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HomeMy WebLinkAbout2003-058RESOLUTION Na 2003-058 A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA, SUPPLEMENTING RESOLUTION NO. 95-63; PROVIDING FOR THE NEGOTIATED SALE OF NOT TO EXCEED $8,320,000 GENERAL OBLIGATION REFUNDING BONDS OF INDIAN RIVER COUNTY, FLORIDA; AUTHORIZING THE SALE THEREOF TO WILLIAM R. HOUGH & CO., SUBJECT TO THE TERMS AND CONDITIONS OF THE BOND PURCHASE AGREEMENT; FIXING REDEMPTION PROVISIONS AND SERIES DESIGNATION FOR THE BONDS; AUTHORIZING THE NEGOTIATED SALE OF THE BONDS; PROVIDING THAT SUCH BONDS SHALL BE ISSUED IN FULL BOOK ENTRY FORM; APPROVING THE FORM OF A PRELIMINARY OFFICIAL STATEMENT; COVENANTING TO PROVIDE CONTINUING DISCLOSURE; DESIGNATING A REGISTRAR AND PAYING AGENT; AUTHORIZING THE PURCHASE OF MUNICIPAL BOND INSURANCE; DESIGNATING AMBAC ASSURANCE AS THE MUNICIPAL BOND INSURER; PROVIDING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on May 16, 1995, the Board of County Commissioners of Indian River County, Florida (the "County") adopted Resolution No. 95-63, as supplemented (the "Original Resolution") to provide for the issuance of not to exceed $26,000,000 in aggregate principal amount of Indian River County General Obligation Bonds payable from the Issuer's ad valorem taxes without limit on all taxable property in the Issuer as provided in the Original Resolution; provided, however, that the Bonds shall be structured in such a manner that at the time of issuance of any series thereof, the millage rate required to make the maximum annual payment of the principal of and interest on the Bonds shall not exceed Y2 mil of the then assessed value of all lands situated in the Issuer subject to ad valorem taxation; and WHEREAS, the Issuer has presently outstanding its $15,000,000 Indian River County, Florida General Obligation Bonds, Series 1995 (the "Refunded Bonds"), and through this Resolution intends on issuing its Indian River County, Florida General Obligations Refunding Bonds, Series 2003 (the "2003 Bonds") to refund the outstanding principal amount of the Refunded Bonds; and WHEREAS, the Issuer expects to receive an offer from William R. Hough & Co. (the "Underwriter") to purchase the 2003 Bonds subject to the terms and conditions set forth in the bond purchase agreement (the "Purchase Agreement"), the form of which is attached hereto as Exhibit "A"' and desires to authorize the Chairman or Vice Chairman of the Board of County Commissioners and the County Administrator to execute such Purchase Agreement upon the approval of the terms thereof by the County Administrator; and WHEREAS, it is in the best interest of the Issuer to provide for the current public sale of not to exceed $8,320,000 of such 2003 Bonds as an additional Series of Bonds; and WHEREAS, the Issuer now desires to approve the issuance of its 2003 Bonds, to sell its 2003 Bonds pursuant to the Purchase Agreement, to authorize the distribution of a Preliminary RESOLUTION NO. 2003-058 Official Statement and an Official Statement in connection with the issuance of the 2003 Bonds and to take certain other actions in connection with the issuance and sale of the 2003 Bonds; and WHEREAS, the Issuer will be provided all applicable disclosure information by the Underwriter as required by Section 218.385, Florida Statutes, prior to the execution of the Purchase Agreement, a copy of which disclosure is to be attached to the Purchase Agreement; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA, as follows: SECTION 1. SERIES DESIGNATION. The issuance of not to exceed $8,320,000 Indian River County, Florida General Obligation Refunding Bonds, Series 2003 by the Issuer is hereby approved upon the terms and conditions set forth in this Resolution (the "2003 Bonds"). The series designation for the series of Bonds herein authorized is hereby determined to be Series 2003. The refunding of the Refunded Bonds and their redemption on July 1, 2003, is hereby authorized. SECTION 2. APPLICATION OF PROVISIONS OF THE RESOLUTION. The 2003 Bonds, herein authorized, shall for all purposes (except as herein expressly provided) be considered to be issued under the authority of the Original Resolution, and shall be entitled to all the protection and security provided therein for Bonds issued thereunder. SECTION 3. SALE OF 2003 BONDS; APPLICATION OF PROCEEDS. (a) Due to the willingness of the Underwriter to purchase not to exceed $8,320,000 in aggregate principal amount of the 2003 Bonds at favorable interest costs and the importance of timing in the marketing of such obligations, it is hereby determined that it is in the best interest of the public and the Issuer to sell the 2003 Bonds at a negotiated sale and such sale to the Underwriter pursuant to the terms and conditions contained in the Purchase Agreement and herein is hereby authorized and approved, subject to the satisfaction of the conditions set forth in Section 3(b) below. (b) The County Administrator is hereby authorized to receive the offer to purchase the 2003 Bonds from the Underwriter in the form of an executed Purchase Agreement in the form approved herein. The Chairman or Vice Chairman of the Board of County Commissioners or the County Administrator is hereby authorized to award the sale of the 2003 Bonds upon the County Administrator's determination that the offer submitted by the Underwriter for the purchase of all of the 2003 Bonds is within all of the following parameters: (1) in the case of the 2003 Bonds, the true interest cost rate shall not exceed 2.80%, (2) the refunding of the Refunded Bonds to be refunded by the 2003 Bonds shall provide the County with a net present value savings of not less than 5.0% of the par amount of such Refunded Bonds with an Underwriter' Discount not in excess of $4.10 per $1,000 principal amount thereof, and (3) the actual principal amount of 2003 Bonds shall be limited to the lesser of $8,320,000 or the actual sum of the amounts required to (i) pay the cost of issuance of the 2003 Bonds, (ii) pay the premium on the Municipal Bond Insurance Policy (herein defined), and (iii) retire the Refunded Bonds in full on July 1, 2003, including any premium and accrued interest thereon to the date of redemption. The Chairman or Vice Chairman of the Board of County Commissioners or the County Administrator are hereby authorized to award the sale of the 2003 Bonds as set forth above or to reject the offer from the Underwriter for the 2003 Bonds. Such award shall be final. The County Administrator RESOLUTION NO. 2003-058 shall cause notice of redemption of the Refunded Bonds on July 1, 2003 to be issued, with such redemption conditional solely upon the issuance of the 2003 Bonds. The acceptance of the offer to purchase the 2003 Bonds, shall constitute a decision to refund the Refunded Bonds in accordance with this Resolution. (c) The proceeds of the sale of the 2003 Bonds shall be deposited by the County on the date of issuance of the 2003 Bonds with the Paying Agent for the Refunded Bonds, together with other funds of the County, which are sufficient to redeem, in full, the Refunded Bonds on July 1, 2003. SECTION 4. GENERAL AUTHORITY. The Chairman or Vice -Chairman, the County Administrator, the County Attorney, the Clerk and any other proper officials of the County are hereby authorized to do all acts and things required of them by this Resolution, the Resolution, the Purchase Agreement or that may otherwise be desirable or consistent with accomplishing the full, punctual and complete performance of all the terms, covenants and agreements contained in any of the foregoing and the County is hereby authorized and directed to execute and deliver any and all papers and instruments and to cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated thereby. SECTION 5. NEGOTIATED SALE. The 2003 Bonds shall be sold to the Underwriter, upon the terms and conditions set forth in the Purchase Agreement attached hereto and incorporated by reference, upon the satisfaction of the conditions set forth in Section 3(b) hereof The Chairman or Vice Chairman of the Board of County Commissioners or County Administrator are hereby authorized to execute such Purchase Agreement in substantially the form attached as Exhibit "A," with the approval of the County Attorney as to form and legal sufficiency, with such additional changes, insertions and omissions therein as do not change the substance thereof and as may be approved by the said officers of the Issuer executing the same, such execution to be conclusive evidence of such approval. SECTION 6. REDEMPTION, INTEREST RATE AND MATURITY PROVISIONS. The 2003 Bonds shall be dated, shall bear interest payable at the times, shall mature and shall be subject to redemption as provided in the Purchase Agreement. The use of the proceeds of the 2003 Bonds, shall be as provided in the Official Statement relating to the 2003 Bonds. SECTION 7. REGISTRAR AND PAYING AGENT. U.S. Bank National Association, Ft. Lauderdale, Florida is hereby appointed and designated to serve as Paying