 0 SECTION 4.2. Delivery of Closing Papers. The obligations and agreements of the Underwriters under this Bond Purchase Agreement are expressly made subject to the condition that, at or prior to the Closing Time, there shall have been delivered to the Underwriters each of the following which the City agrees to do: (a) Basic Documents: (i) One executed copy of each of the 2002B Basic Documents in the respective forms thereof delivered to the Underwriters pursuant to Section 3.1 of this Bond Purchase Agreement, which documents shall be in full force and effect, with only such revisions therein or additions thereto as shall have been required to incorporate terms specified in this Bond Purchase Agreement or as shall be satisfactory to the Managing Underwriter. (ii) Ten executed copies of the Official Statement and ten executed copies of the Supplement, with the Appendices attached. (b) Closing Papers to be Furnished by the City: (i) One copy of each ofthe City's Referendum Resolution, the Resolution ID and the action by the City certifying the results of the Referendum, certified by the appropriate City official to be true and correct copies thereof as adopted and as in full force and effect as of the Closing Date. (ii) One executed copy Of certificate of an authorized party on behalf of the City, dated the Closing Date, (A) confirming that each of the representations of the City contained in Section 2.1 of this Bond Purchase Agreement was true and accurate in all material respects on the date when made, has been true and accurate in all material respects at all times since, and continues to be true and accurate in all material respects on the Closing Date as if such representations were made at the Closing Time; provided, however, that such certification shall also include a statement to the effect that any representation and warranty made with respect to the Official Statement is deemed expanded to include the Supplement, to the extent not already addressed in Section 2.1, and shall be confirmed, with respect to the Supplement, as having been true and accurate in all material respects -as if made as of the date of the Supplement, as continuing to be true and accurate in all material respects at all times since, and as continuing to be true and accurate in all material respects on the Closing Date as if such representations were made at the Closing Time, (B) stating that there has been no material adverse change iti the business or financial condition of the City from that shown in the Financial Statements, (C) stating that to its best knowledge no event affecting the City has occurred since the date of the Official Statement which should be disclosed in the Supplement for the HL:859278:1 11 02- 284 ipurpose for which they are used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect as of the Closing Date; and (D) certifying that the City's Referendum Resolution and Resolution have not been supplemented, modified, amended or repealed, except as described in the Official Statement or Supplement. (iii) One executed- original of a customary incumbency and no -litigation certificate, in form prepared by and reasonably acceptable to Bond Counsel, the Office of the City Attorney and Underwriters' Counsel, dated the Closing Date and signed by an authorized member of the City's Governing Body. (iv) One executed copy of the Arbitrage Certificate, in form satisfactory to Bond Counsel, dated the Closing Date, signed by an authorized party on behalf of the City. (v) One executed copy of the final approving opinions of the City's Bond Comisel, in substantially the form contained in an Appendix to the Official Statement and, if applicable, the Supplement, and one executed copy of the supplemental legal opinions of Bond Counsel, dated the Closing Date, in the form as set forth in Exhibit C hereto. . (vi) One executed copy of the opinion of the City Attorney in the form as set forth in Exhibit B hereto. (vii) One executed copy of the opinion of the City's Co -Disclosure Counsel as set forth in the attached Exhibit D. (viii) A copy of the municipal bond insurance policy (the "Policy') insuring the Series 2002B Bonds issued by (the "Insurer"), together with a customary opinion of counsel to the Insurer as to the binding nature of the Policy, a no default certificate of the Insurer and a certificate as to the accuracy of the information in the Final Official Statement relating to the Insurer. (ix) Letters of Confirmation with respect to the ratings of the Series 2002B Bonds from Moody's Investors Service, Standard & Poor's Ratings Service and Fitch, Inc. of Aa 1, AA+ and AA+, respectively, based on the Policy, and of the underlying ratings of the Series 2002B Bonds from Moody's Investors Service, Standard & Poor's Ratings Service and Fitch, Inc. of , _ and , respectively. (x) An executed copy of the Letter of Representation to the Depository Trust Company. (xi) A certificate of the Escrow Agent, together with an opinion of counsel to the Escrow Agent, to the effect that the Escrow Agent has all requisite authority and power to execute and perform its functions under the Escrow Agreement; the 12 ail FTL:859278:1 !� 0 0 - acceptance by the Escrow Agent of its duties and obligations thereunder, and compliance with the provisions thereof will not conflict with or constitute a breach of or default under any law or administrative regulation or, to the knowledge of such counsel, any agreement or instrument to which the Escrow Agent is subject or violate the organizational documents of the Escrow Agent; all approvals, consents and orders of any governmental authority or agency having jurisdiction in the matter which would constitute a condition precedent to the performance by the Escrow Agent of its obligations under the Escrow Agreement have been obtained and are in full force and effect; there is no litigation, proceeding or investigation relating to the Escrow Agent before or by any court, public board or body pending or threatened against or affecting the Escrow Agent challenging the validity of, or in which an unfavorable decision, ruling or finding would materially adversely affect the Escrow Agent's ability to perform under the Escrow Agreement or•the transactions contemplated thereby; and the duties and obligations of the Escrow Agent under the Escrow Agreement have been duly accepted by the Escrow Agent. . (xii) The Verification Report of The Arbitrage Group relating to the Refunded Bonds. (xiii) Written consent to the inclusion of the City's audited financial statements as appendices in the Preliminary Official Statement, the Official Statement and the Supplement from KPMG LLP (the "Auditor") and to the references to the Auditor in the Preliminary Official Statement, Official Statement and Supplement, together with a copy of the Auditor's engagement letter to the City in connection with providing such consent. (d) Other Assurances: Such additional opinions, certificates, proceedings, instruments and other documents as the Underwriters, Underwriters' Counsel or Bond Counsel may reasonably request to verify or evidence (i) compliance by the Parties with applicable legal requirements, (ii) the truth and accuracy of the representations or opinions of the Parties contained in this Bond Purchase Agreement or in any Closing Paper, or (iii) the due performance of all agreements and the satisfaction of all conditions required to be performed or satisfied at or prior to the Closing Time. SECTION 4.3. Form of Closing Pagers, Waiver of Conditions. The Closing Papers to be delivered to the Underwriters pursuant to this Bond Purchase Agreement shall be deemed to be in compliance with the conditions of this Bond Purchase Agreement if, but only if, in the reasonable judgment of the Underwriters, they are satisfactory in form and substance. The legal opinions and certificates described in Section 4.2 shall be addressed to the Underwriters or a reliance letter with respect thereto shall be addressed to the Underwriters. No condition hereof shall be deemed to have been waived by the Underwriters unless expressed specifically in a writing signed by the Managing Underwriter. F7'L:859278:1 13 02-- 284 0 • • ARTICLE V T TERMINATION; PAYMENT OF EXPENSES SECTION 5.1. Termination. This Bond Purchase Agreement may be terminated by the Underwriters without liability on the part of the Underwriters, if, at or prior to the Closing Time: (a) The Referendum, the City's Referendum Resolution, the Resolution or this Bond Purchase Agreement shall not be in full force and effect or shall have been supplemented, modified, amended or repealed, without the prior written consent of the Underwriters. (b) Any representation of the City contained in this Bond Purchase Agreement or in any Closing Paper shall prove to be or to have been false -in any material respect; (c) There shall be a material failure of any one or more of the conditions set forth in Sections 4.1, 4.2 or 4.3 of this Bond Purchase Agreement; (d) Litigation or an administrative proceeding or investigation shall be pending or threatened affecting, contesting„ questioning or seeking to restrain or enjoin (i) the powers or the valid existence of the City or the titles of its officers to their respective offices, or (ii) the pledge of the City's full faith, credit and taxing power to the payment of the Series 2002B • Bonds, or (iii) contesting the validity or effecting the enforceability of the Series 2002B Bonds, the 2002B Basic Documents or contesting the power of either the City to execute and deliver such documents (to the extent applicable) or to consummate the transactions contemplated therein or in the Official Statement or the Supplement, or (iv) contesting in any way the completeness or accuracy of the Official Statement or the Supplement, or (v) wherein an unfavorable decision, ruling or finding would, in the judgment of the Underwriters, materially and adversely affect the validity or enforceability of the .2002B Basic Documents; (e) Any legislative, executive or regulatory action or any court decision shall occur which, in the judgment of the Underwriters, casts sufficient doubt on the legality of, or the exclusion from gross income for Federal income tax purposes of interest on, obligations of the general kind and character as the Series 2002B Bonds so as to impair materially the marketability, or to reduce materially the market price of, such obligations; (f) Any action by the Securities and Exchange Commission or a court shall occur which would require registration of any Series 2002B Bonds under the Securities Act of 1933, as amended, or the qualification of the Resolution under the Trust Indenture Act of 1939, as amended; (g) Any material restriction not presently in force on trading in securities generally, or any banking moratorium shall occur, which, in the judgment of the Managing Underwriter, substantially impairs the marketability of the Series 2002B Bonds; • 14 c� c� o FTC -00276:1 02- 2 8 4 (h) The outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war shall occur, if the effect of Ob any such event, in the judgment of the Managing Underwriter materially and adversely affects the public offering or the delivery of the Series 2002B Bonds; (i) There shall occur any adverse change in the operations, properties or financial condition of the City from that described in the Oficial Statement or the Supplement, which, in the judgment of the Underwriters, is material and makes it inadvisable to proceed with the sale of the Series 2002B Bonds; or 0) Any event or condition shall occur which, in the judgment of the Underwriters, renders untrue or incorrect, in any material respect as of the time to which the same purports to relate, the information contained in the Preliminary Official Statement, the Official Statement or the Supplement or which requires that information not reflected therein be included therein in order to make the statements and information contained therein not misleading in any material respect as of such time. SECTION 5.2. Pa ent„ of Expenses. The following costs and expenses relating to the transactions contemplated or described in this Bond Purchase Agreement shall be borne and paid by the City regardless of whether the transactions herein contemplated shall close: printing of Series 2002B Bonds; printing and photocopying of Closing Papers (including the Preliminary Official Statement, the Official Statement and the Supplement) in such reasonable quantities as the Underwriters may request; fees and disbursements of Bond Counsel, the City's Co -Disclosure Counsel, Auditor and financial advisor; and fees of the rating agencies, the _Insurer, the Escrow Agent and The Arbitrage Group or other verification agent. The Underwriters shall pay (i) the fees and disbursements of Underwriters' Counsel; (ii) all advertising expenses in connection with the public offering of the Series 2002B Bonds; and (iii) all other expenses incurred by them in connection with their public offering and distribution of the Series 2002B Bonds. Except as otherwise provided above, the City and the Underwriters shall each bear the costs and expenses incident to the performance of their respective obligations under this Bond Purchase Agreement. ARTICLE VI MISCELLANEOUS SECTION 6.1. Parties In Interest: Survival of Representations. This Bond Purchase Agreement is made solely for the benefit of the City and the Underwriters and no other person, partnership, association or corporation, including but not limited to owners of Series 2002B Bonds or beneficial interests therein, shall acquire or have any rights hereunder or by virtue hereof. All representations and agreements in this Bond Purchase Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any Party and shall survive the delivery of and payment for the Series 2002B Bonds. HL.859278:1 l "'" 284 . SECTION 6.2. Notices. All notices, demands, certificates or other communications (other than the Closing Papers) under this Bond Purchase Agreement shall be sufficiently given and shall be deemed given when hand delivered or when mailed by certified or registered mail, postage prepaid, or by prepaid telegram, or by electronic communications with the original forwarded by certified or registered mail, postage prepaid, with proper address as indicated below: r� To the Citv: To the Underwriters: City Commission 444 S.W. 2"d Avenue Miami, Florida 33130 Attention: Chair J.P. Morgan Securities; Inc. 5201 Blue Lagoon Drive Suite 800 Miami, Florida 33126 Attention: Percy Aguila, Vice President SECTION 6.3. Amendment. No modification, alteration or amendment to this ,Bond Purchase Agreement shall be binding upon any Party until such modification, alteration or amendment is reduced to writing and executed by all Parties. SECTION 6.4. governing Law: Venue. The laws of the State of Florida shall govern this Bond Purchase Agreement. Venue shall be in Miami -Dade County, Florida. . SECTION 6.5. Captions. The captions or headings in this Bond Purchase Agreement are for convenience only and in no way define, limit or describe the scope or intent of any of the provisions of this Bond Purchase Agreement. SECTION 6.6. Counterparts. This Bond Purchase Agreement may be signed in any number of counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument. SECTION 6.7. Severability. If any provisions of this Bond Purchase Agreement shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions, or in all cases because it conflicts with any other provision or provisions hereof or any constitution or statute or rule of public policy, or for any other reason, such circumstance shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatever. The invalidity of any one or more phrases, sentences, clauses or Sections in this Bond Purchase Agreement contained, shall not affect the remaining portions of this Bond Purchase Agreement, or any part thereof. FTL:859278: i' 16 02- 284 SECTION 6.8. Rights ofMana .n Underwriter. -The Managing -Underwriter, on behalf of the Underwriters, being duly authorized so to do, shall have the power to enter into this Bond Purchase Agreement, to consent to any amendments hereto, to agree to the interpretation of the provisions hereof and to waive any preconditions to Closing hereunder. SECTION 6.9. Effective Time of this Bond Purchase Agreement. This Bond Purchase Agreement shall be effective and binding upon its execution and delivery. [Signatures To Follow] C7 C 17 02' 28.4 F'1'L:859278:1 IN WITNESS WHEREOF, the parties hereto have. executed this Agreement as of the day and year set forth beneath each signature. [SEAL] The City: ATTEST: CITY OF MIAMI, FLORIDA By: BY: - Its: City Manager Its: Date: , 2002 The Underwriters: J.P. MORGAN SECURITIES, INC. on behalf of itself and the other Underwriters Iisted on Schedule A hereto. •Its: Date: , 2002 18 02- 284 FTL:859278:1 SCHEDULE A. UNDERWRITERS PaineWebber Incorporated Salomon Smith Barney Morgan Stanley & Co. Incorporated Jackson Securities, Inc. Lehman Brothers • Schedule A-1 FTL:859278:1 02- is • EXHIBIT A MATURITIES, AMOUNTS, INTEREST RATES AND PRICES AND YIELDS Series 2002B Bonds Year' Principal Interest (1) Amount Rate Yield Price FTi:859278:1 (plus accrued interest from 1, 2002) Exhibit A-1 02" 284 0 REDEMPTION PROVISIONS • Exbibit A-2 U 2 .. 284 FTL:859278:1 • • 0 • • EXHIBIT B , 2002 City Commission City of Miami Miami, Florida J.P. Morgan Securities, Inc. as representative of the underwriters Miami, Florida • Re: $ City of Miami, Florida General Obligation Refunding Bonds, Series 2002B Ladies and Gentlemen: I am City Attorney for the City of Miami, Florida (the "City") and have served in such capacity in connection with the issuance of the above -captioned bonds (the "Series 2002B Bonds") and related transactions. This opinion is furnished pursuant to the Bond Purchase Agreement dated , 2002 (the "Purchase Agreement") among the City, J.P. Morgan Securities, Inc. and the Participating Underwriters named therein (J.P. Morgan Securities, Inc. and said Participating Underwriters are referred to collectively as the "Underwriters"). All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Purchase Agreement. The Office of the City Attorney has examined such documents and instruments as we deemed necessary to render the requested opinion. Based upon examination of such documents and matters of law as the Office of the City Attorney has determined relevant for the purposes of rendering this opinion, and subject to the reservations set forth herein, I am of the opinion that: 1. The City is a municipal corporation of the State ofFlorida, duly organized and validly existing under the constitution and laws of the State of Florida. 2. The City is authorized by the laws of the State of Florida to pledge the full faith credit and taxing power of the City to the Series 2002B Bonds, to execute and deliver the 2002B Basic Documents, the Official Statement and the Supplement and to perform its obligations under the 2002B Basic Documents or as described therein. The Series 2002B Bonds are payable from ad valorem taxes levied without limitation as to rate or amount on all taxable property within the City, sufficient to pay the principal of and interest on the Series 2002B Bonds. Exhibit B-1 02- 284 F?L:85927$:1 3. The City's Referendum Resolution and Resolution have been duly adopted and the execution and delivery by the City'of the 200213 Basic Documents, the Official Statement and the Supplement, and the performance of its obligations thereunder or as described therein, for and in the name of the City, have been duty authorized by the City and, with respect to the Prior Bonds (or the bonds refunded by the Prior Bonds), by the qualified electors of the City as required by applicable law. Except for the Referendum, no additional referenda are required by applicable law to permit the issuance of the Series 2002B Bonds. 4. The City has duly authorized the distribution of the Preliminary Official Statement by the Underwriters, has duly approved and executed the Official Statement and the Supplement and has duly authorized the distribution thereof by the Underwriters in connection with the public offering of the Series 2002B Bonds. 5. The 2002B Basic Documents, the Official Statement, the Supplement and the certificates of the City delivered on this date have been duly authorized, executed and delivered by the City and constitute valid and legally binding obligations of the City enforceable against the City in accordance with their respective terms. The Referendum Resolution, the Resolution and the 2002B Basic Documents are in full force and effect and have not been modified or amended except as disclosed in the Official Statement and Supplement. 6. To the best of my knowledge, no authorization, approval, consent, license or other action of any court or public or governmental or regulatory authority having jurisdiction over the City that has not been obtained is or will be required for adoption ofthe Referendum Resolution and the Resolution, respectively, the issuance and sale of the Series 200213 Bonds or the valid and Iawful authorization, execution and delivery of, or consummation by the City of the other transactions contemplated by, the 2002B Basic Documents, the Official Statement and the Supplement. 7. The adoption by the City of the City's Referendum Resolution and Resolution and the execution and delivery by the City of the 2002B Basic Documents, the Official Statement and the Supplement and compliance on the City's part with the provisions contained or -described therein, will not conflict with, violate or constitute 'a breach of or a default under (a) any existing law, court or administrative regulation, order or decree, or (b) any commitment, mortgage, lease, indenture, agreement, contractor instrument to which the City is a party or by which it or any of its properties is bound. 8. To the best of my knowledge, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by the Circuit Court of the State of Florida in and for the Eleventh Judicial Circuit or in the United States District Court for the Southern District of Florida or any other court, governmental agency, public board or body for which the City has received actual notice, pending or, to the best of my knowledge, after due investigation, threatened against the City which in any way affects, contests, questions or seeks to restrain or enjoin any of the following: (a) the powers or valid existence of the Exhibit B-2 FTE:859278:1 02— 284 • is • �J Cityor the titles of the members of the City's Governing Body -of its other officers to their respective offices; (b) any of the proceedings had or actions taken leading up to the sale, issuance and delivery of the Series 2002B Bonds or the execution, delivery or performance of the Purchase Agreement, including the Referendum; (c) the delivery, validity or enforceability of the Series 2002B Bonds or any of the other 2002B Basic Documents or contesting the power of the City to undertake or consummate the transactions contemplated therein and in the Final Official Statement; (d) contesting in any way the completeness or accuracy of the Official Statement or Supplement; (e) wherein an unfavorable decision, raling or finding would materially and adversely affect the validity or enforceability of the 2002B Basic Documents; or (f) the pledge of the City's full faith, credit and taxing power to payment of the Series 2002B Bonds. 9. The statements and information relating to the City, the Referendum Resolution, Referendum, the Resolution and the other 2002B Basic Documents and the information under the caption "Ad Valorem Taxation," in each case as set forth in the Preliminary Official Statement and the Official Statement and the statements and information relating to'the City, the Referendum Resolution, Referendum, the Resolution and the other 2002B Basic Documents in the Supplement (except for the Financial Statements and other financial and statistical data included therein as to which no view is expressed) did not on the respective dates of the Preliminary Official Statement, the Official Statement and the Supplement, and do not on the date hereof, contain any untrue statement of 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 misleading. Without undertaken to determine independently the accuracy or completeness of the information in the Preliminary Official Statement, the Official Statement and the ,Supplement except as to the information noted in the preceding sentence, nothing has come to my attention that would lead me to believe that the Preliminary Official Statement, the Official Statement and the Supplement contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein not misleading (excluding the financial statements and financial and statistical data included therein as to which no view is expressed). All opinions as to the enforceability of the legal obligations of the City set forth herein are 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 subject to the enforceability thereof, to the exercise of judicial discretion in accordance with the general principles of equity. I am qualified to practice law in the State of Florida and for the purpose of this opinion, I do not purport to be an expert on, or to express an opinion herein concerning, the laws of any other jurisdiction (including any such laws which may be applicable by virtue of the application of the choice of law provisions under Florida law) except the laws of the United States to the extent set forth herein. • FiL:859278:1 Exhibit B-3 284 No one, other than the addressees named above, is entitled to rely upon the statements made, and conclusions expressed, within this opinion. 0 Very truly yours, OFFICE OF THE UTY A17ORNEY • • Exhibit B-4 F7L:859278:1 02- 2... 2 g • • • J.P. Morgan Securities, Inc. and Participating Underwriters Miami, Florida Re: S 2002B Ladies and Gentlemen: C7 EXHIBIT C , 2002 City of Miami, Florida General Obligation Refunding Bonds, Series We have acted as Bond Counsel in connection with the issuance of the above -captioned bonds (the "Series 2002B Bonds") and related transactions. This opinion is furnished pursuant to the Bond Purchase Agreement dated , 2002 (the "Purchase Agreement") among the City of Miami, Florida (the "City"), J.P. Morgan Securities, Inc. and the Participating Underwriters named therein (J.P. Morgan Securities, Inc. and said Participating Underwriters are referred to collectively as the "Underwriters"). All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Purchase Agreement. We have examined such documents and instruments as we deemed necessary to render the requested opinion. It is our opinion that: 1. The Series 2002B Bonds, the Continuing Disclosure Certificate and the Escrow Agreement have been duly authorized, executed and delivered on behalf of the City and constitute binding and enforceable agreements of the City, enforceable in accordance with their respective, terms. 2. The Resolution has been duly adopted by the City and has not been amended or repealed, except as disclosed in the Official Statement and Supplement. 3. The information and statements in the Official Statement under the headings "INTRODUCTION," "PURPOSE OF THE ISSUE," "DESCRIPTION OF THE SERIES 2002B BONDS" (except the subsection therein entitled "Book -Entry Only System"), "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2002B BONDS," "LEGAL MATTERS," "ENFORCEABILITY OF REMEDIES," "CONTINUING DISCLOSURE," "APPENDIX B -- FORM OF THE BOND RESOLUTION" and "APPENDIX D — FORM OF BOND COUNSEL OPINION," and APPENDIX F -- Form of Continuing Disclosure Certificate," insofar as such information and statements constitute summaries of the Referendum Resolution, the Resolution, the Referendum, the Continuing Disclosure Certificate and the Series 2002B Bonds or the law referred to therein, constitute fair and accurate summaries of such matters. We are further of the opinion that the FTL:859278:1 Exhibit C-1 284 statements contained under the heading "TAX MATTERS" are correct as to matters of law • and fairly and accurately reflect the information purported to be presented therein. [Additional sections of Supplement to be added as applicable] 4. The Series 2002B Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended and the Referendum Resolution and the Resolution are each exempt from qualification under the Trust Indenture Act of 1939, as amended. 5. Assuming the proper execution and deliver of the Escrow Agreement by the Issuer and the Escrow Agent, the right, title and interest of the holders of the Refunded Bonds under Resolution No. _ adopted by the City on, 1992 pursuant to which the Refunded Bonds were issued (the "Refunded Bonds Resolution') has ceased, determined and become void and the Refunded Bonds are no longer outstanding under the Refunded Bonds Resolution. In rendering this opinion we have relied upon the arithmetical accuracy of certain computations prepared by the Underwriters and verified by The Arbitrage Group. This opinion is supplemental to our approving opinion dated as of the date hereof with respect to the Series 2002B Bonds. You may rely on our approving opinion as if it were addressed to you. FTL:859278:1 Respectfully Submitted, Exhibit C-2 021., 294 • 0 • • • EXHIBIT D , 2002 City Commission City of Miami Miami, Florida J.P. Morgan Securities, Inc. and Participating Underwriters Clearwater, Florida Re: $ City of Miami, Florida General- Obligation Refunding Bonds, Series 2002B Ladies and Gentlemen: We have acted as Co -Disclosure Counsel to the City of Miami, Florida (the "City") in connection with their purchase of the above -captioned bonds (the "Series 2002E Bonds") pursuant to the Bond Purchase Agreement dated , 2002 (the "Bond Purchase Agreement") among J.P. Morgan Securities, Inc., the Participating Underwriters named therein and the City. In that capacity, we hereby deliver the following opinions. 1. Based upon our participation in the preparation ofthe Preliminary Official Statement, Official Statement and Supplement relating to the Series 200213 Bonds, nothing has come to our attention that would lead us to believe that any of the Preliminary Official Statement, the Official Statement or the Supplement (excluding therefrom the Financial Statements and financial, demographic and statistical data included therein and the information contained under the captions "Book -Entry Only System" and "Municipal Bond Insurance" as to which we express no opinion) as of their respective dates contain any untrue statement of material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 2. The Continuing Disclosure Certificate dated _ , 2002 delivered by the Issuer in connection with the Series 2002B Bonds complies, in all material respects, with the requirements of Rule 15(c)2 -12(b)(5) adopted by the United States Securities and Exchange Commission under the Securities Exchange Act of 1934. This opinion may be relied upon solely by you. FTL:859278:1 Very truly yours, Exhibit D-1 0— 284 City Commission City of Miami Miami, Florida Re: $ 2002B Ladies and Gentlemen: • EXHIBIT E - 11 UNDERWRITERS' TRUTH -IN -BONDING AND DISCLOSURE STATEMENT 2002 City of Miami, Florida General Obligation Refunding Bonds, Series The City ofMiami, Florida (the "City") is proposing to cause to be issued its $ City of Miami, Florida General Obligation Refunding Bonds, Series 2002B (the "Bonds"). The Bonds are expected to be repaid over a period of approximately_ years. At a forecasted true interest rate of total interest paid over the life of the Bonds will be $ • The source of repayment for the Bonds consists primarily of ad valorem taxes levied by the i City solely for the purpose of paying debt service on the Bonds. These ad valorem taxes can not be . used for any other purpose of the City. In addition, pursuant to the provisions of Sections 218.385(4), Florida Statutes, the following disclosure is made: (a) . The 'nature and estimated amounts. of expenses to be incurred by (collectively, the "Underwriters") in connection with the purchase and re- offering of the Bonds are set forth in Exhibit A attached hereto. (b) No person has entered into an understanding with the Underwriters, or to the knowledge of the Underwriters with the City, -for any paid or promised compensation or valuable consideration, directly or indirectly, expressly or implied, to act solely as an intermediary between the City and the Underwriters for the purpose of influencing any transaction in the purchase of the Bonds. (c) The underwriting spread (i.e., the difference between the price at which the Bonds will be initially offered to the public by the Underwriters and the price to be paid to the City for the Bonds, exclusive of accrued interest in both cases) will be % ofthe Principal amount of the Bonds. —" CJ Exhibit E-1 FTL:859278:1 02- 2.8 4 • (d) The underwriting spread set forth in paragraph (c) above, includes a management fee of $ is (e) No other fee, bonus or other compensation is estimated to be paid by the Underwriters in connection with the issuance of the Bonds to any person not regularly employed or retained by the Underwriters (including any "finder" as defined in Section 218.386(1)(a), Florida Statutes), except as specifically enumerated as expenses to be incurred by the Underwriters as set forth in Exhibit A. FTL-859278:1 (f) The name and address of each of the Underwriters is: J.P. Morgan Securities, Inc. 5201 Blue Lagoon Drive Miami, FL 33126 PaineWebber Incorporated One International Plaza, Suite 1600 Miami, FL 33131 Salomon Smith Barney 110 East Broward Boulevard, Suite 1850 Fort Lauderdale, FL 33301 Morgan Stanley & Co. Incorporated Sun Bank Center 200 South Orange Avenue, Suite 1440 Orlando, FL 32801 Jackson Securities, Inc. 801 Brickell Avenue, Suite 934 Miami, FL 33131 Lehman Brothers 1111 Brickell Avenue Miami, FL 33131 Exhibit E-2 o2-- 284 We -understand that you do not require any further disclosure from the Underwriters pursuant . to Section 218.385(4), Florida Statutes. Very truly yours, J.P. Morgan Securities, Inc., as Representative for the Underwriters By: Its: Date: . 