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Home My WebLink AboutExhibit 4THE CITY OF MIANH, FLORIDA MAYOR Manuel A. Diaz CITY COMMISSIONERS Angel Gonzalez, Chairman Joe M. Sanchez Michelle Spence -Jones Tomas P. Regalado Marc Sarnoff CITY MANAGER CITY ATTORNEY Pedro G. Hernandez Julie O. Bru, Esq. MIA1VII PARKING AUTHORITY BOARD OF DIRECTORS EXECUTIVE DIRECTOR Arthur Noricga, V. BOND COUNSEL Broad and Cassel Orlando, Florida CHAIRMAN Jami Reyes MEMBERS Arthur H. Hertz Marlon A. Hill Stephen Nostrand Thomas B. Jelke CHIEF FINANCIAL OFFICER Scott Simpson, CPA DISCLOSURE COUNSEL Squire, Sanders & Dempsey L.L.P. Miami, Florida FINANCIAL ADVISOR First Southwest Company (Florida) Aventura, Florida MIAMI/4221626.2 No dealer, broker, salesman or other person has been authorized by the City or the Underwriter to give any information or to make any representations in connection with the 2008 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 2008 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the City, DTC, the Bond Credit Facility Issuer 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 Underwriter. The Underwriter listed on the cover page hereof has reviewed the information in this Official Statement in accordance with and as part of its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The information and expressions of opinion stated herein are subject to change. 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 2008 Bonds are qualified in their entirety by reference to the form thereof included in the aforesaid documents and agreements. NO REGISTRATION STATEMENT RELATING TO THE 2008 BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") 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 2008 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. THE FOREGOING AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. MIAMI/4221626.2 TABLE OF CONTENTS Page INTRODUCTION 1 PLAN OF FINANCE 3 General 3 The Refunded Bonds 3 ESTIMATED SOURCES AND USES OF FUNDS 3 ESTIMATED DEBT SERVICE SCHEDULE 4 DESCRIPTION OF THE 2008 BONDS 5 General 5 Determination of Interest Rates 5 Changes in Mode 6 Mandatory Conversion to Fixed Rate Mode or a Term Rate Mode 7 Book -Entry Only System 7 Discontinuance of Securities Depository 10 Registration, Transfer and Exchange 10 Tenders for Purchase 11 Remarketing and Purchase of Tendered Bonds 13 Optional Redemption 15 Mandatory Redemption 15 Extraordinary Redemption 16 Redemption in Part 17 Notice and Effect of Redemption 17 Replacement of 2008 Bonds Mutilated, Destroyed, Stolen or Lost 18 BOND CREDIT FACILITY 18 General 18 Events of Defaults and Remedies under the Bond Credit Facility Agreement 19 SECURITY AND SOURCES OF PAYMENT FOR THE 2008 BONDS 22 Source of Payment 22 No Pledge of Credit or Taxing Power 23 Flow of Funds 23 Reserve Account 26 Debt Service Reserve Surety Bond 28 Rate Covenant 29 Additional Parity Bonds 30 Interim Indebtedness and Short -Term Indebtedness 31 Additional Subordinated Debt 32 Swap Agreement 32 THE CITY OF MIAMI 33 Background 33 General 33 The Board 34 MIAMI/4221626.2 1 TABLE OF CONTENTS (continued) Page LEGAL MATTERS 34 LITIGATION [TO BE UPDATED] 34 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS 35 TAX MA ITERS 35 RATINGS 36 FINANCIAL ADVISOR 37 AUDITED FINANCIAL STATEMENTS 37 GASB 34 37 UNDERWRITING 37 CONTINGENT FEES 37 ENFORCEABILITY OF REMEDIES 38 CONTINUING DISCLOSURE 38 ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT 38 FORWARD -LOOKING STATEMENTS 39 MISCELLANEOUS 39 AUTHORIZATION OF OFFICIAL STATEMENT 40 MIAMI/4221626.2 11 APPENDICES APPENDIX A - AUDITED BASIC FINANCIAL STATEMENTS OF THE DEPARTMENT FOR FISCAL YEAR ENDED SEPTEMBER 30, 2007 APPENDIX B - GENERAL INFORMATION REGARDING THE CITY OF MIAMI, FLORIDA AND MIAMI-DADE COUNTY APPENDIX C - SUMMARY OF CERTAIN PROVISIONS OF THE 1998 BOND ORDINANCE AND COPY OF THE SERIES ORDINANCE APPENDIX D - FORM OF BOND CREDIT FACILITY APPENDIX E - AMBAC ASSURANCE CORPORATION APPENDIX F - PROPOSED FORM OF OPINION OF BOND COUNSEL APPENDIX G - FORM OF DISCLOSURE DISSEMINATION AGENT AGREEMENT MIAMU4221626.2 iii OFFICIAL STATEMENT relating to THE CITY OF MIAMI, FLORIDA Tax -Exempt Variable Rate Parking System Revenue Refunding Bonds Series 2008 Taxable Variable Rate Parking System Revenue Refunding Bonds Series 2008 INTRODUCTION 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") and $ aggregate principal amount of The City of Miami, Florida Tax -Exempt Variable Rate Parking System Revenue Refunding Bonds, Series 2008 (the "Tax -Exempt Series 2008 Bonds") and $ aggregate principal amount of The City of Miami, Florida Taxable Variable Rate Parking System Revenue Refunding Bonds, Series 2008 (the "Taxable Series 2008 Bonds" and, together with the Tax -Exempt Series 2008 Bonds, the "2008 Bonds"), in connection with the sale of the 2008 Bonds. The 2008 Bonds are being issued pursuant to the Constitution and laws of the State of Florida, including Chapter 166, Part II, Florida Statutes, the Charter of the City (the "Charter"), and other applicable provisions of law (the "Act") and pursuant to Ordinance No. 11693, duly enacted by the City Commission (the "City Commission") of the City on August 14, 1998, as amended by Ordinance No. 11719, duly enacted by the City Commission on October 27, 1998 (collectively, the "1998 Bond Ordinance"), as supplemented by Ordinance No. , duly enacted by the City Commission on , 2008 (the "Series Ordinance" and, together with the 1998 Bond Ordinance, the "Bond Ordinance"). This Official Statement in general describes the terms of the 2008 Bonds only while the 2008 Bonds are bearing interest at the Weekly Rate as described herein. The City may elect to convert the 2008 Bonds to another interest rate Mode as provided herein. See "APPENDIX C — SUMMARY OF CERTAIN PROVISIONS OF THE 1998 BOND ORDINANCE AND COPY OF THE SERIES ORDINANCE" herein. The City is situated at the mouth of the Miami River on the western shores of Biscayne Bay. It is the county seat of 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 B - GENERAL INFORMATION REGARDING THE CITY OF MIAMI, FLORIDA, MIAMI-DADE COUNTY AND THE DEPARTMENT OF OFF-STREET PARKING." Pursuant to the Charter, the Department of Off -Street Parking of the City of Miami d/b/a the Miami Parking Authority (the "Department") is an agency and instrumentality of the City, which owns, operates and manages, under the supervision of the Off -Street Parking Board of the MIAMI/4221626.2 City of Miami (the "Board") certain parking facilities of the Department which are located within the City (the "Parking System"). For a description of the Parking System, See "THE PARKING SYSTEM" herein. The 2008 Bonds are being issued for the purpose of providing funds, together with other available funds, to (a) refund the City's $36,805,000 original aggregate principal amount of Tax -Exempt Variable Rate Parking System Bonds, Series 2006 and its $3,850,000 original aggregate principal amount of Tax -Exempt Variable Rate Parking System Bonds, Series 2006 (collectively, the "Refunded Bonds") and (b) pay costs of issuance related to the 2008 Bonds. The 2008 Bonds are being issued on a parity with the City's outstanding $13,490,000 original aggregate principal amount of Parking System Revenue Refunding Bonds, Series 1998 currently outstanding in the aggregate principal amount of $7,560,000 (the "1998 Bonds"). The 2008 Bonds, together with the 1998 Bonds and any Additional Bonds issued under the Bond Ordinance, are hereinafter referred to as the "Bonds". Each Series of the 2008 Bonds are initially being issued at the Weekly Rate, as described herein. Upon issuance of the 2008 Bonds, the City will enter into a Letter of Credit Agreement (the "Bond Credit Facility Agreement") with SunTrust Bank, as initial Bond Credit Facility Issuer (the "Bank") to induce the Bond Credit Facility Issuer to issue separate irrevocable direct - pay Letters of Credit (each a "Bond Credit Facility") to initially provide for the payment of the principal of, Purchase Price on and interest on each Series 2008 Bonds in certain situations, as described herein. Each Bond Credit Facility will be issued initially in the amount of $ for the Tax -Exempt Series 2008 Bonds and $ for the Taxable Series 2008 Bonds (each a "Bond Credit Facility Amount"), which amounts represent the respective initial principal amounts of each Series of 2008 Bonds plus [35] days of accrued interest calculated at the Maximum Rate. The expiration date of each of the initial Bond Credit Facilities is , 20 . See "BOND CREDIT FACILITY" herein. NO REPRESENTATION IS MADE CONCERNING THE FINANCIAL STATUS OF THE CITY. PROSPECTIVE PURCHASERES OF THE 2008 BONDS ARE ADVISED TO RELY SOLELY UPON THE RESPECTIVE BOND CREDIT FACILITIES FOR PAYMENT OF PRINCIPAL AND PURCHASE PRICE OF AND INTEREST ON THE 2008 BONDS. AN EVENT OF DEFAULT UNDER THE BOND CREDIT FACILITY AGREEMENT, INCLUDING, AMONG OTHER THINGS, THE CITY'S FAILURE TO PAY ITS REIMBURSEMENT OBLIGATIONS OR CAUSE AN EVENT OF DEFAULT UNDER THE BOND ORDINANCE, WHICH WOULD REQUIRE THE BONDS TO BE DECLARED IMMEDIATELY DUE AND PAYABLE. In order to provide for the remarketing of each Series of 2008 Bonds under certain circumstances, the City and SunTrust Robinson Humphrey, Inc. (in such capacity, the "Remarketing Agent") will enter into a Remarketing Agreement dated as of 1, 2008 (the "Remarketing Agreement"). 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 MIAMI/4221626.2 2 defined herein have the meanings set forth in the Bond Ordinance, unless the context would clearly indicate otherwise. A summary of certain provisions of the Bond Ordinance is attached hereto as "APPENDIX C — SUMMARY OF CERTAIN PROVISIONS OF THE 1998 BOND ORDINANCE AND COPY OF THE SERIES ORDINANCE". All documents of the City or the Department referred to herein may be obtained from the Executive Director, Department of Off -Street Parking, 190 N.E. Third Street, Miami, Florida 33132, Telephone (305) 373-6789. PLAN OF FINANCE General The 2008 Bonds are being issued for the purpose of providing funds, together with other available funds, to (a) refund the Refunded Bonds, and (b) pay costs of issuance related to the 2008 Bonds. [The Refunded Bonds Concurrently with the delivery of the 2008 Bonds, a portion of the proceeds of the 2008 Bonds, together with other legally available funds, will be deposited with the Trustee to be applied to the payment in full of the Refunded Bonds. The Refunded Bonds will be redeemed in whole on [ , 2008] at a redemption price of 100% of the par amount of the Refunded Bonds being redeemed, together with accrued interest to the redemption date. 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 2008 Bonds: Tax -Exempt Taxable Series Series 2008 Bonds 2008 Bonds Total SOURCES: Principal Amount of 2008 Bonds $ $ $ [Other moneys] $ $ $ TOTAL SOURCES $ $ $ USES: Deposit to Escrow Deposit Trust $ $ $ Fund Underwriter's Discount Costs of Issuance(» TOTAL USES $ $ $ (1) Includes Letter of Credit fees, professional fees and expenses, and miscellaneous costs of issuance. MIAM1/4221626.2 3 MIAMI/4221626.2 4 Bond Year Ending October 1 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 ESTIMATED DEBT SERVICE SCHEDULE The following table sets forth the aggregate debt service requirements for the 1998 Bonds and the principal and estimated interest requirements and total estimated debt service for the 2008 Bonds and total debt service on all Bonds. 1998 Bonds Debt Service Tax -Exempt Tax -Exempt Series 2008 Series 2008 Bonds Bonds Principal Interest(I) $ 1,170,965 $ $ 1,171,565 1,174,825 1,170,450 1,174,950 1,171,950 1,174,188 1,173,538 TOTAL(3) $ Taxable Series 2008 Bonds Principal Taxable Series 2008 Bonds 2008 Bonds Total Bonds Interest(2) Debt Service Debt Service $ $ $ $ $ (1) Based on swap rate of % for the notional amount of $ and on an assumed variable rate for the principal amount of $ at %. (2) Based on an assumed variable rate of %. (3) Totals may not add due to rounding. MIAMI/4221626.2 5 DESCRIPTION OF THE 2008 BONDS General Each Series of 2008 Bonds will be dated their date of delivery, will be issued as fully registered bonds initially in denominations of $100,000 and any integral multiple of $5,000 in excess thereof, through the book -entry only system maintained by The Depository Trust Company, New York, New York, and will bear interest initially at the Weekly Rate, computed on the basis of a 365-day or 366-day year, for the number of days actually elapsed at the rates determined by the Remarketing Agent and mature on the dates set forth on the cover page of this Official Statement. Interest on the 2008 Bonds will be payable on the first Business Day of each calendar month (each an "Interest Payment Date") while the 2008 Bonds bear interest at the Weekly Rate. Principal on the 2008 Bonds is payable to Registered Owners upon presentation and surrender of the 2008 Bonds when due at the principal corporate trust office of TD Bank, National Association, as Paying Agent (in such capacity, the "Paying Agent"). See "DESCRIPTION OF THE 2008 BONDS -- Book -Entry Only System" herein. This Official Statement in general describes the terms of the 2008 Bonds only while the 2008 Bonds are bearing interest at the Weekly Rate as described herein. The City may elect to convert the 2008 Bonds to another interest rate Mode as provided herein. See "APPENDIX C — SUIVIMARY OF CERTAIN PROVISIONS OF THE 1998 BOND ORDINANCE AND COPY OF THE SERIES ORDINANCE" herein. [The City has entered into a Qualified Derivative Agreement with respect to a portion of the 2008 Bonds. See "SECURITY AND SOURCES OF PAYMENT FOR TIIE 2008 BONDS — Swap Agreement" herein.] Determination of Interest Rates The interest rate for each Series of 2008 Bonds in a Weekly Mode for each Interest Period shall be the rate of interest per annum determined by the Remarketing Agent on and as of the applicable Rate Determination Date as the minimum rate of interest that, in the sole judgment of the Remarketing Agent, would, under then existing market conditions, result in the sale of such Series of 2008 Bonds in the Weekly Mode on the Rate Determination Date at a price equal to the principal amount thereof, plus accrued interest, if any. The Rate Determination Date in the case of the 2008 Bonds in the Weekly Mode, for any Interest Period commencing on any Mode Change Date is the Business Day immediately preceding the respective Mode Change Date, and for other Interest Periods thereafter, not later than each Thursday. With respect to a Series of 2008 Bonds in the Weekly Mode, an Interest Period shall be the periods from and including the Closing Date (if initially issued in the Weekly Mode) or the Mode Change Date that they began to bear interest at the Weekly Rate to and including the following Wednesday, and thereafter, commencing on and including each Thursday