Agent and Regis- trar for the 2003 Bonds. SECTION 8. APPLICATION OF FUNDS HELD FOR REFUNDED BONDS. On the date of issuance of the 2003 Bonds, the Issuer shall transfer the funds on hand in the various funds and accounts established for the Refunded Bonds in such manner as may be directed by a certificate of the County Administrator executed prior to or simultaneously with the issuance of the 2003 Bonds. SECTION 9. PRELIMINARY OFFICIAL STATEMENT. The County Administrator is authorized and directed to cause a Preliminary Official Statement to be prepared in substantially the form attached hereto as Exhibit B, with such changes, insertions and omissions as shall be approved by the County Administrator and to furnish a copy of such Preliminary Official RESOLUTION NO. 2003-058 Statement to the Underwriter. The County Administrator is authorized to deem final the Preliminary Official Statement prepared pursuant to this Section for purposes of Rule 15c2-12 (the "Rule") of the Securities and Exchange Commission. Upon the award of the 2003 Bonds to the Underwriter, the Issuer shall also make available a reasonable number of copies of the Official Statement to the Underwriter, who may mail such Official Statements to prospective purchasers at the Underwriter's expense. SECTION 10. CONTINUING DISCLOSURE. The Issuer hereby covenants and agrees that, in order to provide for compliance by the Issuer with the secondary market disclosure requirements of the Rule, that it will comply with and carry out all of the provisions of that certain Continuing Disclosure Certificate in substantially the form attached hereto as Exhibit C, to be executed by the Issuer and dated the date of issuance and delivery of the 2003 Bonds, as it may be amended from time to time in accordance with the terms thereof (the "Continuing Disclosure Certificate"). Notwithstanding any other provision of this Resolution, failure of the Issuer to comply with such Continuing Disclosure Certificate shall not be considered an event of default; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under this Section. SECTION 11. MUNICIPAL BOND INSURANCE. The purchase of a municipal bond insurance policy (the "Financial Guaranty Insurance Policy") to be issued by Ambac Assurance Corporation (." AMBAC") is hereby authorized in accordance with the commitment for insurance attached hereto as Exhibit "Dm and payment for such insurance is hereby authorized from Bond proceeds or other funds provided by the Issuer, so long as such purchase results in a net interest cost savings The County Administrator, or his designee, shall have the authority to determine whether the purchase of the Financial Guaranty Policy would result in a net interest cost savings to the County at the time the 2003 Bonds are sold. A statement of insurance is hereby authorized to be printed on or attached to the Bonds for the benefit and information of the Bondholders. For so long as the Financial Guaranty Insurance Policy is applicable to the 2003 Bonds, the additional provisions set forth in the Original Resolution regarding AMBAC as the provider of the municipal bond insurance policy shall be applicable to the 2003 Bonds and AMBAC as the provider of the Financial Guaranty Insurance Policy. In addition to the covenants and agreements of the Issuer contained in the Original Resolution regarding the rights of AMBAC which are incorporated herein, the Issuer hereby covenants and agrees for the benefit of AMBAC and the holders of the Bonds while the Financial Guaranty Insurance Policy insuring the 2003 Bonds is in full force and effect, to provide AMBAC with copies of any notices to be given to any party pursuant to the Resolution, and to provide prior notice to AMBAC of any amendments to the Resolution. SECTION 12. BOOK ENTRY ONLY BONDS. It is in the best interest of the Issuer and the residents and inhabitants thereof that the 2003 Bonds be issued utilizing a pure book -entry system of registration. In furtherance thereof, the Issuer has previously executed and delivered a Blanket Letter of Representations with The Depository Trust Company. For so long as the 2003 Bonds remain in such book entry only system of registration, in the event of a conflict between the provisions of the Original Resolution and of the Blanket Letter of Representations, the terms and provisions of the Blanket Letter of Representations shall prevail. RESOLUTION NO. 2003-058 SECTION 13. RECORD DATE. Payment of the interest on the 2003 Bonds shall be made by the Paying Agent on each interest payment date to the person appearing on the registration books of the Registrar as of the date fifteen (15) days prior to each interest payment date, as the Registered Owner thereof, by check or draft mailed to such Registered Owner at his address as it appears on such registration books; provided, however, that for any Registered Owner of $1,000,000 or more in principal amount of 2003 Bonds, principal and interest payments will, at the written request and at the expense of such Owner, be made by wire transfer or other medium acceptable to the Issuer and to the Owner. SECTION 14. INCONSISTENT PROVISIONS. All prior resolutions and motions of the Issuer inconsistent with the provisions of this resolution are hereby modified, supplemented and amended to conform with the provisions herein contained and except as otherwise modified, supplemented and amended hereby shall remain in full force and effect. SECTION 15. EFFECTIVE DATE. This resolution shall take effect immediately upon its adoption.',-:, PASSEDAND ADOPTED the 20th day of May , 2003. 'ATTEST,. -:::J: K.' Barton;Clerk /tom C. ved as -to •form°and legals arian E. Fell Assistant County Attorney INDIAN RIVER COUNTY Board o ' ounty (commissioners EXHIBIT A FORM OF BOND PURCHASE AGREEMENT INDIAN RIVER COUNTY, FLORIDA $[Bond Amountl General. Obligation Refunding Bonds Series 2003 BOND PURCHASE CONTRACT [BPA Date] Board of County Commissioners Indian River County Vero Beach, Florida Dear Commission Members: William R Hough & Co. (the "Underwriter") offers to enter into the following agreement with you (the "County") which, upon your acceptance of this offer, will be binding upon the County and upon the Underwriter. This offer is made subject to your acceptance on or before 11:59 p.m., E.D.T., on the date hereof, and ifnot so accepted, will be subject to withdrawal by the Underwriter uponnotice to the County at any time prior to the acceptance hereof by you. All capitalized terms not otherwise defined herein shall have the meanings set forth in the Official Statement (as hereinafter defined). 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements set forthherein, the Underwriter herebyagree to purchase from the County for offering to the public and the County hereby agrees to sell and deliver to the Underwriter for suchpurpose, all (but not less than all) of the County's $[Bond Amount] General ObligationRefunding Bonds, Series 2003 (the "Series 2003 Bonds"). The Series 2003 Bonds shallbe dated as ofJuly 1, 2003, shall be issued in such principal amounts and bear such rates of interest as set forth in Exhibit A attached hereto. Interest on the Series 2003 Bonds shall be payable semiannually on January 1 and July 1, of each year, commencing January 1, 2004. The aggregate purchase price of the Series 2003 Bonds shall be $[Purchase Price] (par, less underwriter's discount of [Discount], plus accrued interest of [Accrued]). The Series 2003 Bonds initially shall be offered to the public at such prices or yields (including discounts and premiums) as indicated on Exhibit A attached hereto. The Series 2003 Bonds are being issued pursuant to Chapter 125, Florida Statutes, Resolution No. 92-146 adopted by the Board of County Commissioners of the County (the"Board") on August 18, 1992, as supplemented and other applicable provisions of law (collectively, the "Act") and pursuant to Resolution No. 95-63, of the Board, adopted May 16, 1995, and as further supplemented by Resolution No. 95-83, adopted by the Board July 11, 1995, as supplemented (the "Resolution") and the vote ofthe electors ofthe County on November 3, 1992, in accordance withChapter 100, Florida Statutes (the "Referendum"). The Bonds are general obligations ofthe County secured by a pledge of the full faith, credit and taxing power ofthe County. In the Resolution the County has covenanted to levy ad valorem property taxes on all non-exempt property located within the boundaries ofthe County, without limit as to amount or rate. The Bonds will rank on aparitywiththe $11,000,000 Indian River County General Obligation Bonds, Series 2001, which will be Outstanding in the aggregate principal amount of $9,925,000 after giving effect to the July 1, 2003 principal payment. The Bonds are being issued to provide funds, which together with other funds ofthe County, will be used to refund and redeem on the date of closing ofthe Bonds, all ofthe Outstanding principal amount of the County's $15,000,000 General Obligation Bonds, Series 1995, which will be Outstanding in the aggregate principal amount of $8,320,000 after giving effect to the July 1, 2003 principal payment. Proceeds of the Bonds will also be used to pay the costs of issuance of the Bonds, including the premium for a policy of financial guaranty insurance. The Underwriter is duly authorized to execute this Bond Purchase Contract. 