2002 Exhibit E-3 FTL:859278:1 0 2 ,,,, 284 • • & 9 . SCHEDULE A UNDERWRITERS' EXPENSES Exhibit E-4 02— 284 FTL:85927$:3 • • EXHIBIT `B" - SERIES 2002A ESCROW DEPOSIT AGREEMENT B-1$ 4 MW4- Doammm N SSIM4 02 • • • • A • Mimi; Domm m k: 90330 CITY OF MIAMI, FLORIDA and THE BANK OF NEW YORK as Escrow Agent ESCROW DEPOSIT AGREEMENT Relating to $ City of Miami, Florida General Obligation Refunding Bonds, Series 2002A Dated as of 1,2002- 0 ,2002• SS&D Draft #I 03/05/02 02-W 284 ESCROW DEPOSIT AGREEMENT THIS ESCROW DEPOSIT AGREEMENT (the "Agreement") made and entered into as of 1, 2002, by and between the CITY OF MIAMI, FLORIDA (the "City"), and The BANK OF NEW YORK, a New York banking corporation organized and existing under the laws of the State of New York, as escrow agent (the "Escrow Agent"). WITNESETH: WHEREAS, the City of Miami, Florida (the "City"), has previously issued its (i) $16,135,000 General Obligation Refunding Bonds, Series 1991 (the "1991 Bonds"), (ii) $10,000,000 General Obligation Bonds, Series 1992 (Storm Sewer Improvements) (the "1992 Bonds") and (iii) $22,500,000 General Obligation Bonds, Series 1995 (Sanitary Sewer System) (the "1995 Bonds"); and 'WHEREAS, the City desires to refund and defease (i) the 1991 Bonds maturing on May 1, 2003 and May 1, 2013, which bonds are currently outstanding in the aggregate principal amount of $2,360,000, (the "1991 Refunded Bonds"), (ii) the 1992 Bonds maturing on August 1 in the years 2003 through 2017, inclusive, which bonds are currently outstanding in the aggregate principal amount of $7,710,000 (the "1992 Refunded Bonds") and (iii) the 1995 Bonds maturing on January 1 in the years 2004 through 2015, inclusive, which bonds are currently outstanding in the aggregate principal amount of $21,900,000 (the "1995 Refunded Bonds" and,, together with the 1991 Refunded Bonds and the 1992 Refunded Bonds, the "Refunded Bonds"), all as more particularly described on Schedule A hereto; and WHEREAS, on March 14, 2002,,the City Commission (the "Commission"), of the City adopted Resolution No. (the "Resolution"), pursuant to which the City is issuing its $ aggregate 'principal amount of General Obligation Refunding Bonds; Series 2002A (the "Series 2002A Bonds"), to refund the Refunded Bonds; and WHEREAS, a portion of the proceeds derived from the sale of the Series 2002A Bonds, will be applied to the purchase of Government Obligations (as such term is defined in this Agreement), which will mature and produce investment income and earnings at such times and in such amounts, as will be sufficient to pay when due the principal of, redemption premium, if any, and interest on the Refunded Bonds, as more specifically set forth in this Agreement; and WHEREAS, it is necessary for the City to enter into this Agreement in order to establish an irrevocable escrow fund held for the deposit of the Government Obligations purchased with the proceeds of the Series 2002A Bonds, and to provide for the proper and timely application of the moneys deposited hereunder, the maturing principal amount of the Government Obligations and investment income and earnings derived therefrom to the payment of the Refunded Bonds; and WHEREAS, the Escrow Agent has received a copy of a verification report from The • Arbitrage Group, confirming that the money deposited in the 2002A Escrow Deposit Trust Fund, Muni; Docwmnt N; 9033v! 02— 284 as provided in this Agreement, is sufficient to provide for the timely payment of the Refunded Bonds; NOW, THEREFORE, the City, in consideration of the foregoing and the mutual covenants set forth in this Agreement 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 terms, does hereby agree as follows: ARTICLE I CREATION AND CONVEYANCE OF TRUST ESTATE Section 1.01. Creation and Conveyance of Trust Estate. The City hereby grants, warrants, remises, releases, conveys, assigns, transfers, aliens, pledges, sets over and confirms unto the Escrow Agent and to its successors in the trust hereby created, and to it and its assigns forever, for the sole benefit and security of the Holders from time to time of the Refunded Bonds, the City's interest in the following property (collectively, the "Trust Estate"): DIVISION I • All right, title and interest in and to $ in moneys deposited directly with the Escrow Agent and derived from the proceeds of the Series 2002A Bonds upon issuance and delivery of the Series 2002A Bonds and execution of and delivery of this Agreement. DIVISION H All right, title and interest in and to the Government Obligations described in Schedule B hereto, together with the income and earnings on such Government Obligations, purchased by the Escrow Agent at the direction of the City as provided in this Agreement. DIVISION III Any and all other property of every kind and nature conveyed, pledged, assigned or transferred as and for additional security under this Agreement by the City, or by anyone on behalf of the City to the Escrow Agent for the benefit of the Holders of the Refunded Bonds. The Trust Estate shall be held by the Escrow Agent, and its successors and assigns, forever in trust, for the sole benefit and security of the Holders from time to time of the Refunded Bonds, but if the principal of, redemption premium, if any, and interest on all of the Refunded Bonds shall be fully and promptly paid when due, in accordance with their terms and Section 3.06 hereof, then this Agreement shall be and become void and of no further force and effect except as otherwise provided in this Agreement; otherwise the same shall remain in full force and effect, and upon the trusts and subject to the covenants acid conditions hereinafter set • forth. � e M6* Domml 0; 9033A 2 o2- 284 R ARTICLE II DEFINITIONS Section 2.01. Definitions. In addition to words and terms. defined elsewhere 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. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in the Resolution. "Government Obligations" means non -callable direct obligations of the United States of America. "Holders" means the registered owners from time to time of the Refunded Bonds. ["Paying Agent" means the The Bank of New York, in its capacity as paying agent for the Refunded Bonds.] 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 plural number and vice versa unless the context shall otherwise indicate. The word "person" shall include corporations, associations, natural persons and public bodies unless the context shall otherwise indicate. Reference to a person other than a natural person shall include its successors. 0 ARTICLE III ESTABLISHMENT OF ESCROW DEPOSIT TRUST FUND; FLOW OF FUNDS Section 3.01. Creation of 2002A Escrow Deposit Trust Fund and Deposit of Moneys. There is created and established with the Escrow Agent a special and irrevocable trust fund designated "City of Miami, Florida General Obligation Refunding Bonds, Series 2002A Escrow Deposit Trust Fund" (the "Series 2002A Escrow Deposit Trust Fund), to be held by the Escrow Agent for the sole benefit of the Holders of the Refunded Bonds and accounted for separate and apart from the other funds of the City and, to the extent required by law, of the Escrow Agent. Concurrently with the delivery of this Agreement, the City causes to be deposited with the Escrow Agent and the Escrow Agent acknowledges receipt of immediately available moneys for deposit in the Series 2002A Escrow Deposit Trust Fund in the amount of $ from the proceeds of the Series 2002A Bonds, all of which (other than $ to be held uninvested), when invested in Government Obligations as directed by this Agreement, will provide moneys sufficient to pay the principal of, redemption premium, if any, and interest on the Refunded Bonds, as more particularly described in Schedule C. Section 3.02. PpMent of Refunded Bonds. The proceeds of the Series 2002A Bonds • received by the Escrow Agent, excluding the uninvested portion of $, will be sufficient to Miuni; Doewnpq p: 9433v1 purchase $ par amount of Government Obligations, all as listed in Schedule B, which will mature in principal amounts and earn income at such times, all as described in Schedule B, so that, together with the uninvested moneys, sufficient moneys will be available to pay as the same are due all principal of, redemption premium, if any, and interest on the Refunded Bonds. Notwithstanding the foregoing, if the amounts deposited in the Series 2002A Escrow Deposit Trust Fund are insufficient to make said payments of principal, redemption premium, if any, and interest, the City shall cause to be deposited into the Series 2002A Escrow Deposit Trust Fund the amount of any deficiency immediately upon notice from the Escrow Agent. Section 3.03. Irrevocable Trust Created. The deposit of moneys and Government Obligations or other property in the Series 2002A Escrow Deposit Trust Fund shall constitute an irrevocable deposit of said moneys and Government Obligations and other property for the sole benefit of the Holders of the Refunded Bonds, subject to the provisions of this Agreement. The Holders of the Refunded Bonds, subject to the provisions of this Agreement, shall have an express lien on all moneys and principal of and earnings on the Government Obligations and other property in `the Series 2002A Escrow Deposit Trust Fund. The moneys deposited in the Series 2002A Escrow Deposit Trust Fund and the matured principal of the Government Obligations and other property and accrued interest shall be held in trust by the Escrow Agent, and shall be transferred in the necessary amounts to the Paying Agent for the Refunded Bonds for the payment of the principal of, redemption premium, if any, and interest on the Refunded • Bonds, as more specifically set forth in Schedule C hereto. Section 3.04. Purchase of Government Obligations. (a) The Escrow Agent is hereby directed immediately to purchase the Government Obligations listed in Schedule B from the proceeds of the Series 2002A Bonds deposited in the Series 2002A Escrow Deposit Trust Fund. The Escrow Agent shall purchase the Government Obligations solely from the moneys deposited in the Series 2002A Escrow Deposit Trust Fund. The Escrow Agent shall apply the moneys deposited in the Series 2002A Escrow Deposit Trust Fund and the Government Obligations purchased therewith, together with all income or earnings thereon, in accordance with the provisions of this Agreement. The Escrow Agent shall have no power or duty to invest any moneys held hereunder or to make substitutions of the Government Obligations held hereunder or to sell, transfer or otherwise dispose of the Government Obligations held hereunder except as provided in this Agreement. The Escrow Agent is directed not to invest $ of the proceeds of the Serids 2002A Bonds deposited in the Series 2002A Escrow Deposit Trust Fund. (b) The City covenants to take no action in the investment, reinvestment or security of the Series 2002A Escrow Deposit Trust Fund in violation of this Agreement and recognizes that any such action in contravention of this Agreement might cause the Refunded Bonds or the Series 2002A Bonds to be classified as "arbitrage bonds" under the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, as applicable (collectively, the "Code"). 4 0— 2S4 Mtum; Doeunm: is: 9033A C] • Section 3.05. Substitution of Certain Government Obligation s. (a) If so directed in writing by the City on the date of delivery of this Agreement, the Escrow Agent shall accept in substitution for all or a portion of the Government Obligations listed in Schedule B, other Government Obligations (the "Substituted Securities"), the principal of and interest on which, together with any Government Obligations listed in Schedule B for which no substitution is made and moneys held uninvested by the Escrow Agent, will be sufficient to pay all principal of, redemption premium, if any, and interest to become due on the Refunded Bonds as set forth in Schedule C. The foregoing notwithstanding, the substitution of Substituted Securities for any of the Government Obligations listed in Schedule B may be effected only upon compliance with Section 3.05(b)(1) and (2) below. (b) If so directed in writing by the City at any time during the term of this Agreement, the Escrow Agent shall sell, transfer, exchange or otherwise dispose of, or request the redemption of, all or a portion of the Government Obligations then held in the Series 2002A Escrow Deposit. Trust Fund and shall substitute for such Government Obligations other Government Obligations, designated by the City, and acquired by the Escrow Agent with the proceeds derived from the sale, transfer, disposition or redemption of or by the exchange of such Government Obligations held in the 2002A Escrow Deposit Trust Fund, but only upon the receipt by the Escrow Agent of: (1) an opinion of nationally recognized counsel in the field of law relating to municipal bonds stating that such substitution will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Refunded Bonds and the Series 2002A Bonds; and (2) verification from an independent certified public accountant stating that the principal of and interest on the substituted Government Obligations, together with any Government Obligations and any uninvested moneys remaining in the Series 2002A Escrow Deposit Trust Fund will be sufficient, without reinvestment, to pay the remaining principal of, redemption premium, if any, and interest on the Refunded Bonds as set forth in Schedule C. Any moneys resulting from the sale, transfer, disposition or redemption of the Government Obligations and the substitution of other Government Obligations not required to be applied for the payment of such principal of, redemption premium, if any, and interest on the Refunded Bonds (as shown in the verification report described in Section 3.05(b)(2) delivered in connection with such substitution), shall be returned to the City for deposit in the Principal and Interest Account established by the Resolution. Upon any such substitution of Government Obligations pursuant to this Section 3.05, Schedule B shall be appropriately amended by the City to reflect such substitution. The Escrow Agent shall be under no duty to inquire whether the Government Obligations as deposited in the Series 2002A Escrow Deposit Trust Fund are properly invested under the Code, except as specifically set forth in this Section 3.05, and provided fiuther that the Escrow • MW* DOMMM 0: 9033VI 5 02. 284 Agent may rely on all specific directions in this Agreement providing for the investment or reinvestment of the 2002A Escrow Deposit Trust Fund. Section 3.06. Transfers from Series 2002A Escrow De osit Trust Fund. As the principal of the Government Obligations set forth in Schedule B shall mature and be paid, and the investment income and earnings thereon are paid, the Escrow Agent shall, no later than the payment dates for the Refunded Bonds, as specified in Schedule C, transfer from the Series 2002A Escrow Deposit Trust Fund to the Paying Agent for the Refunded Bonds amounts sufficient to pay the principal of, redemption premium, if any, and interest on the Refunded Bonds, as specified in Schedule C. The 1991 Refunded Bonds shall be redeemed on 2002, at a redemption price of 101% of the principal amount thereof. The 1992 Refunded Bonds shall be redeemed on August 1, 2002, at a redemption prince of 100% of the principal amount thereof. The 1995 Refunded Bonds shall be redeemed on January 1, 2003, at a redemption price of 101% of the principal amount thereof. The City hereby irrevocably determines to call the Refunded Bonds for redemption on the respective redemption dates stated in. this Section 3.06. Section 3.07. Investment of Certain Moneys Remaining in 2002A Escrow Deposit Trust Fund. Subject to the provisions of Section 3.04, the Escrow Agent shall invest and reinvest, at the written direction of the City, in Government Obligations any moneys remaining from time to time in the Series 2002A Escrow Deposit Trust Fund until such time as they are needed. Such moneys shall be reinvested in such Government Obligations for such periods and at such interest is rates, as the Escrow Agent shall be directed to invest by the City, which periods and interest rates shall be set forth in an opinion from nationally recognized counsel in the field of law relating to' municipal bonds to the City and to the Escrow Agent, which opinion shall also be to the effect that such reinvestment of such moneys in such Government Obligations for such period and at such interest rates will not, under the statutes and regulations applicable to the Refunded Bonds and the Series 2002A Bonds, cause the interest on such Refunded Bonds or Series 2002A Bonds to be included in gross income for federal income tax purposes and that such investment is not inconsistent with the statutes and regulations applicable to the Refunded Bonds and the Series 2002A Bonds. Any interest income resulting from reinvestment of moneys pursuant to this Section 3.07 not required to be applied for the payment of the principal of, redemption premium, if any, and interest on the Refunded Bonds shall be returned to the City, at the City's written request, for deposit into the Principal and Interest Account established by the Resolution. Section 3.08. 2002A Escrow Deposit Trust Fund Constitutes Trust Fund. The Series 2002A Escrow Deposit 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, to the extent required by law, of the Escrow .Agent and used only for the purposes and in the manner provided in this Agreement. Section 3.09. Transfer of Funds After All Payments Required. by this Agreement are Made. After all of the transfers by the Escrow Agent to the paying agents for payment of the principal of, redemption premium, if any, and interest on the Refunded Bonds provided in • Schedule C have been made, all remaining moneys and securities, together with any income and interest thereon, in the Series 2002A Escrow Deposit Trust Fund immediately shall be returned 6 ctr Mbad; Doan 0: 90330 02- 284 to the City for deposit into the Principal and Interest Account established by the Resolution; provided, however, that no such transfers (except transfers made in accordance with Sections 3.05 and 3,07) shall be made until all of the principal of, redemption premium, if any, and interest on the Refunded Bonds have been paid. ARTICLE IV CONCERNING THE ESCROW AGENT Section 4.01. Liabilily of Escrow Agent. The Escrow Agent shall not be liable in connection. with the performance of its duties under this Agreement except for its own negligence or default. The Escrow Agent shall not be liable for any loss resulting from any investments made pursuant to the terms of this Agreement. The Escrow Agent shall not be liable for the accuracy of the calculations as to the sufficiency of moneys and of the principal amount of the Government Obligations and the related earnings to pay the Refunded Bonds. So long as the Escrow Agerit: applies any moneys, Government Obligations and interest earnings therefrom to pay the Refunded Bonds as provided in this Agreement, and complies fully with the terms of this Agreement, the Escrow Agent shall not be liable for any deficiencies in the amounts necessary to pay the Refunded Bonds caused by such calculations. To the extent permitted by law, the City agrees to indemnify the Escrow Agent for, and to hold it harmless against, any loss, liability or expense incurred without negligence or willful misconduct on its part, arising out of or in connection with acceptance or administration of this . Agreement, including the reasonable costs and expenses of defending itself against such claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. Notwithstanding any provision in this Agreement, the Escrow Agent's rights to immunities and protection from liability hereunder and its rights to payment of its fees, expenses and indemnities shall survive the termination of this Agreement. The Escrow Agent may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties. The Escrow Agent may consult with counsel and the advice of such counsel or any opinion of counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. Section 4.02. Permitted Acts. The Escrow Agent and its affiliates may become the owner of all or may deal in the Refunded Bonds as fully and with the same rights as if it were not the Escrow Agent. • • Section 4.03. Pa ent to Escrow A ent. The City shall pay to the Escrow Agent reasonable compensation agreed to by the City as set forth in Schedule D hereto for all services • rendered by it and also its reasonable expenses, charges and other disbursements and those of its �' � Mid DoewneM'k: 9033rd 7 02f- 281 0 0 . attorneys, agents and employees incurred in and about the administration and execution of the trusts created pursuant to this Agreement, and the performance of its powers and duties, including, without limitation, all advances, counsel fees and other expenses reasonably made or incurred by the Escrow Agent in connection with such services. The Escrow Agent shall have no lien, security interest or right of set-off whatsoever upon any of the moneys or investments in the Series 2002A Escrow Deposit Trust Fund for the payment of fees or expenses for the services rendered by the Escrow Agent under this Agreement. Section 4.04. Termination ResigLaation and Removal of Escrow A ent. (a) This Agreement shall terminate when all transfers and payments required to be made by the Escrow Agent under the provisions hereof shall have been made. (b) The Escrow Agent may evidence its intent to resign by giving written notice to the City. Such resignation shall take effect only upon delivery of the Trust Estate to a successor Escrow Agent designated in writing by the City, and the Escrow Agent shall thereupon be discharged from all obligations under this Agreement and shall have no further duties or responsibilities in connection herewith. The Escrow Agent shall deliver the Trust Estate without unreasonable delay after receiving the City's designation of a successor Escrow Agent and upon payment of all of its fees and expenses. (c) The City may evidence its intent to remove the Escrow Agent by giving written . notice to the Escrow Agent. Such removal shall take effect only upon delivery of the Trust Estate to a successor Escrow Agent designated in writing by the City, and the Escrow Agent shall thereupon be discharged from all obligations under this Agreement and shall have no further duties or responsibilities in connection herewith. The Escrow Agent shall deliver .the Trust Estate without unreasonable delay after receiving the City's designation of a successor Escrow Agent and upon payment of all of its fees and expenses. (d) If after thirty (30) days from the date of delivery of its written notice of intent to resign or of the City's notice of intent to remove, the Escrow Agent has not received a written designation of a successor Escrow Agent, the Escrow Agent's sole responsibility shall be in its sole discretion either to retain custody of the Trust Estate and apply the Trust Estate in accordance with this Agreement without any obligation to reinvest any part of the Trust Estate until it receives such designation, or to apply to a court of competent jurisdiction for the appointment of a successor Escrow Agent and after such appointment to have no further duties or responsibilities in connection herewith. (e) Notwithstanding any of the foregoing provisions of this Section, any bank or trust company having power to perform the duties and execute the trusts of this Agreement, and otherwise qualified to act as Escrow Agent hereunder, with or into which the bank or trust company acting as Escrow Agent may be merged or consolidated, -or to which the assets or • corporate trust business of such bank or trust company may be sold, shall be deemed the successor of the Escrow Agent. Mimi; Aommem N. 9033A 02-" 284 ARTICLE V MISCELLANEOUS Section 5.01. Amendments to this A Bement. This Agreement is made for the benefit of the Holders from time to time of the Refunded Bonds and shall not be repealed, revoked, altered or amended without the written consent of all such Holders of the Refunded Bonds, the Escrow Agent and the City; provided, however, that the City and the Escrow Agent may, without the consent of, or notice to, such Holders, enter into such agreements supplemental to this Agreement which shall not adversely affect the rights of such Holders and shall not be inconsistent with the terms and provisions of this Agreement for any one or more of the following purposes: (a) to cure any ambiguity or formal defect or omission in this Agreement; or (b) to grant to or confer upon the Escrow Agent 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 the Escrow Agent. The Escrow Agent shall be entitled to rely upon an unqualified opinion of a nationally recognized counsel in the field of law relating to municipal bonds with respect to compliance with this Section. If at the time of any proposed repeal, revocation, alteration or amendment of thiq Agreement, any of the Refunded Bonds are rated by Standard & Poor's Ratings Group ("S&P") or Moody's Investors Service, Inc. (Moody's') on the basis of the escrow established by this Agreement, then prior to such proposed repeal, revocation, alteration or amendment of this. Agreement, the City shall provide written notice thereof to S&P and Moody's, as applicable, at their addresses set forth below: Standard & Poor's Ratings Group 25 Broadway New York, New York 10004 Attn: Municipal Ratings Desk/Refunded Bonds Moody's Investors Service, inc. 99 Church Street New York, New York 10007 Section 5.02. Severability. If any one or more of the covenants or agreements provided in this Agreement on the part of the City or the Escrow Agent 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 contained in this Agreement and shall in no way affect the validity of the remaining provisions of this Agreement. 9 02. ZS4 Mica; noaumnl N. 9033v1 C� • • Section 5.03. A eement Bindin . All the covenantsro osals an p p d agreements in this Agreement contained by or on behalf of the City or by or on behalf of the Escrow Agent shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not. Section 5.04. Notices to Escrow Agent and the City. Any notice, demand, direction, request or other instrument authorized or required by this Agreement to be given to or filed with the Escrow Agent or the City, shall be deemed to have been sufficiently given or filed for all purposes of this Agreement if personally delivered and receipted for, or if sent by registered or certified United States mail, return receipt requested, addressed as follows: (a) As to the City - City of Miami, Florida 444 S.W. 2"d Avenue, 106'Floor Miami, Florida 33130 Attention: Finance Director (b) As to the Escrow Agent - The Bank of New York 10161 Centurion Parkway J'acksonvilIe, Florida 32256 Attention: Corporate Trust Department Any party to this Agreement may, by notice sent to the other party to this Agreement, designate a different or additional address to which notices under this Agreement are to be sent. Section 5.05. Notice of Redemption. The Escrow Agent is hereby instructed to send notice of the redemption of the Refunded Bonds, as applicable, to the Registered Owners thereof (as such Registered Owners appear on the registration books of the City maintained by the bond registrars for the Refunded Bonds), all in accordance with the provisions of the resolutions pursuant to which the Refunded Bonds were issued. The notice of redemption shall be substantially in the form thereof attached hereto as Schedule E. Section 5.06. Termination. This Agreement shall terminate when all transfers and payments required to be made by the Escrow Agent under the provisions of this Agreement shall have been made. Section 5.07. Execution by 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. Section 5.08. Governing Law. This Agreement shall be governed by and construed in accordance with the applicable laws of the State of Florida. • 10 p2.- 284 Miuni; E)owmmtt q: 9037v1 IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed by its duly authorized officers and its official seal or corporate seal, as the case may be, to be affixed to this Agreement and attested as of the date first above written. ATTEST: CITY OF MIAMI, FLORD)A (SEAL) 0 lYihmi Docwaot kL 90330 By: Mayor City Clerk THE BANK OF NEW YORK Z 11 M. Vice President • 024 284 • • r 1991 REFUNDED BONDS Maturity Date 05/01/03 05/01/13 1992 REFUNDED BONDS Maturity Date 08/01/03 08/01/04 08/01/05 08/01/06 08/01/07 08/01/08 08/01/09 08/01no 08/01/11 08/01/12 08/01/13 08/01/14 08/01/15 08/01/16 08/01/17 1995 REFUNDED BONDS Maturity Date 01/01/04 01/01/05 01/01/06 01/01/07 01/01/08 01/01/09 01/01/10 01/01/11 01/01/12 01/01/13 01/01/14 . 01/01/15 SCHEDULE A REFUNDED BONDS Principal Amount $1,795,000 565,000 Principal Amount $330,000 350,000 370,000 390,000 420,000 440,000 470,000 500,000 530,000 560,000 590,000 630,000 670,000 710,000 750,000 Principal Amount $ 100,000 100,008. 100;000 100,000 100,000 1,000,000 1,000,000 2,000,000 3,700,000 3,700,000 4,200,000 5,800,000 • Interest Rate 6.60% 6.90 Interest Rate 6.00% 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.05 6.05 6.05 6.05 Interest Rate 4.900% 5.000 5.100 5.200 5.300 5.375 5.375 5.400 5.400 5.400 6.500 6.500 A-1 02— 284 Mimi; nocvmeAt to. 9093v1 Type of Security SLGS SCHEDULE B INVESTMENT OF BOND PROCEEDS Mahnitx Date' Par Amount B-1 Miami; Dwjmg q: 9033vt Rate 02` 284 • C� • • Date SCHEDULE C SCHEDULE OF PAYMENTS ON REFUNDED BONDS Principal Interest Call Premium * Represents [ ]% call premium on $[ _I principal amount of Refimded Bonds being called for redemption. C-1 02- 284 MW* Docua 0: 9033v1 SCHEDULE D ESCROW AGENT FEES AND EXPENSES An annual fee of $ • • D_ MWW.'Damumd N; 9033vi 02- 2S4 • 0 0 . SCHEDULE E NOTICE OF REDEMPTION City Of Miami, Florida General Obligation [Refunding] Bonds, Series [_ _ l dated [ 1 NOTICE IS HEREBY GIVEN that the City of Miami, Florida General Obligation [Refunding] Bonds, Series [____j (the "Bonds") dated [ _ J, maturing on I ] in the years L _ __ _ _ 1, inclusive, outstanding in the aggregate principal amount of $ [ �J, which are redeemable on [ _j at the option of the City at a redemption price equal to [__J% of the principal amount of such Bonds plus interest accrued to the date of redemption, have been irrevocably called for redemption on [ T l . Payment of the redemption price (as described above) will be made on or after said redemption date of [ �] upon the presentation of said Bonds at the offices of the City, as the Paying Agent for the Bonds, at Attn: Interest on such Bonds due prior to said redemption date will be paid in the usual manner. Interest on such Bonds to be redeemed will cease to accrue from and after [ J. Date: , Miuui; Document M 9033vl THE BANK OF NEW YORK, as Escrow Agent E-1 02. 284 EXHIBIT `B -I>° SERIES 2002B ESCROW DEPOSIT AGREEMENT MMt4- Dmmm #. 8573A • • • • • SS&D Draft #1 03/06/02 CITY OF MIAMI, FLORIDA and THE BANK OF NEW YORK as Escrow Agent ESCROW DEPOSIT AGREEMENT Relating to $ City of Miami, Florida General Obligation Refunding Bonds, Series 2002E Dated as of September 1, 2002 Mined: Dwumaa 4: %43v I Q� � 284 0 0 , ESCROW DEPOSIT AGREEMENT THIS ESCROW DEPOSIT AGREEMENT (the "Agreement") made and entered into as of September 1, 2002, by and between the CITY OF MIAMI, FLORIDA (the "City"), and The BANK OF NEW YORK, a New York banking corporation organized and existing under the laws of the State of New York, as escrow agent (the "Escrow Agent"). WITNESETH: WHEREAS, the City of Miami, Florida (the "City"), has previously issued its (i) $70,100,000 General Obligation Refunding Bonds, Series 1992 (the "1992 Bonds"); and WHEREAS, the City desires to refund and defease (i) the portion of the 1991 Bonds maturing on December 1, 2013, which bonds are currently outstanding in the aggregate principal amount of $4,045.,000, (the "Refunded Bonds"), all as more particularly described on Schedule A hereto; and WHEREAS, on March 14, 2002, the City Commission (the "Commission"), of the City adopted Resolution No. (the "Resolution"), pursuant to which the City is issuing its $ aggregate principal amount of General Obligation Refunding Bonds, Series 2002B (the "Series 2002B Bonds"), to refund the Refunded Bonds; and is WHEREAS, a portion of the proceeds derived from the sale of the Series 2002B Bonds; will be applied to the purchase of Government Obligations (as such term is defined in this Agreement), which will mature and produce investment income and earnings at such times and in such amounts, as will be sufficient to pay when due the principal of and interest on the Refunded Bonds, as more specifically set forth in this Agreement; and WHEREAS, it is necessary for the City to enter into this Agreement in order to establish an irrevocable escrow fund held for the deposit of the Government Obligations purchased with the proceeds of the Series 2002B Bonds, and to provide for the proper and timely application of the moneys deposited hereunder, the maturing principal amount of the Government Obligations and investment income and earnings derived therefrom to the payment of the Refunded Bonds; and WHEREAS, the Escrow Agent has received a copy of a verification report from The Arbitrage Group, confirming that the money deposited in the 2002B Escrow Deposit Trust Fund, as provided in this Agreement, is sufficient to provide for the timely payment of the Refunded Bonds; NOW, THEREFORE, the City, in consideration of the foregoing and the mutual covenants set forth in this Agreement and in order to secure the payment of the principal of and interest on all the Refunded Bonds according to their terms, does hereby agree as follows: 2 8 4 MGuN; Docvmrnl M; 9003v1 0 0 . ARTICLE I CREATION AND CONVEYANCE OF TRUST ESTATE Section 1.01. Creation and C_ onveyance of Trust _Estate. The City hereby grants, warrants, remises, releases, conveys, assigns, transfers, aliens, pledges, sets over and confirms unto the Escrow Agent and to its successors in the trust hereby created, and to it and its assigns forever, for the sole benefit and security of the Holders from time to time of the Refunded Bonds, the City's interest in the following property (collectively, the "Trust Estate"): DIVISION I All right, title and interest in and to $ in moneys deposited directly with the Escrow Agent and derived from the proceeds of the Series 2002B Bonds upon issuance and delivery of the Series 2002B Bonds and execution of and delivery of this Agreement. DIVISION II All right, title and interest in and to the Government Obligations described in Schedule B hereto, together with the income and earnings on such Government Obligations, purchased by the Escrow Agent at the direction of the City as provided in this Agreement. 0 DIVISION III Any and all other property of every kind and nature conveyed, pledged, assigned or transferred as and for additional security under this Agreement by the City, or by anyone on behalf of the City to the Escrow Agent for the benefit of the Holders of the Refunded Bonds. The Trust Estate shall be held by the Escrow Agent, and its successors and assigns, forever in trust, for the sole benefit and security of the Holders from time to time of the Refunded Bonds, but if the principal of and interest on all of the Refunded Bonds shall be fully and promptly paid when due, in accordance with their terms and Section 3.06 hereof, then this Agreement shall be and become void and of no further force and effect except as otherwise provided in this Agreement; 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 II DEFINITIONS Section 2.01. Definitions. In addition to words and terms defined elsewhere 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. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in the Resolution. 2 ®2-- 284 Mid: nocunmu'e: 9043v1 "Government Obligations means non -callable direct obligations of the United States of America. "Holders" means the registered owners from time to time of the Refunded Bonds. "Paying Agent" means the The Bank of New York, in its capacity as paying agent for the Refunded Bonds. 