to and including Wednesday of the following week. The Remarketing Agent shall make the rates available by Electronic Means to the City, the Department, the Paying Agent, the Tender Agent, and the Bond Credit Facility Issuer (together with the Remarketing Agent, the "Notice Parties") by 4:00 p.m., on the Rate MIAMI/4221626.2 6 Determination Date. The determination of each interest rate by the Remarketing Agent shall be conclusive and binding, in the absence of manifest error, upon the Tender Agent, the Paying Agent, the Bond Credit Facility Issuer, the City and the owners of such 2008 Bonds in the Weekly Mode. If the Remarketing Agent fails to determine the interest rate(s) or if the method of determining the interest rate(s) shall be held to be unenforceable by a court of law of competent jurisdiction, then the 2008 Bonds shall thereupon bear interest at the Alternate Rate for subsequent weekly periods. The Alternate Rate is generally, as of any Rate Determination Date, (i) with respect to Tax -Exempt Series 2008 Bonds (a) the Securities Industry and Financial Market Association Municipal Swap Index (the "SIFMA Index") released by Municipal Market Data to its subscribers, plus (b) fifteen basis points (0.15%) and (ii) with respect to the Taxable Series 2008 Bonds, the 91-Day Treasury Bill Rate on such date. Changes in Mode Any Mode, other than a Fixed Rate Mode, may be changed to any other Mode at the times and in the manner provided in the Bond Ordinance. Either Series of 2008 Bonds may be converted to a Daily Mode, a Commercial Paper Mode, a Term Rate Mode or a Fixed Rate Mode as described in the Bond Ordinance. Subsequent to such change in Mode, such 2008 Bonds (other than 2008 Bonds in a Fixed Rate Mode) may be changed to a different Mode at the times and in the manner provided in the Bond Ordinance, including a Weekly Mode. The 2008 Bonds converted to a Fixed Rate Mode shall not be changed to any other Mode, except when a Fixed Rate Bond subject to optional redemption is purchased in lieu of redemption and remarketed in another Mode. Each Series of 2008 Bonds may bear interest in different Modes. The City shall give written notice to the Notice Parties of its intention to effect a change in the Mode from the Mode then prevailing (the "Current Mode") to another Mode (the "New Mode") specified in such written notice, together with the proposed Mode Change Date. Such notice shall be given at least 20 days prior to the Mode Change Date, if the Current Mode is the Daily Mode, the Weekly Mode or the Commercial Paper Mode. The Mode Change Date must be a Business Day. In addition, on or prior to the date the City provides the notice to the Notice Parties pursuant to the Bond Ordinance and in connection with a Change in Mode of the Tax - Exempt Series 2008 Bonds, the City shall deliver to the Notice Parties a counsel's opinion to the effect that it expects to be able to deliver an opinion of Bond Counsel on the Mode Change Date to the effect that such change in Mode shall not adversely affect the tax-exempt status of such Tax -Exempt Series 2008 Bonds. No change in the Mode will become effective unless all conditions precedent thereto have been met as set forth in the Bond Ordinance, including an opinion of Bond Counsel and with respect to a change in the Mode to a Daily Mode, Weekly Mode, Commercial Paper Mode or Term Rate Mode (other than a change in Mode from a Daily Mode to a Weekly Mode or a Weekly Mode to a Daily Mode), a Bond Credit Facility with the applicable Bond Credit Facility Amount for such Mode. With respect to a change in Mode that requires a new Bond Credit Facility (or an amendment to the existing Bond Credit Facility) the receipt from each Rating Agency of a confirmation of the ratings assigned to such 2008 Bonds upon the delivery of such new Bond Credit Facility (or amendment thereto) is a condition precedent to such Mode change. MIAMI/42216262 7 If all conditions to the Mode change are met, the Interest Period(s) for the New Mode shall commence on the Mode Change Date and the Interest Rate(s), together with the Interest Period(s) for a change to a Commercial Paper Mode, shall be determined by the Remarketing Agent in the manner provided in the Bond Ordinance. With respect to a change in the Mode, in the event the conditions precedent have not been satisfied by the Mode Change Date, the New Mode shall not take effect and such 2008 Bonds that are the subject of the notice of Mode change will remain in the Weekly Mode. Mandatory Conversion to Fixed Rate Mode or a Term Rate Mode The City has covenanted in the Bond Ordinance to take such steps as are required under the Bond Ordinance to, as soon as reasonably possible, change the Mode on the 2008 Bonds to a Fixed Rate Mode or a Term Rate Mode that does not require a Bond Credit Facility, upon the occurrence of the following events, (i) the failure of the Bond Credit Facility Issuer to transfer amounts available under the Bond Credit Facility to pay the Purchase Price of the 2008 Bonds following proper notice by the Tender Agent, (ii) the scheduled Expiration Date of the Bond Credit Facility, as such date may be extended from time to time as provided therein, or the date on which the City, upon the direction of the Department, elects to terminate the Bond Credit Facility (the "Expiration Date") or the date on which the Bond Credit Facility shall terminate pursuant to- its terms -or-otherwise be terminated prior to its Expiration Date, and such Expiration Date occurs prior to the date on which an alternate Bond Credit Facility is to be substituted for a then -existing Bond Credit Facility (the "Substitution Date"), (iii) if during the term of any Bond Year, the Remarketing Agent fails to remarket 2008 Bonds on two separate occasions, (iv) the applicable rate of interest on 2008 Bonds held as Purchased Bonds at any time equals or exceeds the Maximum Rate or (v) the City fails to provide a Bond Credit Facility for the 2008 Bonds during any period that the 2008 Bonds are in a Mode which requires the support of a Bond Credit Facility. Book -Entry Only System The Depository Trust Company ("DT£"), New York, New York, or its successor, will act as securities depository for each Series of the 2008 Bonds. The 2008 Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representation of DTC. One fully - registered 2008 Bond certificate will be issued for each maturity of each Series in the aggregate principal amount of such maturity of such Series of 2008 Bonds and will be deposited with DTC. References herein to Registered Owners of the 2008 Bonds shall mean DTC or Cede & Co., and shall not mean the Beneficial Owners referred to below. Certain portions of the following information have been furnished by DTC. So long as Cede & Co. is the Registered Owner of the 2008 Bonds, payments of the principal of and interest due on the 2008 Bonds will be payable directly to DTC. DTC, the worlds' largest depository, is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds MIAMI/4221626.2 8 and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post - trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is a holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org. Purchases of the 2008 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the 2008 Bonds on DTC's records. The ownership interest of each actual purchaser of the 2008 Bonds (the "Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, 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 2008 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of the Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interest in 2008 Bonds, except in the event that use of the book -entry system for the Series 2008 Bonds is discontinued. To facilitate subsequent transfers, all 2008 Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co or such other name as may be requested by an authorized representative of DTC. The deposit of 2008 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the 2008 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such 2008 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. MIAMI/4221626.2 9 Redemption notices will be sent to DTC. If less than all of a Series of 2008 Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the 2008 Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. 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 2008 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions and dividend payments on the 2008 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Paying Agent or the City on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be govemed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name", and will be the responsibility of such Participant and not of DTC, the Paying Agent or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions and dividends payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Paying Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its 2008 Bonds purchased or tendered, through its Participant, to Tender Agent, and shall effect delivery of such 2008 Bonds by causing the Direct Participant to transfer the Participant's interest in the 2008 Bonds, on DTC's records, to TenderAgent. The requirement for physical delivery of the 2008 Bonds in connection -with- an optional tender or mandatory purchase will be deemed satisfied when the ownership rights in the 2008 Bonds are transferred by Direct Participants on DTC's records and followed by a book -entry credit of tendered 2008 Bonds to Tender Agent's DTC account. DTC may discontinue providing its services as securities depository with respect to the 2008 Bonds at any time by giving reasonable notice to the City or the Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, 2008 Bond certificates are required to be printed and delivered to DTC. The City may decide to discontinue use of the book -entry only system for transfers through DTC (or a successor securities depository). In such event, 2008 Bond certificates will be printed and delivered. The information in this section concerning DTC and DTC's book -entry only system has been obtained from sources the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. MIAMI/4221626.2 10 SO LONG AS CEDE & CO., AS NOMINEE FOR DTC, IS THE SOLE REGISTERED OWNER, THE CITY AND THE PAYING AGENT SHALL TREAT CEDE & CO. AS THE ONLY OWNER OF THE 2008 BONDS FOR ALL PURPOSES UNDER THE BOND ORDINANCE INCLUDING RECEIPT OF ALL PRINCIPAL OF AND INTEREST ON THE 2008 BONDS, RECEIPT OF NOTICES, VOTING AND REQUESTING OR DIRECTING THE CITY AND THE PAYING AGENT TO TAKE OR NOT TO TAKE, OR CONSENTING TO, CERTAIN ACTIONS UNDER SUCH BOND ORDINANCE. THE CITY AND THE PAYING AGENT HAVE NO RESPONSIBILITY OR OBLIGATION TO THE PARTICIPANTS OR THE BENEFICIAL OWNERS WITH RESPECT TO (A) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY PARTICIPANT; (B) THE PAYMENT BY ANY PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OF AND INTEREST ON THE 2008 BONDS; (C) THE DELIVERY OR TIMELINESS OF DELIVERY BY ANY PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE BOND ORDINANCE TO BE GIVEN TO REGISTERED OWNERS; (D) THE SELECTION BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY BENEFICIAL OWNER TO RECEIVE PAYMENT IN THE EVENT OF A PARTIAL REDEMPTION OF THE 2008 BONDS; OR (E) OTHER ACTION TAKEN BY DTC OR CEDE & CO., AS REGISTERED OWNER. Discontinuance of Securities Depository DTC may discontinue providing its services with respect to the 2008 Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law, or the City may terminate its participation in the system of book -entry transfers through DTC at any time as provided in the Bond Ordinance. In the event that the DTC book - entry only system is discontinued and it is not replaced with another book -entry system, the provisions of the Bond Ordinance regarding Transfer and Exchange of Bonds will apply. Registration, Transfer and Exchange So long as the 2008 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 2008 Bonds. The 2008 Bonds issued under the Bond Ordinance 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 Bond Ordinance and in the 2008 Bonds. So long as any of the 2008 Bonds shall remain Outstanding, the Trustee shall maintain and keep, at the office of the Trustee, books for the registration of transfer of the 2008 Bonds. The transfer of any 2008 Bonds may be registered only upon such books and only upon surrender thereof to the Trustee together with an assignment duly executed by the Bondholder or his attorney or legal representative in such form as shall be satisfactory to the Trustee. Upon any such registration of transfer the City shall execute and the Trustee shall authenticate and deliver MIAMI/4221626.2 11 in exchange for such 2008 Bond, a new 2008 Bond or 2008 Bonds registered in the name of the transferee, and in an aggregate principal amount equal to the principal amount of such 2008 Bond or 2008 Bonds so surrendered. In all cases in which 2008 Bonds shall be exchanged, the City shall execute and the Trustee shall authenticate and deliver, at the earliest practicable time, 2008 Bonds of the same Series and type in accordance with the provisions hereof. All 2008 Bonds surrendered in any such exchange or registration of transfer shall forthwith be cancelled by the Trustee. The City or the Trustee may make a charge for every such exchange or registration of transfer of 2008 Bonds sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer, and for shipping and out-of-pocket costs incurred by the City or the Trustee, but no other charge shall be made to any Bondholder for the privilege of exchanging or registering the transfer of 2008 Bonds under the provisions of the Bond Ordinance. The person in whose name any 2008 Bond is registered shall be deemed and regarded as the absolute owner thereof for all purposes and payment of or on account of the principal of any such 2008 Bond shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payment shall be valid and effectual to satisfy and discharge the liability upon such 2008 Bond to the extent of the sum or sums so paid. Tenders for Purchase Optional Tender of 2008 Bonds. Subject to the provisions of the Bond Ordinance relating to the source of funds for Purchase of 2008 Bonds, the Bondholders of any 2008 Bonds in a Weekly Mode may elect to have such 2008 Bonds (or portions thereof in Authorized Denominations) purchased at a price equal to 100% of the principal amount thereof plus accrued interest, if any, to and including the date of such purchase (the "Purchase Price") upon delivery of an irrevocable written notice of tender, or irrevocable telephonic notice of tender to the Tender Agent and Remarketing Agent, promptly confirmed in writing by Electronic Means to the Tender Agent and Remarketing Agent at their respective designated offices, not later than 4:00 p.m. on a Business Day not less than