2. Good FaithDeposit. Delivered to you herewith, as a good faith deposit, is a corporate check of the Underwriter payable to the order of the County in the amount. of $ [Good Faith Amount] as security for the performance by the Underwriter of its obligations to accept and pay for the Series 2003 Bonds at Closing (as defined herein) in accordance with the provisions hereof In the event that you accept this offer, said check shall be held uncashed by the County as a good faith deposit. At the Closing, the check will be retumed to the Underwriter. In the event you do not accept this offer, the check shall be immediately returned to the Underwriter. If the Underwriter fails (other than for a reason permitted hereunder) to accept and pay for the Series 2003 Bonds at the Closing as provided herein, the check may be cashed by you and the proceeds retained by the County as and for full liquidated damages for such failure and for any and all defaults hereunder on the part of the Underwriter, and the retention of such amounts shall constitute a full release and discharge of all claims and damages for such failure and for any and all such defaults hereunder on the part of the Underwriter. In the event that the County fails to deliver the Series 2003 Bonds at the Closing, or if the County is unable at or prior to the date of Closing to satisfy or cause to be satisfied the conditions to the obligations of the Underwriter contained in this Bond Purchase Contract, or if the obligations of the Underwriter contained herein shall be cancelled or terminated for any reason permitted by this Bond Purchase Contract, the County shall be obligated to immediately return the check to the Underwriter and the return of such check shall constitute a full release and discharge of all claims and damages for such failure and for any and all such defaults hereunder on the part of the County. 3. Offering. It shall be a condition of your obligation to sell and deliver the Series 2003 Bonds to the Underwriter, and the obligation of the Underwriter to purchase and accept delivery of the Series 2003 Bonds, that the entire aggregate principal amount ofthe Series 2003 Bonds shall be sold and delivered by you and accepted and paid for by the Underwriter at the Closing. The Underwriter agrees to make a public offering of all of the Series 2003 Bonds at the initial offering prices set forth in Exhibit A attached hereto; provided, however, the Underwriter reserves the right to make concessions to dealers and to change such initial offering prices as the Underwriter shall deem necessary in connection with the marketing of the Series 2003 Bonds. 2 4. Preliminary Official Statement and Official Statement. The County hereby confirms that it has heretofore made available to the Underwriter a Preliminary Official Statement of the County relating to the Series 2003 Bonds, dated [POS Date] (which, together with the cover page and appendices contained therein, is herein called the 'Preliminary Official Statement"), and authorizes and ratifies the use and distribution thereof to prospective purchasers and investors. Within seven business days of the acceptance hereofby the County, the County shall cause to be delivered the final Official Statement, dated the date hereof (which, together with the cover page and appendices contained therein, is herein called the "Official Statement"), executed on behalf of the County by its Chairman of the Board of County Commissioners and by its County Administrator and suchreasonable numbers of conformed copies as the Underwriter shall request, which shall be sufficient in number to comply with paragraph (b)(3) of Rule 15c2-12 of the Securities and Exchange Commission (17 CFR §240.15c2-12) under the Securities Exchange Act of 1934 and with Rule G-32 and all other applicable rules of the Municipal Securities Rulemaking Board. The County, by its acceptance hereof, ratifies and approves the Preliminary Official Statement and ratifies and approves and authorizes the Underwriter to use the Official Statement and all documents described therein in connection with the public offering and the sale ofthe Series 2003 Bonds. The County hereby deems the Preliminary Official Statement "final" as of its date for purposes of SEC Rule 15c2 -12(b)(1). In accordance with Section 218.385, Florida Statutes, the Underwriter hereby disclosed the information required by such Section, including a truth -in -bonding statement, as provided in Exhibit B attached hereto. 5. Use of Documents. You hereby authorize the use by the Underwriter of (a) the Resolution, (b) the Preliminary Official Statement, (c) the Official Statement (including any supplements or amendments thereto), (d) the Continuing Disclosure Certificate of the County, dated as of July 1, 2003 (the "Continuing Disclosure Certificate"); and (e) any other documents related to the transactions contemplated in the Official Statement in connection with the public offering, sale and distribution of the Series 2003 Bonds. 6. Representations, Warranties and Agreements. The County hereby represents, warrants and agrees as follows: (a) As of the date of the Official Statement and at the time of Closing, the statements and information contained in the Official Statement will be true, correct and complete in all material respects and the Official Statement will not omit any statement or information which should be included therein for the purposes for which the Official Statement is to be used or which is necessary to make the statements or information contained therein, in light ofthe circumstances under which they were made, not misleading. (b) Between the date of this Bond Purchase Contract and the time of Closing, the County will not execute any bonds, notes or obligations for borrowed money (other than the Series 2003 Bonds) which pledge the full faith and credit ofthe County, without givingpriorwrittennotice thereofto the Underwriter. 3 (c) The County is, and will be at the date of Closing, duly organized and validly existing as a political subdivision of the State of Florida, with the powers and authority set forth in the Act. (d) The County has full legal right, power and authority to: (i) enter into this Bond Purchase Contract and the Continuing Disclosure Certificate, (ii) have adopted the Resolutionand to have conducted the Referendum, (iii) sell, issue and deliver the Series 2003 Bonds to the Underwriter as provided herein, and (iv) carry out and consummate the transactions contemplated by this Bond Purchase Contract, the Continuing Disclosure Certificate, the Resolution and the Official Statement and the County has complied, and at the Closing will be in compliance, in all respects, with the terms of the Act and with the obligations on its part in connection with the issuance of the Series 2003 Bonds contained in the Resolution, the Series 2003 Bonds, the Continuing Disclosure Certificate and this Bond Purchase Contract. (e) By all necessary official action, the Countyhas duly adopted the Resolution, conducted the Referendum in accordance with lawatwhichthe issuance ofthe Bonds under the Resolutionwas approved by a majority of the qualified electors, has duly authorized and approved the Official Statement, has duly authorized and approved the execution and delivery of, and the performance by the County, of this Bond Purchase Contract, the Continuing Disclosure Certificate and all other obligations on its part in connection with the issuance of the Series 2003 Bonds and the consummation by it of all other transactions contemplated by this Bond Purchase Contract in connection with the issuance of the Series 2003 Bonds; upon delivery of the Series 2003 Bonds, each of the Resolution and the Continuing Disclosure Certificate will each constitute a legal, valid and binding obligation of the County, enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency, and similar laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity. (1 When delivered to and paid for by the Underwriter at the Closing in accordance withthe provisions of this Bond Purchase Contract, the Series 2003 Bonds will have been duly authorized, executed, issued and delivered and will constitute valid and binding obligations of the County in conformity with the Act and the Resolution, and shall be entitled to the benefits of the Resolution, including a prior pledge ofand lienuponthe Pledged Revenues in accordance withthe provisions of the Resolution, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity. (g) The adoption of the Resolution, the conduct of the Referendum and the authorization, executionand deliveryofthis Bond Purchase Contract, the Continuing Disclosure Certificate and the Series 2003 Bonds, and compliance with the provisions hereof and thereof, will not conflict with, or constitute a breach of or default under any law, administrative regulation, consent decree, ordinance, resolution or any agreement or other instrument to which the County was or is subject, nor will such enactment, adoption, execution, delivery, authorization or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance ofany nature whatsoever upon any of the property or assets ofthe County, or under the terms of any law, administrative regulation, ordinance, resolutionor instrument, except as expressly provided by the Resolution or the Series 2003 Bonds. 