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 plural number and vice versa unless the context shall otherwise indicate. Tlie word "person" shall include corporations, associations, natural persons and public bodies unless the context shall otherwise indicate. Reference to a person other than a natural person shall include its successors. ARTICLE III ESTABLISHMENT OF ESCROW DEPOSIT TRUST FUND; FLOW OF FUNDS Section 3.01. Creation of 2002B Escrow Deposit Trust Fund and Dpposit of Moneys. There is created and established with the Escrow Agent a special and irrevocable trust fund designated "City of Miami, Florida General Obligation Refunding Bonds, Series 2002B Escrow Deposit Trust Fund" (the "Series 2002B Escrow Deposit Trust Fund"), to be held by the Escrow Agent for the sole benefit of the Holders of the Refunded Bonds and accounted for separate and apart from the other funds of the City and, to the extent required by law, of the Escrow Agent. Concurrently with the delivery of this Agreement, the City causes to be deposited with the Escrow Agent and the Escrow Agent acknowledges receipt of immediately available moneys for deposit in the Series 2002B Escrow Deposit Trust Fund in the amount of $ from the proceeds of the Series 2002B Bonds, all of which (other than $ to be held uninvested), when invested in Government Obligations as directed by this Agreement, will provide moneys sufficient to pay the principal of and interest on the Refunded Bonds, as more particularly described in Schedule C. Section 3.02. Payment of Refunded Bonds. The proceeds of the Series 2002B Bonds received by the Escrow Agent, excluding the uninvested portion of $, will be sufficient to purchase $ par amount of Government Obligations, all as�listed in Schedule B, which will mature in principal amounts and earn income at such times, all as described in Schedule B, so that, together with the uninvested moneys, sufficient moneys will be available to pay as the same are due all principal of and interest on the Refunded Bonds. Notwithstanding the foregoing, if the amounts deposited in the Series 2002B Escrow Deposit Trust Fund are insufficient to make said payments of principal and interest, the ' City.shall cause to be deposited into the Series 2002B Escrow Deposit Trust Fund the amount of any deficiency immediately upon notice from the Escrow Agent. • 3 CAB MW*Doaunax N.'90430 Section 3.03. Irrevocable Trust Created. The deposit of moneys and Government Obligations or other property in the Series 2002B Escrow Deposit Trust Fund shall constitute an irrevocable deposit of said moneys and Government Obligations and other property for the sole benefit of the Holders of the Refunded Bonds, subject to the provisions of this Agreement. The Holders of the Refunded Bonds, subject to the provisions of this -Agreement, shall have an express lien on all moneys and principal .of and earnings on the Government Obligations and other property in the Series 2002B Escrow Deposit Trust Fund. The moneys deposited in the Series 200213 Escrow Deposit Trust Fund and the matured principal of the Government Obligations and other property and accrued interest shall be held in trust by the Escrow Agent, and shall be transferred in the necessary amounts to the Paying Agent for the Refunded Bonds for the payment of the principal of and interest on the Refunded Bonds, as more specifically set forth in Schedule C hereto. Section 3.04. Purchase of Government Obligations. (a) The Escrow Agent is hereby directed immediately to purchase the Government Obligations listed in Schedule B from the proceeds of the Series 2002B Bonds deposited in the Series 2002B Escrow Deposit Trust Fund. The Escrow Agent shall purchase the Government Obligations solely from the moneys deposited in the Series 2002B Escrow Deposit Trust Fund. The Escrow Agent shall apply the moneys deposited in the Series 2002B Escrow Deposit Trust Fund and the Government Obligations purchased therewith, together with all income or earnings thereon, in accordance with the provisions of this Agreement. The Escrow Agent shall have no power or duty to invest any moneys held hereunder or to make substitutions of the Government Obligations held hereunder or to sell, transfer or otherwise dispose of the Government Obligations held hereunder except as provided in this Agreement. The Escrow Agent is directed not to invest $ of the proceeds of the Series 2002B Bonds deposited in the Series 2002B Escrow Deposit Trust Fund. (b) The City covenants to take no action in the investment, reinvestment or security of the Series 2002B Escrow Deposit Trust Fund in violation of this Agreement and recognizes that any such action in contravention of this Agreement might cause the Refunded Bonds or the Series 2002B Bonds to be classified as "arbitrage bonds" under the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, as applicable (collectively, the "Code"). Section 3.05. Substitution of Certain Government Obligations. (a) If so directed in writing by the City on the date of delivery of this Agreement, the Escrow Agent shall accept in substitution for all or a portion of the Government Obligations listed in Schedule B, other Government Obligations (the "Substituted Securities'), the principal of and interest on which, together with any Government Obligations listed in Schedule B for which no substitution is made and moneys held uninvested by the Escrow Agent, will be suff cient to pay all principal of and interest to become due on the Refunded Bonds as set forth in Schedule C. The foregoing notwithstanding, the substitution of Substituted Securities for any of the Government Obligations listed in Schedule B may be effected only upon compliance with Section 3.05(b)(1) and (2) below. MiWrI4 DOCURM4 p: 9043vt 4 02- 284 0 0 . (b) If so directed in writing by the City at any time during the term of this Agreement, the Escrow Agent shall sell, transfer, exchange or otherwise dispose of, or request the redemption of, all or a portion of the Government Obligations then held in the Series 200213 Escrow Deposit Trust Fund and shall substitute for such Government Obligations other Government Obligations, designated by the City, and acquired by the Escrow Agent with the proceeds derived from the sale, transfer, disposition or redemption of or by the exchange of such Government Obligations held in the 2002B Escrow Deposit Trust Fund, but only upon the receipt by the Escrow Agent of: (I) an opinion of nationally recognized counsel in the field of law relating to municipal bonds stating that such substitution will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Refunded Bonds and the Series 2002B Bonds; and (2) verification from an independent certified public accountant stating that the principal of and interest on the substituted Government Obligations, together with any Government Obligations and any uninvested moneys remaining in the Series 2002B Escrow Deposit Trust Fund will be sufficient, without reinvestment, to pay the remaining principal of and interest on the Refunded Bonds as set forth in Schedule C. Any moneys resulting from the sale, transfer, disposition or redemption of the Government Obligations and the substitution of other Government Obligations not required to be applied for the payment of such principal of and interest on the Refunded Bonds (as shown in the verification report described in Section 3.05(b)(2) delivered in connection with such. substitution), shall be returned to the City for deposit in the 2002B Principal and Interest Account established by the Resolution. Upon any such substitution of Government Obligations pursuant to this Section 3.05, Schedule B shall be appropriately amended by the City to reflect such substitution. The Escrow Agent shall be under no duty to inquire whether the Government Obligations as deposited in the Series 2002B Escrow Deposit Trust Fund are properly invested under the Code, except as specifically set forth in this Section 3.05, and provided further that the Escrow Agent may rely on all specific directions in this Agreement providing for the investment or reinvestment of the 2002B Escrow Deposit Trust Fund. Section 3.06. Transfers from Series 2002B Escrow D2posit Trust Fund. As the principal of the Government Obligations set forth in Schedule B shall mature and be paid, and the investment income and earnings thereon are paid, the Escrow Agent shall, no later than the payment date for the Refunded Bonds, as specified in Schedule C, transfer from the Series 2002B Escrow Deposit Trust Fund to the Paying Agent for the Refunded Bonds an amount sufficient to pay the principal of and interest on the Refunded Bonds, as specified in Schedule C. The Refunded Bonds shall be redeemed on December 1, 2002, at a redemption price of 100% of the principal amount thereof. The City hereby irrevocably determines to call the Refunded Bonds for redemption on the redemption date stated in this Section 3.06. r MWr,t; ooeimrai p: 400M 5 02 284 Section 3.07. Investment of Certain Moneys Remaining in 2002B Escrow Deposit Trust Fund. Subject to the provisions of Section 3.04, the Escrow Agent shall invest and reinvest, at the written direction of the City, in Government Obligations any moneys remaining from time to time in the Series 2002B Escrow Deposit Trust Fund until such time as they are needed. Such moneys shall be reinvested in such Government Obligations for such periods and at such interest rates, as the Escrow Agent shall be directed to invest by the City, which periods and interest rates shall be set forth in an opinion from nationally recognized counsel in the field of law relating to municipal bonds to the City and to the Escrow Agent, which opinion shall also be to the effect that such reinvestment of such moneys in such Government Obligations for such period and at such interest rates will not, under the statutes and regulations applicable to the Refunded Bonds and the Series 2002B Bonds, cause the interest on such Refunded Bonds or Series 2002B Bonds to be included in gross income for federal income tax purposes and that such investment is not inconsistent with the statutes and regulations applicable to the Refunded Bonds and the Series 2002B Bonds. Any interest income resulting from reinvestment of moneys pursuant to this Section 3.07 not required to be applied for the payment of the principal of and interest on the Refunded Bonds. shall be returned to the City, at the City's written request, for deposit into the 2002B Principal and Interest Account established by the Resolution. Section 3.08. 2002B Escrow Deposit Trust Fund Constitutes Trust Fund. The Series 2002E Escrow Deposit 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, to the extent required by law, of the Escrow Agent and used only for the purposes and in the manner provided in this Agreement. Section 3.09. Transfer of Funds After All Payments Required, by this Agreement are Made. After all of the transfers by the Escrow Agent to the paying agents for payment of the principal of and interest on the Refunded Bonds provided in Schedule C have been made, all remaining moneys and securities, together with any income and interest thereon, in the Series 2002B Escrow Deposit Trust Fund immediately shall be returned to the City for deposit into the 2002B Principal and Interest Account established by the Resolution; provided, however, that no such transfers (except transfers made in accordance with Sections 3.05 and 3.07) shall be made until all of the principal of and interest on the Refunded Bonds have been paid. ARTICLE -.IV CONCERNING THE ESCROW AGENT Section 4.01. Liability of Escrow Agent. The Escrow Agent shall not be liable in connection with the performance of its duties under this Agreement except for its own negligence or default. The Escrow Agent shall not be liable for any loss resulting from any investments made pursuant to the terms of this Agreement. The Escrow Agent shall not be liable for the accuracy of the calculations as to the sufficiency of moneys and of the principal amount of the Government Obligations and the related earnings to pay the Refunded Bonds. So long as the Escrow Agent applies any moneys, Government Obligations and interest earnings therefrom to pay the Refunded Bonds as provided in this Agreement, and complies fully with the terms of b Miami. Document Or W43v1 02— 2 '•fi 0 0 . this Agreement, • gr ent, the Escrow Agent shall not be liable for any deficiencies in the amounts necessary to pay the Refunded Bonds caused by such calculations. To the extent permitted by law, the City agrees to indemnify the Escrow Agent for, and to hold it harmless against, any loss, liability or expense incurred without -negligence or willful misconduct on its part, arising out of or in connection with acceptance or administration of this Agreement, including the reasonable costs and expenses of defending itself against such claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. Notwithstanding any provision in this Agreement, the Escrow Agent's rights to immunities and protection from liability hereunder and its rights to payment of its fees, expenses and indemnities shall survive the termination of this Agreement. The Escrow Agent may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties. The Escrow Agent may consult with counsel and the advice of such counsel or any opinion of counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. Section 4.02. Permitted Acts. The Escrow Agent and its affiliates may become the owner of all or may deal in the Refunded Bonds as fully and with the same rights as if it were not. the Escrow Agent. Section 4.03. Pa ent to Escrow Agent. The City shall pay to the Escrow Agent. reasonable compensation agreed to by the City as set forth in Schedule D hereto for all services rendered by it and also its reasonable expenses, charges and other disbursements and those of its attorneys, agents and employees incurred in and about the administration and execution of the trusts created pursuant to this Agreement, and the performance of its powers and duties, including, without limitation, all advances, counsel fees and other expenses reasonably made or incurred by the Escrow Agent in connection with such services. The Escrow Agent shall have no lien, security interest or right of set-off whatsoever upon any of the moneys or investments in the Series 2002B Escrow Deposit Trust Fund for the payment of fees or expenses for the services rendered by the Escrow Agent under this Agreement. Section 4.04. TerminationjKesignation and Removal of Escrow A ent. (a) This Agreement shall terminate when all transfers and payments required to be made by the Escrow Agent under the provisions hereof shall have been made. (b) The Escrow Agent may evidence its intent to resign by giving written notice to the City. Such resignation shall take effect only upon delivery of the Trust Estate to a successor . Escrow Agent designated in writing by the City, and the Escrow Agent shall thereupon be 7 MWO', DOMM N. MM 02- 284 • 0 0 . discharged from all obligations under this Agreement and shall have no further duties or responsibilities in connection herewith. The Escrow Agent shall deliver the Trust Estate without unreasonable delay after receiving the City's designation of a successor Escrow Agent and upon payment of all of its fees and expenses. (c) The City may evidence its intent to remove the Escrow Agent by giving written notice to the Escrow Agent. Such removal shall take effect only upon delivery of the Trust Estate to a successor Escrow Agent designated in writing by the City, and the Escrow Agent shall thereupon be discharged from all obligations under this Agreement and shall have no further duties or responsibilities in connection herewith. The Escrow Agent shall deliver the Trust Estate without unreasonable delay after receiving the City's designation of a successor Escrow Agent and upon payment of all of its fees and expenses. (d) If after thirty (30) days from the date of delivery of its written notice of intent to resign or of the City's notice of intent to remove, the Escrow Agent has not received a written designation of a successor Escrow Agent, the Escrow Agent's sole responsibility shall be in its sole discretion either to retain custody of the Trust Estate and apply the Trust Estate in accordance with this Agreement without any obligation to reinvest any part of the Trust Estate until it receives such designation, or to apply to a court of competent jurisdiction for the appointment of a successor Escrow Agent and after such appointment to have no further duties or responsibilities in connection herewith. (e) Notwithstanding any of the foregoing provisions of this Section, any bank or trust company having power to perform the duties and execute the trusts of this Agreement, and otherwise qualified to act as Escrow Agent hereunder, with or into which the bank or trust company acting as Escrow Agent may be merged or consolidated, or to which the assets or corporate trust business of such bank or trust company may be sold, shall be deemed the successor of the Escrow Agent. ARTICLE V MISCELLANEOUS Section 5.01. Amendments to this Agreement. This Agreement is made for the benefit of the Holders from time to time of the Refunded Bonds and shall not be repealed, revoked, altered or amended without the written consent of all such Holders of the Refunded Bonds, the Escrow Agent and the City; provided, however, that the City and the Escrow Agent may, without the consent of, or notice to, such Holders, enter into such agreements supplemental to this Agreement which shall not adversely affect the rights of such Holders and shall not be inconsistent with the terms and provisions of this Agreement for any one or more of the following purposes: (a) to cure any ambiguity or formal defect or omission in this Agreement; or Mimi; Docunmu #: N43vt 8 02- 284 (b) to grant to or confer upon the Escrow Agent 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 the Escrow Agent. The Escrow Agent shall be entitled to rely upon an unqualified opinion of a nationally recognized counsel in the field of law relating to municipal bonds with respect to compliance with this Section. If at the time of any proposed repeal, revocation, alteration or amendment of this Agreement, any of the Refunded Bonds are rated by Standard & Poor's Ratings Group ("S&P') or Moody's Investors Service, Inc. (Moody's") on the basis of the escrow established by this Agreement, then prior to such proposed repeal, revocation, alteration or amendment of this Agreement, the City shall provide written notice thereof to S&P and Moody's, as applicable, at their addresses set forth below: Standard & Poor's Ratings Group 25 Broadway New York, New York 10004 Attn: Municipal Ratings Desk/Refunded Bonds Moody's Investors Service, Inc. 99 Church Street New York, New York 10007 Section 5.02. Severability. If any one or more of the covenants or agreements provided in this Agreement on the part of the City or the Escrow Agent 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 contained in this Agreement and shall in no way affect the validity of the remaining provisions 'of this Agreement. Section 5.03. A eement Binding. All the covenants, proposals and agreements in this Agreement contained by or on behalf of the City or by or on behalf of the Escrow Agent shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not. Section 5.04. Notices to Escrow Agent and the Ci1y. Any notice, demand, direction, request or other instrument authorized or required by this Agreement to be given'to or filed with the Escrow Agent or the City, shall be deemed to have been sufficiently given or filed for all purposes of this Agreement if personally delivered and receipted for, or if sent by registered or certified United States mail, return receipt requested, addressed as follows: Mimi; WWW W N: 9043A 0 02- 284 • �J • • • • (a) As to the City - City of Miami, Florida 444 S.W. 2nd Avenue, 10`h Floor Miami, Florida 33130 Attention: Finance Director (b) As to the Escrow Agent - The Bank of New York I0161 Centurion Parkway Jacksonville, Florida 32256 Attention: Corporate Trust Department Any party to this Agreement may, by notice sent to the other party to this Agreement, designate a different or additional address to. which notices under this Agreement are to be sent. Section 5.05. Notice of Redemption. The Escrow Agent is hereby instructed to send notice of the redemption of the Refunded Bonds, as applicable, to the Registered Owners thereof (as such Registered Owners appear on the registration books of the City maintained by the bond registrar for the Refunded Bonds), all in accordance with the provisions of the resolution pursuant to which the Refunded Bonds were issued. The notice of redemption shall be substantially in the form thereof attached hereto as Schedule E. Section 5.06. Termination. This Agreement shall terminate when all transfers and payments required to be made by the Escrow Agent under the provisions of this Agreement shall have been made. Section 5.07. Execution by Counterparts. This Agreement may be executed in 'sevbral 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. Section 5.08. Governing Law. This Agreement shall be governed by and construed in accordance with the applicable laws of the State of Florida. Mimi; Document #: 9643A 10 02_ 284 IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed by its duly authorized officers and its official seal or corporate seal, as the case may be, to be affixed to this Agreement and attested as of the date first above written. ATTEST: CITY OF MIAMI, FLORIDA (SEAL) City Clerk By: Mayor THE BANK OF NEW YORK LM Vice President 02— 284 • 0 0 �J REFUNDED BONDS Maturity Date 12/01/13 Miami; Documrnt 4: %43vl U SCHEDULE A REFUNDED BONDS Principal Amount $4,045,000 A-1 • Interest Rate 5.50% 02- 284 SCHEDULE B INVESTMENT OF BOND PROCEEDS T e of SecmfiMggldlyDate Par Amount SLGS B-1 Mount; Cocumem k: 9043v1 Rate 02- 284 �A • • • • • Date 12/01/02 Miami; Domaromu 4: 9043vl • SCHEDULE C SCHEDULE OF PAYMENTS ON REFUNDED BONDS Principal Interest $4,045,000 $111,237.50 C-1 Call Premium -0- 02-- 284 SCHEDULE D ESCROW AGENT FEES AND EXPENSES An annual fee of $ Mb*, Dmw" M: 9043v1 • • 0 SCHEDULE E NOTICE OF REDEMPTION City Of Miami, Florida General Obligation -Refunding Bonds, Series 1992 dated November 15, 1992 NOTICE IS HEREBY GIVEN that the City of Miami, Florida General Obligation Refunding Bonds, Series 1992 (the "Bonds') dated November 15, 1992, maturing on December 1, 2013, outstanding in the aggregate principal amount of $4,045,000, which are redeemable on December 1, 2002 at the option of the City at a redemption price equal to 100% of the principal amount of such Bonds plus interest accrued to the date of redemption, have been irrevocably called for redemption on December 1, 2002. Payment of the redemption price (as described above) will be made on or after said redemption date 4 December 1, 2002 upon the presentation of said Bonds at the offices of The Bank of New York, as the Paying Agent for the Bonds, at Attn: Interest on such Bonds to be redeemed will cease to accrue from and after December 1, 2002. THE BANK OF NEW YORK, as Escrow Agent Date: September_, 2002 • ., X84 E-1 Mimi; Dwama p: 90430 y EXHIBIT "C" T PAYING AGENT AND REGISTRAR AGREEMENT C -I 02-. 284 M6ud.' DommwA M: 8573A is • SS&D Draft #1 03/06/02 PAYING AGENT AND REGISTRAR AGREEMENT THIS PAYING AGENT AND REGISTRAR AGREEMENT (the "Agreement") is entered into as of the day of May, 2002, by and between the CrrY OF MIAMI, FLORIDA (the "City"), and THE BANK OF NEW YORK, acting through its agent THE BANK OF NEW YORK TRUST COMPANY OF FLORIDA, N.A., Jacksonville, Florida, a state banking corporation duly organized and existing under the laws of the State of New York (the "Bank"). WITNESSETH: WHEREAS, the City has determined to issue $ in aggregate principal amount of its City of Miami, General Obligation Refunding Bonds, Series 2002A (the "Series 2002A Bonds"), and $ in aggregate principal amount of its City of Miami, General Obligation Refunding Bonds, Series 2002B (the "Series 2002B Bonds" and, together with the 200.2A Bonds, the "Series 2002 Bonds"), pursuant to the provisions of Resolution No. _ __ , adopted by the City Commission of the City (the "City Commission") on March 14, 2002 (the "Bond Resolution"); and WHEREAS, the City represents that all things necessary to make the Series 2002 Bonds - the valid obligations of the City, in accordance with their terms, will be taken upon the issuance and delivery thereof; and WHEREAS, the City desires that the Bank acts as the Paying Agent of the City in paying the principal of and interest on the Series 2002 Bonds, in accordance with the terms thereof, and that the Bank acts as the Bond Registrar for the Series 2002 Bonds; and WHEREAS, the Bank has represented that it is duly qualified to perform the duties described herein as Paying Agent and Bond Registrar; and WHEREAS, the City and the Bank each have duly authorized the execution and delivery of this Agreement; and all things necessary to make this Agreement the valid agreement of the City and the Bank, in accordance with its terms, have been done; NOW, THEREFORE, for and in consideration of the premises and the covenants herein contained, the City and the Bank hereby agree as follows: ARTICLE 1 APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR SECTION 1.01 Appointment. The City hereby appoints the Bank to act as Paying Agent with respect to the Series 2002 • Bonds, to pay to the Bondholders of the Series 2002 Bonds the principal of and interest on all or any of the Series 2002 Bonds as the same shall become due and payable. $2,- 284 Miura; Documeat k 90441 Bonds. The City hereby appoints the Bank as Bond Registrar with respect to the Series 2002 The Bank hereby accepts its appointment, and agrees to act as the Paying Agent and the Bond Registrar for the Series 2002 Bonds, and as such, to perform the functions of Paying Agent and Bond Registrar, as described herein and in the Bond Resolution, and in the event of conflict, the terms of the Bond Resolution shall govern. SECTION 1.02 Compensation. As compensation for the Bank's services as Paying Agent and Bond Registrar, the City hereby agrees to pay the Bank the fees and amounts set forth in Exhibit A hereto. In addition, the City agrees to reimburse the Bank upon its request for all reasonable expenses, disbursements, and advances incurred or made by the Bank in accordance with any of the provisions hereof. Such fees and expenses shall be paid to the Bank as billed. ARTICLE 2 DEFINITIONS SECTION 2.01 Definitions. For all purposes of this Agreement, except as otherwise expressly provided, or unless the context otherwise requires: "Authorized Representative" shall mean an authorized representative of the City, as designated by the City Commission from time to time and shall initially include the Mayor, City Manager and the Director of Finance. ["Bond Insurance Agreement" shall mean that certain Agreement Regarding Bond Insurance, dated as of , 20022 by and between the City and I. "Bond Register" shall mean the registration books maintained by the Bond Registrar for the Series 2002 Bonds. "Bondholder" and "Security Bondholder'° each mean a Person in whose name a Series 2002 Bond is registered in the Bond Register. ["Municipal Bond Insurance Policy" shall mean Municipal Bond New Issue Insurance Policy No. issued by insuring the payment of the principal of and interest on the Series 2002 Bonds. "Person" shall mean any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government -or any agency or political subdivision of a government. M6*- Dowmaa P 4)o44vl • "Predecessor Bonds" of any particular Series - 2002 Bond -shall mean every previous Series 2002 Bond evidencing all or a portion of the same obligation as that evidenced by such particular Series 2002 Bond (for the purposes of this definition, any Series 2002 Bond registered and delivered under the provisions of the Bond Resolution in lieu of a mutilated, lost, destroyed, or stolen Series 2002 Bond shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Series 2002 Bond). "Record Date" shall mean the fifteenth day (whether or not a business day) of the month next preceding the applicable interest payment date. "Responsible Officer" when used with respect to the Bank shall mean the President, any Vice President, any Trust Officer, Assistant Trust Officer or Client Service Officer, or any other officer of the Bank customarily performing functions similar to ,those performed by any of the above designated officers, and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of or familiarity with the particular subject. "Stated Maturity" shall mean the date specified as the fixed date on which the principal of a Series 2002 Bond is due and payable. SECTION 2.02 Other Definitions. The terms "Bank", "City", "Bond Resolution" and "Series 2002 Bonds" have the meaning assigned to them in the opening paragraph of this Agreement or in the preamble hereto. The terms "Paying Agent" and "Bond Registrar" refer to the Bank when it is performing the respective functions associated with such terms in this Agreement. ARTICLE 3 THE SERIES 2002 BONDS SECTION 3.01 Forms Generally. The Series 2002 Bonds, the certificate of authentication and the assignment to be printed on each of the Series 2002 Bonds, shall be in the forms set forth in the Bond Resolution, with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by the Bond Resolution and approved by an Authorized Representative of the City. SECTION 3.02 Execution, Registration, Delivery, and Dating. The Series 2002 Bonds shall be executed on behalf of the City as directed by the Bond Resolution. The signature of any of the officers of the City on the Series 2002 Bonds may be manual or facsimile. Series 2002 Bonds bearing the manual or facsimile signatures of individuals who were at the time the proper officers of the City shall bind the City, notwithstanding that such individuals or any of them shall cease to hold such offices prior to the certification of registration and delivery of the Series 2002 Bonds or shall not have held such offices at the date of the Series 2002 Bonds. 3 02- `84 Miuni; oocummt A: 4044v1 0 0 . At any time and from time to time after the execution and delivery of this Agreement, the . Bondholder may deliver to the Bank for transfer or "exchange Series 2002 Bonds accompanied by instructions designating the Persons, maturities, and principal amounts to and in which such Series 2002 Bonds are to be transferred, and the Bank shall thereupon, within not more than three (3) business days, register and deliver such Series 2002 Bonds as provided herein and in such instructions. Every Series 2002 Bond surrendered for transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer, the signature on which has been guaranteed by an officer of a federal or state bank or a member of the National Association of Securities Dealers, in form satisfactory to the Bank, duly executed by the Bondholder thereof or his attorney duly authorized in writing. All Series 2002 Bonds registered and delivered by the Bank hereunder shall be dated as provided in the Bond Resolution. , No Series 2002 Bond shall be entitled to any right or benefit under this Agreement, or be valid or obligatory for any purpose, unless there appears on such Series 2002 Bond a certificate of • authentication- Substantially in the form provided in the Bond Resolution, executed by the Bank by manual signature, and such certificate upon any Series 2002 Bond shall be conclusive evidence, and the only evidence, that such Series 2002 Bond has been duly certified or registered and delivered. SECTION 3.03 Person Deemed Owners. The City, the Bank, and any agent of the City or the Bank may treat the Person in whose name any Series 2002 Bond is registered as the owner of such Series 2002 Bond for the purpose• of receiving payment of the principal of and interest on such Series 2002 Bond and for all other purposes whatsoever whether or not such Series 2002 Bond be overdue, and, to the extent permitted by law, the City, the Bank, and any such agent shall not be affected by notice to the contrary, except to the extent expressly so provided in the Bond Resolution with respect to rights that may be exercised by,, ;he issuer of any municipal bond insurance policy or other credit facility relating to the Series 2002 Bonds. ARTICLE 4 PAYING AGENT SECTION 4.01 Duties of Paying Agent. As Paying Agent the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the City, pay on the behalf of the City the principal of the Series- 2002 Bonds at their Stated Maturity to the Bondholder upon surrender of the Series 2002 Bonds to the Bank. As Paying Agent the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the City, pay on behalf of the City on the payment date the interest on the Series 2002 Bonds when due by computing the amount of interest to be paid i each Bondholder and (i) preparing and mailing checks by first-class mail, postage prepaid, to the MWd: DOMMM #: 9MV, 4 02— 2X3 4 Bondholders of the Series 2002 Bonds (or their Predecessor Bonds) on the Record Date, addressed to their address appearing on the Bond Register; provided, however, that if ownership of the Series 2002 Bonds is maintained in a book -entry only system by a securities depository, such payment may be made by automated wire transfer to such securities depository or its nominee or (ii) wiring funds to the Bondholders who have requested payment by wire transfer in accordance with Section 6.B. of the Bond Resolution, or (iii) utilizing such other customary banking arrangements to which the Bondholders and the Bank agree. The Bank expressly acknowledges its understanding and acceptance of its duties as Paying Agent in the Bond Resolution, [and the Bond Insurance Agreement]. The Bank, as Paying Agent, shall immediately notify [Bond Insurer] if on any interest payment date there are insufficient moneys to make any payments of principal of and interest on the Series 2002 Bonds. The Paying Agent shall also immediately notify [Bond insurer] upon the occurrence of any payment default under any related security agreement of which the Paying Agent has knowledge. SECTION 4.02 Payment Dates. The City hereby instructs the Bank to pay the principal of and interest on the Series 2002 Bonds on the dates specified or provided for in the Bond Resolution and other pertinent documents relating to the Series 2002 Bonds. ARTICLE 5 BOND REGISTRAR SECTION 5.01 Transfer and Exchange. The City shall keep at the Bank a register (herein sometimes referred to as the "Bond Register'), which shall be maintained by the Bank, to provide for the registration of Series 2002 Bonds and transfers of the•Series 2002 Bonds. The Bank is hereby appointed "Bond Registrar" for the purpose of registering Series 2002 Bonds and transfers of Series 2002 Bonds as herein provided. The Bank agrees to maintain the Bond Register while it is Bond Registrar. Upon surrender for transfer of any Series 2002 Bond at the corporate trust office of the Bank the Bank shall, not more than three (3) business days after request and presentation, register and deliver, in the name of the designated' transferee or transferees, one or more new fully registered Series 2002 Bonds of the same maturity, of any authorized denominations, and of a like aggregate principal amount. To the extent so provided with respect to the Series 2002 Bonds, at the option of the Bondholder, Series 2002 Bonds may be exchanged for other Series 2002 Bonds of the same maturity, of any authorized denominations, and of like aggregate principal amount, upon surrender of the Series 2002 Bonds to be exchanged at the corporate trust office of the Bank. Whenever any Series 2002 Bonds are to be surrendered for exchange, the City shall execute and the Bank shall authenticate, register and deliver, the Series 2002 Bonds which the Bondholder making the exchange is entitled to receive. • All Series 2002 Bonds issued upon any transfer or exchange, after authentication by the Bank, shall be the valid obligations of the City, evidencing the same debt, and entitled to the 5 42 294 MMt boaummt M: 9044A 0 6 - same benefits hereunder and under the Bond Resolution,�as the Series 2002 Bonds surrendered . upon such transfer or exchange. Every Series 2002 Bond surrendered for transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer, the signature on which has been guaranteed by an officer -of a federal or state bank or a member of the National Association of Securities Dealers, in form satisfactory to the Bank, duly executed by the Bondholder thereof or his attorney duly authorized in writing, and shall be numbered in order of their authentication by the Bank. The Bond Registrar may request any supporting documentation necessary to effect a re - registration. No service charge shall be made to the Bondholder for any registration, transfer, or exchange of Series 2002 Bonds, but the City or the Bond Registrar may require payment of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in connection with any transfer or exchange of Series 2002 Bonds. SECTION 5.02 . Certificates. In the event that the book -only entry system for the Series 2002 Bonds is terminated, the City shall provide an adequate inventory of unauthenticated Series 2002 Bond certificates to facilitate transfers. The Bank covenants that it will maintain any such Series 2002 Bond certificates in safekeeping and will use reasonable care in maintaining such Series 2002 Bonds in safekeeping, being not less than the care which it takes in connection with other governments or corporations for which it serves as registrar, or which it maintains for its own securities. SECTION 5.03 Form of Bond Register. The Bank, as Bond Registrar, will maintain the record of the Bond Register in accordance . with the Bank's general practices and procedures in effect from time to time. The Bank shall.not be obligated to maintain such Bond Register in any form other than those which the Bank has currently available and currently utilizes at the time. The Bond Register may be maintained in written form or in any other form capable of being converted into written form within a reasonable time. SECTION 5.04 List of Bond Bondholders. The Bank will provide the City, at any time requested by the City, upon payment of any copying costs, a copy of the information contained in the Bond Register. The City may also inspect the Bond Register at any time the Bank is customarily open for business, provided that reasonable time is allowed the Bank to provide an up to date listing or to convert the information into written form. The Bank will not release or disclose the content of the Bond Register to any person other than to, or at the written request of, an Authorized Officer or employee of the City, except upon receipt of a subpoena or court order. Upon receipt of a subpoena or court order the Bank will notify the City so that the City may contest a subpoena or court order. . . 