seven days before the date specified in the notice of tender for purchase (the "Purchase Date"). Such notice shall state (i) the CUSIP number and the principal amount of such Weekly Rate Bond being tendered and (ii) that such Weekly Rate Bond shall be purchased on the Purchase Date so specified by the Bondholder. Notwithstanding anything contained in the Bond Ordinance to the contrary, during any period that the 2008 Bonds are registered in the name of DTC or a nominee thereof, (i) any notice of tender delivered pursuant to the Bond Ordinance shall also (a) provide evidence satisfactory to the Tender Agent and the Remarketing Agent that the party delivering the notice is the Beneficial Owner or a custodian for the Beneficial Owner of the 2008 Bonds referred to in the notice, and (b) if the Beneficial Owner is other than a Participant, identify the Participant through whom the Beneficial Owner will direct transfer; (ii) on or before the Purchase Date, the Beneficial Owner must direct (or if the Beneficial Owner is not a Participant, cause the Participant to direct) the transfer of said 2008 Bond on the records of DTC; and (iii) it shall not be necessary for the 2008 Bonds to be physically delivered on the Purchase Date and the Purchase Price shall be paid to DTC. In accepting a notice of tender of any 2008 Bond, the MIAMI/4221626.2 12 Remarketing Agent and the Tender Agent may conclusively assume that the person providing the notice of tender is the Beneficial Owner of the 2008 Bond being tendered. Mandatory Tender for Purchase. Subject to the provisions of the Bond Ordinance, the 2008 Bonds to be changed to any Mode from any other Mode are subject to mandatory tender for purchase on the Mode Change Date at the Purchase Price. The 2008 Bonds are also subject to mandatory tender for purchase on (a) the second Business Day preceding the Expiration Date of a Bond Credit Facility, which second Business Day is hereinafter referred to as an "Expiration Tender Date;" (b) the second Business Day following the date that the Tender Agent and Paying Agent receive from the Bond Credit Facility Issuer a written notice of the occurrence of an event of default under the Bond Credit Facility Agreement, directing the Tender Agent to cause a mandatory tender of the 2008 Bonds; and (c) the Substitution Date for a Bond Credit Facility. The Paying Agent shall draw on the Bond Credit Facility (rather than the alternate Bond Credit Facility), as necessary to pay the Purchase Price of 2008 Bonds that are tendered or deemed tendered on the Substitution Date and shall not surrender the Bond Credit Facility until drawing is honored. Notice of Mandatory Tender for Purchase. The Tender Agent shall, at least fifteen (15) calendar days prior to the Expiration Tender Date, give notice to the Bondholders, the Bond Credit Facility Issuer and the Remarketing Agent of the mandatory tender of such Series of 2008 Bonds on such Expiration Tender Date, if it has not theretofore received confirmation that the Expiration Date has been extended. The Tender Agent shall, at least thirty (30) calendar days prior to any Substitution Date with respect to a Bond Credit Facility relating to any 2008 Bonds, give notice to the Bondholders and the Remarketing Agent of the mandatory tender of such 2008 Bonds on such Substitution Date. The Tender Agent shall, at least fifteen (15) calendar days prior to any Mode Change Date if the Current Mode is the Weekly Mode, give notice to the Bondholders and the Remarketing Agent of the mandatory tender for purchase of such 2008 Bonds on such Mode Change Date. Except as otherwise provided in the Bond Ordinance, notice of any mandatory tender of 2008 Bonds shall state that such 2008 Bonds are to be purchased pursuant to Section 603, 604 or 605 of the Series Ordinance, shall be provided by the Paying Agent or caused to be provided by the Tender Agent by mailing a copy of the notice of mandatory tender by first-class mail to each Bondholder of 2008 Bonds at the respective addresses shown on the registration books kept by the Paying Agent. Each notice of mandatory tender for purchase shall identify the reason for the mandatory tender for purchase, specify the Mandatory Purchase Date, the Purchase Price, the place and manner of payments and specify that the Bondholder has no right to retain such 2008 Bonds and that no further interest will accrue from and after the Mandatory Purchase Date to such Bondholder. Each notice of mandatory tender for purchase caused by a change in the Mode applicable to the 2008 Bonds shall in addition specify the conditions that have to be satisfied 13 MIAMI/4221626.2 pursuant to the Bond Ordinance in order for the new Mode to become effective and the consequences that the failure to satisfy any of such conditions would have. In the event that a mandatory tender of 2008 Bonds shall occur at or prior to the same date on which an optional tender for purchase is scheduled to occur, the terms and conditions of the applicable mandatory tender for purchase shall control. The Paying Agent shall give a copy of any notice of mandatory tender given by it to the other Notice Parties. Any notice mailed as provided by the Bond Ordinance shall be conclusively presumed to have been duly given, whether or not the Bondholder of the 2008 Bond received the notice, and the failure of such Bondholder to receive any such notice shall not affect the validity of the action described in such notice. Failure by the Tender Agent to give a notice as provided by the Bond Ordinance shall not affect the obligation of the Tender Agent to purchase the 2008 Bonds subject to mandatory tender for purchase on the Mandatory Purchase Date. Remarketing and Purchase of Tendered Bonds The Remarketing Agent for the 2008 Bonds shall offer for sale and use its best efforts to find purchasers for (i) all 2008 Bonds or portions thereof as to which notice of optional tender has been given, and (ii) all 2008 Bonds required to be tendered for purchase. 2008 Bonds shall be remarketed at one hundred percent (100%) of the principal thereof plus accrued interest thereon. No 2008 Bonds shall be remarketed to the City, unless permitted under applicable laws. The Remarketing Agent shall notify the Tender Agent by Electronic Means not later than 12:00 noon on the Purchase Date or Mandatory Purchase Date of the registration instructions (i.e. the names of the tendering Bondholders and the names, addresses and taxpayer identification numbers of the purchasers, the desired Authorized Denominations and, in the case of 2008 Bonds in the Weekly Mode, any account number for payment of principal and interest furnished by a purchaser to the Remarketing Agent) with respect thereto. Unless otherwise permitted by DTC and the book -entry -only system, applicable to the 2008 Bonds, the Tender Agent shall authenticate and have available for delivery to the Remarketing Agent prior to 1:30 p.m. on the Purchase Date or Mandatory Purchase Date new 2008 Bonds for the respective purchasers thereof. The Remarketing Agent shall at or before 12:00 noon on the Purchase Date or Mandatory Purchase Date, as the case may be, (A) notify the City and the Tender Agent by Electronic Means of the amount of tendered 2008 Bonds that were successfully and not successfully remarketed, and (B) confirm to the Tender Agent the completion of the transfer of the Purchase Price of remarketed 2008 Bonds to the Tender Agent in immediately available funds, such confirmation to include the pertinent Fed Wire reference number. In the event that all of the tendered 2008 Bonds are not successfully remarketed, the Tender Agent shall at or before 12:30 p.m. on the Purchase Date or Mandatory Purchase Date, as the case may be, notify the Bond Credit Facility Issuer, in accordance with the terms of the Bond Credit Facility, the amount necessary to be drawn upon the Bond Credit Facility to pay the Purchase Price of such tendered 2008 Bonds (for which remarketing proceeds are not then on deposit in the Purchase Fund) not successfully remarketed. MIAMI/4221626.2 14 No drawings under such Bond Credit Facility shall be made for 2008 Bonds for which such Bond Credit Facility is not in effect. Until remarketed, 2008 Bonds that constitute Purchased Bonds shall bear interest at the Bank Rate as defined in the Bond Credit Facility. Source of Funds for Purchase of 2008 Bonds. On or before the close of business on the Purchase Date or the Mandatory Purchase Date, the Tender Agent shall purchase such 2008 Bonds from the Bondholders at the Purchase Price. Funds for the payment of such Purchase Price shall be derived in the order of priority indicated below: (a) Immediately available funds transferred by the Remarketing Agent to the Tender Agent derived from the remarketing of the 2008 Bonds; (b) Immediately available funds transferred to the Tender Agent from amounts available under the Bond Credit Facility; and (c) At the City's sole discretion upon deposit into the Revenue Account established by the Bond Ordinance, Net Revenues available for the payment of the 2008 Bonds. provided, that funds described in paragraph (c) above shall not be commingled with funds described in paragraphs (a) and (b) above, provided further, that failure by the City to deposit such Net Revenues pursuant to paragraph (c) above shall not constitute an event of default under the Bond Ordinance, and provided further, that if a Bond Credit Facility is in effect with respect to 2008 Bonds and properly presented drawing under the Bond Credit Facility is not honored, then the 2008 Bonds shall thereafter bear interest at the Maximum Rate until the Purchase Price is paid. Delivery, Tender and Payment for Purchased Bonds. Except as otherwise required or permitted by the book -entry -only system of DTC, the 2008 Bonds or the applicable subseries thereof sold by the Remarketing Agent shall be delivered by the Remarketing Agent to the respective purchasers of those 2008 Bonds by 3:00 p.m. on the Purchase Date or the Mandatory Purchase Date, as the case may be. The 2008 Bonds or the applicable subseries thereof purchased with moneys provided by the applicable Bond Credit Facility Issuer shall be delivered at the direction of such Bond Credit Facility Issuer. The Purchased Bonds will not be released upon remarketing until the Tender Agent has received written notice from the Bond Credit Facility Issuer that the principal commitment and interest commitment of the Bond Credit Facility have been reinstated. Except as otherwise required or permitted by the book -entry -only system of DTC, the 200$ Bonds or any subseries thereof purchased pursuant to the Bond Ordinance shall be delivered (with all necessary endorsements) at or before 12:00 noon on the Purchase Date or the Mandatory Purchase Date, as the case may be, at the office of the Tender Agent, New York, New York; provided however, that payment of the Purchase Price of 2008 Bonds purchased pursuant to an optional tender for purchase shall be made only if such 2008 Bonds so delivered to the Tender Agent conform in all respects to the description thereof in the notice of tender. Payment of the Purchase Price shall be made by wire transfer in immediately available funds by MIAIvMI/4221626.2 15 the Tender Agent by the close of business on the Purchase Date or the Mandatory Purchase Date, as the case may be, or, if the Bondholder has not provided or caused to be provided wire transfer instructions, by draft or check mailed to the Bondholder at the address appearing in the books required to be kept by the Paying Agent. If 2008 Bonds to be purchased are not delivered by the Bondholders to the Tender Agent by 12:00 noon on the Purchase Date or the Mandatory Purchase Date, as the case may be, the Tender Agent shall hold any funds received for the purchase of those 2008 Bonds in trust in a separate account and shall pay such funds to the former Bondholders upon presentation of the 2008 Bonds subject to tender. Any such amounts shall be held uninvested. Such undelivered 2008 Bonds shall be deemed tendered and cease to accrue interest as to the former Bondholders on the Purchase Date or the Mandatory Purchase Date, as the case may be, and moneys representing the Purchase Price shall be available against delivery of those 2008 Bonds at the designated office of the Tender Agent; provided, however, that any funds which shall be so held by the Tender Agent and which remain unclaimed by the former Bondholder of any such 2008 Bond not presented for purchase for a period of six years after delivery of such funds to the Tender Agent, shall, to the extent permitted by law, upon request in writing by the City and the furnishing of security or indemnity to the Tender Agent's satisfaction, be paid to the City free of any trust or lien and thereafter the former Bondholder of such 2008 Bond shall look only to the City and then only to the extent of the amounts so received by the City without any interest thereon and the Tender Agent shall have no further responsibility with respect to such moneys or payment of the Purchase Price of such 2008 Bonds. The Tender Agent shall authenticate a replacement 2008 Bond for any undelivered 2008 Bond which may then be remarketed by the Remarketing Agent; provided, however, that if a book -entry only system is then in effect with respect to such 2008 Bonds, the Tender Agent shall not be obligated to authenticate such replacement 2008 Bonds. Optional Redemption The 2008 Bonds in the Weekly Mode shall be subject to redemption at the option of the City, in whole or in part, on any Business Day, at the redemption price (100% of the principal amount), plus accrued interest to the Redemption Date. Mandatory Redemption The Tax -Exempt Series 2008 Bonds maturing on October 1, , will be subject to mandatory redemption prior to maturity, by operation of the Sinking Fund Account, by lot, in such manner as the City may deem appropriate, at a redemption price equal to par plus interest accrued to the redemption date, beginning on October 1, 2016, and on each October 1, thereafter as follows: MIAMI/4221626.2 16 Year Principal Amount *Maturity Year Principal Amount The Taxable Series 2008 Bonds maturing on October 1, , will be subject to mandatory redemption prior to maturity, by operation of the Sinking Fund Account, by lot, in such manner as the City may deem appropriate, at a redemption price equal to par plus interest accrued to the redemption date, beginning on October 1, , and on each October 1, thereafter as follows: Year *Maturity Extraordinary Redemption Principal Amount In the event that Net Proceeds (as defined in the Bond Ordinance) of any insurance required by the Bond Ordinance or Net Proceeds resulting from Eminent Domain proceedings are delivered to the Trustee for deposit in the Insurance and Condemnation Award Account created under the Bond Ordinance, and