4 (h) At the time ofClosing, the County will be in compliance in all respects with the covenants and agreements contained in the Act and the Resolution and no event of default and no event which, with the lapse of time or giving ofnotice, or both, would constitute an event of default under the Resolution will have occurred or be continuing. (i) Except as provided in the Official Statement, all approvals, consents, authorizations and orders of any governmental authority or agency having jurisdiction in any matter which would constitute a condition precedent to the performance bythe Countyofits obligations hereunder and under the Resolution or the Continuing Disclosure Certificate have been obtained and are in full force and effect. (j) The County is lawfully empowered to pledge the full faith and credit of the County to the payment of the Series 2003 Bonds. (k) Except as disclosed in the Official Statement, to the best knowledge of the County, as of the date hereof, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, govemment agency, public board or body, pending or threatened against the County, affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Series 2003 Bonds or the pledge of the full faith and credit of the County thereto as provided in the Resolution or contesting or affecting as to the County the validity or enforceability in any respect relating to the Series 2003 Bonds, the Resolution, the Continuing Disclosure Certificate or this Bond Purchase Contract, or contesting the tax-exempt status of interest on the Series 2003 Bonds, or contesting the completeness or accuracy of the Official Statement or any supplement or amendment thereto, or contesting the powers ofthe County or the County Commission, or contesting the referendum or any authority for the issuance of the Series 2003 Bonds, the adoption of the Resolution or the execution and delivery by the County of this Bond Purchase Contract or the Continuing Disclosure Certificate. (1) The County will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order to (i) qualify the Series 2003 Bonds for offer and sale under the "blue sky" or other securities laws and regulations of such states and otherjurisdictions ofthe United States as the Underwriter may designate, and (i) determine the eligibility ofthe Series 2003 Bonds for investment under the laws of such states and other jurisdictions, and will use its best efforts to continue such qualifications in effect so long as required for the distnbutionofthe Series 2003 Bonds; provided, however, that the County shall not be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction or expend its own funds with respect to the foregoing. (m) The County will not take or omit to take any actionwhichactionor omission will in any way cause the proceeds from the sale of the Series 2003 Bonds to be applied in a manner contrary to that provided for in the Resolution and as described in the Official Statement. (n) Except as expressly disclosed in the Official Statement, the Countyneither is nor has been in default any time after December 31, 1975, as to payment of principal or interest with respect to an 5 obligation issued or guaranteed by the County (except with respect to bonds for which it has acted solely as a "conduit issuer"). (o) The County has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be relied upon. (p) As of its date, the Preliminary Official Statement is hereby deemed "final" by the County for purposes of SEC Rule 15c2 -12(b)(1), except for "permitted omissions" as defined in such Rule. (q) If after the date of this Bond Purchase Contract and until the earlier of (i) 90 days from the end of the "underwriting period" (as defined in SEC Rule 15c2-12) or (ii) the time when the Official Statement is available to any person from a nationally recognized repository, but in no case less than 25 days following the end of the underwriting period, any event shall occur which might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the County shall notify the Underwriter thereof, and, if in the opinion of the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, the County will at its own expense forthwith prepare and furnish to the Underwriter a sufficient number of copies of an amendment of or supplement to the Official Statement (in form and substance satisfactory to Counsel to the Underwriter) which will supplement or amend the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at such time, not misleading. The Underwriter shall notify the County in writing of the date on which the "underwriting period" ends. (r) The County shall undertake, pursuant to the Resolution, to comply with the Continuing Disclosure Certificate. 7. Closing. Before 1:00 p.m., Vero Beach, Florida time, on July 1, 2003, or at such time on such earlier or later date as shall be agreed upon, you will deliver to the Underwriter, at the location and place to be agreed upon by you and the Underwriter, the Series 2003 Bonds in definitive form, duly executed, together with the other documents herein mentioned; and the Underwriter will accept such delivery and pay at such location as may be agreed upon by you and the Underwriter the purchase price of the Series 2003 Bonds as set forth in Section 1 hereof, plus accrued interest, if any, thereon, by immediately available funds, payable to the order of the County. This delivery and payment is herein called the "Closing." The Series 2003 Bonds shall be made available to the Underwriter at least one business day before the Closing for purposes of inspecting and packaging. The Series 2003 Bonds shall be prepared and delivered as fully registered Bonds. 8. Closing Conditions. The Underwriter has entered into this Bond Purchase Contract in reliance upon the representations and warranties of the County herein contained and the performance by the County of its obligations hereunder, both as of the date hereof and as of the time of Closing. The 6 obligations ofthe Underwriter under this Bond Purchase Contract are and shall be subject to the following conditions: (a) The representations, warranties and agreements of the County contained herein shall be true and correct and complied with as of the date hereof and as of the date of the Closing, as if made on the date of the Closing. (b) At the time ofthe Closing, the Resolution shall be in full force and effect in accordance with its terms and shall not have been amended, modified or supplemented except as amended, modified or supplemented by a resolution incorporating the terms and conditions contained in the municipal bond insurance commitment of the Insurer (as defined herein), and the Official Statement shall not have been supplemented or amended, except in any such case as may have been agreed to by the Underwriter. (c) At the time of Closing, a resolution of the County shall have incorporated the terms and conditions contained in the financial guaranty policy commitment of the Insurer into the Resolution. (d) At the time of the Closing, all official action of the County relating to this Bond Purchase Contract, the Continuing Disclosure Certificate, the referendum and the Series 2003 Bonds shall be in full force and effect in accordance with their respective terms and shall not have been amended, modified or supplemented in any material respect, except in each case as may have been agreed to by the Underwriter. (e) The Underwriter shall have the right to cancel the agreement contained herein to purchase, to accept delivery of and to pay for the Series 2003 Bonds by notifying you in writing of their intention to do so if (i) between the date hereofand the Closing, legislation shall have been enacted by the Congress of the United States, or recommended to the Congress for passage by the President of the United States, or favorably reported for passage to either House of Congress by any Committee of such House, or passed by either House of Congress, or a decision shall have been rendered by a court ofthe United States or the United States Tax Court, or a Wiling shall have been made or a regulation shall have been proposed or made by the TreasuryDepartment ofthe United States or the Internal Revenue Service, withrespect to the federal taxation of interest received on obligations ofthe general character ofthe Series 2003 Bonds, which, in the opinion of counsel for the Underwriter has, or will have, the effect of making such