6 02- 284 Mimi; Documcnl p: 9044v1 ! SECTION 5.05 0 Return of Cancelled Certificates. • The Bank will surrender to the City, at such reasonable intervals as it determines, certificates of destruction in lieu of which or in exchange for which other Series 2002 Bonds have been issued, or which have been paid. SECTION 5.06 Mutilated, Destroyed, Lost, or Stolen Bonds. The City hereby instructs the Bank to authenticate and deliver Series 2002 Bonds in exchange for or in lieu of mutilated, destroyed, lost, or stolen Series 2002 Bonds as long as the same does not result in an over -issuance, all in conformance with the requirements of the Bond Resolution. The Bank will authenticate and deliver a new Series 2002 Bond in exchange for a mutilated Series 2002 Bond surrendered to it. The Bank will issue a new Series 2002 Bond in lieu of a Series 2002 Bond for which it received written representation from the Bondholder that the certificate representing such Series 2002 Bond is destroyed, lost or stolen, without the surrender or production of the original certificate. The Bank will pay on behalf of the City the principal of a Series 2002 Bond for which it receives written representation that such Series 2002 Bond is destroyed, lost or stolen following the Stated Maturity of the Series 2002 Bond, without surrender or production of the original certificate. . The Bank will not issue a replacement Series 2002 Bond or pay such replacement Series 2002 Bond unless there is delivered to the Bank such security or indemnity as it may require (which may be by the Bank's blanket bond) to save both the Bank and the City harmless. On satisfaction of the Bank and the City, the certificate number on the Series 2002 Bond will be cancelled with a notation on the Bond Register that it has been mutilated, destroyed, lost,. or stolen, and a new Series 2002 Bond will be issued of the same series and of like' tenor. and principal amount bearing ,a number (according to the Bond Register) not contemporaneously outstanding. The Bank may charge the Bondholder the Bank's reasonable fees and expenses in connection with issuing a new Series 2002 Bond in lieu of or exchange .for a mutilated, destroyed, lost or stolen Series 2002 Bond. SECTION 5.07 Surety Bond. The City hereby accepts the Bank's current blanket bond for lost, stolen or destroyed certificates and any substantially similar future substitute blanket bond for .lost, stolen or destroyed certificates that the Bank may arrange, and agrees that the coverage under any such blanket band is acceptable to it and meets the City's requirements as to security or indemnity. The Bank need not notify the City of any changes in the bond or other company giving such bond, or the terms of any such bond. The blanket bond then utilized by the Bank for the purpose of lost, stolen or destroyed certificates by the Bank is available for inspection by the City upon ® request. 02- 284 7 M N:9MY1 SECTION 5.08 Transaction Information to City. The Bank will, within a reasonable time after receipt of a written request from the City, furnish the City information as to the Series 2002 Bonds it has paid pursuant to Section 4.01 hereof, Series 2002 Bonds it has delivered upon the transfer or exchange of any Series 2002 Bonds pursuant to Section 5.01 hereof, and Series 2002 Bonds it has delivered in exchange for or in lieu of mutilated, destroyed, lost or stolen Series 2002 Bonds pursuant to Section 5.06 hereof. ARTICLE 6 THE BANK SECTION 6.01 Duties Of the Bank. The Bank undertakes to perform the duties of Paying Agent and Bond Registrar as set forth herein and in the Bond Resolution and agrees to use reasonable care in the performance thereof, and in the event of conflict with the Bond Resolution, the terms of the Bond Resolution shall goyem. The Bank hereby agrees to use the funds deposited with it for payment of the principal of and interest on the Series 2002 Bonds, to pay the Series 2002 Bonds as the same shall become due and fiuther agrees to establish and maintain all accounts and funds as may be required for the Bank to function as Paying Agent, SECTION 6.02 Reliance on Documents, Etc. (a) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts. (b) No provisions of this Agreement shall require the Bank to expend or risk. its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not assured to it. (c) The Bank may rely and shall be protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Bank shall not be bound to make any investigation into the facts or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security or other paper or document supplied by the City. (d) The Bank may consult with counsel and the written advice of such counsel or any written opinion of counsel shall be full and complete authorization and protection with respect to any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. 8 02- 284 Mil*Docurne�u a: Novi • • 0 ! (e) The Bank may exercise any of its powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys of the Bank. • SECTION 6.03 Recitals of the City. The recitals contained herein, in the Bond Resolution and in the Series 2002 Bonds shall be taken as the statements of the City. and the Bank assumes no responsibility for their correctness. The Bank shall in no event be liable from its own funds to the City, any Bondholder or Bondholders of any Series 2002 Bond or any other Person for any amount due on any Series 2002 Bond. SECTION 6.04 Bank May Hold Series 2002 Bonds. The Bank, in its individual or any other capacity, may become the owner or pledgee of Series 2002 Bonds and may otherwise deal with the City with the same rights it would have if it were not the Paying Agent and Bond Registrar. SECTION 6.05 Moneys Held by Bank. Money held by the Bank hereunder shall be segregated from any other funds of the Bank and the City, and such money shall be held in trust for the benefit of the Bondholders of the Series 2002 Bonds. Any money deposited with the Bank for the payment of the principal of or interest on any Series 2002 Bonds and remaining unclaimed three (3) years following the final maturity of the Series 2002 Bonds shall be paid by the Bank to the City, and the Bondholder of such Series 2002 Bonds shall thereafter look only to the City for payment thereof, and all liability of the Bank with respect to such moneys shall thereupon cease. SECTION 6.06 Bank Not a Trustee. Notwithstanding Section 6.05 hereof with respect to the responsibility of the Bank to hold moneys hereunder in trust, this Agreement shall not be construed to require the Bank to enforce any remedy which any Bondholder may have against the City during any default or event of default under any agreement between any Bondholder and the City, including the Bond Resolution, or to act as trustee for such Bondholder, other than the duty to provide notice of such events to [Bond Insurer] and to perform the duties provided in the Bond Resolution, the Bond Insurance Agreement with respect to payment under the [Municipal Bond Insurance Policy]. SECTION 6.07 - Bank Not Responsible for Series 2002 Bonds. The Bank shall not be accountable for the use of any Series 2002 Bonds or for the use or application of the proceeds thereof. Miami; Daemm W #:9044vI 9 02— 2S4 SECTION 6.08 Interpleader. T The City and the Bank agree that the Bank may seek adjudication of any adverse claim, demand, or controversy over its person as well as funds on deposit, waive personal service of any process and agree that service of process by certified or registered mail, return receipt requested, to the addresses set forth in Section 7.03 hereof shall constitute adequate service. The City and the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction to determine the rights of any person claiming any interest herein. ARTICLE 7 MISCELLANEOUS PROVISIONS SECTION 7.01 Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereto. SECTION 7.02 Assignment. This Agreement may not be assigned by either party without the prior written consent of the other. SECTION 7.03 Notices; Waiver. Any request, demand, authorization, direction, notice, consent, waiver, or other document provided or permitted hereby to be given or furnished to the City, the Bank or to Bond Insurer shall be mailed first-class postage prepaid or hand delivered to the City, the Bank or Bond . Insurer, respectively, at the addresses shown below: City of Miami, Florida. 444 S.W. 2°d Avenue, I& Floor Miami, Florida 33130 Attn: City Manager The Bank of New York Trust Company of Florida, N.A. Towermarc Plaza 10161 Centurion Parkway Jacksonville, Florida 32256 Attn: Corporate Trust Department [Bond Insurer] 10 a �• `i 4' Mimi; Dnpundu #: 9044v1 i C� • • Any notice to Bondholders provided by this Agreement of any event shall be sufficiently given if it is in writing and mailed, first-class postage prepaid, to each Bondholder, at the address of such Bondholder as it appears in the Bond Register. • In any case where notice to Bondholders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Bondholder shall affect the sufficiency of such notice with respect to all other Bondholders. Where this Agreement provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Bondholders shall be filed with the Bank, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 7.04 Effect of Headings. The article and section headings herein are for convenience only and shall not affect the construction hereof SECTION 7.05 Successors and Assigns. All covenants and agreements herein by the parties hereto shall bind their successors and assigns, whether so expressed or not. SECTION 7.06 Severability. In case any provision herein shall be invalid, illegal or unenforceable, the validity,, legality or enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 7.07 Benefits of Agreement. Nothing herein, express or implied, shall give to any person, other than the Bondholders and the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy or claim hereunder. SECTION 7.08 Entire Agreement. This Agreement and the Bond Resolution constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent and Bond Registrar, and if any conflict exists between this Agreement and the Bond Resolution, the Bond Resolution shall govern. SECTION 7.09 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which shall constitute one and the same A17eement. Mis* DOQU U to; 90""1 11 02- 284 0 U SECTION 7.10 Termination. • Subject to Section 14 of the Bond Resolution, this Agreement will terminate on the date the Bank issues its check or wire transfer for the final payment of principal of, premium, if any, and interest on the Series 2002 Bonds. This Agreement may be earlier terminated with or without cause. Upon notice of such termination, the City reserves the right to appoint a successor Paying Agent and Bond Registrar. The Bank shall deliver all records and any unclaimed funds to the City or such successor without a right of set off for any fees, charges or expenses due to the Bank. However, the Bank is entitled to payment of all outstanding fees and expenses before delivering records to the City. In the event this Agreement is terminated by giving written notice, then the Bank agrees, upon request by the City, to give notice by first-class mail to all registered Bondholders and to [Bond Insurer] of the name and address of the successor Paying Agent and Bond Registrar. Expenses for such notice shall be paid by the City. SECTION 7.11 _ Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Florida. 12 02- 284 Mimi; nocumau *.9Mv1 • • 10 10 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. (SEAL) Attest: LE City Clerk (SEAL) Attest: By: Name: Title: CITY OF MIAMI, FLORIDA Lo Mayor THE BANK OF NEW YORK, NEW YORK, NEW YORK, as Paying Agent and Bond Registrar LE 13 o2- 284 Mim* Doom= EXHIBIT A . Schedule of Paying Agent and Bond Registrar Fees 1. Annual Paying Agent and Bond Registrar Fee - $ 2. In addition to the foregoing annual fees, the Paying Agent and Bond Registrar shall be entitled to reimbursement for its reasonable out-of-pocket costs and disbursements, including, without limitation, the reasonable fees and expenses of its counsel, associated with the performance of its duties under the Paying Agent and Registrar Agreement. Mune' DOMMW P 90440 • 0 EXHIBIT "D" PRELIMINARY OFFICIAL STATEMENT • • E_1 02", 284 Miami: Aomama M: SM4 Electronic Distribution of the Preliminary Official Statement Disclaimer Language $ • THE CITY OF MIAMI, FLORIDA General Obligation Refunding Bonds Series 2002A 8M0 Draft M5 317102 THE CITY OF MIAMI, FLORIDA General Obligation Refunding Bonds Series 2002E (Forward Delivery Bonds) Electronic access to the following Preliminary Official Statement (including the information incorporated by reference) is being provided to you as a matter of convenience only. The only official version of the Preliminary Official Statement is the printed version available for physical delivery. Although the information contained in the following Preliminary Official Statement has been formatted in a manner which should exactly replicate the printed Preliminary Official Statement, physical appearance may differ for various reasons, including electronic communication difficulties or particular user' equipment. In order to assure accuracy, users should obtain a copy of and refer to the printed Preliminary Official Statement. The user of this Preliminary Official Statement assumes the risk of any discrepancies between the printed Preliminary Official Statement and the electronic version of this document. Copies of the printed Preliminary Official Statement may be obtained from: J.P. Morgan Securities, Inc. 5201 Blue Lagoon Drive, Suite 800 Miami, Florida 33126 Tel:(305) 716-4293 Email: aquila percy@jpmorgan,com Attention: Percy R. Aquila, Jr. This Preliminary Oficial Statement and the information contained herein are subject to completion or amendment without notice. The posting of this Preliminary Oficial Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities described in the Preliminary Offletal Statement in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualication'under the securities laws of any such jurisdiction, By clicking on the hyperlink at the bottom of this page and accessing the following Preliminary Official Statement, you will have been deemed to have (i) accepted the provisions of this page, (ii) agreed not to print the PItliminary Official Statement except in its entirety, and (iii) consented to the electronic transmission of the Preliminary Official Statement. *Preliminary, subject to change. 02- 284 u • • • 0 0 . PRELIMINARY OFFICIAL STATEMENT DATED — , 2002 NEW ISSUE -- BOOK ENTRY ONLY Insured Ratings: Standard and Poors: Moodys: Fitch Ratings: Underlying Ratings: (See "Ratings" herein) In the opinion of Squire, Sanders & Dempsey L.L.P., Bond Counsel, under existing law (i) assuming continuing compliance with certain covenants and the accuracy of certain representations, interest on the Series 2002 Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, and (ii) the Series 2002 Bonds and the income thereon are exempt from taxation under the laws of the State of Florida, except estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended. Interest on the Series 2002 Bonds may be subject to certain federal taxes imposed only on certain corporations, including the corporate alternative minimum tax on a portion of that interest. For a more complete discussion of the tax aspects, see "TAXMRTTERS" herein. THE CITY OF MIAMI, FLORIDA General Obligation Refunding Bonds Series 2002A Dated: _, 2002 (Series 2002A Bonds) 2002 (Series 2002B Bonds) THE CITY OF MIAMI, FLORIDA General Obligation Refunding Bonds Series 2002E (Forward Delivery Bonds) Due: September 1, as shown below The General Obligation Refunding Bonds, Series 2002A (the "Series 2002A Bonds') and the General Obligation Refunding Bonds, Series 2002E (the "Series 2002B Bonds') (collectively, the "Series 2002 Bonds") are being issued by The City of Miami, Florida, (the "City's pursuant to the Constitution and laws of the State of Florida, including Chapter 166, Part 11, Florida Statutes, Sections 132.33 through 132.47, Florida Statutes, the Charter of the City, and other applicable provisions of law (the "Act") and pursuant to Resolution No. of the City adopted by the City Commission of the City on March 14, 2002 (the "Resolution"). The Series 2002A Bonds are being issued for the purpose of (i) refunding all or a portion of the City's outstanding $16,135,000 General Obligation Refunding Bonds, Series 1991 on a current refunding basis, $10,000,000 General Obligation Bonds, Series 1992 (Stonn Sewer improvements) on a current refunding basis and $22,500,000 General Obligation Bonds, Series 1995 (Sanitary Sewer System) on an advance refunding basis, and (ii) paying certain costs and expenses incurred in connection with the issuance of the Series 2002A Bonds, including the premium for a municipal bond insurance policy. The Series 2002B Bonds are being issued on a forward delivery basis for the purpose of (i) refunding all or a portion of the City's outstanding $70,100,000 General Obligation Refunding Bonds, Series 1992 and (ii) paying certain expenses incurred in connection with the issuance of the Series 2002B Bonds, including the premium for a municipal bond insurance policy. This cover page contains certain information for quick reference only. It is not, and is not intended to be, a summary of the issue. Investors must read the entire Official Statement to obtain information needed for the making of an informed investment decision. The Series 2002 Bonds are being issued by the City as fully registered bonds, which initially will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC'). Individual AP 284 purchases will be made in book -entry form only through Participants (defined herein) in denominations of $5,000 and integral multiples thereof. Purchasers of the Series 2002 Bonds (the "Beneficial Owners") will not receive physical delivery of certificates. Transfers of ownership interests in the Series 2002 Bonds will be effected by the DTC book -entry system as described herein. As long as Cede & Co. is the registered owner as nominee of DTC, principal and interest payments will be made directly to such registered owner which will in turn remit such payments to the Participants (as defined herein) for subsequent disbursement to the Beneficial Owners. Interest on the Series 2002 Bonds is payable semi-annually on each March I and September 1, commencing September 1, 2002. Principal of, premium, if any, and interest on the Series 2002 Bonds will be payable by The Bank of New York, New York, New York, as Paying Agent and Registrar. The Series 2002 Bonds are subject to optional and mandatory redemption prior to their respective maturities, as described herein under "DESCRIPTION OF THE SERIES 2002 BONDS — Redemption Provisions." The Series 2002 Bonds constitute general obligations of the City to which the full faith and credit and taxing power of the City are pledged. The City has covenanted in the Resolution to levy and collect a tax, without limit as to rate or amount on all taxable property within the City (excluding exemptions as provided by applicable: law) sufficient in amount to pay the principal of and interest on the Series 2002 Bonds. The full faith, credit and taxing power of the City are irrevocably pledged to the payment of the principal of, interest on and redemption premium, if any, with respect to the Series 2002 Bonds. The scheduled payment of principal of and interest on the Series 2002A Bonds and the Series 2002B Bonds, respectively, when due will be guaranteed by two separate municipal bond insurance policies to be issued concurrently with the delivery of the Series 2002A Bonds and the Series 2002E Bonds, respectively, by (the "Insurer"). [Insert Logo] The Series 2002 Bonds are offered when, as, and if issued and received by the Underwriters, subject to the opinion on certain legal matters relating to their issuance by Squire, Sanders & Dempsey L.L.P., Miami, Florida, Bond Counsel. Certain legal matters will be passed upon for the City by Alejandro Vilarello, Esq„ City Attorney and by Bryant, Miller and Olive, P.A., Coral Gables, Florida and Manuel Alonso-Poch, P.A., Coral Gables, Florida, Co - Disclosure Counsel to the City. Certain legal matters will be passed upon for the Underwriters by Ruden, McClosky. Smith, Schuster & Russell, P.A., Miami, Florida. RBC Dain Rauscher Inc. is serving as Financial Advisor to the City. It is expected that the Series 2002A Bonds in definitive form will be available for delivery to the Underwriters in New York New York at the facilities of DTC on or about 2002. It is expected that the Series 1002B Bonds in definitive farm will be available for delivery to the Underwriters in New York, New York at the facilities of DTC on or about . 2002. See "DELAYED DELIVERY RISKS" herein. Prospective purchasers of the Series 2002B Bonds will be required to execute and deliver a Delayed Delivery Contract, the form of which is attached hereto as "Appendix G ". J.P. MORGAN SECURITI ES INC. UBS PAINEWEBBER INC. LEHMAN BROTHERS Dated: , 2002 *Preliminary, subject to change. MORGAN STANLEY & CO., INCORPORATED .JACKSON SECURITIES INC. SALOMON SMITH BARNEY • • • • 0 • SERIES 2002A MATURITIE S, AMOUNTS, INTEREST RATES, PRICES OR YIELDS AND CUSIP NUMBERS S SERIAL BONDS* Maturity Initial (September 1) Amount* Ittls g t Rate Price or Yield CUIP Number $ % Term Bonds due September 1, Yield (Accrued Interest to be added) SERIES 2002E MATURITIE S, AMOUNTS, INTEREST RATES, PRICES OR YIELDS AND CUSIP NUMBERS S SERIAL BONDS* Maturity Initial (September 1) Amount_*. Interest Rate Price or Yield S>rTjp Number $ °(° Term Bonds due September 1, Yield (Accrued Interest to be added) *Preliminary, subject to change, �-� 284 RED HERRING LANGUAGE: • This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the Series 2002 Bonds in any jurisdiction. in which such offer, solicitation or sale would be unlawful prior to registration, qualification or exemption under the securities laws of such jurisdiction. The City has deemed this Preliminary Official Statement "final," except for certain permitted omissions, within the contemplation of Rule 15c2-12 promulgated by the Securities and Exchange Commission. • �J BOND COUNSEL Squire, Sanders & Dempsey L.L.P. Miami, Florida CO -DISCLOSURE COUNSEL Bryant, Miller and Olive, P.A. Coral Gables, Florida Manuel Alonso-Poch, P.A. Coral Gables, Florida FINANCIAL ADVISOR RBC Dain Rauscher Inc. Fort Lauderdale, Florida INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS KPMG LLP Miami, Florida • ()2- 284 THE CITY OF MIAMI, FLORIDA MAYOR Manuel A. Diaz CITY COMMISSIONERS Tomas P. Regalado, Chairman Johnny L. Winton, Vice Chairman Angel Gonzalez Joe M. Sanchez Arthur E. Teele, Jr. CITY MANAGER Carlos A. Gimenez ASSISTANT CITY MANAGER Robert J. Nachlinger, CPA FINANCE DIRECTOR Scott Simpson, CPA CITY ATTORNEY Alejandro Vilarello, Esq. BOND COUNSEL Squire, Sanders & Dempsey L.L.P. Miami, Florida CO -DISCLOSURE COUNSEL Bryant, Miller and Olive, P.A. Coral Gables, Florida Manuel Alonso-Poch, P.A. Coral Gables, Florida FINANCIAL ADVISOR RBC Dain Rauscher Inc. Fort Lauderdale, Florida INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS KPMG LLP Miami, Florida • ()2- 284 No dealer, broker, salesman or other person has been authorized by the City or the Underwriters to give any information or to make any representations in connection with the Series 2002 Bonds, other than as contained in this Official Statement, and, if given or made, such information or representations must not be relied upon as having been authorized by the City. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2002 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the City, the Insurer, DTC and other sources that are believed to be reliable, but is not guaranteed as to accuracy or completeness by and is not to be construed as a representation by the Underwriters. The Underwriters listed on the cover page hereof have reviewed the information in this Official Statement in accordance with and as part of their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. The information and expressions of opinion stated herein are subject to change, and neither the delivery of this Official Statement nor any sale made hereunder shall create, under any circumstances, any implication that there has been no change in the matters described herein since the date hereof. IN CONNECTION WITH THIS OFFERING OF THE SERIES 2002 BONDS, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH SERIES 2002 BONDS AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. All summaries herein of documents and agreements are qualified in their entirety by reference to such documents and agreements, and all summaries herein of the Series 2002 Bonds are qualified in their entirety by reference to the form thereof included in the aforesaid documents and agreements. Other than with respect to information concerning ( the "Insurer") contained under the caption "MUNICIPAL BOND INSURANCE" and "APPENDIX E - SPECIMEN MUNICIPAL BOND INSURANCE POLICY" attached hereto, none of the information supplied in this Official Statement has been supplied or verified by the Insurer and the Insurer makes no representation or warranty, express or implied, as to (i) the accuracy or completeness of such information, (ii) the validity 'of the Series 2002 Bonds, or (iii) the tax exempt status of the interest on the Series 2002 Bonds. NO REGISTRATION STATEMENT RELATING TO THE SERIES 2002 BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION') OR WITH ANY STATE SECURITIES COMMISSION. 'IN MAKING ANY INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATIONS OF THE CITY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE SERIES 2002 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION OR ANY STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. THE FOREGOING AUTHORITIES HAVE NOTPASSED UPON THE ACCURACY ORADEQUACY OFTHIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. • 012.:_'8 4 TABLE OF CONTENTS Con1§111s EM 0 02-- 2 S 4 INTRODUCTION....................................................... . ..... .......... I ... ... I PURPOSE OF THE ISSUE......................................................................... 2 THE REFUNDING PLAN .......................................................................... 2 DELAYED DELIVERY RISKS..................................................................... 4 ESTIMATED SOURCES AND USES OF FUNDS ...................................................... 7 DEBT SERVICE SCHEDULE...................................................................... 8 DESCRIPTION OF THE SERIES 2002 BONDS ....................................................... 9 General................................................................................... 9 Book -Entry Only System..................................................................... 9 Optional Redemption....................................................................... it Mandatory Redemption..................................................................... 12 Notice and Effect of Redemption............................................................. 13 Registration, Transfer and Exchange.......................................................... 13 Replacement of Bonds Mutilated, Destroyed, Stolen or Lost ....................................... 14 MUNICIPAL BOND INSURANCE................................................................. 14 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2002 BONDS ............................ 15 General.................................................................................. 15 Amendment of Resolution.................................................................. 15 AD VALOREM TAXATION...................................................................... 16 General..................................................................................16 Save Our Homes Amendment................................................................ Protein Millage ....dures 16 17 ent ............................................................. Property Assessment Procedures 17 Levy of Ad Valorem Taxes ................................................. ............... 17 MillageRates................................................:............................ 19 AssessedValuations....................................................................... 19 TaxCollection............................................................................ 20 TaxDeeds......................................................................... ... 20 THE CITY OF MIAMI........................................................................... 23 Background.................................................................I...... . 23 CityGovernment..........................................................................23 ISSUES RELATED TO FINANCIAL EMERGENCY .................................................. 24 Background.............................................................................. 24 Appointment of Financial Oversight Board ..................................................... 24 Securities and Exchange Commission Actions ............................. .................. 25 CURRENT FINANCIAL STATUS OF THE CITY ................................... I ............1... 26 Adoption of Financial Integrity and Anti -Deficiency Ordinances .................................... 26 Adoption of Five Year Financial Plan ......................................................... 27 Adoption of Investment Policy............................................................... 27 Adoption of Debt Management Policy......................................................... 28 Capital Improvement Plan ......................................................... ......... 28 Information Technology.................................................................... 28 Fiscaland Accounting Procedures............................................................ 29 GASB34................................................................................ 29 Cash Management.........................................................................29 ManagementDiscussion.................................................................... 29 GeneralFund .................................................... . .................... 30 0 02-- 2 S 4 LIABILITIES OF THE CITY ....................................... . Insurance Considerations Affecting City 32 the ................................. ................... Ability to be Sued, Judgments Enforceable 32 .................... .......... Indebtedness of the City ................ ..................... 32 ............................... ................... Direct Debt 34 .........., Overlapping Debt.......................................................................... 34 .......................................... Debt Ratios ....................... 35 Other Obligations......................................................................... 35 ........................................... FU'T'URE BORROWINGS 35 Future Bonds.................. 36 •'......................................................... .......................................................... LEGAL MATTERS ERS 36 ............................................................................. LITIGATION 37 ........................ ........... DISCLOSURE REQUIRED BY FLORIDA BLUE 37 SKY REGULATIONS ..................... 38 I ........... TAX MATTERS ..................... 38 General................................................................................. ...................................... . Original Issue Discount and Original Issue Premium 38 ............................................ RATINGS 39 ................ ................................................. FINANCIAL ADVISOR 39 ...................... AUDITED FINANCIAL STATEMENTS............................................................ 40 UNDERWRITING .......•........................................................... 40 VERIFICATION OF ARITHMETICAL COMPUTATIONS 40 ............................................. ............................................ CONTINGENT FEES 41 ............. ENFORCEABILITY OF REMEDIES 41 ............................................................... CONTINUING DISCLOSURE ................... . ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT 42 .................... . ..................... FORWARD-LOOKING STATEMENTS 42 ............................................................ MISCELLANEOUS 42 ........................... AUTHORIZATION OF OFFICIAL 42 STATEMENT .................................................... 