the Department elects not to apply or cause such Net Proceeds to be applied to replace, repair, rebuild, or restore the Parking System, the Department shall direct the Trustee to redeem Bonds in accordance with the Bond Ordinance and to transfer from the Insurance and Condemnation Award Account to the Redemption Account created under the Bond Ordinance an amount sufficient to pay the Redemption Price of the Bonds to be redeemed and to the Interest Account an amount that, together with amounts then on deposit therein, is sufficient to pay interest accruing on the Bonds to be redeemed to the date of redemption. See "APPENDIX C - SUMMARY OF CERTAIN PROVISIONS OF THE 1998 BOND ORDINANCE AND COPY OF SERIES ORDINANCE Insurance and Eminent Domain Proceeds" attached hereto. Redemption of a Series of 2008 Bonds from such Net Proceeds shall be in whole or in part at any time upon payment of 100% of the principal amount MIAMI/4221626.2 17 of such Bonds to be redeemed, plus interest accrued to the redemption date, and without premium. Redemption in Part In the event of redemption of less than all of a Series of the 2008 Bonds, then the 2008 Bonds or portions thereof' to be redeemed shall be selected by the Paying Agent by lot in such manner as the Paying Agent in its discretion may determine; provided, however, the 2008 Bonds to be redeemed shall be in Authorized Denominations; and provided further, any 2008 Bonds which are Purchased Bonds shall be redeemed prior to any other 2008 Bonds. New 2008 Bonds representing the unredeemed balance of the principal amount thereof shall be issued to the Bondholder thereof, without charge therefor. Any new 2008 Bond issued shall be executed by the City and authenticated by the Trustee and shall be in any Authorized Denominations in an aggregate unpaid principal amount equal to the unredeemed portion of such 2008 Bond surrendered. Notice and Effect of Redemption Unless waived by any Bondholder of 2008 Bonds to be redeemed, official notice of any such redemption shall be given by the Paying Agent on behalf of the City by mailing a copy of an official redemption notice by first class mail, at least 30 days prior to the redemption date for 2008 Bonds, to each Bondholder of the 2008 Bonds to be redeemed at the address shown on the bond registration books. All official notice of redemption shall be dated and shall state the Redemption Date, the Redemption Price, the principal amount (and, in the case of partial redemption, the respective principal amounts, identification numbers and maturity date) of the 2008 Bonds to be redeemed, that on the Redemption Date the Redemption Price will become due and payable upon each such 2008 Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, and the place where the 2008 Bonds to be redeemed are to be surrendered for payment of the Redemption Price, which place of payment shall be the designated payment office of the Paying Agent. The failure of any Bondholder of 2008 Bonds to receive notice given as provided in the Bond Ordinance, or any defect therein, shall not affect the validity of any proceeding for the redemption of any 2008 Bonds. Any notice mailed as provided in the Bond Ordinance shall be conclusively presumed to have been duly given and shall become effective upon mailing, whether or not any Bondholder receives such notice. So long as DTC is effecting book -entry transfers of the 2008 Bonds, the Paying Agent shall provide the notice specified in the Bond Ordinance only to DTC. It is expected that DTC shall, in turn, notify its Participants and that the Participants will notify or cause to be notified the Beneficial Owners. Any failure on the part of DTC or a Participant, or failure on the part of a nominee of a Beneficial Owner of a 2008 Bond to notify the Beneficial Owner of the 2008 Bond so affected, shall not affect the validity of the redemption of such 2008 Bond. Any notice of optional redemption given pursuant to the Bond Ordinance shall state that it is conditional upon receipt by the Paying Agent of moneys sufficient to pay the Redemption Price, plus interest accrued to the Redemption Date, or upon the satisfaction of any other MIAMI/4221626.2 18 condition, or that it may be rescinded upon the occurrence of any other event, and any conditional notice so given may be rescinded at any time before payment of such Redemption Price and accrued interest if any such condition so specified is not satisfied or if any such other event occurs. Notice of such rescission shall be given by the Paying Agent to affected Bondholders of 2008 Bonds as promptly as practicable upon the failure of such condition or the occurrence of such other event. Replacement of 2008 Bonds Mutilated, Destroyed, Stolen or Lost If any 2008 Bond is mutilated, destroyed, stolen or lost, the City shall cause to be executed, and the Trustee shall deliver a new 2008 Bond of like series, date, number and tenor in exchange and substitution for and upon the cancellation of any mutilated 2008 Bond, or in lieu of and in substitution for any destroyed, lost, or stolen 2008 Bond and the Bondholder shall pay the reasonable expenses and charges of the City in connection therewith. Prior to the delivery of a substitute 2008 Bond, the Bondholder of any 2008 Bond which was destroyed, lost, or stolen shall file with the Trustee evidence satisfactory to it of the destruction, loss, or theft of such 2008 Bond, and of the Bondholder's ownership thereof and shall furnish to the City and to the Trustee such security or indemnity as may be required by them to save each of them harmless from all risks, however remote. Any such duplicate 2008 Bond shall constitute an additional contractual obligation of the City, whether or not the destroyed, lost or stolen 2008 Bond is found at any time or is enforceable by anyone, and shall be entitled to all the benefits and security hereof equally and proportionately with any and all other 2008 Bonds duly issued under the Bond Ordinance. All Bonds shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost, or stolen 2008 Bonds and shall preclude any and all other rights or remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender. BOND CREDIT FACILITY This is a summary of certain provisions of the Letter of Credit Agreement, dated as of June 1, 2008 (the "Bond Credit Facility Agreement") between the City and SunTrust Bank, as initial Bond Credit Facility Issuer (the "Bank") for each Series of the 2008 Bonds. General Each Bond Credit Facility will be an irrevocable direct pay obligation of SunTrust Bank (the `Bank"), as Bond Credit Facility Issuer which will expire at the close of the Bank's business on 15, , unless terminated earlier in accordance with its terms or unless renewed or extended, to pay to the Trustee, upon request and in accordance with the terms thereof, an amount sufficient to pay (i) the principal of the applicable Series of 2008 Bonds or the portion of the Purchase Price corresponding to the principal of the applicable Series of 2008 Bonds (at maturity or upon acceleration or redemption prior to maturity) and (ii) 35 days' accrued interest (at a maximum rate of 12% per annum) on such 2008 Bonds or that portion of the Purchase Price MIAMU4221626.2 19 corresponding to the interest accrued thereon. A form of the Bond Credit Facility is attached hereto as Appendix D. During the term of the applicable Bond Credit Facilities, the Trustee shall timely draw moneys under the Bond Credit Facility in accordance with the terms thereof to pay when due (whether by reason of maturity, the occurrence of an Interest Payment Date, redemption, acceleration or otherwise) the principal of and interest on the applicable Series of 2008 Bonds; and to the extent moneys representing the proceeds of the remarketing of the applicable Series of 2008 Bonds are not available therefor, to pay when due the Purchase Price of such applicable Series of 2008 Bonds. In the event of a drawing under the Bond Credit Facility to pay the Purchase Price of 2008 Bonds upon a Mandatory Purchase Date relating to the issuance and delivery of an Altemate Bond Credit Facility, the Trustee shall draw moneys under the corresponding Bond Credit Facility in effect on and prior to such Mandatory Purchase Date and shall not draw upon the Alternate Bond Credit Facility that will become effective on or after such Mandatory Purchase Date. Notwithstanding any provision to the contrary which may be contained in the Bond Ordinance, (i) in computing the amount to be drawn under such Bond Credit Facility on account of the payment of the principal or Purchase Price of, or interest on the applicable Series of 2008 Bonds, the Trustee shall exclude any such amounts in respect of any Series of 2008 Bonds which are Purchased Bonds on the date such payment is due, and (ii) amounts drawn by the Trustee under the applicable Bond Credit Facility shall not be applied to the payment of the principal or Purchase Price of, or premium, if any, or interest on, any Series of 2008 Bonds which are Purchased Bonds on the date such payment is due. After any "C Drawing," the obligation of the Bank to honor demands for payment under the applicable Bond Credit Facility with respect to payment of interest, or the portion of Purchase Price of such Series of 2008 Bonds corresponding to interest, on such 2008 Bonds will automatically and immediately be reinstated up to the total amount specified therein, upon the terms and conditions set forth in the applicable Bond Credit Facility. Upon release by or on behalf of the Bank pursuant to the Bond Credit Facility Agreement of any Purchased Bonds, the obligation of the Bank to honor demands for payment under the Bond Credit Facility with respect to payment of the principal, or the portion of Purchase Price of such 2008 Bonds corresponding to principal, of such 2008 Bonds will be automatically and immediately reinstated up to the total amount specified therein upon the terms and conditions set forth in the Bond Credit Facility. Events of Defaults and Remedies under the Bond Credit Facility Agreement Any of the following events will constitute an "Event of Default" under the Bond Credit Facility Agreement (all capitalized terms used in this Section "Events of Defaults and Remedies under the Bond Credit Facility Agreement" shall have the meaning ascribed to such terms in the Bond Credit Facility Agreement): M1AM1/42216262 20 (a) The City shall fail to pay (i) the Letter of Credit Fee specified in Section 2.2 of the Bond Credit Facility Agreement, and such amount shall remain unpaid for ten (10) Business Days after written notice of such failure has been given by the Bank to the City and the Department, or (ii) other amounts owing hereunder (other than those described in (i) above or Section (h) below) and such amount shall remain unpaid for twenty (20) Business Days after written notice of such failure has been given by the Bank to the City and the Department. (b) Failure of the City to observe or perform any of the covenants or conditions relating to the provision of an Alternate Bond Credit Facility, the preservation of the lien on the Trust Estate, a conversion or defeasance of the 2008 Bonds, the creation of any encumbrance on the Trust Estate, the modification, amendment or supplement of the Bond Ordinance, the Rate Covenant and the issuance of Additional Bonds or the sale or encumbrance of the Parking System. (c) Failure of the City to observe or perform any of the covenants, conditions or provisions of the Bond Credit Facility Agreement (other than as specified in subparagraph (a) or (b) above) or any Related Document and to remedy such default within thirty (30) days after such failure; provided, however, that any failure to comply with the reporting requirements of Section 6.2 of the Bond Credit Facility Agreement shall constitute an Event of Default, only upon notice from the Bank thereof and a failure by the City to remedy such failure within fifteen (15) days of the receipt of such notice. (d) Any representation or warranty made by the City in the Bond Credit Facility Agreement or in any certificate, financial or other statement furnished by the City to the Bank pursuant to the Bond Credit Facility Agreement or any Related Document shall prove to have been untrue or incomplete in any material respect when made. (e) (i) A final, nonappealable judgment or order for the payment of money in excess of $10,000,000 in the aggregate or (ii) two or more final, nonappealable judgments or orders for the payment of money in excess of $10,000,000 in the aggregate, in either case, shall be rendered against the City and attach to thel'AM Estate with respect to which, in the opinion of the Bank, adequate cash reserves have not been'established or adequate insurance does not exist, and such judgment(s) or order(s) shall continue unsatisfied and unstayed for a period of sixty (60) days. (f) The City shall apply for or consent to the appointment of, or the taking of possession by, a receiver, trustee, liquidator or custodian or the like of itself, of all or a substantial part of its assets or of all or a substantial part of the Parking System, admit in writing its inability, or be generally unable, to pay its debts as they become due, make a general assignment for the benefit of creditors, or commence a voluntary case as a debtor under the federal bankruptcy laws of the United States of America or file a voluntary petition or answer seeking reorganization, an arrangement with creditors or an order for relief as a debtor or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it in any bankruptcy, reorganization or insolvency proceeding, or action shall be taken by it for the purpose of effecting any of the fore going. (g) If a proceeding shall be instituted, without the application or consent of the City, in any court of competent jurisdiction under any law relating to bankruptcy, insolvency, MIAMI/4221626.2 21 reorganization, dissolution, winding up, liquidation, seeking a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of the City, of all or a substantial part of its assets or of all or a substantial part of the Parking System, or other like relief in respect thereof under any bankruptcy or insolvency law, and the same shall result in the entry of an order for relief or any such adjudication or appointment, or continue undismissed, or pending and unstayed for any period of sixty (60) consecutive days. (h) The City shall (i) fail to make any payment or payments of any amount when due on any 2008 Bond (including any Bank Bond) or any Parity Obligation (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), or (ii) fail to perform or observe any term, covenant or condition on its part to be performed or observed under any such agreement or instrument (other than any failure to perform any term contemplated by sub -clause (i) of