interest subject to inclusion in gross income for purposes of federal income taxation, except to the extent such interest shall be includable in gross income on the date hereof, or (ii) between the date hereofand the Closing, legislation shall be enacted or any action shallbe taken by the Securities and Exchange Commission which, in the opinion of counsel for the Underwriter, has the effect ofrequiring the contemplated issuance or distribution of the Series 2003 Bonds to be registered under the Securities Act of 1933, as amended, or of requiring the Resolution to be qualified under the Trust Indenture Act of 1939, as amended, or (iii) an event described in paragraph (q) of Section 6 hereof shall have occurred which requires an amendment or supplement to the Official Statement and which, in the reasonable opinion ofthe Underwriter, materially adversely affects the marketability ofthe Series 2003 Bonds or the market price thereof, or (iv) inthe reasonable opinion ofthe Underwriter, payment for and deliveryofthe Series 2003 Bonds is rendered impracticable or inadvisable because (A) trading in securities generally shall have been suspended on the New York Stock Exchange, Inc., or (B) a general banking moratorium shall have been established by Federal, New York or Florida authorities, or (C) the engagement of the United States in a war or other hostilities or the threat ofwar or other hostilities, or (v) an order, decree or injunction of any court of competent jurisdiction, or any order, ruling, regulation or administrative proceeding by any governmental body or board, shall have been issued or commenced, or any legislation enacted, with the purpose or effect of prohibiting the issuance, offering or sale of the Series 2003 Bonds as contemplated hereby or by the Official Statement or prohibiting the adoption of the Resolution or the performance thereof, or (vi) between the date hereofand the Closing, the County has, without the prior written consent of the Underwriter, offered or issued any bonds, notes or other obligations for borrowed money, or incurred any material liabilities, direct or contingent, other than as described in the Official Statement, in either case payable from the full faith and credit of the County, or (vii) the President of the United States, the office of Management and Budget, the Department of Treasury, the Internal Revenue Service or any other governmental body, department, agency or commission of the United States or the State of Florida shall take or propose to take any action or implement or propose regulations, rules or legislation which, in the reasonable judgment ofthe Underwriter, materially adversely affects the market price ofthe Series 2003 Bonds or causes any material information in the Official Statement, in light of the circumstances under which it appears, to be misleading in any material respect, or (viii) any executive order shall be announced, or any legislation, ordinance; rule or regulation shall be proposed by or introduced in, or be enacted by any governmental body, department, agency or commission ofthe United States or the State ofFlorida or the State ofNew York, having jurisdiction over the subject matter, or a decision by any court of competent jurisdiction within the United States or within the State of Florida or the State of New York shall be rendered which, in the reasonable judgment ofthe Underwriter, materially adversely affects the market price of the Series 2003 Bonds or causes any information in the Official Statement to be misleading in any material respect, or (ix) prior to Closing, either (A) Standard & Poor's Credit Markets Services or Fitch Ratings shall inform the County or the Underwriter that the Series 2003 Bonds will not be rated 8 at least "AAA" and "AAA," respectively and " "and " " respectively, without regard to the financial guaranty insurance policy (the "Policy") issued by AMBAC Assurance Corporation (the "Insurer"), or (B) the Insurer shall inform the Underwriter or the County that it shall not deliver the Policy at the time of Closing, or (x) the rating of any class of security of the County shall have been downgraded or withdrawn by a national credit rating service, or the Certification has been modified or revoked. (f) At or prior to the date of the Closing, the Underwriter shall receive the following documents: (i) The Resolution certified by the Clerk of Circuit Court under seal as having been duly enacted, adopted or executed, as the case may be, by the County and as being in effect, with only such supplements, modifications or amendments as may have been agreed to by the Underwriter. (ii) Fully executed counterparts of (A) the Continuing Disclosure Certificate, and (B) the Official Statement and copies of conformed Official Statements sufficient to satisfy the requirements of Section 4 hereof. (iii) A final approving opinion of Bryant, Miller and Olive, P.A., Bond Counsel to the County, addressed to you, dated the date of the Closing, in substantially the form included in the Official Statement. (iv) A letter ofBryant, Miller and Olive, P.A., addressed to the Underwriter, and dated the date of Closing, to the effect that their final approving opinion referred to in Section 8(f)(iii) hereofmay be relied upon by the Underwriter and the Insurer to the same extent as if such opinion were addressed to the Underwriter and the Insurer. (v) A supplemental opinion of Bryant, Miller and Olive, P.A., addressed to you and the Underwriter, and dated the date of Closing, to the effect that, (A) the information set forth in the Official Statement under the headings, "INTRODUCTION," "AUTHORITYFOR BONDS," "PURPOSE OF IS SUANCE," "DESCRIPTION OF THE BONDS "and "AD VALOREM TAX MA 1"i ERS" (other than the financial and statistical information and information concerning the Insurer included therein as to which no opinion need be expressed), insofar as such information purports to be descriptions or summaries ofthe Act, the Resolution, the referendum and the Series 2003 Bonds, constitute correct summaries of the matters set forth or the documents referred to therein, and the information under the heading "TAX EXEMPTION" is correct, and (B) the Series 2003 Bonds are not required to be registered under the Securities Act of 1933, as amended, and it is not necessary to qualify the Resolution under the Trust Indenture Act of 1939, as amended. 9 (vi) An opinion of WilliamG. Collins II, Esquire, addressed to you, the Insurer and the Underwriter, and dated the date of the Closing, to the effect that, (A) the County is a political subdivision of the State of Florida, duly created and validly existing and has full legal right, power and authority to adopt the Resolution, to conduct the referendum and perform its obligations under the Resolution, and to authorize, execute and deliver and to perform its obligations under this Bond Purchase Contract, the Continuing Disclosure Certificate and the Series 2003 Bonds, (B) the County has duly adopted the Resolution, has duly conducted the referendum and has duly authorized, executed and delivered this Bond Purchase Contract and the Continuing Disclosure Certificate, and assuming the due authorization, execution and delivery of this Bond Purchase Contract and the Continuing Disclosure Certificate by the other parties thereto, each such instrument constitutes the legal, binding and valid obligation of the County, enforceable in accordance with its respective terms; provided, however, the enforceabilitythereofmaybe subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and subject, as to enforceability, to general principles ofequity and the Series 2003 Bonds have been properly executed by the proper officers of the County, and (C) the use of the Preliminary Official Statement by the Underwriter for the purpose of offering the Series 2003 Bonds for sale has been duly authorized and ratified by the County, (D) to the best of his knowledge, the adoption of the Resolution, the conduct of the referendum and the authorization, execution and delivery of this Bond Purchase Contract, the Continuing Disclosure Certificate and the Series 2003 Bonds, and compliance with the provisions hereof and thereof, will not conflict with, or constitute a breach of or default under, any law, administrative regulation, consent decree, ordinance, resolution or any agreement or other instrument to which the County was or is subject, as the case may be, nor will such enactment, adoption, execution, delivery, authorization or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any ofthe property or assets ofthe County, or under the terms of any law, administrative regulation, ordinance, resolution or instrument, except as expressly provided by the Resolution, (E) to the best of his knowledge, all approvals, consents, authorizations and orders o f any governmental authority or agency having jurisdiction in any matter which would constitute a condition precedent to the performance by the County, of its obligations hereunder and under the Resolution have been obtained