43 APPENDICES APPENDIX A: GENERAL INFORMATION REGARDING THE CITY OF MIAMI APPENDIX BFORM OF THE BOND RESOLUTION APPENDIX C: GENERAL PURPOSE AUDI'T'ED FINANCIAL STATEMENTS OF THE CITY OF MIAMI FOR FISCAL YEAR ENDED SEPTEMBER 30, 2001 APPENDIX D: FORMS OF BOND COUNSEL OPINIONS APPENDIX ESPECIMEN MUNICIPAL BOND INSURANCE POLICY APPENDIX F:FORM OF CONTINUING DISCLOSURE CERTIFICATE APPENDIX GFORM OF DELAYED DELIVERY CONTRACT Ifi 02- 284 • is u �J • OFFICIAL STATEMENT relating to THE CITY OF MIAMI, FLORIDA General Obligation Refunding Bonds Series 2002A INTRODUCTION • THE CITY OF MIAMI, FLORIDA General Obligation Refunding Bonds Series 2002B (Forward Delivery Bonds) The purpose of this Official Statement, including the cover page and appendices, is to set forth information concerning The City of Miami, Florida (the "City"), The City of Miami, Florida General Obligation Refunding Bonds, Series 2002A (the "Series 2002A Bonds")and The City of Miami, Florida General Obligation Refunding Bonds, Series 200213 (the"Series 2002B Bonds', in connection with the sale of the Series 2002A Bonds and the Series 2002B Bonds. The Series 2002A Bonds and the Series 2002B Bonds are collectively referred to herein as the "Series 2002 Bonds". The City is situated at the mouth of the Miami River on the western shores of Biscayne Bay. It is the county seat 6f -,Miami -Dade County, Florida. The City comprises 34.3 square miles of land and 19.5 square miles of water. The City's diversified economic base is comprised of light manufacturing, trade, commerce, wholesale, and retail trade and tourism. For more information about the City, see "APPENDIX A – GENERAL INFORMATION REGARDING THE CITY OF MIAMI." The Series 2002 Bonds are being issued pursuant to the Constitution and laws of the State of Florida, including Chapter 166, Part II, Florida Statutes, Sections 132.33 through 132.47, Florida Statutes, the Charter of the City, and other . applicable provisions of law (the "Act") and pursuant to Resolution No. of the City adopted by the City Commission of the City on March 14, 2002 (the "Resolution'l. The Series 2002A Bonds and the Series 2002B are being issued for the purpose of refunding certain outstanding obligations of the City. See "PURPOSE OF THE ISSUE" herein. is The Series 2002 Bonds constitute general obligations of the City to which the full faith and credit and taxing power of the City are pledged. The City has covenanted in the Resolution to levy and collect a tax, without limitus to rate or amount on all taxable property within the City (exeluding exemptions as provided by applicable law) sufficient in amount to pay the principal of and interest on the Series 2002 Bonds. The full faith, credit and taxing power of the City are irrevocably pledged to the payment of the principal of, interest on and redemption premium, if any, with respect to the Series 2002 Bonds. See "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2002 BONDS" herein. Payment of the principal of and interest on the Series 2002A Bonds and the Series 2002B Bonds, respectively, will be guaranteed by two separate municipal bond insurance policies to be issued simultaneously with the delivery of the Series 2002A Bonds and the Series 2002E Bonds, respectively, by (the "Insurer"). The summaries of and references to all documents, statutes, reports and other instruments referred to herein do not purport to be complete, comprehensive or definitive, and each such summary and reference is qualified in its entirety by reference to each such document, statute, report or instrument. All capitalized terms used in this Official Statement and not otherwise defined herein have the meanings set forth in the Resolution, unless the context would clearly indicate otherwise. A copy of the Resolution is attached hereto as "APPENDIX B – FORM OF THE BONA RESOLUTION" *Preliminary, subject to change. — 2S4 All documents of the City referred to herein may be obtained from Scott Simpson, CPA, Finance Director, 444 S.W. 2'd Avenue, 6'h Floor, Miami, Florida 33130, Telephone (305) 416-1377. PURPOSE OF THE ISSUE The Series 2002 Bonds are being issued by The City of Miami, Florida, pursuant to the Constitution and laws of the State of Florida, including Chapter 166, Part 11, Florida Statutes, Sections 132.33 through 132.47, Florida Statutes, the Charter of the City, and other applicable provisions of law and pursuant to Resolution No. of the City adopted by the City Commission of the City on March 14, 2002 (the "Resolution"). The Series 2002A Bonds are being issued for the purpose of (i) refunding all or a portion of the City's outstanding $16,135,000 General Obligation Refunding Bonds, Series 199I on a current refunding basis, $10,000,000 General Obligation Bonds, Series 1992 (Storm Sewer Improvements) on a current refunding basis and $22,500,000 General Obligation Bonds, Series 1995 (Sanitary Sewer System) on an advance refunding basis (collectively, the "Prior Bonds"} on a current refunding basis and (ii) paying certain costs and expenses incurred in connection with the issuance of the Series 2002A Bonds, including the premium for a municipal bond insurance policy. The Series 2002B Bonds are being issued on a forward delivery basis for the purpose of (i) refunding all or a portion of the City's outstanding $70,100,000 General Obligation Refunding Bonds, Series 1992 (the "Series 1992 Bonds") and (ii) paying certain expenses incurred in connection with the issuance of the Series 2002E Bonds, including the premium for a municipal bond insurance policy. THE REFUNDING PLAN The City has determined that it can achieve a present value savings in annual debt service payments by providing for the refunding of all or a portion of the Prior Bonds and the Series 1992 Bonds. Such refunding will be accomplished through the issuance of the Series 2002A Bonds and the Series 2002B Bonds and the use of a portion of the proceeds thereof. Upon delivery of the Series 2002A Bonds, The Bank of New York, New York, Now York (the "Escrow Agent") will enter into an Escrow Deposit Agreement (the "Prior Bonds Escrow Agreement') with the City to provide for the refunding of all or a portion of the Prior Bonds. The Prior Bonds Escrow Agreement creates an irrevocable escrow deposit trust find (the "Prior Bonds Escrow Deposit Fund") which is held by the Escrow Agent, and the money and securities held therein are to be.applied to the payment of principal of, interest on and redemption premium, if any, on the refunded Prior Bonds, as the same become due and payable, whether at maturity (if applicable) or redemption prior to maturity. Immediately upon the issuance and delivery of the Series 2002A Bonds, the City will deposit certain of the proceeds from the sale of the Series 2002A Bonds into the Prior Bonds Escrow Deposit Fund. Substantially all of such money is expected to be invested in certain noncallable direct obligations of the United States of America (the "Prior Bonds Government Obligations'). The maturing principal amount of and interest on the Prior Bonds Government Obligations and any cash held in the Prior Bonds Escrow Deposit Fund will be sufficient to pay the principal of, interest on and redemption premium, if any, with respect to the refunded Prior Bonds, and will be pledged solely for the benefit of the holders of the refunded Prior Bonds, and will not be available for payment of debt service on the Series 2002A Bonds. The initial cash deposit plus principal and interest on the Prior Bonds Government Obligations in the Prior Bonds Escrow Deposit Fund will be sufficient to pay the refunded Prior Bonds to their redemption date according to the schedules _prepared by the Underwriters and as verified by The Arbitrage Group, Inc. See "VERIFICATION OF ARITHMETICAL COMPUTATIONS" herein. In reliance upon the above -referenced schedules and verification, at the time of delivery of the Series 2002A Bonds, Bond Counsel shall deliver an opinion to the City to the effect that the right, title and interest of the holders of 0 • 0 0 . the refunded Prior Bonds under the applicable resolutions authorizing the Prior Bonds (collectively, the "Refunded Resolutions") shall thereupon cease, determine and become void and that the refunded Prior Bonds are no longer outstanding under the applicable Refunded Resolutions. Upon delivery of the Series 2002B Bonds, the Escrow Agent will enter into an Escrow Deposit Agreement (the "1992 Bonds Escrow Agreemene') with the City to provide for the refunding of all or a portion of the Series 1992 Bonds. The 1992 Bonds Escrow Agreement creates an irrevocable escrow deposit trust fund (the "1992 Bonds Escrow Deposit Fund") which is held by the Escrow Agent, and the money and securities held therein are to be applied to the payment of principal of, interest on and redemption premium, if any, on the refunded Series 1992 Bonds, as the same become due and payable, whether at maturity (if applicable) or redemption prior to maturity. Immediately upon the issuance and delivery of the Series 2002E Bonds, the City will deposit certain of the proceeds from the sale of the Series 2002B Bonds into the 1992 Bonds Escrow Deposit Fund. Substantially all of such money is expected to be invested in certain noncallable direct obligations of the United States of America (the "1992 Bends-Govemment Obligations"), The maturing principal amount of and interest on the 1992 Bonds Govemment Obligations and any.cash held in the 1992 Bonds Escrow Deposit Fund will be sufficient to pay the principal of, interest on and redemption premium, if any, with respect to the refunded Series 1992 Bonds, and will be pledged solely for the benefit of the holders of the refunded Series 1992 Bonds, and will not be available for payment of debt service on the Series 20028 Bonds. The initial cash deposit plus principal and interest on the 1992 Bonds Government Obligations in the 1992 Bonds Escrow Deposit Fund will be sufficient to pay the refunded Series 1992 Bonds to their redemption date according to the schedules prepared by the Underwriters and as verified by The Arbitrage Group, Inc. See "VERIFICATION OF ARITHMETICAL COMPUTATIONS" herein. In reliance upon the above -referenced schedules and verification, at the time of delivery of the Series 2002E Bonds, Bond Counsel shall deliver an opinion to the City to the effect that the right, title and interest of the holders of the refunded Series 1992 Bonds under the resolution authorizing the Series 1992 Bonds (the "1992 Resolution") shall thereupon cease, determine and become void and that the refunded Series 1992 Bonds are no longer outstanding under the 1992 Resolution. DELAYED DELIVERY RISKS THERE ARE NUMEROUS CONDITIONS WHICH MUST BE SATISFIED PRIOR TO THE DELIVERS( OF THE SERIES 2002B BONDS AND THE FOLLOWING IS NOT MEANT TO BE AN EXHAUSTIVE LIST OF ALL SUCH CONDITIONS. THERE CAN BE NO ASSURANCE THAT ALL OF THE CONDITIONS FOR THE DELIVERY OF THE SERIES 2002B BONDS W LLBE SATISFIED, AND NO ASSURANCE CAN BE GIVEN THAT THE SERIES 2002B BONDS WILL BE ISSUED. Delayed Delivery The City anticipates that the Series 2002B Bonds will be issued and delivered on or about (the "Series 2002B Delivery Date"), approximately — months from the date hereof. [Purchasers of the Series 2002B Bonds will be required immediately to execute and deliver a Delayed Delivery Contract in connection with said purchase, the form of which is attached hereto as Appendix "G".] Delivery of the Series 2002B Bonds is contingent upon delivery of the municipal bond insurance policy by , the delivery of certain certificates, reports, and legal opinions, and the satisfaction of certain conditions as of the Series 2002B Delivery Date, as provided in the Delayed Delivery Contract related to the Series 2002B Bonds (the "Purchase Contract"). The documents required to be delivered by the Purchase Contract include, among other things, the opinion of Bond Counsel in substantially the form as set forth in Appendix "D" hereto, certain additional opinions of Bond Counsel and the City's Attorney, and certificates of the City as to the completeness and accuracy of the Official Statement, as amended and/or supplemented (as provided in the following sentence), prior to ,- 284 . T the delivery of the Series 2002B Bonds (the Official Statement, as amended and/or supplemented, being the "Settlement Official Statement"). The Purchase Coritract requires that the City prepare on or before the date occurring seven (7) business days prior to the 2002B Delivery Date, the Settlement Official Statement and furnish same to the Underwriters. During the period of time between the date hereof and the Series 2002B Delivery Date (the "Series 2002B Delayed Delivery Period"), material events or conditions could occur which are not described in this Official Statement and information contained in this Official Statement could change in a material respect. Except for delivery of the Settlement Oficial Statement as provided above, the City is not otherwise obligated by the Purchase Contract to update this Offcial Statement during the Series 2002E Delayed Delivery Period. FAILURE TO COMPLETE THE REQUIREMENTS FOR SETTLEMENT AND DELIVERY OF THE SERIES 2002E BONDS, INCLUDING FAILURE OF THE CITY OR OTHER PARTIES TO DELIVER ANY OF THE DOCUMENTS REQUIRED BY THE PURCHASE CONTRACT IN THE FORM AND SUBSTANCE PROVIDED FOR IN SUCH PURCHASE CONTRACT UNLESS SUCH FAILURE IS WAVED BY THE UNDERWRITERS, WILL MEAN THAT -[HE SERIES 2002B BONDS WILL NOT BE ISSUED AND DELIVERED. THE UNDERWRITERS HAVE THE RIGHT, BUT ARE UNDER NO OBLIGATION, TO WAIVE ANY SUCH FAILURE. Bond Insurance Risks The municipal bond insurance issued by currently results in bond issues covered by such policies being rated " " by Fitch Ratings, " " by Standard and Poors and " " by Moody's Investors Service. (See "RATINGS" herein). The City has received a commitment for the delivery of a bond insurance policy by on the Series 2002B Delivery Date. The Series 2002E Bonds will be rated at the time of delivery based, in part, upon the applicable bond insurance policy. No assurances can be given that the ratings ultimately assigned to the Series 2002B Bonds will not be different from those currently assigned to bond issues insured by 0 Further, pursuant to the commitment for the insurance policy, may not issue its municipal bond insurance policy if there has been a material change in the City's financial condition prior to the Series 2002B Delivery Date. Secondary Market Risk The Underwriters are not obligated to establish a secondary market in the Series 2002B Bonds and no assurances can be given that a secondary market will exist for the right to purchase the Series 2002B Bonds during the Series 2002B Delayed Delivery Period. Prospective purchasers of the Series 2002B Bonds should assume that the Series 2002B Bonds will not be a liquid investment throughout the Series 2002E Delayed Delivery Period, Market Value Risk The market value of the Series 2002E Bonds as of the Series 2002B Delivery Date may be affected by a variety of factors, including, without limitation, general market conditions, the ratings on the Series 2002E Bonds the financial condition and business operations of the City, and I then prevailing interest rates, federal and state income tax and other laws, including proposed laws, and the relative value of tax-exempt obligations versus other types of investments, such as taxable obligations. The market value of the Series 2002B Bonds on the Series 2002B Delivery Date could be greater or less than the agreed purchase price therefor by the initial purchasers thereof, and the difference could be substantial. NEITHER THE CITYNOR THE UNDERWRITERS MAKE ANY REPRESENTATION AS TO THE MARKET PRICE OF A SERIES 2002B BOND AS OF THE DELIVERY DATE THEREOF. • 02- 284 Issuance of Legal Opinion It is a condition to the issuance of the Series 2002E Bonds at the Series 2002E Delivery Date that Bond Counsel deliver their approving opinion in substantially the form attached hereto as Appendix "D". The ability of Bond Counsel to deliver such opinion at the Series 2002E Delivery Date is subject to its review and analysis at the time of certain matters, including, among other things, the application of the proceeds of such Series 2002B Bonds and pertinent provisions of statutes, regulations, rulings, and court decisions, including, but not necessarily limited to, federal income tax and securities laws then in effect or proposed to be in effect. Bond Counsel has advised the City and the Underwriters that, assuming satisfaction by the City and the Underwriters of the obligations to be satisfied in the Purchase Contract, and the issuance of the Series 2002E Bonds, no changes in any applicable laws, regulations, or rulings, or in the interpretations thereof, or in any other facts or circumstances (tax or otherwise) which, in Bond Counsel's view, affect or are material to their opinion (including without limitation, the existence of any limitation), Bond Counsel expects to be able to issue at the Series 2002B Delivery Date an opinion substantially in the form attached hereto as Appendix "D". In addition, in order to deliver such opinion, appropriate certifications and representations by or on behalf of the City and others must be delivered and made in connection with the issuance of the Series 2002B Bonds. Thus, no assurances can be given that there will be no change in any applicable law, regulations, or rulings, or in interpretations thereof, prior to the time of the Series 2002B Delivery Date, that the circumstances and facts that are material to such opinion will not differ, at the time of the Series 2002B Delivery Date from those currently expected, or that such certifications and representations will be delivered and made in connection with the issuance of the Series 2002B Bonds and, as a consequence, such opinion may not be rendered. [Remainder of page left intentionally blank.] • • Q2- 294 ESTIMATED SOURCES AND USES OF FUNDS The table that follows summarizes the estimated sources and uses of funds to be derived from the sale of the Series 2002A Bonds: SOURCES: Principal Amount of Series 2002A Bonds $ Other Legally Available Funds Less Net Original Issue Discount TOTAL SOURCES g USES: Deposit to Principal and Interest Account Deposit to Prior Bonds Escrow Deposit Fund $ Costs of Issuance(l) TOTAL USES $ The table that follows summarizes the estimated sources and uses of funds to be derived from the sale of the Series 2002E Bonds: SOURCES: Principal Amount of Series 2002B Bonds $ Other Legally Available Funds Less Net Original Issue Discount TOTAL SOURCES $ USES: Deposit to Principal and Interest Account Deposit to 1992 Bonds Escrow Deposit Fund $ Costs of issuance') TOTAL USES $ o� Includes municipal bond insurance premium and underwriting discount, financial advisory and legal fees and expenses, and miscellaneous costs of issuance. 6 02- 284 • DEBT SERVICE SCHEDULE The following table sets forth the debt service requirements for the City's current outstanding general obligation debt, the Series 2002A Bonds and the Series 2002E Bonds. Series 2002A Bonds Series 20028 Bonds Year Ended September 1 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 " 2012 2013 2014 2015 2016 2017 Total r� u Outstanding General Obligation Debt 17,217,651 17,000,552 14,985,542 13,881,072 11,627,942 9,438,765 8,437,630 7,722,862 7,609,187 7,700,742 7,5f5,437 5,437 7;259,075 6,948,980 6,787,365 798,330 795,375 $145,726,50 - Total Debt Principal Interestprincipal interest amice 7 02_ 284 DESCRIPTION OF THE SERIES 2002 BONDS General • Each Series of the Series 2002 Bonds shall be issued as fully registered, book -entry only bonds in the denomination or $5,000 each or any integral multiple thereof through the book -entry only system maintained by The Depository Trust Company, New York, New York. Each Series of the Series 2002 Bonds shall be numbered consecutively from 1 upward preceded by the letters "RA" prefixed to the number in the case of the Series 2002A Bonds, and preceded by the letters "RB" prefixed to the number in the case of the Series 2002B Bonds. The principal of and redemption premium, if any, on the Series 2002 Bonds shall be payable upon presentation and surrender at the principal office of The Bank of New York, New York, New York, (the "Paying Agent'). Interest on the Series 2002 Bonds is payable semi- annualIy on March I and September I of each year, commencing September 1, 2002 and shall be paid by check or draft drawn upon the Paying Agent and mailed to the registered owners of the Series 2002 Bonds at the addresses as they appear on the registration books maintained by the Bond Registrar at the close of business on the 15th day (whether or not a business day) of the month next preceding the interest payment date (the "Record Date"), irrespective of any transfer or exchange of such Series 2002 Bonds subsequent to such Record Date and prior to such interest payment date, unless the City shall be in default in payment of interest due on such interest payment date; provided, however, that (i) if ownership of Series 2002 Bonds is maintained in a -book -entry only system by a securities depository, such payment may be made by automatic funds transfer (wire) to such securities depository or its nominee or (ii) if such Series 2002 Bond's are not maintained in a book -entry only system by a securities depository, upon written request of the holder of $1,000,000 or more in principal amount of Series 2002 Bonds, such payments may be made by wire transfer to the bank and bank account specified in writing by such holder (such bank being a bank within the continental United States), if such holder has advanced to the Paying Agent the amount necessary to pay the cost of such wire transfer or authorized the Paying Agent to deduct the cost of such wire transfer from the payment due such holder. In the event of any default in the payment of interest, such defaulted interest shall be payable to the persons in whose names such Series 2002 Bonds are registered at the close of business on a special record date for the payment of such defaulted interest as . established by notice deposited in the U.S. mails, postage prepaid, by the Paying Agent to the registered owners of the Series 2002 Bonds not less than fifteen (15) days preceding such special record date. Such notice shall be mailed to the persons in whose names the Series 2002 Bonds are registered at the close of business on the fifth (5th) day (whether or not a business day) preceding the date of mailing. Book -Entry Only System THE FOLLOWING INFORMATION CONCERNINGDTC AND DTC'SBOOK-ENTRYONLYSYS'IEM HAS BEEN OBTAINED FROM SOURCES THAT THE CITY BELIEVES TO BE RELIABLE, BUT THE CITY TAKES NO RESPONSIBILITY FOR THE ACCURACY THEREOF. DTC will act as securities depository for the Series 2002 Bonds. The Series 2002 Bonds will be registered in the name of Cede & Co. (DTC's partnership nominee). Purchases of beneficial ownership interests in the Series 2002 Bonds will be made in book -entry only form, in the denominations hereinbefore described. Purchasers of beneficial ownership interests in the Series 2002 Bonds ("Beneficial Owners') will not receive bond certificates representing their ownership interests in the Series 2002 Bonds, except in the event that use of the book -entry only system for the Series 2002 Bonds is discontinued. One fully registered certificate has been issued for each maturity of the Series 2002 Bonds, and deposited with DTC. SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE SERIES 2002 BONDS, AS NOMINEE OF DTC, REFERENCES IN THIS OFFICIAL STATEMENT TO THE SERIES 2002 BONDHOLDERS OR REGISTERED OWNERS OF THE SERIES 2002 BONDS SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE SERIES 2002 BONDS. THE DESCRIPTION WHICH FOLLOWS OF THE PROCEDURES ANDRECORD KEEPING WITH RESPECT TO BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 2002 BONDS, PAYMENT OF INTEREST AND PRINCIPAL ON THE SERIES 2002 BONDS TO DTC PARTICIPANTS (AS HEREINAFTER DEFINED) OR 0 • BENEFICIAL OWNERS OF THE SERIES 2002 BONDS, CONFIRMATION AND TRANSFER OF BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 2002 BONDS, AND OTHER RELATED TRANSACTIONS BY AND BETWEEN DTC, THE DTC PARTICIPANTS AND BENEFICIAL OWNERS OF THE SERIES 2002 BONDS IS BASED SOLELY ON INFORMATION FURNISHED BY DTC, ACCORDINGLY, THE CITY NEITHER MAKES NOR CAN MAKE ANY REPRESENTATIONS CONCERNING THESE MATTERS. DTC is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC holds securities that its participants (the "Direct Participants") deposit with DTC. DTC also facilitates the settlement among Direct Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic book -entry changes in Direct Participants' accounts, thereby eliminating the need of physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange LLC and the National Association of Securities Dealers Inc. Access to the DTC system is also available to others such as securities brokers, dealers, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the "Indirect Participants"). The rules applicable to DTC and its Direct and Indirect Participants are on file with the Securities and Exchange Commission. Purchases of beneficial interests in Series 2002 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for such Series 2002 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2002 Bond (the "Beneficial Owner") is, in turn, to be recorded on the records of the Direct and Indirect Participants. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2002 Bonds will be accomplished by entries on the books of Participants acting on behalf of the Beneficial Owners. Beneficial Owners will not receive certificates representing their beneficial interests in the Series 2002 Bonds, unless use of the book -entry only system for the Series 2002 Bonds is discontinued. To facilitate subsequent transfers, all Series 2002 Bonds deposited by Participants with DTC are registerfd in the name of DTC's partnership nominee, Cede & Co. The deposit of Series 2002 Bonds with DTC and their registration in the name of Cede & Co. effect,no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2002 Bonds. DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2002 Bonds are credited, which may or may not be the Beneficial Owners, The Direct and Indirect Participants will remain responsible for keeping an account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements•as may be in effect from time to time. Redemption notices shall be sent to Cede & Co. If less than all of the Series 2002 Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such bonds, as the case may be, to be redeemed. Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Series 2002 Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2002 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Series 2002 Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt of funds and corresponding detail information from the City or the Paying 02- 284 Agent and Bond Registrar on the payable date in accordance with their respective holdings shown on the records of DTC. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participants and not of DTC, the Paying Agent and Bond Registrar or the City, subject to any statutory and regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the City and/or the Paying Agent and Bond Registrar for the Series 2002 Borids. Disbursement of such payments to Direct Participants is the responsibility of DTC, and disbursement of.such payments to the Beneficial Owners is the responsibility of the Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Series 2002 Bonds at any time by giving reasonable notice to the City. Under such circumstances, in the event that a successor securities depository is not obtained, certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository). In that event, certificates will be printed and delivered. The City does not have any responsibility or obligations to the DTC Participants, Indirect Participants or the Beneficial Owners with respect to (a) the accuracy of any records maintained by DTC or any DTC Participant or Indirect Participant; (b) the payment by DTC or any DTC Participant or Indirect Participant of any amount due to any Beneficial Owner in respect of the principal of and premium, if any, and interest on, or the purchase price with respect to, the Series 2002 Bonds; (c) the delivery or timeliness of delivery by DTC or any DTC Participant or Indirect Participant of any notice to any Beneficial Owner which is required or permitted under the terms of the Resolution to be given to Bondholders; (d) the timely delivery or implementation of any optional or mandatory tender notices or payments to, among, or between the City, Paying Agent and Bond Registrar, DTC, the Participants or the Beneficial Owners; (e) the selection of the Beneficial Owners to receive payments in the event of any partial redemption of the Series 2002 Bonds; or (f) any consent given or other action taken by DTC, or its nominee, Cede & Co., as Series 2002 Bondholder. Optional Redemption The Series 2002A Bonds maturing on September 1, 20 and thereafter are subject to redemption at the option of the City on or after September 1, 20_, in whole or in part at any time, in such manner as shall be determined by the City, at the redemption prices (expressed as a percentage of the principal amount of the Series 2002A Bonds to be redeemed) as set forth below together with accrued interest to the date fixed for redemption: Rederttption Periods Redemption Moth�Dates,;larlusive) _ rXice_ September 1, 20_ to August 31, 20� % September 1, 20_ to August 31, 20_. % September 1, 2C and thereafter % The Series 2002B Bonds maturing on September I, 20. and thereafter are subject to redemption at the option of the City on or after September 1, 20_, in whole or in part at any time, in such manner as shall be determined by the City, at the redemption prices (expressed as a percentage of the principal amount of the Series 2002B Bonds to be redeemed) as set forth below together with accrued interest to the date fixed for redemption: Redemption Periods (Both Dates Inclusive) September 1, 20_„ to August 31, 20_ September 1, 20„_, to August 31, 2Q_., 10 Redemption .Price • 0 • • September 1, 20^ and thereafter % Mandatory Redemption The Series 2002A Bonds maturing on September 1, 20_, shall be subject to mandatory redemption in part prior to maturity by lot, in such manner as shall be determined by the Bond Registrar, through Amortization Installments by operation of the Bond Amortization Account, on September I in the years and amounts set forth below, at redemption prices equal to 100% of the principal amount thereof plus accrued interest to the date of redemption: YM *Maturity Principal AMount The Series 2002B Bonds maturing on September 1, 20—, shall be subject to mandatory redemption in part prior to maturity by lot, in such manner as shall be determined by the Bond Registrar, through Amortization Installments by operation of the Bond Amortization Account, on September 1 in the years and amounts set forth below, at redemption prices equal to 100% of the principal amount thereof plus accrued interest to the date of redemption: Year- Principal Amount 0 $ • *Maturity Notice and Effect of )Redemption. Notice of redemption shall be given by deposit in the U.S. mails of a copy of a redemption notice; postage'prepaid, at least thirty (30) days before the redemption date to all registered owners of the Series 2002 Bonds or portions of the Series 2002 Bonds to be redeemed at their addresses as they appear on the registration books to be maintained in accordance with the provisions hereof. Failure to mail any such notice to a registered owner of a Series 2002 Bond, or any defect therein, shall not affect the validity of the proceedings for redemption of any Series 2002 Bond or portion thereof with respect to which no failure or defect occurred. Such notice shall set forth the date fixed for redemption, the rate of interest borne by each Series 2002 Bond being redeemed, the name and address of the Bond Registrar and Paying Agent, the redemption price to be paid and, if less than all of the Series 2002'Bonds then Outstanding shall be called for redemption, the distinctive numbers and letters, including CUSIP numbers, if any, of such Series 2002 Bonds to be redeemed and, in the case of Series 2002 Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. If any Series 2002 Bond is to be redeemed in part only, the notice of redemption which relates to such Series 2002 Bond shall also state that on or after the redemption date, upon surrender of such Series 2002 Bond, a new Series 2002 Bond or Series 2002 Bonds in a principal amount equal to the unredeemed portion of such Series 2002 Bond will be issued. Any notice mailed as described in this Section shall be conclusively presumed to have been duly given, whether or not the owner of such Series 2002 Bond receives such notice. 02- 8. • The Bond Registrar shall not be required to transfer or exchange any Series 2002 Bond atter the mailing of a notice of redemption nor during the period of fifteen (I5) days next preceding mailing of a notice of redemption. Registration, Transfer and Exchange So long as the Series 1002 Bonds are registered in the name of DTC or its nominee, the following paragraphs relating to transfer and exchange of Bonds do not apply to the Series 2002 Bonds, The Series 2002 Bonds issued under the Resolution shall be and have all the qualities and incidents of negotiable instruments under the law merchant and the Uniform Commercial Code of the State of Florida, subject to the provisions for registration of transfer contained in the Resolution and in the Series 2002 Bonds. So long as any of the Series 2002 Bonds shall remain outstanding, the City shall maintain and keep, at the office of the Bond Registrar, books for the registration of transfer of the Series 2002 Bonds. The registration of any Series 2002 Bond may be transferred upon the registration books upon delivery thereof to the principal office of the Bond Registrar accompanied by a written instrument or instruments of transfer in form and with guaranty of signature satisfactory to the Bond Registrar, duly executed by the Bondholder or his attomey-in-fact 'or legal representative containing written instructions as to the details of the transfer of such Series 2002 Bond, along with the social security number or federal employer identification number of such transferee. In all cases of a transfer of a Series 2002 Bond, the Bond Registrar shall at the earliest practical time in accordance with the terms of the Resolution enter the transfer of ownership in the registration books and shall deliver in the name of the new transferee or transferees a new fully registered Series 2002 Bond or Bonds of the same maturity and of authorized denomination or denominations, for the same aggregate principal amount and payable from the same source of funds. The City and the Bond Registrar may charge the Bondholder for the registration of every transfer or exchange of a Series 2002 Bond an amount sufficient to reimburse them for any tax, fee or any other governmental charge required (other than by the City) to be paid with • respect to the registration of such transfer, and may require that such amounts be paid before any such new Series 2002 Bond shall be delivered. The City, the Bond Registrar, and the Paying Agent may treat the registered owner of any Series 2002 Bond as the absolute owner of such Series 2002 Bond for the purpose of receiving payment of the principal thereof and the interest and redemption premium, if any, thereon. Series 2002 Bonds may be exchanged at the office of the Bond Registrar for a like aggregate principal amount of Series 2002 Bonds, or other authorized denominations of the same.series and maturity. Replacement of Bonds Mutilated, Destroyed, Stolen or Lost If any Series 2002 Bond is mutilated, destroyed, stolen or lost, the City or its agent may, in its discretion (i) deliver a duplicate replacement Series 2002 Bond, or (ii) pay a Series 2002 Bond that has matured or iq about to mature. A mutilated Series 2002 Bond shall be surrendered to and canceled by the Bond Registrar. The Bondholder must furnish the City or its agent proof of ownership of any destroyed, stolenvr lost Series 2002 Bond; post satisfactory indemnity; comply with any reasonable conditions the City or its agent. may prescribe; and pay the City or its agent's reasonable expenses. Any such duplicate Series 2002 Bond shall constitute an original contractual obligation on the part of the City whether or not the destroyed, stolen or lost Series 2002 Bond be at any time found by anyone, and such duplicate Series 2002 Bond shall be entitled to equal and proportionate benefits and rights as to lien on, and source of payment of and security for payment from, the funds pledged to the payment of the Series 2002 Bond so mutilated, destroyed, or stolen or lost. 12 02-- 284 C7 • • • MUNICIPAL BOND INSURANCE (To Come] 13 U 02- 284 SECURITY• AND SOURCES OF PAYMENT FOR THE SERIES 2002 BONDS General The Series 2002'Bonds constitute general obligations of the City to which the full faith and credit and taxing power of the City are pledged. Seo "AD VALOREM TAXATION" herein. In each fiscal year while any of the Series 2002 Bonds are outstanding, there shall be assessed, levied and collected a tax, without limitation as to rate or amount, on all taxable property within the corporate limits of the City (excluding exemptions as provided by applicable law), in addition to all other taxes, sufficient in amount to pay the principal of and interest on the Series 2002 Bonds as the same shall become due. The tax assessed, levied and collected for the security and payment of the Series 2002 Bonds shall be assessed, levied and collected in the same manner and at the same time as other taxes are assessed, levied and collected and the proceeds of said tax, except as herein provided, shall be applied solely to the payment of the principal of and interest on the Series 2002 Bonds. The full faith, credit and taxing power of the City are hereby irrevocably pledged to the punctual payment of the principal of, interest on and redemption premium, if any, with respect to the Series 2002 Bonds as the same become due and payable. The City covenanted in the Resolution to diligently enforce its right to receive tax revenues, ho diligently enforce and collect such taxes and to not take any action that will impair or adversely affect its rights to levy, collect and receive said taxes, or impair or adversely affect in any manner the pledge made in the Resolution or the rights of the Bondholders. The City is currently operating under an Escrow Agreement dated March 17, 1997 entered into by First Union National Bank ("First Union"), the Financial Oversight Board (described later herein under "ISSUES RELATED TO FINANCIAL EMERGENCY"), and the City (the "Agreement"). The Agreement provides for the City to deposit into two separate holding accounts its pledged revenues and certain ad valorem tax revenues which are paid to the City by Miami- • Dade County, Florida. At least five days prior to the due date of any principal, interest or redemption payment for any outstanding obligations as outlined in the Agreement, the City shall give notice to First Union regarding the amount due and the appropriate paying agent. First Union shall then pay the appropriate amount to the appropriate paying agent from the applicable account, including the Paying Agent for the Series 2002A Bonds and Series 2002B Bonds. The parties may terminate the Agreement at any time. There is no assurance that the Agreement will be maintained for the life of the Series 2002A Bonds or the Series 2002B Bonds. If in the event that the Agreement is terminated, the City will transfer payments directly to the Paying Agent for the Series 2002A Bonds and the Series 2002B Bonds for deposit into the respective accounts created,for such bonds pursuant to the Resolution. Amendment of Resolution The Resolution may be modified and amended by the City from time to time prior to the issuance of the Series 2002 Bonds. Thereafter, no modification or amendment of the Resolution or of any resolution or ordinance amendatory hereof or supplemental hereto materially adverse to the Bondholders may be made without the consent in writing of the owners of not less than a majority in aggregate principal amount of the Outstanding Series 2002 Bonds. In addition to the foregoing, pursuant to the Resolution, the Insurer may consent to amendments to the Resolution. Such consent shall constitute consent of the Bondholders. Notwithstanding the foregoing, no modification or amendment shall permit a change (a) in the maturity of the Series 2002 Bonds or a reduction in the rate of interest thereon, (b) in the amount of the principal obligation of any Series 2002 Bond, (c) that would affect the unconditional promise of the City to levy and collect taxes as herein provided, or (d) that would reduce such percentage of owners of the Series 2002" Bonds required above for such modifications or amendments, without the consent of all of the Bondholders. For the purpose of Bondholders' voting rights or consents, the Series 2002 Bonds owned by or held for the account of the City, directly or indirectly, shall not be counted. See "APPENDIX B -- FORM OF THE BONA RESOLUTION." 