the Bond Credit Facility Agreement) if, in either case, the effect of such failure to perform or observe is to accelerate, or to permit the acceleration of the maturity of or mandatory redemption of, any 2008 Bond (including any Bank Bond) or any Parity Obligation. (i) The Series Ordinance, the 2008 Bonds (including any Bank Bonds), any Parity Obligation, the 1998 Bond Ordinance or the Bond Credit Facility Agreement shall be declared, pursuant to -a--final and nonappealable order of a court of_competent jurisdiction, to be not binding in any material respect which has an adverse affect on the City's obligations to the Bank under the Bond Credit Facility Agreement, or any obligations or duties of the City under any Related Document. (j) The City shall, in writing to the Trustee, the Bank or, in a public statement, claim that the Series Ordinance, the 2008 Bonds (including any Bank Bonds), any Parity Obligation, the 1998 Bond Ordinance or this Agreement is/are not valid or binding on the City, or repudiate its obligations under the Series Ordinance, the 2008 Bonds (including any Bank Bonds), any Parity Obligation, the 1998 Bond Ordinance or this Agreement or (ii) the City shall file any legal proceedings to seek an adjudication that the Series Ordinance, the 2008 Bonds (including any Bank Bonds), any Parity Obligation, the 1998 Bond Ordinance or this Agreement is/are not valid or binding on the City. (k) Any Governmental Authority with jurisdiction to rule on the validity of the Series Ordinance, the 2008 Bonds (including any Bank Bonds), any Parity Obligation, the 1998 Bond Ordinance or this Agreement shall publicly find or rule that the Series Ordinance, the 2008 Bonds (including any Bank Bonds), any Parity Obligation, the 1998 Bond Ordinance or this Agreement, as the case may be, is not valid or not binding on the City, or (ii) any Governmental Authority with jurisdiction over the City and the affairs of the City shall have declared or imposed a debt moratorium, debt adjustment or comparable restriction on repayment of the 2008 Bonds (including any Bank Bonds) or any Parity Obligation. (1) The occurrence of a Bond Ordinance Event of Default. In the case of any Event of Default described under this heading "Events of Defaults and Remedies under the Bond Credit Facility Agreement" herein, the Bank may give written notice of such Event of Default and termination of the Bond Credit Facility Agreement (a "Notice of MIAMI/4221626.2 22 Termination Date") to the Trustee, the Tender Agent, the City and the Remarketing Agent requesting a Default Tender. If the Bank elects to deliver such Notice of Termination Date, it shall include therein a direction to the Tender Agent to cause a mandatory tender and purchase of 2008 Bonds in accordance with Series Ordinance. The obligation of the Bank to purchase 2008 Bonds shall terminate on the thirtieth (30th) day (or if such day is not a Business Day, the next following Business Day) after such Notice of Termination Date is received by the Tender Agent and on such date the Available Commitment shall terminate and the Bank shall be under no obligation hereunder to purchase 2008 Bonds. SECURITY AND SOURCES OF PAYMENT FOR THE 2008 BONDS Source of Payment The 2008 Bonds are secured by a pledge of, and are payable solely from, (a) the Net Revenues of the Parking System, (b) the right of the City and the Department to receive Net Revenues, and (c) the money and investment Obligations in the funds and accounts established under the Bond Ordinance (with the exception of the money and Investment Obligations in the Rebate Fund until such are transferred to the Revenue Fund as provided in the Bond Ordinance) and the income derived from such Investment Obligations and the investment of such money, on a parity with the pledge thereof in favor of the Registered Owners of any Additional Bonds hereafter issued under the Bond Ordinance. The term "Net Revenues" as used herein and in the Bond Ordinance means the excess of Revenues (as hereafter defined) over Current Expenses (as hereafter defined). The Bond Ordinance provides that this pledge shall be effective and operate immediately and that the Trustee shall have the right to collect and receive Net Revenues from the Department in accordance with the provisions of the Bond Ordinance at all times during the period from and after the date of issuance of the 2008 Bonds until the 2008 Bonds have been fully paid and discharged. "Revenues," under the Bond Ordinance, include (a) except to the extent excluded below, all income earned by the Department from the operation and use of and for the services furnished or to be furnished by the Parking System and all income eamed from the ownership and rental of the Parking System and properties financed by Subordinated Debt and by Interim Indebtedness, (b) income received by the Department under any agreement to manage or operate facilities on behalf of any person, (c) any proceeds of business interruption insurance, and (d) the investment income on, and the income and gains realized upon the maturity or sale of, securities held by or on behalf of the City or the Department in any Funds and Accounts established by the Bond Ordinance. Revenues shall not include (i) any grants, contributions or donations; (ii) proceeds from the sale and disposition of all or any portion of the Parking System; (iii) income from the operation of any Special Purpose Facilities for so long as such Special Purpose Facilities are not part of the Parking System; (iv) to the extent and for so long as such income is pledged to secure the financing for the same, rental income from the leasing of any land used in connection with, or income from the operation of, any Special Purpose Facilities; (v) any proceeds of insurance other than as mentioned above; (vi) investment income from the investment of moneys in the Construction Fund; and (vii) the proceeds of any borrowing. "Current Expenses" is defined in the Bond Ordinance to include the current expenses, paid or accrued, of the Board and the Department for the operation, maintenance and ordinary, MIAMI/4221626.2 23 current repair of the Parking System as determined in accordance with generally accepted accounting principles, including, without limiting the generality of the foregoing, all ordinary and usual expenses of operation, maintenance and repair, administrative expenses, salaries, payments to any retirement plan or plans properly chargeable to the Parking System, payments to other governmental entities for current expenses for the operation, maintenance and repair of the Parking System, insurance premiums and expenses and accumulation of appropriate reserves for self-insurance, engineering expenses relating to the operation, maintenance and repair of the Parking System, fees and expenses of the Trustee and the Paying Agent, legal expenses, fees of consultants, and any other expenses required to be paid by the Board and the Department under the Bond Ordinance or by law, but Current Expenses shall not include any reserves for extraordinary replacements or repairs, any allowance for depreciation, any principal payment in respect of capital leases or Subordinated Debt, any deposits to any Fund or Account created under the Bond Ordinance or any payment to any governmental entity for capital costs. No Pledge of Credit or Taxing Power The 2008 Bonds are special and limited obligations of the City, and shall not be or constitute general obligations or indebtedness of the Department or the City within the meaning of the Florida Constitution. Neither the full faith and credit nor the taxing power of the City or the State of Florida or any political subdivision thereof, is pledged to the payment of the principal of, the interest on or Purchase Price of the 2008 Bonds and the owners thereof shall not have any right to compel any exercise of the taxing power of the City or the State of Florida or of any political subdivision thereof, to enforce such payment. The 2008 Bonds are not, and will not be, secured by any lien, charge or encumbrance, legal or equitable, upon the property of the City or the State of Florida or any political subdivision thereof, except the sources specified in the Bond Ordinance. The Department has no taxing power and if it acquires taxing power, such taxing power is not pledged to the payment of the 2008 Bonds or any interest or premium thereon. Flow of Funds The Bond Ordinance creates the Miami Parking System Construction Fund (the "Construction Fund"), the Miami Parking System Bond Fund (the "Bond Fund") and the Miami Parking System Fund (the "Parking System Fund"). The Series Ordinance establishes a special account designated the "Cost of Issuance Subaccount." There is also created within the Cost of Issuance Subaccount two separate accounts designated the "2008 Taxable Cost of Issuance Account" and the "2008 Tax -Exempt Cost of Issuance Account. The Bond Ordinance also creates within the Bond Fund the following six special accounts: the Interest Account, the Principal Account, the Sinking Fund Account, the Reserve Account, the Redemption Account, and the Insurance and Condemnation Award Account. In addition, the Bond Ordinance creates within the Parking System Fund, the Revenue Account, the Renewal and Replacement Account, the Rebate Account and the General Reserve Account. The Bond Fund and the Accounts therein shall be established with and held by the Trustee. The Trustee or the Department may establish separate accounts or subaccounts for such Funds and Accounts with respect to the 2008 Bonds. The Parking System Fund and the Accounts therein shall be established with and held by the Department in a Depositary. MLAMU4221626.2 24 Except as hereinafter described, all Revenues received by the Department will be deposited when received to the credit of the Revenue Account. The Department will apply moneys in the Revenue Account to the payment of Current Expenses and thereafter, to the extent provided in the Bond Ordinance, to the purchase of Bonds. On or before the 20th day of each month, the Chief Financial Officer will withdraw from the Revenue Account all amounts on deposit therein in excess of the Operations and Maintenance Requirement and will apply such moneys in the following manner and order (except that payments provided for in (a), (b) and (c) shall be on a parity with each other): (a) with the Trustee to the credit of the Interest Account an amount thereof which, together with any other funds provided by the Department for such purpose, is equal to one -sixth (1/6) of the interest to become due and payable within the next ensuing six (6) months on all Bonds then Outstanding and the amount of any Qualified Derivative Payment payable by the City accruing in such month, after taking into account any capitalized or accrued interest or an amount of any Qualified Derivative Payment set aside for such purpose; (b) with the Trustee to the credit of the Principal Account an amount thereof which, together with any other funds provided by the Department for such purpose, is equal to one - twelfth (1/12) of the principal to become due and payable within the next ensuing twelve (12) months on all Serial Bonds then -Outstanding; (c) with the Trustee to the credit of the Sinking Fund Account an amount thereof which, together with any other funds provided by the Department for such purpose, is equal to one -twelfth (1/12) of the Sinking Fund Requirement to become due and payable within the next ensuing twelve (12) months on all Term Bonds then Outstanding; (d) with the Trustee to the credit of the Reserve Account such amount, including an amount necessary to reimburse the issuer of a Reserve Product for draws thereunder in order to reinstate such Reserve Product, as may be required to make the amount then to the credit of the Reserve Account equal to the Reserve Requirement; provided, however, that if so provided in the Series Ordinance relating to Additional Bonds or Refunding Bonds, the amount required to make the amount to the credit of the Reserve Account following the issuance of such Series of Bonds equal to the Reserve Requirement may be deposited to the credit of the Reserve Account in sixty (60) or less substantially equal monthly installments beginning in the month following the month in which such Series of Bonds are authenticated and delivered; (e) to the credit of the Renewal and Replacement Account such amount as may be required to make the amount then on deposit to the credit of the Renewal and Replacement Account equal to the Renewal and Replacement Account Requirement; (f) to the credit of the Rebate Account, such amounts as shall be required under the terms of the Bond Ordinance; and (g) to the credit of the General Reserve Account the balance remaining after making the deposits required by paragraphs (a) through (f). Except as is otherwise provided in the Bond Ordinance, in determining the amount of money to be deposited to each Fund and Account there shall be taken into consideration the MIAMI/4221626.2 25 investment earnings or losses that are to be charged to such Fund or Account (in accordance with the Bond Ordinance) and the amounts then on deposit therein resulting from the application of Bond proceeds or the transfers as provided below. In each month following a month in which the Department has failed to make any deposit or payment required by paragraphs (a) through (f), the Department will deposit or pay, in addition to the amounts then due, an amount sufficient to cure the deficiency in deposit or payment in the prior month unless such deficiency is cured by a transfer, pursuant to the Bond Ordinance, of money or Investment Obligations to such Fund or Account from other Funds and Accounts. Notwithstanding the above, unless a Qualified Derivative Agreement shall have been entered into with respect to the 2008 Bonds and any other Variable Rate Bonds issued by the City (in which case, the amount to be deposited into the Interest Account shall be calculated as described in the definition of "Principal and Interest Requirement" in the Bond Ordinance), the amount required to be deposited in the Interest Account for the payment of interest on the 2008 Bonds and any other Variable Rate Bonds shall be calculated as of the first day of each Fiscal Year and shall be equal to the greater of one hundred ten per centum (110%) of (i) the average daily interest rate on such 2008 Bond and any other Variable Rate Bonds during the preceding Fiscal Year, or (ii) the actual rate of interest applicable to such 2008 Bonds and any other Variable Rate Bonds on the date of calculation. The City has entered into a Qualified Derivative Agreement with respect to a portion of the 2008 Bonds. See "SECURITY AND SOURCES OF PAYMENT FOR THE 2008 BONDS — Swap Agreement" herein. In the event that the period to elapse between