and are in fiill force and effect, (F) the County is lawfully empowered to pledge its full faith and credit to the payment payment of the principal of and interest on the Series 2003 Bonds as the same becomes due and payable, and (G) except as disclosed in the Official Statement, to the best of his knowledge, as ofthe date of such opinion, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or threatened against the County, affecting or seeking to prohibit, restrain or enjoin the sale, issuance or deliveryofthe Series 2003 Bonds, challenge the referendum, or the pledge of the full faith and credit of the County to the repayment of the Series 2003 Bonds, or contesting or affecting the validity or enforceability in any respect of the Series 2003 Bonds, the Resolution, the referendum, the Continuing Disclosure Certificate or this Bond Purchase Contract, or contesting the tax-exempt status of interest on the Series 2003 Bonds, or contesting the completeness or accuracy of the Official Statement or any supplement or amendment thereto, or contesting the powers of the County or the County 10 Commission, or any authority for the issuance of the Series 2003 Bonds, the adoption of the Resolution, the conduct of the referendum or the execution and deliveryby the County of this Bond Purchase Contract and the Continuing Disclosure Certificate. (vii) A certificate, which shall be true and correct at the time of Closing, signed by the County Finance Director, or such other officials satisfactory to the Underwriter, and in form and substance satisfactory to the Underwriter, to the effect that, to the best of their knowledge and belief (A) the representations, warranties and covenants of the County contained herein are true and correct in all material respects and are complied with as of the time of Closing, (B) the information appearing in the Official Statement under the captions "THE COUNTY" and "COUNTY FINANCIAL MATTERS" has been provided by the County specifically for inclusion therein and is true, correct and complete as of its date, (C) except as described under the caption referred to in (B) above, since the date of the audited financial statements contained in the Official Statement, there has been no material adverse change in the financial condition of the County, and (D) the Official Statement did not as of its date, and does not as of the date of Closing, contain any untrue statement of a material fact or omit to state a material fact which should be included therein for the purposes for which the Official Statement is to be used, or which is necessary in order to make the statements contained therein, in light of the circumstances in which they were made, not misleading (provided, that no opinion need be expressed regarding the information contained therein relating to the Insurer or the Policy). (viii) A certificate of an authorized representative of U.S. Bank (the "Bank"), as Registrar and Paying Agent to the effect that (A) the Bank is a national banking association duly organized, validly existing and in good standing under the laws ofthe United States of America and is duly authorized to exercise trust powers in the State of Florida, (B) the Bank has all requisite authority, power, licenses, permits and franchises, and has full corporate power and legal authority to execute and perform its functions under the Resolution, (C) the performance by the Bank of its functions under the Resolution will not result in any violation of the Articles of Association or Bylaws ofthe Bank, any court order to which the Bank is subject or any agreement, indenture or other obligation or instrument to which the Bank is a party or by which the Bank is bound, and no approval or other action by any govemmental authority or agency having supervisoryauthorityover the Bank is required to be obtained by the Bank in order to perform its functions under the Resolution, and (D) to the best of such representative's knowledge, there is no action, suit, proceeding or investigation at law or in equitybefore any court, public board or body pending or, to his or her knowledge, threatened against or affecting the Bank wherein an unfavorable decision, ruling or finding on an issue raised by any party thereto is likely to materially and adversely affect the ability of the Bank to perform its obligations under the Resolution. The Policy issued by the Insurer. (x) An opinion of general counsel to the Insurer or a certificate of an officer of the Insurer dated the date of the Closing and addressed to the Underwriter, concerning the Insurer, 11 the Policy, and the information relating to the Insurer and the Policy contained in the Official Statement, in form and substance satisfactory to Bond Counsel and the Underwriter. (xi) A letter of Fitch IBCA, Inc. to the effect that the Series 2003 Bonds have been assigned a rating no less favorable than "AAA" and letter of Standard & Poor's Credit Markets Services to the effect that the Series 2003 Bonds have been assigned a rating no less favorable than "AAA" each of which ratings shall be in effect as of the date of Closing. (xiii) Suchadditional legal opinions, certificates, instruments and other documents as the Underwriter mayreasonably request to evidence the truth and accuracy, as of the date hereof and as of the date of the Closing, ofthe County's representations and warranties contained herein and ofthe statements and information contained in the Official Statement and the due performance or satisfaction by the County on or prior to the date of Closing of all the agreements then to be performed and conditions then to be satisfied by it If the County shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Series 2003 Bonds contained in this Bond Purchase Contract and the Underwriter does not waive such inability in writing, or if the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Series 2003 Bonds shall be terminated for any reason permitted by this Bond Purchase Contract, this Bond Purchase Contract shall terminate, the good faith deposit described in Section 2 hereof shall be returned to the Underwriter and neither the Underwriter nor the County shall be under any further obligation hereunder, except that the respective obligations of the County and the Underwriter set forth in Section 9 hereof shall continue in full force and effect. 9. Expenses. The Underwriter shall be under no obligation to pay, and the County shall pay, any expense incident to the performance of the County's obligations hereunder including, but not limited to: (a) the cost of preparation, printing and delivery of the Resolution; (b) the cost of preparation and printing of the Series 2003 Bonds; (c) the fees and disbursements of Bond Counsel and Disclosure Counsel; (d) the fees and disbursements of the County's certified public accountants; (e) the fees and disbursements of any experts, consultants or advisors retained by the County; (f) fees for bond ratings; (g) the fees and expenses ofthe Registrar, the Paying Agent and of their respective counsel; and (h) the costs of preparing, printing and delivering the Preliminary Official Statement and the Official Statement and any supplements or amendments thereto. The Underwriter shall. pay: (a) all advertising expenses; and (b) all other expenses incurred by them or any of them in connection with the public offering of the Series 2003 Bonds. In the event that either party shall have paid obligations of the other as set forth in this Section 9, adjustment shall be made at the time of the Closing. 10. Notices. Any notice or other communicationto be given to you under this Bond Purchase Contract maybe given by mailing the same to IndianRiverCounty, Florida, 1840 25th Street, Vero Beach, 12 Florida 32960, to the attentionofthe County Administrator, with copies to the Director ofFinance and the County Attorney, and any such notice or other communication to be given to the Underwriter may be mailed to WilliamR. Hough & Co., 100 Second Avenue South, Suite 800, St. Petersburg, Florida 33701 to the Attention of Mitch Owens. 11. Parties in Interest. This Bond Purchase Contract is made solely for the benefit of the County and the Underwriter and no other party or person shall acquire or have any right hereunder or by virtue hereof. All your representations, warranties and agreements in this Bond Purchase Contract shall remain operative and in full force and effect and shall survive the delivery of the Series 2003 Bonds. 12. Waiver. Notwithstanding any provision herein to the contrary, the performance ofany and all obligations ofthe County hereunder and the performance of any and all conditions contained herein for the benefit ofthe Underwriter may be waived by the Underwriter, in their sole discretion, and the approval of the Underwriter when required hereunder or the determination of their satisfaction as to any document referred to herein shall be in writing, signed by an appropriate officer or officers of the Underwriter and delivered to you. 13. No Liability. Neither the Board of County Commissioners, nor any of the members thereof, nor any officer, agent or employee thereof, shall be charged personally by the Underwriter with any liability, or held liable to the Underwriter under any term or provision of this Bond Purchase Contract because ofits execution or attempted execution, or because ofany breach or attempted or alleged breach thereof. 