14 • • • • AD VALOREM TAXATION General Under Florida law, the assessment of all properties and the collection of all City, municipal and property taxes are consolidated in the office of the Miami -Dade County Property Appraiser and Miami -Dade County Tax Collector. The laws of the State of Florida regulating tax assessment are designed to assure a consistent property valuation method statewide. Article VII, Section 9(b) of the Florida Constitution limits the aggregate rate of ad valorem taxes that may be levied on real and personal property. The limitation, except as noted below, is ten (10) mills each for all City and municipal purposes. A mill is equal to one-tenth (0.1) of one cent of one dollar or $1.00 for every $1,000 of assessed value. Article VII, Section 9(b) excludes from the general 10 mill cap ad valorem taxes which are necessary to pay debt service on general obligation bonds such as the Series 2002 Bonds. Each respective millage rate, except as limited by law, is set on the basis of estimates of revenue needs and total taxable property valuations within the taxing authority's respective jurisdiction. Ad valorem taxes are not levied in excess of actual budget requirements. In 1973, the State of Florida enacted legislation to encourage public awareness of spending and taxing decisions made by local elected officials. This legislation provides that if the tax rate established by the governing board exceeds the rolled -back tax rate, the taxing authority shall publish notice of the proposed tax increase prior to the public hearing required to be held for the adoption of the final budget and millage rate. Under Section 200.0.65, Florida Statutes, a "rolled -back tax rate" is defined as the millage rate that would produce the same amount of ad valorem taxes in each current year as were levied in the prior year, exclusive of any increase in assessments resulting from new construction, additions to structures, deletions and property added due to geographic boundary changes. Section 4 of Article VII of the Constitution of the State provides, with certain exceptions: `By general law regulations shall be prescribed which shall secure a just valuation of all real property for ad valorem taxation." The factors considered in arriving at a just valuation, as set forth in Section 193.011, Florida Statutes, as amended, are summarized as follows: (1) the present cash value of the property; (2) the highest and best use to which the property can be expected to be put in the immediate future and the present use of the property; (3) the location of the property; (4) the quantity or size of the property; (5) the cost of the property and the present replacement value of any improvements to the property; (6) the condition of the property; (7) the income from the property; and (8) the net proceeds of the sale of the property after deduction of certain reasonable fees and costs of sale. Save Our homes Amendment By voter referendum held on November 3, 1992, Article VII, Section 4 of the Florida Constitution was amended by adding thereto a subsection which, in effect, limits the increases in assessed just value of homestead property to the lesser of (a) 3% of the assessment for the prior year or (b) the percentage change in the Consumer Price index for all urban consumers, U.S. City Average, all items 1967-100, or successor reports for the preceding calendar year as initially reported by the United States Department of Labor, Bureau of Labor Statistics (the "Save Our Homes Amendment"). Further, the Save Our Homes Amendment provides that (1) no assessment shall exceed just value; (2) after any change 15 404 0 0 _ of ow T nership of homestead property or upon termination of homestead status, such property shall be reassessed at just value as of January 1 of the year following the year of sale or change of status; (3) new homestead property shall be assessed at just value as of January I of the year following the establishment of the homestead; and (4) changes, additions, reductions or improvements to homestead steal l initially be assessed as provided by general law, and thereafter as provided in the Save Our Homes Amendment. The effective date of the Save Our Homes Amendment was January 15, 1993, and the base year for determining compliance with the restrictions is 1994. The 1995 tax roll year was the first year such limitations were effective. For the 2001 tax roll year, the increase in assessed just value of homestead property in the City was limited pursuant to the Save Our Homes Amendment to 2.6% of the assessment for the prior year. Truth in Millage Bill The Florida Legislature enacted the Truth in Millage Bili (the "Trim Bill") requiring that only governing bodies of taxing authorities fix the millage rate and requiring that all property be assessed at one hundred percent (1000/6) of just value. Sections 200.071 and 200.091, Florida Statutes prohibit the millage for taxing authorities from being set by referendum, except as provided in the Constitution of the State. -Property Assessment Procedures Real and personal property valuations are determined each year as of January I by the Miami -Dade County Property Appraiser's Office. The assessment roll is prepared between each January 1 and July 1, with each taxpayer given notice of the proposed assessed value of his property. The property owner has the right to file an appeal with the Miami -Dade County Property Appraisal Adjustment Board, which considers petitions relating to assessments and exemptions. The Miami -Dade County Pro Appraisal Adjustment Board certifies the assessment roll upon completion of the hearing of all appeals. Millage are then computed by the various taxing authorities and certified to the Miami -Dade County Property Appraiser, who applies the millage rates to the assessment roll. This procedure creates the tax roll which is then annually turned over to the Miami - Dade County Tax Collector on or about the first Monday in October. Levy of Ad Valorem Taxes A notice is mailed to each property owner on the tax roll for the taxes levied by cities, counties, school boards, and other taxing authorities. Ali taxes are due and payable on November 1 of each year or as soon thereafter as the certified tax roll is received by the Tax Collector. Taxes may be paid upon receipt of such notice with discounts at the rate of 41/o if paid in the month of November; 3% if paid in the month of December; 2% if paid in the month of January; and I% if paid in the month of February. Taxes paid during the month of March are without discount. Taxes become delinquent on April 1 following the year in which they are assessed or 60 days after mailing of the original tax notice, whichever is later. if the delinquency date for ad valorem taxes is later than April 1 of the year following the year in which taxes are assessed, all dates or time periods specified in the Florida,Statutes relative to the collection of, or administrative procedures regarding, delinquent taxes shall be extended a like number of days. Exemptions from the ad valotem tax include the first $25,000 of assessed value for a homestead; homestead property of totally and permanently disabled persons; improved real property on which a renewable energy source device is installed and operated; inventory; property used by not-for-profit hospitals, nursing homes -and homes for special services; property used by certain not-for-profit homes for the aged; property used exclusively for educational purposes by educational institutions or other exempt organizations, including charter schools, for educational purposes; property owned by certain charitable, literary, religious or scientific organizations and used predominately for such purposes; property owned and used for educational purposes by labor organizations; property of certain community centers; certain property used for affordable housing; property owned and used by certain governmental units; property 16 02- 284 • t • 0 of certain not-for-profit sewer and water companies; and the first $500 of property of every widow, widower, blind person or disabled person. In addition, pursuant to Section 196.075, Florida Statutes, beginning with fiscal year 2001, an additional homestead exemption of $25,000 may be granted by a city or municipality relating to ad valorem taxes payable to either persons 65 or older, subject to certain income limitations. The City has adopted such exemption for the period commencing with fiscal year 2001. Such exemption should not have a material impact on the amount of ad valorem taxes levied or collected by the City. [Remainder of page intentionally left blank] 17 02- 284 Millage Rates The following table shows millage rates for the City for fiscal years ending September 30, 1993 through September 30, 2002. THE CITY OF MIAMI, FLORIDA PROPERTY TAX RATES ..Q„a, JV& zone wy, uperatigns 8.9950 �''� i" ' 1.2180 Total 10.2130 2001 8.9950 1.2800 10.2750 2000 9.5000 1.4000 10.9000 1999 10.000 1.7900 11.7900 1998 9.5995 1.9200 11.5195 1997 9.5995 1.9200 11.5195 1996 9.5995 2.1060 11.7055 1995 9.5995 2.1060 11.7055 1994 9.5995 2.1060 11.7055 1993 r 9.5995 2.2126 11.8121 1`1 Millage for voted debt service on general obligation bonds is excluded from the 10 mill cap set forth in Article V11, Section 9(b) of the Florida Constitution. Source: The City of Miami, Florida FY 1999, FY 2000, FY 2001 and FY 2002 Budgets Assessed Valuations The following table shows the assessed valuations for the last ten fiscal years, THE CITY OF MIAMI, FLORIDA ASSESSED VALUE OF TAXABLE PROPERTY Fiscal Real Personal Homestead Net Assessed 1QW ExcoWons Value 2002j11 2001 S 13,768,305,749 $1,649,669,861 $15,417,975,610 $1,168,878,720 514,249,096,890 2000 12,986,652,464 12,255,415,806 1,471,641,515 14,458,293,979 1,022,522,356 13,435,771,623 1999 11,550,382,420 1,325,238,294 13,580,654,100 1,319,946,647 12,712,742,646 1,013,367,239 12,567,286,861 1998 11,142,232,778 1,317,459,000 12,362,960,000 1,015,773,092 1,013,567,000 11,696,969,554 11,349,393,000 1997 1996 10,773,800,884 10,245,892,805 1,295,394,000 12,003,551,000 1,258,035,000 11,497,352,000 1,012,060,000 10,991,491,000 1995 10,003,904,327 1,234,650,000 11,233,614,000 1,007,532,000 1,006,367,000 10,489,820,000 10,227,247,000 1994 1993 10,227,731,122 1,253,841,000 11,497,370,000 1,005,657,000 10,491,713,000 Source: Miami -Dade County Property Appraiser's Office 1'l Subject to final adjustment IS p2- 284 0 • �J • Tax Collection It is the Miami -Dade County Tax Collector's duty on or before June I of each year to advertise and sell tax certificates on real property delinquencies extending from the previous April 1. The tax certificates must not be less than the amount of the taxes plus interest from April 1 to the date of sale, together with the cost of advertising and expense of sale. Delinquent real property taxes bear interest at the rate of 1$% per year from April 1 until a certificate is sold at auction, at which time the interest rate is as bid by the buyer of the certificate. Delinquent taxes may be redeemed prior to sale of the tax certificates upon payment of all costs, delinquent taxes, and interest. The minimum interest for delinquent taxes paid prior to the sale of a certificate is 3%. A tax certificate may be redeemed by paying the Miami -Dade County Tax Collector the face value of the certificate, interest, costs, charges and omitted taxes, if any, plus a redemption fee of $5. The redeemer must pay the interest rate due on the certificate or 5% of the face amount of the certificate, whichever amount is greater, unless the certificate was bid at no interest. Florida law -provides a different method for the collection of delinquent tangible personal property taxes, which includes the possible seizure and sale of the tangible personal property. Tax Deeds After two years from April 1 of the year of issuance of the tax certificate and before seven years of the date of issuance, a private holder of any unredeemed tax certificate may apply for a tax deed to the property. Miami -Dade County, for tax certificates that it has acquired, also has a two-year minimum wait for purchase of a tax deed, beginning April I of the year of issuance of the certificate. Such procedures are governed by State law applicable to all Florida counties. The request for a tax deed is referred to the Clerk of the Circuit Court of Miami -Dade County who will hold an auction after the proposed sale of the tax deed has been advertised for four consecutive weeks in a newspaper as prescribed by law. [Remainder of page intentionally left blank.] • 02- 284 0 • The following table shows tax levies and tax collections in the City for the last ten fiscal years. THE CITY OF MIAMI, FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS FISCAL 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 TOTAL TAX $136,827,422 138,283,717 143,485,898 130,407,000 i 31,773,000 123,464,000 119,643,000 119,720,000 121,377,000 124,176,000 COLLECTIONS AS % OF 96.7500 96.7500 98.3365 96.7818 99.1893 95.9607 99.0381 95.6467 92.8654 96.3860 (1) Includes levies for general operations and debt service. (2) Net of reserve of approximately 5% of total tax levy. Source: The City of Miami, Florida 20 TOTAL OUTSTANDING DELINQUENT TAXEST $2,255,654 3,633,429 2,427,257 1,666,079 4,067,000 1,552,000 2,683,000 1,673,000 3,942,000 5,077,000 COLLECTION OF DELINQUENT TAXES $2,291,707 2,255,654 2,522,000 2,496,000 2,990,000 2,945,000 3,707,000 5,754,000 5,631,000 5,780,000 OUTSTANDING DELINQUENT TAXES AS % OF K IMM LEVY 1.59% 2.54 1.0 3.22 0.81 4.04 0.96 4.35 7.13 3.61 02-- 284 • • • 'COLLECTION PERCENT FISCAL TOTAL TAX OF CURRENT OF LEVY YEAR LEMY11_' YEAR'S,TA= COULCM 2001 $141,425,410 $134,535,715 95.13% 2000 142,932,314 136,028,063 95.17 1999 I45,913,155 143,515,000 98.36 1998 134,743,24I 127,911,000 94.93 1997 132,850,000 128,783,000 96.94 1996 I28,66I,000 120,519,000 93.67 1995 120,805,000 115,936,000 95.97 1994 125,169,000 113,966,000 91.05 I993 130,702,000 115,746,000 88,56 1992- , 128,832,000 118,396,000 91,90 FISCAL 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 TOTAL TAX $136,827,422 138,283,717 143,485,898 130,407,000 i 31,773,000 123,464,000 119,643,000 119,720,000 121,377,000 124,176,000 COLLECTIONS AS % OF 96.7500 96.7500 98.3365 96.7818 99.1893 95.9607 99.0381 95.6467 92.8654 96.3860 (1) Includes levies for general operations and debt service. (2) Net of reserve of approximately 5% of total tax levy. Source: The City of Miami, Florida 20 TOTAL OUTSTANDING DELINQUENT TAXEST $2,255,654 3,633,429 2,427,257 1,666,079 4,067,000 1,552,000 2,683,000 1,673,000 3,942,000 5,077,000 COLLECTION OF DELINQUENT TAXES $2,291,707 2,255,654 2,522,000 2,496,000 2,990,000 2,945,000 3,707,000 5,754,000 5,631,000 5,780,000 OUTSTANDING DELINQUENT TAXES AS % OF K IMM LEVY 1.59% 2.54 1.0 3.22 0.81 4.04 0.96 4.35 7.13 3.61 02-- 284 • • • i [Remainder of page intentionally left blank] 0 21 02- 284 TEN LARGEST TAX ASSESSMENTS 2001 ASSESSED VALUES NATURE OF ASSESSED TAXPAYER ACTMTY VALUECg�vT 1. SRI AETNA Life Insurance Co. Real Estate Investments $178,100,000 1.25% 2. Florida Power & Light utility 149,163,031 1.05 3. Metropolitan Life Insurance Real Estate Investments 135,950,000 0.95 4. Bellsouth Utility 133,972,769 0.94 5. Prudential Insurance Co. Real Estate Investments 117,000,000 0.82 6. Brickell Associates Office Building 83,000,000 0.58 7. Cedeara Healthcare Group LTD Medical 60,750,852 0.43 8. NOP LLC Real Estate Investments 60,100,000 0.42 9. Brickell Equities Corp. Real Estate Investments 57,015,028 0.40 10. Brickell Square Office Building 51,190,595 0.36 All Others Various 92.80 TOTAL 2 14 i [Remainder of page intentionally left blank] 0 21 02- 284 THE CITY OF MIAMI Background • Now 106 years old, the City is part of the nation's eleventh largest metropolitan area. Incorporated in 1896, the City is the only municipality conceived and founded by a woman - Julia Tuttle. According to the U.S. Census Bureau, the City's population in 1900 was 1,700 people. Today it is a city rich in cultural and ethnic diversity with more than 362,000 residents, 60% of them foreign bom. In physical size the City is not large, encompassing only'.14.3 square miles. In population, the City is the largest of the 31 municipalities that make up Miami -Dade County and is the county seat. For additional information concerning the City, see "APPENDIX A --- GENERAL INFORMATION REGARDING THE CITY OF MIAMI" City Government Since 1997, the City has been governed by a form of government known as the "Mayor -Commissioner plan" There are five Commissioners elected from designated districts within the City. The Mayor is elected at large every four years. As official head of the City, the Mayor has veto authority over actions of the Commission. The Mayor appoints the City Manager who functions as chief administrative officer. The Mayor of the City is presently Manuel A. Diaz. The current members of the City Commission and expiration of their current terms of office are: Tomas P. Regalado, Chairman Johnny L. Winton, Vice Chairman Angel Gonzalez Joe M. Sanchez Arthur E. Teele, Jr. Daft November, 2003 November, 2003 November, 2003 November, 2005 November, 2005 The City Manager is a full-time employee and is the chief administrative officer of the City. The City Manager is responsible for directing the administrative and operational aspects of the City in compliance with the policies set by the Commission and the Mayor. Carlos A. Gimenez has been City Manager since May 9, 2000. He is responsible for an organization that has more than 4,000 employees and administers a budget of more than $330 million, Prior to his current position, he served as Fire Chief of the City for nine years and gave more than twenty-six years of service in the City's Fire Department. He holds a Bachelors Degree in Public Administration from Barry University. The City's Assistant City Manager for Finance and Administration is Robert J. Nachlinger. lie is responsible for the following departments: finance, human resources, information technology, risk management, purchasing and the civil service board. He was appointed the Assistant City Manager for Finance and Administration in July 2000. Prior to that he was the Finance Director for the City of Homestead, Florida. Mr. Nachlinger has been the Chief Accountant for Dallas County, Texas, Internal Auditor and Treasurer for the Dallas Independent School District, Finance Director for the City of Beaumont, Texas, Finance Director for the City of Miami Beach and an Assistant City Manager for the City in 1997 before being hired by the City of Homestead. He holds a BBA degree in accounting and a MBA in finance. He is also licensed as a CPA in the State of Texas and is a member of the State of Florida CPA Society and the Florida Govemment Finance Officers Association. The City's Finance Director is Scott Simpson, CPA, CGFO. He reports to the Assistant City Manager for Finance & Administration. He is responsible for managing and investing public funds. The finance department is responsible for accounts payable, general ledger, grants monitoring, payroll, treasury management and preparation of routine 22 02- 284 • • • • • 0 0 _ accounting reports as well as the City's annual financial statement. Mr. Simpson joined the City in October 1998 as the Assistant Finance Director and was appointed the Finance Director in June 2001. Prior to his joining the City, Mr. Simpson was the Chief Accountant for the City of Winter Park, Florida for approximately three years. Mr. Simpson has been previously employed in private industry in the position of Accounting Manager and Controller. Mr. Simpson graduated from North Carolina State University with a B.A. in Accounting. He is licensed as a CPA in the State of North Carolina and is a member of the American and Florida Institutes of Certified Public Accountants and the Government Finance Officers Association of the United States and Canada. ISSUES RELATED TO FINANCIAL EMERGENCY Background For the period 1984 through I995, the General Fund of the City had a small but positive fund equity. During the same twelve year period the enterprise funds were recording losses in each year. • The internal service funds recorded losses in eight of the twelve fiscal years. While the General Fund equity was being supported by transfers from the proprietary funds, the retained earnings in the proprietary funds were becoming more negative each year. By 1995, the enterprise funds had negative retained earnings of over $65 million and the internal service funds had negative retained earnings of over $7 million. In the 1996 Comprehensive Annual Financial Statements, the City recognized that the General Fund was the guarantor of the "proprietary operations" and collapsed the proprietary funds into the General Fund since they were not being operated as proprietary funds. This resulted in a negative equity of $21.8 million in the General Fund. Appointment of Financial Oversight Board In 1996, both Standard and Poor's Rating Group and Moody's Investors Service dropped the City's bond rating to below investment grade. Unable to obtain credit, and projecting a cash deficit hampering the City's ability to make payroll, or pay bills, the City requested that the Governor advance its State shared revenue payments to the City prior to the date they were due. Pursuant to Executive Order 96-318, the Governor advanced $22 million to the City. Although the City was not technically in a financial emergency, as defined by the Florida Statutes, the Executive Order required the City to adopt a plan to resolve the financial situation by November 17, 1996. Unable to establish a plan to resolve the situation, the City Commission declared the City to be in a financial emergency. Pursuant to the City's request, the Governor issued Executive Order 96-391 effective December 11, 1996, creating the Financial Oversight Board (the "FOB") to monitor the financial affairs of the City. The FOB was established as a five -member board, appointed by the Governor. Also, Executive Order 96-391 dirgcted the FOB to enter into an Intergovernmental Cooperation Agreement (the "ICA"). The ICA was entered into between the City, the Governor and the FOB and it is through the ICA that the FOB received its power and authority. Further, the ICA established a corrective action plan and outlined an approval process for all functions key to the financial recovery process. Pursuant to the corrective action plan the City implemented the following: (1) A financial recovery plan for fiscal year 1996-97 shall be developed by the City and approved by the FOB to eliminate the $68 million deficit and structurally balance recurring revenues with recurring expenditures; (2) All budgets developed by the City for five fiscal years of balanced operations were approved by the FOB before final adoption; (3) Monthly financial reports were prepared by the City and submitted to the FOB, which monitored budget to actual revenues and expenditures and explained trends and variances; (4) A five year plan was developed by the City and approved by the FOB for fiscal year 1996-97 through fiscal year 2000-01. The plan included forecasts of revenues and expenditures (both recurring and non-recurring), address managerial, operational and other deficiencies and must show how the City plans to balance its operations in each year. This plan was updated annually by the City and approved by the FOB; (5) The City was prohibited from expending funds on anything but debt service payments if it was not operating under an FOB approved budget; (6) An official Estimating Conference made up of professional staff including the FOB's financial advisor, reviewed and approved all revenue and expenditure estimates used in the budgets and Five Year plans of the City; (7) A Fiscal Sufficiency Advisory Board was created to ensure the City establishes and maintains segregated debt service payment '23 ®2-- .284 accounts and that appropriate balances in the debt service funds were kept, and timely payment of debt service on bonds was made by the City; (8) A Contract Review Committee was established and the City was required to submit any amendment, renewal, extension or new contract with a value of $4,500 or more to the Contract Review Committee for approval before the City could enter into the contract. The amount was later amended upward to $ I0,000"or more; and (9) A time frame was provided for all required actions in the ICA. See "CURRENT FINANCIAL STATIJS OF THE CITY" for a description of City policies resulting from the ICA's corrective plan, Since 1997, the FOB met 46 times in fulfillment of its role and pursuant to the requirements sett forth in the ICA. Pursuant to its terms, the ICA terminates once the City has ended each of five consecutive fiscal years with balanced operations. The City's external auditors have confirmed the City's balanced operations each of the past five fiscal years (fiscal years 1996 through 2000). No other financial emergency conditions pursuant to Section 21$.503, Florida Statutes have arisen concluding the terms of the ICA. With the release of the fiscal year 2001 Audited Financial Statement, which was released Manch 7, 2002, the City has fulfilled all of its obligations pursuant to the ICA. Therefore, it is expected that the FOB will be officially dissolved upon the execution by the Govemor of the executive order dissolving such body. Securities and Exchange Commission Actions On September 22, 1999, the Securities and Exchange Commission instituted an Administrative Proceeding against the City of Miami, Florida, its former City Manager, Cesar Odio, and its former Finance Director, Manohar Surana, AP File No. 3-10022. The SEC's Division of Enforcement alleged that the City violated Sections 17(a)(1). 17(a)(2) and 17 (a)(3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, and Rule 10(b)(5) thereunder, in connection with the sale of three bond offerings (the "Bond Offerings"), all of which occurred in 1995. The Division also alleged that the City's two former officials were a cause of these violations. Messrs. Odin and Surana each subsequently reached settlements with the SEC. The Division alleged, among other things, that the Official Statements for the Bond Offerings and the City's 1994 Comprehensive Annual Financial Report omitted to disclose that the City's cash position had materiality declined since the close of fiscal year 1994 and the Official Statements for the Bond Offerings failed to disclose that "Operation Right -Size" (a plan instituted by the City to reduce costs), would not have been sufficient to remedy the City's immediate economic problems. The SEC does not seek to impose monetary fines or penalties against the City, nor has the City been requested to re -state any previously issued financial statements. The sole remedy sought against the City was the entry of a cease and desist order. In March 2000, the Division and the City proceeded to trial. On June 22, 2001, the Administrative Law Judge ("ALJ") issued an Initial Decision ("Initial Decision"), in which the ALJ concluded that the City violated the federal securities laws and ordered that the City cease and desist from further violations of Exchange Act Section I0(b) and Rule I0(b)(5) thereunder, and Section 17(a) of the Securities Act. The City appealed from the Initial Decision contending that the ALF's Initial Decision was erroneous and should be reversed and set aside by the SEC. The parties have fully briefed the issues and are awaiting the SEC's decision. In connection with the foregoing proceedings, the SEC instituted an action against Rauscher Pierce Refsnes, Inc., now known as Dain Rauscher Incorporated ("Rauscher") alleging that as underwriter of the City's $72 million Pension Bond Offering in 1995, Rauscher should have known certain material information regarding the City's financial condition and that the official statement failed to disclose the City's true financial condition to investors. On September 27, 2001, the SEC ordered Rauscher to (1) cease and desist from committing or causing any violation and any future violation of Sections (17(a)(2) and (3) of the Securities Act, Section 15B(c)(1) of the Exchange Act and MSRB Rule G-17; (2) pay a civil money penalty in the amount of $200,000 to the United States Treasury and (3) comply with all provisions of the SEC Order. 24 6} " 284 �J s - RBC Dain Rauscher Inc., formerly Rauscher Pierce Refines, Inc. and Dain Rauscher Incorporated, is acting as financial advisor to the City for the Series 2002 Bonds. In 1997, the city filed a professional malpractice action against the City's former external auditing firm. A counterclaim was filed against the City alleging abuse of process in which the compens4tory damages being sought are not specified. At this time, the City cannot determine who will ultimately prevail in the above-mentioned case. CURRENT FINANCIAL STATUS OF THE CITY The City has made progress toward implementing the ICA's corrective plan. The FOB provided leadership and guidance to the City when and where necessary. The City's present management has been stable and its key senior management positions (those positions which report to the City Manager) are filled with trained professionals. The City has adopted several policies, as outlined below, to help it to continue its long term growth and prevent significant problems from developing again. Adoption of Financial Integrity and Anti -Deficiency Ordinances The City's Anti -Deficiency Ordinance was passed in fiscal year 1999. The Anti -Deficiency Ordinance includes several provisions aimed at financial accountability, including holding department heads personally responsible for departmental overruns. The Anti -Deficiency Ordinance provides that no contract or other agreement may be entered into for future payment of money in excess of those funds approved in the current year budget. Further, if it is reasonably believed or anticipated that the annual budget of an agency or department may exceed the sum appropriated in the approved budget, then written notice shall be provided to the Mayor, City Commission, City Manager, City Attorney, City Clerk and the Director of the Department of Management and Budget. . In January 2000, the FOB and the City's staff developed a Financial Integrity Ordinance. The ordinance augments the City's Anti -Deficiency Ordinance. The Financial Integrity Ordinance was enacted as a preventative measure setting forth financial practices that would prevent the recurrence of a financial emergency. It also includes a self-governing provision whereby the City Auditor is required to prepare an annual report on the City's adherence to these principles. The Financial Integrity Ordinance addresses the following integrity principles: (i) Structurally Balanced Budget, (ii) Estimating Conference Process, (iii) Interfund Borrowing, (iv) Reserve Policies, (v) Multi-year Financial and Capital Plan, (vi) Financial Oversight and Reporting, (vii) Basic Financial Policies, (viii) Evaluation Committees, (ix) Full cost of Service and (x) Promoting Operating Efficiencies. The City has begun implementation of this ordinance. The City's Auditor issued its first report on July 3, 2001 for the period of February 1, 2000 through September 30, 2000. Although, the City's Auditor found some areas which the City needs to 'improve upon, such as the filing for reimbursements on a timely basis and recording of reimbursements due to the City as accounts receivable, overall, the report was satisfactory. Since the date of the report, the City has taken steps to improve those areas identified. • [Remainder of page left intentionally blank.) 25 U4- 284 U Adoption of Five Year Financial Plan • On October 12, 2000, the City adopted its Five Year Financial Plan for fiscal years 2001- 2005 (the "Five Year Plan"). Over the next five years the City's total budget is projected to grow from the $510.4 million approved for fiscal year 2001 to $535.9 million in fiscal year 2005. The Five Year Plan contemplates no increase in the ad valorem tax rate, no increase in the fire fee and a five percent increase in business licenses for fiscal year 2002 and fiscal year 2004. The chart below shows a summary of the five year projection of revenues and expenses by fund: Revenues FY 2001 E' 2002 EY 2Q03 FY 2094 Fy 2005 General Fund $316,622,817 $326,897,785 $334,590,402 $343,475,342 $355,911,253 Special Revenue Funds 152,454,677 150,872,791 151,709,660 142,562,153 143,430,573 Debt Service Fund 41,383.593 39,933.886 39,583,611 37,247,001 3¢,5Q8.987 Total All Funds S510,461.Q87 ;5JJ,2 3 3.984.599 �� 5.850.813 Expenditures General Fund Special Revenue Funds $316,622,817 $326,897,785 $334,590,402 $343,475,342 $355,911,253 Debt Service Fund. 152,454,677 41.383.593 I50,872,791 151,709,660 142,562,153 143,430,573 39.933.886 39.583.61 I 3].947.045 36,508.987 Total All Funds 4 87 J5J.Z,7Q4,AL2 $525,113,673UZLU.4 The Five Year Plan anticipates that the City will have a structurally balanced budget with recurring revenue capacity to resolve small deficits projected in expenditures over revenues in fiscal year 2004 and fiscal year 2005. Reserve levels are consistent throughout the period. The City is preparing a five year capital improvement plan that is separate from the Five Year Plan discussed above. See "CURRENT FINANCIAL STATUS OF THE CITY -Capital Improvement Plan" herein. Adoption of Investment Policy The City adopted a detailed written investment policy on May 10, 2001, that applies to all cash and investments held or controlled by the City and identified as "general operating funds" of the City with the exception of the City's Pension Funds, Deferred Compensation & Section 401(a) Plans, and such funds related to the issuance of debt where there are other existing policies or indentures in effect for such funds. Additionally, any future revenues, which have statutory investment requirements conflicting with the City's Investment Policy and funds held by state agencies (e.g. Department of Revenue), are not subject to the provisions of the policy. The foremost objective of the investment program is"the safety of the principal of these funds within the portfolios. investment transactions shall seek to keep capital losses at a minimum, whether they are from securities defaults or erosion of market value. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio. The pordblios are required to be managed in such a manner that funds are available to meet reasonably anticipated cash flow requirements in an orderly manner. Investment portfolios are required to be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Return on investment is of least importance compared to the safety and liquidity objectives described in the policy. The policy provides that the portfolios shall be managed in such a manner that funds are available to meet reasonably anticipated cash flow requirements in an orderly manner. In accordance with the City's Administrative Policies, the responsibility for providing oversight and direction in regard to the management of the.investment program resides with 26 the City's Finance Director. The Finance Director has established written procedures for the operation of the investment portfolio and a system of internal accounting and administrative controls. Pursuant to the policy, the City may employ an Investment Advisor to assist in managing some of the City's portfolios, but has not done so at this time. To the extent possible, an attempt shall be made to match investment securities with known cash needs and anticipated cash flow requirements. Subject to the exceptions in the City's investment policy, the City may invest in the following types of securities: (a) The Florida Local Government Surplus Funds Trust Fund, (b) United States Government Securities, (c) United States Government Agencies, (d) Federal Instrumentalities, (e) Interest Bearing Time Deposit or Savings Accounts, (f) Repurchase Agreements, (g) Commercial Paper, (h) Corporate Notes, (i) Bankers' Acceptances, 0) State and/or Local Government Taxable and/or Tax -Exempt Debt, (k) Registered Investment Companies (Money Market Mutual Funds) and (1) Intergovernmental Investment Pool. Also, the City may invest in investment products that include the use of derivatives as long as the dollar amount invested by the investment product is minuscule to the total dollar amount invested by the investment product. As of January 31, 2002, approximately 76.5% of the City's investment portfolio was invested in United States Treasury Obligation and obligations of agencies of the United States Government. Approximately 23.5% of the City's investment portfolio was invested in money market funds and commercial paper. The City's investment policy may be modified from time to time by the City Commission. Adoption of Debt Management Policy The City adopted a Debt Management Policy on July 21, 1998 to provide guidance goveming the 'issuance, management, continuing evaluation of and reporting on all debt obligations issued by the City and to provide for the • preparation and implementation necessary to assure compliance and conformity with the policy. It is the responsibility of the City's finance committee to review and make recommendations regarding the issuance of debt obligations and the management of outstanding debt. The finance committee consists of seven voting members - five members of the local business community which are appointed by the City Commission, the City Manager or his designee and the City's Finance Director. The finance committee considers all issues related to outstanding and proposed debt obligations, votes on issues affecting or relating to the credit worthiness, security and repayment of such obligations, including but not limited to procurement of services, structure, repayment terms and covenants of the proposed debt obligation, and issues which may affect the security of the bonds and ongoing disclosure to bondholders and interested parties. • In the Debt Management Policy, the following policies concerning the issuance and management of debt were established: (a) the City will not issue debt obligations or use debt proceeds to finance current operations; (b) the City will utilize debt obligations only for acquisition, construction or remodeling of capital improvement projects that cannot be funded from current revenue sources or in such cases wherein it is more equitable to the users of the projects to finance the project over its useful life•, and (c) the City will measure the impact of debt service requirements of outstanding and proposed debt obligations on single year, five, ten and twenty yearperiods. This analysis will consider debt service maturities and payment patterns as well as the City's commitment to a pay as you go budgetary capital allocation. The finance committee has approved the Series 2002 Bonds and their negotiated We to the Underwriters. Capital Improvement Plan The City does not currently have a capital plan, but has hired Post, Buckley, Shuh and Jernigan as consultants to prepare a twenty-year capital plan along with a current condition assessment of the City's infrastructure. The study is currently underway and is expected to be completed in October, 2002. Proceeds of the approved limited ad valorem tax revenue bonds, together with additional revenue bonds and other legally available funds of the City will be used to 27 02- ` 8 4 0 0 - • fund a portion of the capital improvement plan. Such capital plan shall be implemented subject to the approval of the City Commission. See "FUTURE BORROWINGS" herein. Information Technology Improvements in the City's intellectual infrastructure will be stressed during the next five years. As the City emerges from its financial difficulties it has the additional resources to address software and hardware needs. Information technology will constitute a critical element in the overall strategic plan formulated by the City. The City has formulated a long-term strategic plan and is in the process of the implementing of the plan. The City Manager has created an Information Technology Steering Committee composed of senior executives from all the City's critical functional areas. This committee is charged with the responsibility of reviewing and approving all major technology projects based on a sound business evaluation, establishing the priorities of major projects, allocating resources of time, personnel and equipment to meet the needs of these projects, approving major software development and/or hardware and software acquisitions, and setting the goals and scope of a disaster recovery- and business continuity plan. The technology improvements will be partially funded under the capital improvement plan. See "CURRENT FINANCIAL STATUS OF THE CITY -Capital Improvement Flan" herein. Fiscal and Accounting Procedures The accounts of the City are organized on the basis of funds or account groups, each of which is considered a separate accounting entity in accordance with generally accepted accounting principles, as defined by the Governmental Accounting Standards Board ("GASB"). The operation of each fund is accounted for in a separate self - balancing set of accounts which comprise its assets and other debits, liabilities, fund equities and other credits, revenues and expenditures. Individual funds that have similar characteristics are combined into fund types. For the past 2 years the City has received the Certificate of Achievement for Excellence in Financial Reporting • from the Government Finance Officers Association of the United States and Canada. For a complete description of the fund types and account groups, see Notes to General Purpose Financial Statements of the City in Appendix "C" herein. GASB 34 In June 1999, the General Accounting Standards Board ("GASB") issued GASB Statement No. 34, Basic Financial Statements — and Management's Discussion and Analysis — for State and Local Governments. • This statement will substantially affect the City's financial data accumulation and financial statement presentation processes. The effective date of the new pronouncement will require implementation by the City for its fiscal year ending September 30, 2002. The City staff has participated in various GASB Statement No. 34 training sessions offered by the Florida Institute of Certified Public Accountants, Governmental Finance Officers Association and Florida Governmental Finance Officers Association and have prepared internally a pro forma GASB 34 Model. The City believes the implementation of GASB 34 will proceed as scheduled. Cash Management The City's Finance Department strives to achieve maximum permissible financial return on available cash resources. Idle cash balances are invested on a daily basis within the constraints imposed by applicable law and City Policies. Substantially all of the City's investments are either insured, registered or physically held in the City's name in order to safeguard its investments. For purposes of maximizing interest earnings, substantially all of the City's cash and investments are pooled, except where separate cash and investments accounts are maintained in accordance with applicable legal requirements. The City's cash equivalents and investments consist of demand deposits with banks, and money market fund investments with original maturities of three months or less and equity in the City's cash management pool. 28 • 0 • General Fund The General Fund is the general operating fund of the City. It accounts for all financial resources except for those required to be accounted for in another fund. The largest source of revenue in this fund is generated from ad valorem taxation. The revenues and expenditures of the General Fund have stabilized at levels below the 1996 combination of proprietary operations into the fund. In addition to the five years of balanced budgets, the City has rebuilt its reserves. Operations will be removed from the General Fund only when they can be operated as true enterprise operations. The following chart shows information regarding the General Fund over the five year period ending September 30, 2001. [Remainder of page intentionally left blank.] 29 02-- 284 • Summary Schedule of Revenues, Expenditures and Changes in Fund Balances for the General Fund (Audited) Revenues Taxes Franch. Fees/Other Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Interest Other Total Revenues Expenditures General government Planning & development Public works Public safety Public facilities Parks and. recreation Pensions Organizational support Risk management Other Non -departmental Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other financing sources and (uses): Operating transfers in Operating transfers out Total other financing sources, net Excess of Revenues and. Other Financing Sources Over Expenditures and Other Financing Uses Fund balance at beginning of year Equity transfers in (out) • • $24,592,817 i t th $18,022,017 $61,743,000 X441 5,041,707 1992 Jul 1997 $119,683,851 $120,426,167 $120,781,649 $108,172,648 $105,493,000 19,081,242 10,960,340 14,383,175 14,419,801 14,075,000 20,333,532 19,833,395 16,050,882 16,641,532 9,816,000 33,688,246 44,454,300 34,032,189 33,841,573 42,814,000 84,334,277 75,470,338 54,241,929 41,866,305 50,387,000 4,818,554 4,249,201 3,703,068 2,814,571 2,761,000 15,909,309 11,134,284 6,916,561 6,132,593 2,939,000 5,506.192 6.751.637 2,963,999 18.47.0.UIT 6.543.000 $303,355,203 $293,279,662 $253,073,452 $241,959,378 $233,560,000 $24,592,817 $23,025,280 $20,509,297 $18,022,017 $61,743,000 5,759,424 5,041,707 5,481,237 5,330,525 3,714,000 40,975,451 37,015,471 38,799,233 35,728,747 31,I42,000 132,844,965 135,173,374 126,287,513 116,894,329 107, I27,000 4,547,020 4,379,971 3,8I9,893 3,556,522 7,337,000 9,358,344 8,746,720 8,221,325 6,99+1,947 6,770,000 18,653,241 16,066,694 13,780,194 35,777,750 29,436,000 23,148,843 21,341,763 17,556,879 _ _ 33,305,868 27,224,122 21,393,616 21,631,701 _ 13,204,0000) 7,891,729 3.083.482 4 74 23.569,M $301,077,702 $281,098.584 $ 0.2 2.261 $267.497.186 S20%473,00D 0 2,277,501 I2,181,078 (7,148,809) (25,537,808) (26,9 1 i,000) 42,369,469 37,752,300 37,894,600 84,601,7100 59,605,0001') (3.2.934.411) (13,285,473) 128.054.155? (29,868.= (9.041.000) 9.435.058 23.766.827 2,840.445 54.7 _42 50.564.000 11,712,559 35,947,905 2,691,636 29,195,739 23,651,000 75,466,134 43,039,538 40,973,658 1,835,000 (21,816,000) Fund balance at edd of year �i S.46b. 134 (1) Includes pension contributions of $12,725,420. (2) Includes proceeds from land sales of $49,457,418. (3) Includes interest charges of $5,285,000. (4) Includes proceeds from land sales of $9,094,000. 30 02.- 284 r� • rI • LIABILITIES OF THE CITY Insurance Considerations Affecting the City Section 768.28, Florida Statutes, provides limits on the liability of the State of Florida and its subdivisions of $100,000 to any one person, or $200,000 for any single incident or occurrence. See "Ability to be Sued, Judgments Enforceable" below. Under the protection of this limit and Chapter 440, Florida Statutes, covering Workmen's Compensation, the City established a Self Insurance Fund to provide coverage for all areas of liability including Workmen's Compensation, General Liability, Auto Liability, Police Professional Liability and Public Officials Liability. The City has purchased an excess liability policy (the "Excess Coverage") to limit catastrophic losses. This Excess Coverage policy has a self-insured retention of $350,000 with limit of $5,000,000. The City also purchases commercial insurance for property, liability coverage for the James L. Knight Center and Bayfront Park, Marinas Operators Liability for the City's marinas. The property insurance has a deductible of $100,000 for all perils except windstorm, which has a separate deductible of 3% of the insured value to a maximum of $6,000,000. The liability policies have a $5,000 and $500 deductible for James L. Knight Center and Bayfront Park respectively and the Marinas policy has a $2,500 deductible. The budgeting process utilizes information developed in the previous year's actuarial report *-addition to historical information and present knowledge on the status of claims. The City is building a fund.to meet unanticipated 'losses at the rate of $1,100,000 per year. Currently, there is $3,300,000 in such fund. Workers Compensation. The City has been working very hard to reduce the backlog of workers compensation claims recently. The City has reduced the total number of open workers compensation claims from a high of 2,971 to approximately 1,648 over the last two years. Such reduction equates to a 45% decrease. The City is continuing to work on a program to further reduce claims and costs. They are currently reviewing the Worker's Compensation area and are searching for a new head of the Risk Management Department. The table below shows the six year history of the amounts paid by the City. City of Miami Workers Compensation Reserve Analysis as of September 30, 2001 Ultimate Reconciliation ($000's) Policy Selected Reported Paid Total YCU vltimate Amounts . Amounts Reserve 2001 $13,746 $5,622 $1,284 $12,462 2000 11,041 4,089 2,644 8,397 1999 9,484 3,709 2,837 6,647 1998 8,769 4,247 3,461 5,308 1997 10,985 5,811 4,770 6,215 1996 11.994 6.940 5.82Q 5.308 Total 566 019 $3� 0 418 520 $45203 Estimated Selected Case IBNR Ultimate Reserve Reserve @,2122 Suite $4,338 $8,125 $11,022 $2,724 1,445 6,953 10,775. 266 872 5,775 9,102 382 787 4,521 8,275 493 1,041 5,175 9,853 1,132 1.120 i 5 j1.t' $ Health Insurance. The City has a group accident and health policy whose premiums are tied to the City's experience rating. Certain employees and retirees of the City contribute through payroll deductions or deductions from pension payments, to the cost of group benefits. The remainder of the funds necessary are contributed by the City based upon the number of participants in the plan. There was a less than 2011/a increase in the premiums of the City's plan this past year and the City anticipates an additional increase next year. 31 �' 284 Ability to be Sued, Judgments Enforceable Notwithstanding the liability limits described below, the laws of the State of Florida provide that each city has waived sovereign immunity for liability in tort to the extent provided in Section 758.28, Florida Statutes. Therefore, the City is liable for tort claims in the same manner and, subject to limits stated below, to the same extent as a private individual under like circumstances, except that the City is not liable for punitive damages or interest for the period prior to judgment. Such legislation also limits the liability of a city to pay a judgment in excess of $100,000 to any one person or in excess of $200,000 because of any single incident or occurrence. Judgments in excess of $100,000 and $200,000 may be rendered, but may be paid from City funds only pursuant to further action of the Florida Legislature. See "Insurance Considerations Affecting the City" herein. Notwithstanding the foregoing, the City may agree, within the limits of insurance coverage provided, to settle a claim made or a judgment rendered against it without further action by the Legislature, but the City shall not be deemed to have waived any defense or sovereign immunity or to have increased the limits of its liability as a result of its obtaining insurance coverage for tortious acts in excess of the $100,000 or $200,000 waiver provided by Florida Statutes. See "LITIGATION" herein. [Remainder of page left intentionally blank.] 32 02- 284 • • T Indebtedness of the City Pursuant to the Debt Management Policy, the City's debt issuance is subject to the following constraints: (i) the Net Debt Per Capita shall not exceed % of such standard median for cities of comparable size; (ii) the Net Debt to Taxable Assessed Value shall not exceed _%; and (iii) the maximum maturity shall be the earlier of (a) the estimated useful life of the capital improvements being financed or (b) thirty years or (c) in the event they issued to refinance outstanding debt obligations the final maturity of the debt obligations being refinanced, unless a longer term is recommended the finance committee. The finance committee shall determine the applicable percentages for the Net Debt Per Capita and the Net Debt to Taxable Assessed Value by bench marking the City to current industry standards. Direct Debt The City has met certain of its financial needs through debt financing. The table which follows is a schedule of the outstanding debt of the City as of September 30, 2001, including that which is payable from sources other than ad valorem taxes. DESCRIPTION Total Debt Amount General Obligations: Issued__ Public Parks & Recreational Facilities, Series 1977 $14,040,000 Storm Sewer; Housing, Fire Fighting, Series 1981 9,150,000 General Obligation Refunding Bonds, Series 1991 16,135,000 Storm Sewer Improvement Bonds, Series I992 10,000,000 General Obligation Refunding Bonds, Series 1992 70,100,000 General Obligation Refunding Bonds, Series 1993 31,860,000 Sanitary Sewer Improvement Bonds, Series 1995 Total General Obligation Bonds 22.500.000 Special Obligation and Revenue Bonds: $4,290,000 Special Obligation Bonds, Series 1986A 65,271,325 Special Revenue Refunding Bonds, Series 1987 6,500,000 Guaranteed Entitlement Rev. Bonds, Series 1989 11,500,060 Community Entitlement Rev. Bonds, Series 1990 18,000,000 Special Non -Ad Valorem Rev. Bonds, Spries 1994 22,000,000 Special Obligation Non -Ad Valorem Rev. Bonds Special Obligation Non -Ad Valorem Revenue Bonds, Series 1995 Total Special Obligation and Revenue Bonds Loans: Sunshine State Gov. Financing Commission Loans $27,630,000 Sunshine State Gov. Financing Commission Commercial Paper Program 15,190,000 30,000,000 Sunshine State Governmental Financing 5,100,000 Section 108 HUD Loan 2,500,000 Section 108 HUD Loan Section 208 HUD.Loan - Wynwood Foreign 5,500,000 Trade Zone, Inc. Sunshine State Gov. Financing Commission - 3,500,000 Commercial Paper Program Secondary Loan Gran Central Corporation Loan 1,701.14 Total Loans 33 284 $ 464,475,189 Outstanding balance $625,000 2,355,000 4,115,000 . 8,020,000 45,980,000 24,425,000 22.10Q.Q00 $1,655,000 24,486,325 3,640,000 2,855,000 13,625,000 20,490,000 67.770.000 $13 $17,211,700 2,880,000 26,565,000 4,700,000 1,400,000 4,860,000 2,715,000 1.708.864 $304,181,889 Overlapping Debt The table set forth below summarizes the general obligation debt of the Miami -Dade County and the School Board of Miami -Dade County as of September 30,200 1. While the City believes the amount of debt of the School Board of Miami -Dade County and Miami -Dade County set forth below to be accurate, it should be understood that this arnouunt was derived from source materials which were not complied and are not subject to verification by the City. Accordingly, no assurance can be given as to the absolute accuracy of these amounts. Miami -Dade County Total net debt net of reserves $264,763,778 Percent applicable to the Cite- 19% $50,305,118 Miami -Dade County School Board (z) Total net debt net of reserves $1,008,525,781 34 0 02- 284 LJ Percent applicable to the Citp- 19% 191.619.898 $ 241.925.016 (!) Based upon the percentage of the County tax roll valuation comprised of real and personal property situated in the City of Miami. (2) The amounts provided by the school board are as of fiscal year ended June 30, 2001. Debt Ratios Net direct general obligation debt as a percentage of taxable assessed valuation 0.73% Combined net direct and overlapping general obligation debt as a percent of taxable assessed valuation 0.73% Net direct general obligation debt per capita $286.44 Combined net direct general and special obligation debt per capita $781.16 Combined net direct and overlapping general obligation debt per capita $286.44 Combined net direct and overlapping general and special obligation per capita $1,448.59 Other Obligations Pension Fund. The City's employees participate in two separate single employer defined benefit contributory pension plans under the administration and management of separate Boards of Trustees: The City of Miami Fire Fighters' and Police Officers' Retirement Trust ("FIPO") and the City of Miami General Employees and Sanitation Employees' Retirement Trust ("GESS"). The plans cover substantially all City employees who contribute a percentage of their base salary or wage an a bi-weekly basis. The City's elected officials participate in a single employer defined benefit non-contributory pension plan under the, administration and management of a separate Board of Trustees, the City of Miami Elected Officers' Retirement Trust ("EORT"). This plan covers all elected officials with 10 or more years of elected service. City employees are required to contribute 10% of their salary to GESS and no more than 7% to FIPO. The EORT is a non-contributory plan. Contributions from employees for FIPO and GESE are recorded in the period the City makes payroll deductions from participants. The City is annually required to contribute such amounts as necessary on an actuarial basis to provide FIPO and GESE with assets sufficient to meet the benefits to be paid. The ordinance covering the FIPO (the "Pension Ordinaupe') provides for actuarial methodology for evaluating assets to be a moving market value averaged over three years. ' The result cannot be greater than 100 percent of market value or less than 80 percent of market value. The Pension Ordinance also provides for the FIFO Board of Trustees' actuary to use the actuarial assumptions adopted the FIFO Board. Currently, the City and the FIPO are in discussions regarding the amount needed for contribution. However, if the City's actuary and the FIPO's actuary cannot agree, together they may appoint a third independent actuary. The third actuary is required to submit a funding recommendation to the FIFO Board and the City Commission. The City Commission is then required to fund the amount recommended by either the FIPO's actuary or the City's actuary, whichever recommendation is closer to the recommendation of the third actuary. The City has challenged the normal costs contributions for the last two years and arbitration of this issue is still pending. As a result, the City only paid a normal cost contribution of $5.4 million in October 2000 instead of $6.9 million and in October 2001, a normal cost contribution of $5.5 million instead of $5.6 million. The projected $23 million normal cost contribution by the FIFO actuary for October 2002 has not yet been adopted by the FIPO Board and is still subject to review and revision. If after review and any subsequent revisions of the required normal cost contribution of the City, the City and the FIFO Board are still not in agreement, the City would only be required to pay $5.4 million until this issue is resolved through arbitration. The City believes it will have sufficient funds from its general funds to fund the recommended amount accepted by the City Commission. 0 35 o2- 284 Accrued Compensated Absences. Under terms of Civil Service regulations, labor contracts and administrative policy, City employees are granted vacation and sick leave in varying amounts. Additionally, certain overtime hours can be accrued and carried forward as earned time off. Unused vacation and sick time is payable upon separation from service, subject to various limitations depending upon the employee's seniority and civil service classification. The amount accrued is currently $48,376,190. The City has set aside $4,500,000 in the budget for fiscal year 2002 and pays such amounts as needed. Every three years the maximum number of hours which can be carried forward is renegotiated with F1P0 and GESS. Collective Bargaining Agreements. The City operates under four labor agreements covering police, fire, general and sanitation employees. Although all four labor agreements have expired, the labor contracts continue under status quo until new contracts are negotiated and ratified. The City's negotiating team includes the Labor Relations Officer for the City, the Fire Chief, the Budget Director and the City Manager, Although, the parties are continuing to meet and negotiate new contracts the City expects the negotiations to conclude with respect to all four labor agreements within the next 30 days. FUTURE BORROWINGS Future Bonds The City Commission approved $255 million of limited ad valorem tax revenue bonds by Resolution No. adopted on , 2001 and the citizens approved such bonds by referendum on , 2001. The proceeds will be used for acquiring, constructing and improving parks, streets and drainage and quality of life and historic preservation improvements, all of which are expected to be included in the City's capital improvement plan. The City anticipates issuing the first of the series of authorized limited ad valorem tax revenue bonds in July 2002 and the next series is anticipated to be issued in 2003. The City also anticipates issuing special obligation refunding bonds within 90 days of issuing the Series 2002A Bonds. As previously noted, the Series 2002B Bonds are also expected to be issued on the Series 2002B Delivery Date. 0 LEGAL MATTERS Certain Iegal matters incident to the validity of the Series 2002A Bonds and the Series 20028 Bonds are subject to the approval of Squire, Sanders & Dempsey L.L.P., Bond Counsel, Miami, Florida whose approving opinions in the forms attached hereto as' APPENDIX D —FORMS OF BOND COUNSEL OPINIONS" will be furnished without charge to the purchasers of the Series 2002A Bonds and the Series 2002B Bonds at the time of their delivery. The actual legal opinion to be delivered may vary from that text if necessary to reflect facts and law on the date of delivery. Cctanlegil matters will be passed upon for the City by Alejandro Vilarelio, Esq., City Attorney, and by Bryant, Miller and OIive, P.A., Coral Gables, Florida and Manuel Alonso-Poch, P.A., Coral Gables, Florida, Co -Disclosure Counsel to the City. Certain legal matters will be passed upon for the Underwriters by Ruden, McClosky, Smith, Schuster & Russell, P.A., Miami, Florida. LITIGATION There is no pending or, to the knowledge of the City, any threatened litigation against the City of any nature whatsoever which in any way questions or affects the validity of the Series 2002 Bonds, or any proceedings or transactions relating to their issuance, sale, execution, or delivery, or the adoption of the Resolution, or the levy of the ad valorem taxes. Neither the creation, organization or existence, nor the title of the present members of the City Commission, or other officers of the City is being contested. The City experiences claims, litigation, and various legal proceedings -which individually are not expected to 36 • U2- 284 0 0 . have a material adverse effect on the operations or financial condition of the City, but may, in the aggregate, have a material impact thereon. In the opinion of the City Attorney, however, except as described below, the City will either successfully defend such actions or otherwise resolve such matters without any material adverse consequences to the financial condition of the City. On July 13, 1999, the City Commission approved Ordinance No. 11813 (the "Parking Surcharge Ordinance") pursuant to Section 218.503(5), Florida Statutes, which institutes a 20% surcharge for parking transactions at parking facilities within the limits of the City. The effective date for the implementing of the surcharge was September 1, 1999. The surcharge is applicable to all parking facilities, public or private, where there is a charge, fee or exchange for parking. It also applies to parking associated with valet service, events and parking validations. Various parties sued the City challenging the Parking Surcharge Ordinance. The above lawsuits involve a class action claim wherein invalidation of the City's Parking Surcharge Ordinance is sought on the grounds that the enabling statute is a special, rather than general, law. The statute was upheld by the trial court but, invalidated by the Third District Court of Appeals in July 2001. The City has appealed to the Supreme Court of Florida, and a decision is expected within 90 days. The statute was amended in November, 2001. If the statute is invalidated by the Supreme Court, the City could be required to return all revenues collected before the amendment, approximately $25 million, or could be required to return only the sums collected between July, 2001 and the amendment, approximately $5 million. Even if the unamended statute is declared invalid, the Supreme Court may determine that no funds are to be refunded because the City collected. the surcharge 'based upon a presumptively valid statute. A class action suit was filed to challenge the City's Fire Rescue Assessment (the "Assessment"). The plaintiffs contend that the Assessment is an unconstitutional tax on real property and, further, that it is not properly apportioned. The City's motion for summary judgment was scheduled for hearing in April 2000 and canceled by the plaintiff's. No new hearing date has been obtained. However, a similar action was brought against the City of North Lauderdale, Florida for a similar fire rescue assessment. The Third District Court of Appeals held the ordinance of the City of North • Lauderdale to be unconstitutional. The North Lauderdale case was is currently being appealed to the Supreme Court. Since the date of the North Lauderdale case, the City has changed the Assessment to the comply with the judgment of the Third District Court of Appeals in the North Lauderdale case. • DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS Pursuant to Section 517.051, Florida Statutes, as amended, no person may directly or indirectly offer or sell securities of the City except by an offering circular containing full and fair disclosure of all defaults as to principal or interest on its obligations since december 31, 1975, as provided by rule of the Florida Department of Banking and Finance (the "Department"). Pursuant to Rule 3E-400.003, Florida Administrative Code, the Department has required the disclosure of the amounts and types of defaults, any legal proceedings resulting from such defaults, whether a trustee or receiver has been appointed over the assets of the City, and certain additional financial information, unless the City believes in good faith that such information would not be considered material by a reasonable investor. The City is not and has not been in default on any bond issued since December 31, 1975 which would be considered material by a reasonable investor. TAX MATTERS General In the opinion of Squire, Sanders & Dempsey L.L.P., Bond Counsel, under existing law (i) interest on the Series 2002 Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the "Code'), and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, and (ii) the Series 2002 Bonds and the income thereon are exempt from taxation under the laws of the State of Florida, except estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended. Bond Counsel will 37 04# - 284 express no opinion as to any other tax consequences regarding the Series 2002 Bonds. The opinion on federal tax matters will be based on and will assume the accuracy of certain representations and certifications, and continuing compliance with certain covenants, of the Issuer to be contained in the transcript of proceedings and that are intended to evidence and assure the foregoing, including that the Series 2002 Bonds are and will remain obligations the interest on which is excluded from gross income for federal income tax purposes. Bond Counsel will not independently verify the accuracy of those certifications and representations. The Code prescribes a number of qualifications and conditions for the interest on state and local government obligations to be and to remain excluded from gross income for federal income tax purposes, some of which require future or continued compliance after issuance of the obligations in order for the interest to be and to continue to be so excluded from the date of issuance. Noncompliance with these requirements by the Issuer may cause the interest on the Series 2002 Bonds to be included in gross income for federal income tax purposes and thus to be subject to federal income tax retroactively to the date of issuance of the Series 2002 Bonds. The Issuer has covenanted to take the actions required of it for the interest on the Series 2002 Bonds to be and to remain excluded from gross income for federal income tax purposes, and not to take any actions that would adversely affect that exclusion. Under Code provisions applicable only to certain corporations (as defined for federal income tax purposes), a Portion of the excess of adjusted current earnings (which includes interest on all tax-exempt obligations, including the Series•20.02 Bonds) over other alternative minimum taxable income is included in alternative minimum taxable income that may be subject to a corporate alternative minimum tax. In addition, interest on the Series 2002 Bonds may be subject to a branch profits tax imposed on certain foreign corporations doing business in the United States and to a tax imposed on excess net passive income of certain S corporations. Under the Code, the exclusion of interest from gross income for federal income tax purposes may have certain adverse federal income tax consequences on items of income, deduction or credit for certain taxa . P Yers. including financial institutions, certain insurance companies, recipients of Social Security and Railroad Retirement benefits, those that are deemed to incur or continue indebtedness to acquire or carry tax-exempt obligations, and individuals otherwise eligible for the earned income tax credit. The applicability and extent of these or other tax consequences will depend upon the particular tax status or other tax items of the owner of the Series 2002 Bonds. Bond Counsel will express no opinion regarding those consequences. Purchasers of the Series 2002 Bonds at other than their original issuance at the respective prices indicated oa the cover of this Official Statement should consult their own tax advisers regarding other tax considerntions such as the consequences of market discount: Original Issue Discount and Original Issue Premium Certain of the Series 2002 Bonds ("Discount Bonds"} as indicated on the cover page of this Official Statement were offered and sold to the public at an original issue discount ("OID"). OID is the excess of the stated redemption price at maturity (the principal amount) over the "issue price"' of a Discount Bond. The issue price of a Discount Bond is the initial offering price to the public (other than to bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) at which a substantial amount of the Discount Bonds of the same maturity is sold pursuant to that offering. For federal income tax purposes, OID accrues to the owner of a Discount Bond over the period to maturity based on the constant yield method, compounded semiannually (or over a shorter permitVA compounding interval selected by the owner). The portion of OID that accrues during the period of ownership of a Discount Bond purchased in the initial offering at the price for such Discount Bond stated on the cover of this Official Statement (i) is interest excludable from the owner's gross income for federal income tax purposes to the same extent, and subject to the 38 02, 284 �J same considerations discussed above, as other interest on the Series 2002 Bonds, and (ii) is added to the owner's tax basis for purposes of determining gain or loss on the maturity, redemption, prior sale or other disposition of that Discount Bond. A purchaser of a Discount Bond at its issue price in the initial public offering who holds that Discount Bond to maturity will realize no gain or loss upon the retirement of that Discount Bond. Certain of the Series 2002 Bonds ("Premium Bonds") as indicated on the cover of this Official Statement were offered and sold to the public at a price in excess of their stated redemption price (the principal amount) at maturity. That excess constitutes bond premium. For federal income tax purposes, bond premium is amortized over the period to maturity of a Premium Bond, based on the yield to maturity of that Premium Bond (or, in the case of a Premium Bond callable prior to its stated maturity, the amortization period and yield may be required to be determined on the basis of an earlier call date that results in the lowest yield on that Premium Bond), compounded semiannually. No portion of that bond premium is deductible by the owner of a Premium Bond. For purposes of determining the owner's gain or loss on the sale, redemption (including redemption at maturity) or other disposition of a Premium Bond, the owner's tax basis in the Premium Bond is reduced by the amount of bond premium that accrues during the.period of ownership. As a result, an owner may realize taxable gain for federal income tax purposes from the sale or other disposition of a Premium Bond for an amount equal to or less than the amount paid by the owner for that Premium Bond. A purchaser of a Premium Bond at its issue price in the initial public offering who holds that Premium Bond to maturity (or, in the case of a callable Premium Bond, to its earlier call date that results in the lowest yield on that Premium Bond) will realize no gain or loss upon the retiremerit of that Premium Bond. Owners of Discount and Premium Bonds should consult their own tax advisers as to the determination for federal income tax purposes of the amount of OID or bond premium properly accruable in any period with respect to the Discount or Premium Bonds and as to other federal tax consequences and the treatment of OID and bond premium for purposes of state and local taxes on, or based on, income. 