Interest Payment Dates will be other than six (6) months, then the monthly payments to be made to the Interest Account shall be increased or decreased, as appropriate, in sufficient amounts to provide the required interest amount maturing on the next Interest Payment Date. Any monthly payment to be deposited as set forth above, for the purpose of meeting interest payments for any Series of Bonds, shall be adjusted, as appropriate, to reflect the frequency of Interest Payment Dates applicable to such Series of Bonds. Any monthly payment to be deposited as set forth above for the purpose of meeting payments of principal on the Bonds or for the purpose of meeting Sinking Fund Requirements shall be adjusted, as appropriate, to reflect the frequency of principal payments or the frequency of Sinking Fund Requirements applicable to such Series of Bonds. In all events, deposits required by paragraphs (a) through (d) above shall be increased or decreased each month to the extent required to timely pay interest, principal and redemption premiums and Qualified Derivative Payments next becoming due and payable, after making allowance for any accrued or capitalized interest. Whenever the amount on deposit in the Revenue Account is insufficient to pay Current Expenses, the Chief Financial Officer will transfer an amount necessary to pay the same to the Revenue Account, drawing upon funds available in the General Reserve Account and the Renewal and Replacement Account, in that order. On or before the 45th day next preceding any date on which Serial Bonds are to mature or Term Bonds are to be redeemed pursuant to a Sinking Fund Requirement or are to mature, the Chief Financial Officer may satisfy all or a portion of the obligation to make the required MIAMI/4221626.2 26 payments into the Principal Account or the Sinking Fund Account by delivering to the Trustee Serial Bonds maturing or Term Bonds maturing or required to be redeemed on such date. The price paid to purchase any such Bond shall not exceed the Redemption Price applicable to such Bonds at the next redemption date. Upon such delivery the Department shall receive a credit against amounts required to be deposited into the Principal Account on account of such Serial Bonds or into the Sinking Fund Account on account of such Term Bonds in the amount 100% of the principal amount of any such Serial Bonds or Term Bonds so delivered. Reserve Account The Bond Ordinance requires the City to maintain on deposit in the Reserve Account an amount equal to the Reserve Requirement. The Reserve Requirement means, with respect to the 1998 Bonds, the 2008 Bonds and any Additional Bonds issued under the Bond Ordinance, an amount of money, or the aggregate available amount under one or more Reserve Account Insurance Policies or Reserve Account Letters of Credit (also referred to herein and in the Bond Ordinance as "Reserve Product"), or a combination thereof, equal to the lesser of (i) the maximum Principal and Interest Requirements calculated with respect to all Series of Bonds Outstanding under the Bond Ordinance in the current or any subsequent Fiscal Year, (ii) 125% of the average annual Principal and Interest Requirements calculated with respect to all Series of Bonds Outstanding under_ the Bond Ordinance, or (iii) 10% of the aggregate stated original principal amount of Bonds Outstanding under the Bond Ordinance, provided, however, that in determining the aggregate stated original principal amount of Bonds Outstanding for purposes of this clause (iii), the issue price of Bonds (net of pre -issuance accrued interest) shall be substituted for the original stated principal amount of those Bonds if such Bonds were sold at either an original issue discount or premium exceeding two percent (2%) of the stated redemption price at maturity. Under the Bond Ordinance, the City is permitted to meet its Reserve Requirement with respect to any Series of Bonds issued under the Bond Ordinance by making deposits to the credit of the Reserve Account in sixty (60) or less substantially equal monthly installments beginning in the month following the month in which a Series of Bonds is authenticated and delivered under the Bond Ordinance. If Additional Bonds are issued under the Bond Ordinance, the Series Ordinance relating to the same shall provide either for the deposit into the Reserve Account of an amount that will cause the amount then on deposit therein to equal the Reserve Requirement on all Bonds Outstanding after the issuance of such Bonds or for sixty (60) or less substantially equal monthly deposits, as described above, in accordance with the provisions in the Bond Ordinance. Notwithstanding the foregoing, in lieu of the required deposits into the Reserve Account, the City may cause to be deposited a Reserve Product for the benefit of the Bondholders in an amount equal to the difference between the Reserve Requirement applicable thereto and the sums then on deposit in the Reserve Account, if any. Such Reserve Product shall be payable to the Trustee (upon the giving of notice as required thereunder) on any Interest Payment Date, maturity date or redemption date on which a deficiency exists which cannot be cured by funds in any other fund or account held pursuant to the Bond Ordinance and available for such purpose. The provider of such Reserve Product shall either be (a) an insurer whose municipal bond insurance policies insuring the payment, when due, of the principal of and interest on municipal bond issues results in such issues being rated in one of the two highest rating categories (without regard to gradations, such as "plus" or "minus" of such categories) by at least one nationally MIAM1/42216262 27 recognized securities rating agency or (b) a commercial bank, insurance company or other financial institution the bonds payable or guaranteed by which have been assigned a rating by at least one nationally recognized securities rating agency in one of the two highest rating categories (without regard to gradations, such as "plus" or `minus" of such categories). In addition, such Reserve Product shall be for a term of not less than twelve (12) months and any reimbursement agreement related thereto shall provide that the City's reimbursement obligation thereunder shall be subordinate to the payment of the principal of and interest on the Bonds. Notwithstanding the foregoing, if the Reserve Account has been funded with cash or Investment Obligations and no Event of Default shall have occurred and be continuing under the Bond Ordinance, the City may, at any time in its discretion, substitute a Reserve Product meeting the requirements of the Bond Ordinance for the cash and Investment Obligations, and the City may then withdraw such cash and Investment Obligations and apply them to any lawful purpose, so long as (i) the same does not adversely affect any rating by any nationally recognized securities rating agency then in effect for the Outstanding Bonds and (ii) the City obtains an opinion of Bond Counsel that such actions will not, in and of themselves, adversely affect the exclusion from gross income of interest on the Bonds (other than Taxable Bonds) for federal income tax purposes. To the extent the City causes to be deposited into the Reserve Account, a Reserve Product for a term of years shorter than the life of the Series of Bonds so insured or secured or if such Reserve Product is subject to termination prior to the maturity of the Series of Bonds so insured, then the Reserve Product shall provide, among other things, that the issuer thereof shall provide the City with notice as of each anniversary of the date of the issuance of the Reserve Product of the intention of the issuer thereof to either (a) extend the tern of the Reserve Product beyond the expiration date thereof, or (b) terminate the Reserve Product on the initial expiration dates thereof or such other future date as the issuer thereof shall have established. If the issuer of the Reserve Product notifies the City pursuant to clause (b) of the immediately preceding sentence or if the City terminates the Reserve Product or it otherwise terminates in accordance with its terms, then the City shall (a) deposit into the Reserve Account, on or prior to the fifteenth day of the first full calendar month following the date on which such notice is received by the City, such sums as shall be sufficient to pay an amount equal to a fraction, the numerator of which is one (1) and the denominator of which is equal to the number of months remaining in the term of the Reserve Product of the Reserve Requirement on the date such notice was received (the maximum amount available, assuming full reimbursement by the City, under the Reserve Product to be reduced annually by an amount equal to the deposit to Reserve Account during the previous twelve (12) month period) until amounts on deposit in the Reserve Account, as a result of the aforementioned deposits, and no later than upon the expiration of such Reserve Product, shall be equal to the Reserve Requirement, and (b) on a parity basis, shall reimburse the provider of the terminated Reserve Product all amounts due and owing under the terms and conditions of the reimbursement agreement between the City and such provider. If any Reserve Product shall not be renewed prior to the stated expiration date thereof, the City agrees that it shall fund the Reserve Account over a period not to exceed sixty (60) months from the date of receipt of any notice of renewal during which it shall make consecutive equal monthly payments in order that the amount on deposit in the Reserve Account at the end of such MIAMU4221626.2 28 period shall equal the Reserve Requirement; provided, the City may obtain a new Reserve Product in lieu of making the payments set forth in this paragraph. The Trustee shall use amounts in the Reserve Account or drawn on a Reserve Product to make transfers to the Interest Account, the Principal Account and the Sinking Fund Account, in that order, to remedy any deficiency in any deposit required to be made to said Accounts under the Bond Ordinance or to pay the interest on or the principal of (whether at maturity, by acceleration or in satisfaction of the Sinking Fund Requirement therefor) the Bonds when due, or to pay Qualified Derivative Payments (as defined in the Bond Ordinance) when due, whenever and to the extent that the money on deposit in any or all of said Accounts, together with transfers thereto from the General Reserve Account and the Renewal and Replacement Account, is insufficient for such purposes. The Trustee shall also use amounts in the Reserve Account to pay the interest on the Interest Payment Date next preceding the final maturity of all Bonds Outstanding and the principal of and the interest on such Bonds on the final maturity date of the same. If at any time the value of the cash and Investment Obligations held in the Reserve Account exceeds the Reserve Requirement, the Trustee shall withdraw an amount equal to such excess therefrom and shall deliver the same to the Department. Upon receipt thereof the Chief Financial Officer shall deposit (a) in the Renewal and Replacement Account the amount then required to be paid thereto by the Department pursuant to the Bond Ordinance and (b) all remaining amounts in the General Reserve Account. Whenever the amount on deposit in the Reserve Account is less than the Reserve Requirement, the Trustee shall notify the Executive Director of the Department (the "Executive Director") and the Chief Financial Officer of the amount of the deficiency and upon such notification the Chief Financial Officer shall immediately deliver to the Trustee an amount sufficient to cure the same, drawing upon funds available in the General Reserve Account and the Renewal and Replacement Account, in that order. Debt Service Reserve Surety Bond The Bond Ordinance requires the establishment of a Reserve Account to be funded in an amount equal to the Reserve Requirement, in connection with the issuance of the Refunded Bonds the increase in the Reserve Requirement was an amount equal to $3,103,204.50. The Bond Ordinance authorizes the City to obtain a Reserve Product in place of fully funding the Reserve Account. Ambac Assurance, in connection with the issuance of the Refunded Bonds issued a Reserve Product (the "Surety Bond") for the purpose of funding the Reserve Account. The premium on the Surety Bond was fully paid at the issuance and delivery of the Refunded Bonds. The Surety Bond provides that upon the later of (i) one (1) day after receipt by Ambac Assurance of a demand for payment executed by the Trustee certifying that provision for the payment of principal of or interest on the Bonds when due has not been made or (ii) the interest payment date specified in the Demand for Payment submitted to Ambac Assurance, Ambac Assurance will promptly deposit funds with the Paying Agent sufficient to enable the Paying Agent to make such payments due on the Bonds, but in no event exceeding the Surety Bond Coverage, as defined in the Surety Bond. MIAMU4221626.2 29 Pursuant to the terms of the Surety Bond, the Surety Bond Coverage is automatically reduced to the extent of each payment made by Ambac Assurance under the terms of the Surety Bond and the City is required to reimburse Ambac Assurance for any draws under the Surety Bond with interest at a market rate. Upon such reimbursement, the Surety Bond is reinstated to the extent of each principal reimbursement up to but not exceeding the Surety Bond Coverage. In the event the amount on deposit, or credited to the Reserve Account, exceeds the amount of the Surety Bond, any draw on the Surety Bond shall be made only after all the funds in the Reserve Account have been expended. In the event that the amount on deposit in, or credited to, the Reserve Account, in addition to the amount available under the Surety Bond, includes amounts available under a letter of credit, insurance policy, Surety Bond or other such funding instrument (the "Additional Funding Instrument"), draws on the Surety Bond and the Additional Funding Instrument shall be made on a pro rata basis to fund the insufficiency. The Bond Ordinance provides that the Reserve Account shall be replenished in the following priority: (i) principal and interest on the Surety Bond shall be paid from first available Net Revenues; (ii) after all such amounts are paid in full, amounts necessary to fund the Reserve Account to the required level, after taking into account the amounts available under the Surety Bond shall be deposited from next available Net Revenues. The SuretyBonddoes not insure against nonpayment caused by the insolvency or negligence of the Trustee or the Paying Agent. The insurance provided by the Surety Bond is not covered by the Florida Insurance Guaranty Association. For information on Ambac