13 14. Governing Law. This Bond Purchase Contract, and the terms and conditions herein, shall constitute the full and complete agreement between the County and the Underwriter with respect to the purchase and sale of the Series 2003 Bonds. This Bond Purchase Contract shall be governed by and construed in accordance with the laws of the State of Florida. Very truly yours, WILLIAM R. HOUGH & CO. By: Title: Vice President Accepted this day of June, 2003. INDIAN RIVER COUNTY, FLORIDA A1'1'hST: Chainnan, Board of County Commissioners Circuit Clerk County Administrator Approved as to form and legal sufficiency: County Attorney 14 Maturity Redemption Provisions. SERIES 2003 BONDS MATURITY SCHEDULE Coupon Yield Maturity Value Price EXHIBIT A The Series 2003 Bonds are not subject to redemption prior to their respective maturities. A-1 EXHIBIT B DISCLOSURE STATEMENT AND TRUTH -IN -BONDING STATEMENT [BPA Date] Board of County Commissioners Indian River County Vero Beach, Florida Re: $[Bond Amount] Indian River County, Florida, General Obligation Refunding Bonds, Series 2003 Dear Commission Members: In connection with the proposed issuance by Indian River County, Florida (the "County") of $[Bond Amount] General Obligation Refunding Bonds, Series 2003 (the "Series 2003 Bonds"), William R Hough & Co. (the "Underwriter") is underwriting a public offering of the Series 2003 Bonds. The purpose of the following sevenparagraphs of this letter is to furnish, pursuant to the provisions of Section 218.385(6), Florida Statutes, as amended, certain information in respect of the arrangements contemplated for the purchase and sale of the Series 2003 Bonds, as follows: (a) The nature and estimated amount of expenses to be incurred by the Underwriter in connectionwiththe purchase and re -offering of the Series 2003 Bonds are set forth in Schedule I attached hereto. (b) There are no "finders," as defined in Section 218.386, Florida Statutes, as amended, connected with the sale and purchase of the Series 2003 Bonds. (c) The combined underwriting spread, the difference between the price at which the Series 2003 Bonds will be initially offered to the public by the Underwriter and the price to be paid to the County for the Series 2003 Bonds, exclusive of net original issue premium and accrued interest, will be approximately $ per $1,000 of Series 2003 Bonds issued. The underwriting spread for the Series 2003 Bonds will be approximately %. B-1 (d) As part of the estimated underwriting spread set forth in paragraph (c) above, the Underwriter will charge a management fee of $ per $1,000 of Series 2003 Bonds issued. (e) No other fee, bonus or other compensation is estimated to be paid by the Underwriter in connection with the issuance of the Series 2003 Bonds to any person not regularly employed or retained by the Underwriter (including any "finder" as defined in Section 218.386(1)(a), Florida Statutes), except as specifically enumerated as expenses to be incurred by the Underwriter, as set forth in paragraph (a) above. (f) The names and addresses of the Underwriter are: William R Hough & Co. 100 Second Avenue South, Suite 800 St. Petersburg, Florida 33701 The purpose of the following two paragraphs is to fumish, pursuant to the provisions of Sections 218.385(2) and (3), Florida Statutes, as amended, the truth -in -bonding statement required thereby, as follows: (a) The County is proposing to issue the Series 2003 Bonds to (i) refund and redeem certain outstanding general obligation bonds of the County; (ii) pay a premium for a municipal bond insurance policy and a debt service reserve account surety bond, and (in) pay certain costs and expenses incurred in connection with the issuance ofthe Series 2003 Bonds, all as more particularly described herein. At the interest rates set forth on Exhibit A to the Bond Purchase Contract to which this is attached, total interest paid over the life of the obligation will be approximately $ (b) The source of repayment or security of the Series 2003 Bonds is the full faith and credit of the County. The issuance of the debt will result in an average of approximately $ of Ad Valorem taxes not being available to finance other services of the County each year for the term of the issue. B-2 The foregoing is provided for information purposes only and shall not affect or control the actual terms and conditions of the Series 2003 Bonds. Very truly yours, WILLIAM R. HOUGH & CO. Title: Vice President B-3 SCI EDULE I UNDERWRITER'S ESTIMATED EXPENSES (Per $1,000 of Series 2003 Bonds) UNDERWRITER'S EXPENSES DETAIL Travel,Closing,Newspaper Advertising ($ /1,000) Postage/Fax/Phone/Courier ($ /1,000) DTC/CUSIP/Dalnet/PSA ($ /1,000) Day Loan ( /1,000) TOTAL EXHIBIT B FORM OF PRELIMINARY OFFICIAL STATEMENT Preliminary Official Statement Dated June 2003 NEW ISSUE - Full Book Entry Only Ratings: Standard & Poor's: "AAA" Fitch: "AAA" (See "Ratings" herein) In the opinion of Bryant, Miller and Olive, P.A. ("Bond Counsel'), under existing statutes, regulations, rulings and court decisions, and assuming continuing compliance with the tax covenants described herein, interest on the Bonds is excludable from gross income for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. Such interest, however, will be includable in the calculation of certain corporations' alternative minimum taxable income. See "TAX EXEMPTION" herein regarding certain other tax considerations. Bond Counsel is further of the opinion that the Bonds and the income therefrom are exempt from taxes under the laws of the State of Florida, except as to Florida estate taxes imposed by Chapter 198, Florida Statutes, as amended, and not income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended. $8,320,000* INDIAN RIVER COUNTY, FLORIDA GENERAL OBLIGATION REFUNDING BONDS, SERIES 2003 Dated: July 1, 2003 Due: July 1, as shown below The Indian River County, Florida General Obligation Bonds, Series 2003 (the "Bonds") are being issued by Indian River County, Florida (the "County') in the form of fully registered bonds and, when issued, will be registered in the name of Cede & Co, as nominee of the Depository Trust Company, New York, New York ("DTC"). DTC will act as securities depository for the Bonds. Purchases of Bonds will be in book -entry only form, in denominations of $5,000 or any integral multiples thereof. Purchasers will not receive certificates representing their interest in the Bonds so purchased. So long as Cede & Co. is the registered owner of the Bonds, references herein to the registered owners shall mean Cede & Co., and shall not mean the Beneficial Owners (as defined herein) of the Bonds. - See "DESCRIPTION OF THE BONDS -BOOK -ENTRY -ONLY -SYSTEM" herein for further information. Interest on the Bonds is payable semiannually on January 1 and July 1, of each year, commencing January 1, 2004. The principal of, premium, if any and interest on the Bonds will be paid by U.S. Bank, National Association, Ft. Lauderdale, Florida, as paying agent (the "Paying Agent"). So long as DTC or its nominee, Cede & Co., is the registered owner, such payments will be made directly to DTC. Disbursement of such payments td the Direct Participants (as defined herein) is the responsibility of DTC, and disbursements of such payments to Beneficial Owners is the responsibility of Direct Participants and Indirect Participants (as defined herein), as more fully described herein. The Bonds are not subject to redemption prior to their stated maturities. The Bonds are being issued to provide funds, .which together with other funds of the County, will be used to refund and redeem on the date of closing of the Bonds, all of the Outstanding principal amount of the County's $15,000,000 General Obligation Bonds, Series 1995, which will be Outstanding in the aggregate principal amount of $8,320,000 after giving effect to the July 1, 2003 principal payment. For additional information, see "PURPOSE OF ISSUANCE" herein. Proceeds of the Bonds will also be used to pay the costs of issuance of the Bonds, including the premium for a policy of financial guaranty insurance. THE BONDS ARE GENERAL OBLIGATIONS OF THE COUNTY SECURED BY A PLEDGE OF THE FULL FAITH, CREDIT AND TAXING POWER OF THE COUNTY. IN THE RESOLUTION THE COUNTY HAS COVENANTED TO LEVY AD VALOREM PROPERTY TAXES ON ALL NON-EXEMPT PROPERTY LOCATED WITHIN THE BOUNDARIES OF THE COUNTY, WITHOUT LIMIT AS TO AMOUNT OR RATE. The Bonds will rank on a parity with the $11,000,000 Indian River County General Obligation Bonds, Series 2001, which will be Outstanding in the aggregate principal amount of 09,925,000 after giving effect to the July 1, 2003 principal payment. Payment of the principal of and interest