0 RATINGS Moody's Investor's Service ("Moody's"), Fitch Ratings and Standard & Poor's Ratings Group ("S&P") are expected to assign their municipal bond ratings of "_," "�" and "_," respectively, to the Series 2002A Bonds with the understanding that upon delivery of the Series 2002A Bonds, the Bond Insurance Policy will be issued by the Insurer. • Moody's Investor's Service ("Moody'e ), Fitch Ratings and Standard & Poor's Ratings Group ("S&P") are expected to assign their municipal bond ratings of "�," and "_," respectively, to the Series 2002B Bonds with the understanding that upon delivery of the Series 2002B Bonds, the Bond Insurance Policy will be issued by the Insurer. In addition, Moody's and S&P have assigned underlying ratings of and . respectively, without giving any regard to such Bond Insurance Policy. The ratings reflect only the views of said rating agencies and an explanation of the ratings may be obtained only from said rating agencies. There is no assurance that such ratings will continue for any given period of time or that they will not be lowered or withdrawn entirely by the rating agencies, or any of them, if in their judgment, circumstances so warrant. A downward change in or withdrawal of any of such ratings, may have an adverse effect on the market price of the Series 2002A Bonds or the Series 2002B Bonds. FINANCIAL ADVISOR The City has retained RBC Dain Rauscher Inc. as Financial Advisor in connection with the City's financing plans and with respect to the authorization and issuance of the Series 2002 Bonds. The Financial Advisor did not participate in the underwriting of tate Series 2002 Bonds. AUDITED FINANCIAL STATEMENTS 39 02- 284 0 9 - The General Purpose Audited Financial Statements of the City for the fiscal year ending September 30, 2001, and report thereon of KPMG LLP (the "Independent Certified Public Accountant") are attached hereto as "APPENDIX C – GENERAL PURPOSE AUDITM FINANCIAL STATEMENTS OF THE CITY OF MIAMI FOR FISCAL YEAR ENDED SEPTEMBER 30, 2001." Such statements speak only as of September 30, 2001. The Independent Certified Public Accountants have consented to the use thereof herein and have performed various procedures relating to the provision of such consent. UNDERWRITING The Series 2002A Bonds are being purchased by the underwriters shown on the cover of the Official Statement (collectively, the "Underwriters") at an aggregate purchase price of $ (which includes net original issue discount of $ and Underwriters' discount of $__ 1, plus accrued interest. The Underwriters' obligations are subject to certain conditions precedent described in the Bond Purchase Contract entered into between the City and the Underwriters, and they will be obligated to purchase all of the Series 2002A Bonds if any Series 2002A Bonds are purchased. The Series 2002A Bonds may be offered and sold to certain dealers (including dealers depositing such Series 2002A Bonds into investment trusts) at prices lower than such public offering prices, and such public offering prices may be changed, from time to time, by the Underwriters. The Series 2002B Bonds are being purchased by the Underwriters at an aggregate purchase price of $ - (which includes net original issue discount of $ and Underwriters' discount of $— _ 1, plus accrued interest. The Underwriters' obligations are subject to certain conditions precedent described in the Delayed Delivery Contract entered into between the City and the Underwriters, and they will be obligated to purchase all of the Series 2002B Bonds if any Series 2002B Bonds are purchased. The Series 2002B Bonds may be offered and sold to certain dealers (including dealers depositing such Series 2002B Bonds into investment trusts) at prices lower than such public offering prices, and such public offering prices may be changed, from time to time, by the Underwriters. VERIFICATION OF ARITHMETICAL COMPUTATIONS The accuracy of the arithmetical computation of the adequacy of the maturing principal amounts of, and interest on, the Prior Bonds Government Obligations together with any uninvested amounts, to be held in the Prior Bonds Escrow Deposit Fund to pay the principal, interest and redemption premium, if any, on the refunded Prior Bonds, will be verified for the City by The Arbitrage Group, Inc., Houston Texas (the "Verification Agent"). Such verification will be based on certain information supplied to the Verification Agent by the Underwriters. The accuracy of the arithmetical computation of the adequacy of the maturing principal amounts of, and interest on, the 1992 Bonds Government Obligations together with any uninvested amounts, to be held in the 1992 Bonds Escrow Deposit Fund to pay the principal, interest and redemption premium, if any, on the refunded Series 1992 Bonds, will be verified for the City by the Verification Agent. Such verification will be based on certain information supplied to the Verification Agent by the Underwriters. CONTINGENT FEES The City has retained Bond Counsel, Financial Advisor and Co -Disclosure Counsel with respect to the authorization, sale, execution and delivery of the Series 2002A Bonds and the Series 2002B Bonds. Payment of the fees of such professionals and an underwriting discount to the Underwriters are each contingent upon the issuance of the Series 2002A Bonds and the Series 2002B Bonds. ENFORCEABILITY OF REMEDIES 40 • 42- 284 The remedies available to the owners of the Series 2002A Bonds and the Series 2002B Bonds upon an event of default under the Resolution and the Bond Insurance Policies are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including specifically the federal bankruptcy code, the remedies specified by the Resolution, the Series 2002A Bonds, the Series 2002B Bonds and the Bond Insurance Policies may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2002 Bonds, including Bond Counsel's approving opinions, will be qualified, as to the enforceability of the remedies provided in the various legal instruments, by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors enacted before of after such delivery. CONTINUING DISCLOSURE The City will covenant for the benefit of the Series 2002A Bondholders and the Series 2002B Bondholders to provide certain financial information and operating data relating to the City and the Series 2002A Bonds and the Series 2002B Bonds in each year, and to provide notices of the occurrence of certain enumerated material events. The City has agreed to file annual financial information and operating data and its audited financial statements with each nationally recognized municipal securities information repository then approved by the Securities and Exchange Commission (the "NRMSIRs"), as well as any state information depository that is established in the State (the "SID"). Currently, there are no such SIDs. The City has agreed to file notices of certain enumerated material events, when and if they occur, with the NRMSIRs or the -Municipal Securities Rulemaking Board, and with the STDs, if any. The specific nature of the financial information, operating data, and of the type of events which trigger a disclosure obligation, and other details of the undertaking are described in "APPENDIX F — FORM OF CON'T'INUING DISCLOSURE CERTIFICATE" attached hereto. The Continuing Disclosure Certificates shall be executed by the City prior to the issuance of the Series 2002A Bonds and Series 2002B Bonds, respectively. These covenants have been made • in order to assist the Underwriters in complying with the continuing disclosure requirements of Rule 15c2- l2 promulgated by the Securities and Exchange Commission (the "Rule"). • With respect to the Series 2002 Bonds, no party other than the City is obligated to provide, nor is expected to provide, any continuing disclosure information with respect to the Rule. The City has never failed to comply with any prior agreements to provide continuing disclosure information pursuant to the Rule. ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT The references, excerpts, and summaries of all documents, statutes, and information concerning the City and certain reports and statistical data referred to herein do not purport to be complete, comprehensive and definitive and each such summary and reference is qualified in its entirety by reference to each such document for full and complete statements of all matters of fact relating to the Series 2002 Bonds, the security for the payment of the Series 2002 Bonds and the rights and obligations of the owners thereof and to each such statute, report or instrument. The appendices attached hereto are integral parts of this.Official Statement and must be read in their entirety together with all foregoing statements. The information and expressions or opinions herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder is to create, under any circumstances, any implication that there has been no change in the affairs of the City from the date hereof. FORWARD-LOOKING STATEMENTS This Official Statement contains certain "forward-looking statements" concerning the City's operations, performance and financial condition, including its future economic performance, plans and objectives and the likelihood of success in developing and expanding. These statements are based upon a number of assumptions and estimates which are subject to significant uncertainties, many of which are beyond the control of the City. The words "may," 41 02- 284 "would," "could," "Will," "expect," "anticipate," "believe, "`intend,""Plan," "es timate' and sf milar expressam meant to identify these forward-looking statements. Actual results may differ materially from those expreessed�ons orimplied by these forward-looking statements, MISCELLANEOUS Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. Neither this Official Statement nor any statement that may have been made verbally or in writing is to be construed as a contract with the owners of the Series 2002 Bonds. AUTHORIZATION OF OFFICIAL STATEMENT The execution and delivery of this Official Statement has been duly authorized and approved by the City. At the time of delivery of the Series 2002A Bonds and the Series 2002B Bonds, the City' will furnish a certificate to the effect that nothing has come to their attention which would lead it to believe that the Official Statement (other than information herein related to the Insurer, the Bond Insurance Policy, DTC, the book -entry only system of registration and the information contained under the caption "TAX MATTERS" as to which no opinion shall to expressed), as of its date and as of the date of delivery of the Series 2002A Bonds and the aeries 2002B Bonds, contain an untrue statement of a material fact or omits to state a material fact which should be included therein for the purposes for which the Official Statement is intended to be used, or which is necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading. THE CITY OF MIAMI, FLORIDA By: 42 Mayor 02- 284 • • 0 • APPENDIX A GENERAL INFORMATION REGARDING THE CITY OF MIAMI • A-1 02- 284 • APPENDIX B FORM OF THE BOND RESOLUTION B-1 • 02-- 284 • • • • • 0 0 . APPENDIX C GENERAL PURPOSE AUDITED FINANCIAL STATEMENTS OF THE, CITY OF MIAMI FOR FISCAL YEAR ENDED SEPTEMBER 30, 2001 C-1 02- 284 APPENDIX D FORMS OF BOND COUNSEL OPINIONS D-1 d2. 284 • • r] • APPENDIX E SPECIMEN MUNICIPAL BOND INSURANCE POLICY L-1 02. 284 APPENDIX F FORM OF CONTINUING DISCLOSURE CERTIFICATE F-1 02- 284 is • • • APPENDrx G FORM OF DELAYED DELIVERY CONTRACT F-2 r U2 -W 284 ` M EXHIBIT "E„ CONTINUING DISCLOSURE COMMITMENT • • E-1 R M� n w: 8573%4 02- 2 8 `f • 0 0 . BMO Draft # 1 316102 LF-4104kNLlt�1�1• J.t This Continuing Disclosure Certificate'(the "Disclosure Certificate") is executed and delivered by the City Commission of the City of Miami, Florida (the "Issuer") in, connection with the issuance of $ The City of Miami, Florida General Obligation Refunding Bonds, Series 2002A (the "Series 2002A Bonds"). The Series 2002A Bonds are being issued pursuant to Resolution No. , adopted on March 14, 2002 (the "Resolution"). The Issuer covenants and agrees as follows: SECTION 1. moose of the Disclosure CS_Wfip . This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Bondholders and in order to assist the Participating Underwriters in complying with S.E.C. Rule- 15c2 -12(b)(5). SECTION 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: • "Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. • "Dissemination Agent" shall mean the issuer, or any successor DisseminationAgent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "Listed Events" shall mean any of the event listed in Section 5(a) of this Disclosure Certificate. "National Repository" shall mean, as of the date of determination, any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. "Participating Underwriter"' shall mean any ofthe original underwriters ofthe Series 2002A Bonds required to comply with the Rule in connection with offering of the Series 2002A Bonds. "Repository" shall mean each National Repository and each State Repository. "Rule" shall mean Rule 15c2 -12(b) (5) adoptedby the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State Repository" shall mean any public or private repository or entity designated by the State as a state repository for the purpose of the Rule. As of the date of this, there is no State Repository. 02- 284 • "Tax-exempt" shall mean that interest on the Series 2002A Bonds is excluded from gross income for federal income tax purposes, whether or not such interest is includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating any other tax liability, including any alternative minimum tax or environmental tax. SECTION 3. Provision of Annual Reports. (a) The Issuer shall, or shall cause the Dissemination Agent to, not later than of each year, commencing ^ 2003, provide to each Repository an Annual Report which is consistentwith the requirements of Section 4 of this Disclosure Certificate. Not later than fifteen (15) Business Days prior to said date, the Issuer shall provide the Annual Report to the Dissemination Agent (if other than the Issuer). The Annual Reportmaybe submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report. (b) If the Issuer is unable to provide to the Repositories an Annual Report by the date required in subsection (a), the Issuer shall send a notice to each Repository in substantially the form attached as Exhibit A. (c) The Dissemination Agent shall: is (i) determine each year prior to the date for providing the Annual Report the name and address of each National Repository and each State Repository, if any; and (if the Dissemination Agent is other than the Issuer) (ii) file a report with the Issuer certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided and listing all the Repositories to which it was provided. SECTION 4. Content of Annual Reports. The Issuer's Annual Report shall contain or incorporate by reference the following: (A) the Issuer's Comprehensive Annual Financial Report for the immediately preceding Fiscal Year (the "CAFR"), which shall include the audited financial statements of the issuer for the immediately preceding Fiscal Year prepared in accordance with Generally Accepted Accounting Principles, as modified by applicable State of Florida requirements and the governmental accounting standards promulgated by the Government Accounting Standards Board; provided, however, if the audited financial statements of the Issuer are not completed prior to of any year, the Issuer shall provide unaudited financial statements on such date and shall provide the audited financial statements as soon as practicable following their completion; and N 02- 284 • (B) to the extent not set forth in the CAFR, additional financial information and operating data of the type included with respect to the Issuer in the final official statement prepared in connection with the sale and issuance of the Series 2002A Bonds (as amended, the "Official Statement'), as set forth below: Updates of the financial information set forth in the Official Statement under the captions: a) The City of Miami, Florida Property Tax Rates b) The City of Miami, Florida Assessed Value of Taxable Property C) The City of Miami, Florida. Property Tax Levies and Collections d) Ten Largest Tax Assessments 2001 Assessed Values e) Summary Schedule of Revenues, Expenditures and Ch@nges in Fund Balances for the General Fund f) City of Miami Workers Compensation Reserve Analysis as of September 30, 2001 g) Direct Debt h) Overlapping Debt i) Debt Ratios Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the issuer or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The Issuer shall clearly identify each such other document so incorporated by reference. SECTION 5. $n.o_rting�a_f Significant Events. (a) This Section 5 shall govern the giving of notices of the occurrence of any of the following events: 1. Delinquency in payment when due of any principal of or interest on the Series 2002A Bonds. 2. Occurrence of any Event of Default under and as defused in the Resolution (other than as described in clause (1) above). 3. Amendment to the Resolution or this Disclosure Certificate modifying the rights ofthe Holders of the Series 2002A Bonds. 4. Giving of a notice or optional or unscheduled redemption of any Series 2002A Bonds. 5. Defeasance of the Series 2002A Bonds or any portion thereof. 0 3 02--- 284 6. Any change in any rating on the Series 2002A Bonds. 7. (A) Receipt of an opinion of nationally recognized bond counsel to the effect that interest on the Series 2002A Bonds is not Tax-exempt; or (B) Any event adversely affecting the tax-exempt status of the Series 2002A Bonds, including but not limited to: (i) Any audit, investigation or other challenge ofthe Tax-exempt swus ofthe Series 2002A Bonds by the Internal Revenue Service or in any administrative or judicial proceeding; or (ii) The issuance of any regulation, decision or other offiicial pronouncement by the Internal Revenue Service or other official tax authority or by any court adversely affecting the Tax. exempt status of the Series 2002A Bonds or bonds of the same type as the bonds or financing structures of the same type as financed by the Series 2002A Bonds. S. Any unscheduled draw on the Bond Insurance Policy reflecting financial difficulties. 9. Any change in the provider of the Bond Insurance Policy to perform on the Bond Insurance Policy. 10. The release substitution or sale ofproperty • p perty secururg repayment of the Serres 2002A Bonds (including property leased, mortgaged or pledged as such security). (a) Whenever the Issuer obtains knowledge of the occurrence of a Listed Event, the Issuer shall as soon as possible determine if such event would constitute material information for Holders of Series 2002A Bonds, provided, that any event under subsection (a) (4), (5) or (' will always be deemed to be material. (b) If the Issuer determines that knowledge of the occurrence of a Listed Event would be material, the Issuer shall promptly file a notice of such occurrence with the Repository. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(4) and (5) need not be given under this subsection any earlier than the notice (if any) ofthe underlying event is given to Holders of affected Series 2002A Bonds pursuant to the Resolution. SECTION 6. JmmWWjmofRcpgWUg= The Issuer's obligations under this Disclosure Certificate shall terminate upon the defeasance, prior redemption or payment in full of ifll ofthe Series 2002A Bonds. 4 • 02-- 284 SECTION 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. SECTION 8. Amendment. Waiver., Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, if such amendment or waiver is supported by an opinion of counsel expert in federal securities laws, to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule. SECTION 9. Additional Infomation. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. Ifthe Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Agreement to update such information or include it in any fixture Annual Report or notice of occurrence of a Listed Event. SECTION 10. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Resolution, and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to, compel performance. SECTION 11. Duties Immunities and Liabilities of Dissemination Agg . The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, includingthe costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or wilful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Series 2002A Bonds. 02- 284 0 SECTION 12. Bene fic . This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and Holders from time to time ofthe Series 2002A Bonds, and shall create no rights in any other person or entity. Date: 2002 THE CITY OF MIAMI, FLORIDA By: Finance Director 31 02- 284 0 • • NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: The City of Miami, Florida Name of Bond Issue: General Obligation Refunding Bonds, Series 2002A Date of Issuance: , 2002 NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by Section — of Resolution No. adopted March 14, 2002. The Issuer anticipates that the Annual Report will be filed by Dated: THE CITY OF MIAMI, FLORIDA • By: Finance Director • AA 02- 284 • • • BM4 Draft #1 3/6/02 This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City Commission of the City of Miami, Florida (the "Issuer") in connection with the issuance of $ The City of Miami, Florida General Obligation Refunding Bonds, Series 2002B (the "Series 2002B Bonds"). The Series 2002B Bonds are being issued pursuant to Resolution No. adopted on March 14, 2002 (the "Resolution"). The Issuer covenants and agrees as follows: SECTION 1. PuU= of the Disfjo= Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Bondholders and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2 -12(b)(5). SECTION 2. pig. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and as . described in, Sections 3 and 4 of this Disclosure Certificate. "Dissemination Agent" shall mean the issuer, or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "Listed Events" shall mean any of the event listed in Section 5(a) of this Disclosure Certificate. "National Repository" shall mean, as of the date of determination, any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. "Participating Underwriter" shall mean any ofthe original underwriters of the Series 2002B Bonds required to comply with the Rule in connection with offering of the Series 2002B Bonds. "Repository" shall mean each National Repository and each State Repository. "Rule" shall mean Rule 15c2 -12(b) (5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State Repository" shall mean any public or private repository or entity designated by the State as a state repository for the purpose of the Rule. As of the date of this, there is no State Repository. • 02- 284 • "Tax-exempt" shall mean that interest on the Series 2002B Bonds is excluded from gross income for federal income tax purposes, whether or not such interest is includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating any other tax liability, including any alternative minimum tax or environmental tax. SECTION 3. Provision of Annual_RepQrta. (a) The Issuer shall, or shall cause the Dissemination Agent to, not later than of each year, commencing 2003, provide to each Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than fifteen (15) Business Days prior to said date, the Issuer shall provide the Annual Report to the Dissemination Agent (ifother than the Issuer). The Annual Reportmay be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report. (b) If the Issuer is unable to provide to the Repositories an Annual Report by the date required in subsection (a), the Issuer shall send a notice to each Repository in substantially the form attached as Exhibit A. 0 (c) The Dissemination Agent shall: • (i) determine each year prior to the date for providing the Annual Report the name and address of each National Repository and each State Repository, if any; and (if the Dissemination Agent is other than the Issuer) (ii) file a report with the Issuer certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided and listing all the Repositories to which it was provided. SEC. ION 4. Content of Annual The Issuer's Annual Report shall contain or incorporate by reference the following: (A) the Issuer's Comprehensive Annual Financial Report for the immediately preceding Fiscal Year (the "CAFR"), which shall include the audited financial statements of the Issuer for the immediately preceding Fiscal Year prepared in accordance with Generally Accepted Accounting Principles, as modified by applicable State of Florida requirements and the governmental accounting standards promulgated by the Government Accounting Standards Board; provided, however, ifthe audited financial statements of the Issuer are not completed prior to of any year, the Issuer shall provide unaudited financial statements on such date and shall provide the audited financial statements as soon as practicable following their completion; and 2 02- 284 (B) to the extent not set forth in the CAFR, additional financial information and operating data of the type included with respect to the Issuer in the updated offiicial statement prepared in connection with the sale and issuance of the Series 2002B Bonds (as amended, the "Settlement official Statement), as set forth below: Updates ofthe financial information set forth in the Settlement Official Statement under the captions: a) The City of Miami, Florida Property Tax Rates b) The City of Miami, Florida Assessed Value of Taxable Property C) The City of Miami, Florida Property Tax Levies and Collections d) Ten Largest Tax Assessments 2001 Assessed Values e) Summary Schedule of Revenues, Expenditures and Changes in Fund Balances for the General Fund f) City of Miami Workers Compensation Reserve Analysis as of September 30, 2001 g} Direct Debt h) Overlapping Debt i) Debt Ratios Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Issuer or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission, If the document incorporated by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board, The Issuer shall clearly identify each such other document so incorporated by reference. SECTION 5. R=Qr ing of SignificaM Events. (a) This Section 5 shall govern the giving of notices of the occurrence of any of the following events: 1. Delinquency in payment when due of any principal of or interest on the Series 2002B Bonds. 2. Occurrence of any Event of Default under and as defined in the Resolution (other thea as described in clause (1) above). 3. Amendment to the Resolution or this Disclosure Certificate modifying the rightsof the Holders of the Series 2002B Bonds. 4. Giving of a notice or optional or unscheduled redemption of any Series 2002B Bonds. 3 02-- 284 • • • 0 6 . 5. Defeasance of the Series 2002B Bonds or any portion thereof. 6. Any change in any rating on the Series 2002B Bonds. 7. (A) Receipt of an opinion of nationally recognized bond counsel to the effect that interest on the Series 2002B Bonds is not Tax-exempt; or (B) Any event adversely affecting the tax-exempt status of the Series 2002B Bonds, including but not limited to: (i) Any audit, investigation or other challenge of the Tax-exempt status of the Series 2002B Bonds by the Internal Revenue Service or in any administrative or judicial proceeding; or (ii) The issuance of any regulation, decision or other official pronouncement by the Internal Revenue Service or otherofficial tax authority or by any court adversely affecting the Tax- exempt sthtus of the Series 2002B Bonds or bonds of the same type as the bonds or financing structures of the same type as financed by the Series 2002B Bonds. 8. Any unscheduled draw on the Bond Insurance Policy reflecting financial difficulties. 9. Any change in the provider of the Bond Insurance Policy to perform on the Bond Insurance Policy. 10. The release, substitution or sale ofproperty securing repayment of the Series 2002B Bonds (including property leased, mortgaged or pledged as such security). (a) Whenever the Issuer obtains knowledge of the occurrence of a Listed Event; the Issuer shall as soon as possible determine if such event would constitute material information for Holders of Series 2002B Bonds, provided, that any event under subsection (a) (4), (5) or (6) will always be deemed to be material. (b) If the Issuer determines that knowledge of the occurrence of a Listed Event would be material, the Issuer shall promptly file a.notice of such occurrence with the Repository. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(4) and (5) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to Holders of affected Series 2002B Bonds pursuant to the Resolution. SECTION 6. jgmWWiQn of &P91fing Obli The Issuer's obligations under this Disclosure Certificate shall terminate upon the defeasance, prior redemption or payment in full of all of the Series 2002B Bonds. 4 02- 284 T SECTION 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. SECTION 8. Amenftpj X;, Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, if such amendment or waiver is supported by an opinion of counsel expert in federal securities laws, to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule ifsuch amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule. SECTION 9. Additional Info a� tion. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Reportor notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 10. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations underthis Disclosure Certificate. A default underthis Disclosure Certificate shall notbe deemed an Event of Default under the Resolution, and the sole remedy underthis Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel performance. SECTION 11. DWiM IMMUWties muLLiabilities of DissMWation Agent The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including allomeys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or wilful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Series 2002B Bonds. SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and Holders from time to time of the Series 2002B Bonds, and shall create no rights in any other person or entity. Date: , 2002 • THE CITY OF MIAMI, FLORIDA By: Finance Director 6 02-- 284 EXHIBIT A NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: The City of Miami, Florida Name of Bond Issue: General Obligation Refunding Bonds, Series 2002B Date of Issuance: , 2002 NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by Section — of Resolution No. adopted March 14, 2002. The Issuer anticipates that the Annual Report will be filed by _ Dated: THE CITY OF MIAMI, FLORIDA • By: Finance Director 02- 284 TO: FROM 0 CITY OF MIAMI, FLORIDA INTER -OFFICE MEMORANDUM The Honorable Mayor & Members of the City Commission Administrative Recommendation: DATE: SUBJECT: REFERENCES: ENCLOSURES: :J March 14, 2002 FILE: Resolution Authorizing the Issuance of not more than $43,500,000 in General Obligation Refunding Bonds The Administration recommends that the City Commission adopt this resolution authorizing the issuance of up to $43,500,000 in General Obligation Refunding Bonds that will produce savings of approximately $2.75 million. Background: The resolution sets the conditions under which the City Manager may complete this transaction. Those parameters relate to the size of the issuance and the percentage of savings that must be realized for the issuance to be finalized. Attached to the resolution are: the Bond Purchase Agreement, the Escrow Deposit Agreement, the Registrar and Paying Agent Agreement, the Preliminary Official Statement and the Continuing Disclosure Agreement. All of these documents have been drafted by or reviewed by our Bond Counsel, Squire, Sanders and Dempsey, and our Disclosure Counsel, Bryant, Miller and Olive. This issuance of bond in the financial markets represents the completion of the final item in the Intergovernmental Cooperation Agreement. All of the goals and tasks established by the State and the Oversight Board have been achieved except for the reentry of the City into the securities market. This bond issue, the first in six and one-half years, represents the completion of this final task. X CAG/RJN/bd 02- 284