Assurance see Appendix E hereto. Rate Covenant The City and the Department have covenanted in the Bond Ordinance to fix, charge and collect rates, fees, rentals and charges for the use of the Parking System and to revise these as often as may be necessary or appropriate to produce Revenues in each Fiscal Year at least equal =to=the sum of(i)_Current Expenses for such period, plus (ii) 150% of the Principal and Interest Requirements for such period, plus (iii) the amounts required to be deposited in the Reserve Account in such period. In calculating Principal and Interest Requirements for purposes of the Rate Covenant, the City and the Department may net out therefrom any amount of interest for such period for which a like amount of accrued or capitalized interest has been set aside and held under the Bond Ordinance. If, in any Fiscal Year, the Revenues are less than the amount required in the preceding paragraph and if the cash and value of the Investment Obligations available within the Funds and Accounts created by the Bond Ordinance are not sufficient to make such deposits to the Interest Account, the Principal Account, the Sinking Fund Account, the Reserve Account, and the Rebate Account, the City and the Department have covenanted to take action to revise the rates, fees, rentals and charges, or alter their methods of operation or take whatever action is necessary to produce the amount so required in such period. If the audit report for any Fiscal Year indicates that the requirements of clauses (i), (ii) and (iii) of the second preceding paragraph above, have not been satisfied, then within fifteen MIAMI/4221626.2 30 (15) days of the receipt of the audit report for such Fiscal Year, the Department has agreed to employ a Parking Consultant to review and analyze the financial status and administration and operations of the Parking System, to inspect the properties constituting the Parking System and to submit to the Board and the Executive Director, within sixty (60) days thereafter, a written report on the same, including the action taken by the City and the Department with respect to the revision of Parking System rates, fees, rentals and charges, which report may contain recommendations of further revision of the rates, fees, rentals, charges and methods of operation of the Parking System that will result in producing the amount so required during that Fiscal Year. Promptly upon its receipt of the recommendations, the Department will transmit copies thereof to the City Commission, the Trustee and each Bondholder of Record who has requested the same and will take such further action as is then in the best interest of the Registered Owners of the Bonds, the Department, the City and its citizens. In the event the City and the Department fail to take the actions described in the preceding paragraph above, the Trustee may upon request of the Registered Owners of not less than 25% in principal amount of all Bonds Outstanding shall, institute and prosecute an action or proceeding in any court or before any board or commission having jurisdiction to compel the City and the Department to comply with such requirements. The City and the Department have further covenanted that no use of the Parking System will be permitted without compensation. Additional Parity Bonds The Bond Ordinance provides that the City Commission may authorize the issuance of one or more Series of Additional Bonds on a parity with the 1998 Bonds for the purpose of providing funds to: (i) pay all or any part of the Costs of any Additional System Facilities; (ii) pay the Costs of completing any Additional System Facilities; (iii) pay any debt obligations issued by the City or the Department or repay any advance made from any source to finance temporarily Costs related to the Parking System as set forth in (i) and (ii) above, including Interim Indebtedness; (iv) increase the amount on deposit in the Reserve Account; (v) pay interest accruing on any Additional Bonds as specified in the Series Ordinance relating to such Bonds; and (vi) pay certain expenses in connection with the issuance of Additional Bonds. Additional Bonds may also be issued on a parity with the Bonds for the purpose of providing funds for paying at maturity or redeeming prior to maturity all or part of the Bonds then Outstanding of any one or more Series including the payment of any redemption premium and any interest that will accrue on such Bonds to the redemption date or maturity date and any expenses in connection with such refunding. The 2008 Bonds are being issued under the Bond Ordinance as Additional Bonds. The Trustee may deliver Additional Bonds for the purpose of paying the Costs of any Additional System Facilities only if, among other requirements, (i) the proceeds of the Additional Bonds together with other funds available for such purpose are not less than the estimated Cost of the Additional System Facilities (as demonstrated in a certificate delivered on behalf of the City to the Trustee); (ii) the sum of (A) Net Revenues from the most recent Fiscal Year for which audited financial statements have been filed and (B) the estimated Net Revenues MIAMI/4221626.2 31 which would have been received if any rate adjustment which affected the Parking System and became effective prior to the issuance of the Additional Bonds had been in effect during that same Fiscal Year, is not less than 150% of the Principal and Interest Requirements for that same Fiscal Year; and (iii) the sum of (A) Net Revenues from the most recent Fiscal Year for which audited financial statements have been filed, (B) the estimated additional Net Revenues which would have been received if any rate adjustments which affected the Parking System and became effective prior to the issuance of the Additional Bonds had been in effect during that same Fiscal Year, and (C) one -fifth of the total estimated Net Revenues attributable to the Additional System Facilities to be fmanced from the proceeds of such Additional Bonds for each of the five Fiscal Years immediately succeeding the Fiscal Year in which the Additional System Facilities are to be placed in use and operation, is not less than 150% of the maximum Principal and Interest Requirements for any Fiscal Year thereafter, including the Additional Bonds then requested to be delivered. The City will not deliver Additional Bonds for the purpose of refunding Bonds of any Series unless any moneys deposited with the Trustee, together with the proceeds (excluding accrued interest) of such Additional Bonds and the interest to accrue upon any Government Obligations acquired to pay the refunded Bonds, are not less than an amount sufficient to pay the principal of and the redemption premium, if any, on the Bonds to be refunded, the interest that will accrue-tfiereon-to- theredemption date -or- the -respective --maturity dates, and the expenses incident to such refunding. The City shall be required to furnish all of the certificates or reports required under the Bond Ordinance for the issuance of Additional Bonds for Additional System Facilities with respect to the issuance of Additional Bonds for the purpose of refunding Bonds unless the Chief Financial Officer of the Department delivers a certificate to the Trustee to the effect that (i) the final maturity of the Additional Bonds being issued is not later than the final maturity of the Bonds being refunded by such Additional Bonds, and (ii) the Principal and Interest Requirement for each Fiscal Year for the Additional Bonds does not exceed the Principal and Interest Requirement for such Fiscal Year for the Bonds being refunded. Interim Indebtedness and Short -Term Indebtedness Interim Indebtedness may be issued on a parity with the Bonds as to payment from Net Revenues, provided that (i) the requirements for the issuance of Additional Bonds for Additional System Facilities set forth under the caption "Additional Parity Bonds" above could be satisfied if such Interim Indebtedness were issued with a maturity of twenty-five (25) years after the date of issuance, with substantially equal annual payments of principal and interest and with an interest rate substantially equal to the market interest rate for similar obligations of 25-year maturity at the time the calculation is made and (ii) there is filed with the Trustee, simultaneously with the incurrence of such Interim Indebtedness, a letter from a banking, investment banking or other appropriate financial institution stating that under the then current market conditions, such Interim Indebtedness could be placed or sold on the terms and conditions assumed for the purposes of (i) above. Short -Term Indebtedness may be issued and payable as to principal and interest as Current Expenses provided that such Short -Term Indebtedness at any time outstanding does not MIAMI/4221626.2 32 exceed 20% of the Department's Current Expenses of the Parking System for the last Fiscal Year for which an audit is available. Additional Subordinated Debt The City may issue Subordinated Debt to finance the acquisition and construction of any facilities, other than Special Purpose Facilities, which the Board and the Department may operate and maintain pursuant to law, upon the conditions set forth in the Bond Ordinance. [The Department has entered into a Loan Agreement dated July 21, 2005 (the "Loan Agreement") with the City to finance a portion of the Goodwill Parking Garage. The Loan Agreement provides that the City will loan to the Department from Community Development Block Grant funds $3,000,000 at 0% to be paid semiannually beginning December 1, 2005 in equal installments of $75,000 each ending on June 1, 2025. The Loan Agreement does not grant a pledge or a lien on the Net Revenues of the Parking System. The Department has also entered into a Loan Agreement dated as of October 11, 2005 (the "SunTrust Agreement") with SunTrust Bank (in such capacity, the "Lender") to purchase air rights. The SunTrust Agreement is secured by a pledge on the proceeds of the sale of the Riverside Lot (as such term is defined in the SunTrust Agreement). [The Department has also covenanted in the SunTrust Agreement to request that the City within 120 days of such SunTrust Agreement, to grant a pledge and lien on the Net Revenues subordinate only to the 1998 Bonds and the 2006 Bonds to the Lender. At this time no subordinate pledge has been granted by the City.] [UPDATE] Swap Agreement [TO BE UPDATED] On , 2008, the City amended its 18-month forward starting interest -rate swap agreement, dated October 12, 2004, consisting of an ISDA Master Agreement, a Schedule to the Master Agreement and a Confirmation, as such documents have been amended (collectively, the "Swap Agreement") with Bear Stearns Capital Markets, Inc. (the "Counterparty"), in connection with the proposed issuance of the 2008 Bonds. Under the terms of the Swap Agreement, the City is to issue 30 year variable rate bonds and pay a fixed interest rate of %. If the City fails to issue the 2008 Bonds by , 2008, the City could be liable to the Counterparty for certain termination payments. The amount of such termination payment, if the 2008 Bonds are not issued is dependent on the interest rates at the time of termination. Upon delivery of the 2008 Bonds, the Counterparty intends to transfer its obligations under the Swap Agreement to Bear Stearns Financial Products, Inc. ("BSFP"). The purpose of the Swap Agreement is to hedge a portion of the Tax -Exempt Series 2008 Bonds through October 1, to provide a synthetic fixed rate of interest of % for such portion of the Tax -Exempt Series 2008 Bonds. The notional amount of the Swap Agreement is $ . The termination date is October 1, , unless terminated earlier as provided in the Swap Agreement. Upon earlier termination, a payment may be owed by the City to the Counterparty, or BSFP, if assigned or may be owed by the Counterparty, or BSFP, if assigned to the City, depending upon the economic circumstances prevailing at the time of termination, such payment may be substantial. MIAMI/4221626.2 33 The Counterparty is the variable rate payor and the City is the fixed rate payor, under the terms of the Swap Agreement. The Counterparty will pay a variable rate based on the BMA Index. The City will pay the fixed rate of %, which may be more or less than the variable rate payment received by the City from the Counterparty under the Swap Agreement. The obligation of the City under the Swap Agreement to make periodic fixed rate payments is secured by a pledge by the City of the Net Revenues under the Bond Ordinance, which pledge will be on a parity with the pledge and lien of the Net Revenues on the 2008 Bonds, the 1998 Bonds and any Additional Bonds issued under the Bond Ordinance, provided that such payments constitute Qualified Derivative Payments under the Bond Ordinance. To the extent that such payments under the Swap Agreement do not constitute Qualified Derivative Payments, then such payments shall be payable from moneys on deposit in the General Reserve Account of the Department, subject and subordinate only to the prior payment of debt service on any Bonds and the replenishment of the Reserve Account and the Renewal and Replacement Account, and secured by a lien on Net Revenues subordinate only to the lien on Net Revenues securing the Bonds. THE CITY OF MIAMI Background Now 110 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 born. In physical size the City is not large, encompassing only 34.3 square miles. In population, the City is the largest of the 35 municipalities that comprise Miami -Dade County and is the county seat. For additional information concerning the City, see "APPENDIX B - GENERAL INFORMATION REGARDING THE CITY OF MIAMI, FLORIDA AND MIAMI-DADE COUNTY AND THE DEPARTMENT OF OFF-STREET PARKING." THE DEPARTMENT AND THE BOARD General The Department, was created in 1955 by a Special Act of the Florida State Legislature. The Department's enabling legislation was incorporated into the City's Charter in 1968. The Depaitrnent is an agency and instrumentality of the City and is charged with the ownership, operation, management and control of the parking facilities of the City located within the City and all properties pertaining thereto. The Department's budget and rates must be approved by the City Commission and its bonds must be issued by the City pursuant to an ordinance enacted by the City Commission. All expenses of the Department and the Board incurred in carrying out their duties are paid solely from revenues generated by the Parking System. MIAMI/4221626.2 34 The Board The Department is governed by the five -member City of Miami, Florida Department of Off -Street Parking Board (the "Board"). Each member of the Board must either reside or have his or her principal place of business in the City and serves a five-year term. No official or employee of the City may serve as a member of the Board while so employed by the City. At least ten days prior to the expiration of the term of a Board member, the successor thereto is required to be appointed by the remaining Board members, subject to confirmation by the City Commission. Any Board member may be removed by the City Commission for good cause, but if so removed, may apply for Circuit Court review of the action of the City Commission. For additional information concerning the Department, the Board and the Parking System, see "APPENDIX B - GENERAL INFORMATION REGARDING THE CITY OF MIAMI, FLORIDA; MIAMI-DADE COUNTY AND THE DEPARTMENT OF OFF-STREET PARKING" LEGAL MATTERS Certain legal matters incident to the validity of the 2008 Bonds are subject to the approval of Broad & Cassel, P.A., Bond Counsel whose approving opinion in the form attached hereto as "APPENDIX F - PROPOSED FORM OF BOND COUNSEL OPINION" will be furnished without charge to the purchasers of the 2008 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. Certain legal matters will be passed upon for the City by Julie O. Bru, Esq., City Attorney, and by Squire, Sanders & Dempsey L.L.P., Miami, Florida, Disclosure Counsel to the City. Certain legal matters will be passed upon for the Underwriter and the Bond Credit Facility Issuer by Adorno & Yoss LLP, Miami, Florida. LITIGATION [TO BE UPDATED] There is no pending or, to the knowledge of the City, any threatened litigation against the City or the Department of any nature whatsoever which in any way questions or affects the validity of the 2008 Bonds, or any proceedings or transactions relating to their issuance, sale, execution, or delivery, or the adoption of the Bond Ordinance, or the collection of the Revenues of the Parking System. Neither the creation, organization or existence, nor the title of the present members of the City Commission or the Department, or other officers of the City or the Department is being contested. The Department experiences claims, litigation, and various legal proceedings which individually are not expected to have a material adverse effect on the operations or financial condition of the Department, but may, in the aggregate, have a material impact thereon. In the opinion of the City Attorney, the Department will either successfully defend such actions or otherwise resolve such matters without any material adverse consequences to the financial condition of the Department. MIAMI/42216262 35 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 of Finance"). Pursuant to Rule 3E-400.003, Florida Administrative Code, the Department of Finance 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 fmancial 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 as to principal or interest on any bond issued since December 31, 1975 which would be considered material by a reasonable investor. TAX MATTERS The Internal Revenue Code of 1986, as amended (the "Code") establishes certain requirements which must be met subsequent to the issuance and delivery of the Tax -Exempt Series 2008 Bonds in order that interest on the Tax -Exempt Series 2008 Bonds be and remain excluded from gross income for purposes of Federal income taxation. Non-compliance may cause interest on the Tax -Exempt Series 2008 Bonds to be included in Federal gross income retroactive to the date of issuance of the Tax -Exempt Series 2008 Bonds, regardless of the date on which such non-compliance occurs or is ascertained. These requirements include, but are not limited to, provisions which prescribe yield and other limits within which the proceeds of the Tax -Exempt Series 2008 Bonds and the other amounts are to be invested and require that certain investment earnings on the foregoing must be rebated on a periodic basis to the Treasury Department of the United States. The City has covenanted in the Bond Ordinance to comply with such requirements in order to maintain the exclusion from Federal gross income of the interest on the Tax -Exempt Series 2008 Bonds. In the opinion of Bond Counsel, assuming compliance with the aforementioned covenants, under existing laws, regulations, judicial decisions and rulings, interest on the Tax - Exempt Series 2008 Bonds is excluded from gross income for purposes of Federal income taxation. Interest on the Tax -Exempt Series 2008 Bonds is not an item of tax preference for purposes of the Federal alternative minimum tax imposed on individuals or corporations; however, interest on the Tax -Exempt Series 2008 Bonds may be subject to the alternative minimum tax when any Tax -Exempt Series 2008 Bond is held by a corporation. The alternative minimum taxable income of a corporation must be increased by 75% of the excess of such corporation's adjusted current earnings over its alternative minimum taxable income (before this adjustment and the alternative tax net operating loss deduction). "Adjusted Current Earning" will include interest on the Tax -Exempt Series 2008 Bonds. In the opinion of Bond Counsel, interest on the Taxable Series 2008 Bonds is not excluded from gross income for purposes of federal income taxation. The 2008 Bonds are exempt from all present intangible personal property taxes imposed pursuant to Chapter 199, Florida Statutes. Except as described above, Bond Counsel will express no opinion regarding the Federal income tax consequences resulting from the ownership of, receipt or accrual of interest on, or MIAMU4221626.2 36 disposition of Tax -Exempt Series 2008 Bonds. Prospective purchasers of the Tax -Exempt Series 2008 Bonds should be aware that the ownership of Tax -Exempt Series 2008 Bonds may result in collateral Federal income tax consequences, including (i) the denial of a deduction for interest on indebtedness incurred or continued to purchase or carry bonds, (ii) the reduction of the loss reserve deduction for property and casualty insurance companies by 15% of certain items, including interest on the Tax -Exempt Series 2008 Bonds, (iii) the inclusion of interest on the Tax -Exempt Series 2008 Bonds in earning of certain foreign corporations doing business in the United States for purposes of a branch profits tax, (iv) the inclusion of interest on bonds in passive income subject to Federal income taxation of certain Subchapter S corporations with Subchapter C earnings and profits at the close of the taxable year, and (v) the inclusion of interest on the Tax -Exempt Series 2008 Bonds in "modified adjusted gross income" by recipients of certain Social Security and Railroad Retirement benefits for purposes of determining whether such benefits are included in gross income for Federal income tax purposes. PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE TAX-EXEMPT SERIES 2008 BONDS AND THE RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY HAVE ADVERSE FEDERAL TAX CONSEQUENCES FOR CERTAIN INDIVIDUAL AND CORPORATE BONDHOLDERS. PROSPECTIVE BONDHOLDERS SHOULD CONSULT WITH THEIR TAX SPECIALISTS FOR INFORMATION IN THAT REGARD. During recent years legislative proposals have been introduced in Congress, and in some cases enacted, that altered certain Federal tax consequences resulting from the ownership of obligations that are similar to the Tax -Exempt Series 2008 Bonds. In some cases these proposals have contained provisions that altered these consequences on a retroactive basis. Such alteration of Federal tax consequences may have affected the market value of obligations similar to the Tax -Exempt Series 2008 Bonds. From time to time, legislative proposals are pending which could have an effect on both the Federal tax consequences resulting from ownership of bonds and their market value. No assurance can be given that legislative proposals will not be introduced or enacted that would or might apply to, or have an adverse effect upon, the Tax - Exempt Series 2008 Bonds. RATINGS Moody's assigned an underlying long term municipal bond rating of " " Moody's expects to assign a short term municipal bond rating of "" based upon the Bond Credit Facility to be provided from the Bank on the 2008 Bonds. Fitch is expected to assign a short-term rating of "_" based upon the Bond Credit Facility to be provided by the Bank. 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 2008 Bonds. MIAMI/4221626.2 37 FINANCIAL ADVISOR The Department has retained First Southwest Company (Florida) as Financial Advisor in connection with the City's financing plans and with respect to the authorization and issuance of the 2008 Bonds. The Financial Advisor did not participate in the underwriting of the 2008 Bonds. AUDITED FINANCIAL STATEMENTS The Basic Financial Statements of the Department for fiscal year ended September 30, 2006 and the report thereon of KPMG LLP (the "Independent Certified Public Accountant") are attached hereto as "APPENDIX A — AUDITED BASIC FINANCIAL STATEMENTS OF THE DEPARTMENT FOR FISCAL YEAR ENDED SEPTEMBER 30, 2007." Such statements speak only as of September 30, 2007. The Independent Certified Public Accountants has not consented to the use thereof herein. Such documents are attached hereto as a public record. The Independent Certified Public Accountant has not been requested to review this Official Statement in connection with the issuance of the 2008 Bonds. GASB 34 In June 1999, GASB issued GASB Statement No. 34, Basic Financial Statements — and Management's Discussion and Analysis — for State and Local Governments. This statement has substantially affected the Department's financial data accumulation and financial statement presentation processes. The effective date of the new pronouncement required implementation by the Department for its fiscal year ended September 30, 2002. The Department has prepared its financial statements attached hereto in Appendix "A" using GASB 34. UNDERWRITING The 2008 Bonds are being purchased by the underwriter shown on the cover of the Official Statement (the "Underwriter") at an aggregate purchase price of $ (the par amount of the 2008 Bonds, less Underwriter's discount of $ ). The Underwriter's obligations are subject to certain conditions precedent described in the Bond Purchase Contract to be entered into between the City and the Underwriter, and they will be obligated to purchase all of the 2008 Bonds if any 2008 Bonds are purchased. The 2008 Bonds may be offered and sold to certain dealers (including dealers depositing such 2008 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 Underwriter. CONTINGENT FEES The City has retained Bond Counsel and Disclosure Counsel with respect to the authorization, sale, execution and delivery of the 2008 Bonds. The Department has retained the Financial Advisor and Parking Consultant with respect to the sale, execution and delivery of the 2008 Bonds. Payment of the fees of such professionals and an underwriting discount to the Underwriter are each contingent upon the issuance of the 2008 Bonds. MIAMI/4221626.2 38 ENFORCEABILITY OF REMEDIES The remedies available to the owners of the 2008 Bonds upon an event of default under the Bond Ordinance and the 2008 Bond Insurance Policy 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 Bond Ordinance, the 2008 Bonds and the Bond Credit Facility may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the 2008 Bonds, including Bond Counsel's approving opinion, will be qualified, as to the enforceability of the remedies provided in the various legal instruments, by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors enacted before or after such delivery. CONTINUING DISCLOSURE [The City and the Department will enter into a Disclosure Dissemination Agent Agreement dated as of , 2008 (the "Disclosure Agreement") with Digital Assurance Certification, L.L.C. ("DAC") covenanting for the benefit of the holders of the 2008 Bonds to provide certain financial information and operating data relating to the Department and the 2008 Bonds in each year, and to provide notices of the occurrence of certain enumerated material events. The Department 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 SEC (the "NRMSIRs"), as well as any state information depository that is established in the State (the "SID"). Currently, there are no such SIDs. The Department 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 SIDs, 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 G — FORM OF DISCLOSURE DISSEMINATION AGREEMENT" attached hereto. The Disclosure Agreement designates DAC as the initial Dissemination Agent for the 2008 Bonds. The covenants contained in the Disclosure Agreement have been made in order to assist the Underwriter in complying with the continuing disclosure requirements of Rule 15c2-12 promulgated by the SEC (the "Rule"). With respect to the 2008 Bonds, no party other than the Department is obligated to provide, nor is expected to provide, any continuing disclosure information pursuant to the Rule. The Department 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, the Department 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 MIAMI/4221626.2 39 all matters of fact relating to the 2008 Bonds, the security for the payment of the 2008 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 of 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 or the Department from the date hereof. FORWARD -LOOKING STATEMENTS This Official Statement contains certain "forward -Looking statements" concerning the City's and the Department's operations, performance and financial condition, including their future economic performance, plans and objectives. 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 or the Department. The words "may," "would," "could," "will," "expect," "anticipate," "believe," "intend," "plan," "estimate' and similar expressions are meant to identify these forward -looking statements. Actual results may differ materially from those expressed or implied by these forward -looking statements. MISCELLANEOUS Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. 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 2008 Bonds. MIAM1/4221626.2 [Remainder of Page Intentionally Left Blank.] 40 AUTHORIZATION OF OFFICIAL STATEMENT The execution and delivery of this Official Statement has been duly authorized and approved by the City and the Department. At the time of delivery of the 2008 Bonds, the City and the Department 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, the Bank, DTC, the book -entry only system of registration and the information contained under the caption "TAX MATTERS" as to which no opinion shall be expressed), as of its date and as of the date of delivery of the 2008 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. MIAMU4221626.2 THE CITY OF MIA.MI, FLORIDA By: /s/ Pedro G. Hernandez City Manager By: /s/Jami Reyes Chairperson, Off -Street Parking Board By: /s/Arthur Noriega, V. Executive Director, Department of Off -Street Parking 41