on the Bonds when due will be insuredby a financialguaranty insurance policy tobe issued by Ambac Assurance Corporation simultaneously with the delivery of the Bonds. See the material under the heading "FINANCIAL GUARANTY INSURANCE" herein. Principal Maturity Interest Amount July 1 Rate Arnbac PRINCIPAL AMOUNTS, MATURITIES, INTEREST RATES AND PRICES OR YIELDS $8,320,000• Serial Bonds Yield - Cusio Principal Maturity Interest Amount July I Rate Yield gige 2004 2008 F 2005 2009 `) 'O2006 2010 5y g ° c " a l 2007 Y ° ▪ THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE INVESTORS MUST READ THE ENTIRE ▪ 7 OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. cThe Bonds are offered when, as and if issued and received by the Underwriter, subject to prior sale, withdrawal or modification of the offer without notice and subject to the unqualified c 2 approval of legality by Bryant, Miller and Olive„ P.A., Tallahassee, Florida, Bond Counsel. Certain legal matters will be passed on for the County by its County Attorney and Nabors, Giblin g 8 . & Nickerson, P.A., Tampa, Florida, Disclosure Counsel. It is expected that the Bonds in definitive form will be available for delivery in New York, New York, through the offices of DTC on y `n & or about July , 2003. • ti WILLIAM R. HOUGH & CO. • IDated: June , 2003 H = ' Preliminary, subject to change. F ? c No dealer, broker, salesman or other person has been authorized by the County or the Underwriters to give any information or to make any representations withrespect to the Bonds other than that contained in this Official Statement, and, if given or made, such information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the 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 County, DTC and other sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representationby, the Underwriters. The information and expressions of opinion contained herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall under any circumstances create any implication that there has been no change in the information or opinions set forth herein after the date of this Official Statement. THE BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THE INDENTURE BEEN QUALIFIED UNDER THE INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF THE SECURITIES LAWS OF THE STATES, IF ANY, IN WHICH THE BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN CERTAIN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE STATES NOR ANY OF THEIR AGENCIES HAVE PASSED UPON THE MERITS OF THE BONDS OR THE ACCURACY OR COMPLETENESS OF THIS OFFICIAL STATEMENT. ANY REPRESENTATIONS TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. INDIAN RIVER COUNTY, FLORIDA BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY Kenneth R. Macht, Chairman Caroline D. Ginn, Vice Chairman Fran B. Adams Arthur R. Neuberger Thomas S. Lowther CLERK OF THE CIRCUIT COURT Jeffrey K. Barton COUNTY ADMINISTRATOR James E. Chandler ASSISTANT COUNTY ADMINISTRATOR Joseph A. J. Baird COUNTY ATTORNEY William G. Collins 11, Esquire COUNTY FINANCE DIRECTOR Edwin M. Fry, Jr. BOND COUNSEL Bryant, Miller and Olive, P.A. Tallahassee, Florida CERTII+IED PUBLIC ACCOUNTANTS Harris, Cotherman & Associates Vero Beach, Florida TABLE OF CONTENTS SUMMARY STATEMENT i The County i Purpose of the Bonds Sources and Security of Payment for the Bonds i Description of the Bonds ii Municipal Bond Insurance ii Tax Exemption iii Authority for Issuance iii Offering and Delivery of the Bonds iii INTRODUCTION 1 AUTHORITY FOR BONDS 2 PURPOSE OF ISSUANCE 2 DESCRIPTION OF THE BONDS 2 General 2 Book -Entry Only System 3 Discontinuance of Securities Depository 6 Bonds Not Subject to Redemption 6 SOURCES AND USES OF FUNDS 7 DEBT SERVICE SCHEDULE 8 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS 9 PARITY BONDS 9 AD VALOREM TAX MA LEERS 10 Property Assessment Procedure 10 Ad Valorem Tax Rates 11 Levy and Collection of Ad Valorem Taxes 11 Historical Table of Assessed Value 13 Historical Ad Valorem Millage Rates 14 Property Tax Levies and Collections 15 Comparative Ratios of Bonded Debt 16 Ten Largest Taxpayers 17 FINANCIAL GUARANTY INSURANCE 18 Payment Pursuant to Financial Guaranty Insurance Policy 18 Ambac Assurance Corporation 19 Available Information 20 THE COUNTY 21 General 21 County Government 22 COUNTY FINANCIAL MATTERS 22 Financial Statements and Annual Audit 23 REFERENDUM 23 LITIGATION 23 LEGAL MA 1' 1'hRS 24 TAX EXEMPTION 24 Federal Income Tax Matters 24 Florida Tax Matters 25 26 ADVISORS AND CONSULTANTS UNDERWRITING 26 BOND RATINGS 27 DISCLOSURE MA 11 ERS 27 Certificate as to Official Statement 27 Continuing Disclosure 27 MISCELLANEOUS 29 Appendices: Appendix A - Appendix B - Appendix C - Appendix D - Financial Statements,ofthe Countyforthe FiscalYear ended September 30, 2002 Form of Resolution Form of Bond Counsel Opinion Form of Ambac Financial Guaranty Insurance Policy SUMMARY STATEMENT This Summary Statement is subject in all respects to more complete information and to the definitions contained or incorporated in this Official Statement. The offering of the Bonds to potential investors is made only by means of this entire Official Statement. No person is authorized to detach this Summary Statement from this Official Statement or otherwise to use this Summary Statement without this entire Official Statement. For a complete description of the terms and conditions of the contract between the County and the owners of the Bonds, reference is made to the Resolution, the formofwhichis included herein as Appendix B. The County Indian River County (the "County") was established in 1925 by an act of the Florida Legislature, separating it from St. Lucie County. The County encompasses approximately 497 square miles and is located in the middle ofFlorida on the eastern coast, approximately 135 miles north ofMiami. The County is bounded on the north by Brevard County, on the south by St. Lucie County, on the west by Osceola and Okeechobee Counties and on the east by the Atlantic Ocean. The City of Vero Beach is the seat of County govemment and the largest city in the County. Other incorporated cities located within the County are Fellsmere, Indian River Shores, Orchid and Sebastian. There are approximately 100 miles of waterfront land in the County, including about 23 miles of Atlantic beaches. Purpose of the Bonds The proceeds to be received by the County from the sale ofthe Bonds will be used by the County pursuant to the Resolution to provide funds, which together with other funds of the County, will be used (1) to refund and redeem on the date of closing ofthe Bonds, all ofthe Outstanding principal amount ofthe County's $15,000,000 General Obligation Bonds, Series 1995, which are currently Outstanding in the aggregate principal amount of $8,320,000, after giving effect to the July 1, 2003 principal payment; and (2) to pay certain expenses related to the issuance and sale ofthe Bonds, including payment ofthe premium for a policy of financial guaranty insurance. See the discussion under the heading "PURPOSE OF ISSUANCE" herein. Sources and Security of Payment for the Bonds The Bonds are general obligations of the County secured by a pledge of the full faith, credit and taxing power ofthe County. In the Resolutionthe Countyhas covenanted to levy ad valorem property taxes on all non-exempt property located within the boundaries of the County, without limit as to amount or rate ("Ad ValoremTaxes"). See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS " herein. i Description of the Bonds Bonds Not Subject to Redemption. The Bonds are not subject to redemption prior to their stated maturities. Denominations . The Bonds willbe issued in denominations of $5,000 each or any integral multiple thereof Book -Entry Only System The Bonds will be initially registered only in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), which will act as securities depository for the Bonds. The Bonds will be available to purchasers only under the book -entry system maintained by DTC through brokers and dealers who are, or act through, DTC Participants. Purchasers will not receive delivery of the Bonds. So long as any purchaser is the Beneficial Owner (as defined herein) of a Bond, he must maintain an account with a broker or dealer who is, or acts through, a DTC Participant to receive payment of principal of and interest on such Bond. See "DESCRIPTION OF THE BONDS - Book -Entry Only System" herein. Paying Agent and Registrar. U.S. Bank, National Association, Ft. Lauderdale, Florida (the "Registrar"), will serve as -Paying Agent and Registrar for the Bonds. Registration and Transfers . The Bonds willbe issued in fully registered, book -entry -only form, registered in the name of Cede & Co., as nominee for DTC. Transfers of book -entry interests will be accomplished by DTC participants or others who act for the Beneficial Owners, in accordance with DTC procedures and applicable state laws. Payments. Payments of principal of and interest on the Bonds will be made by the Registrar to Cede & Co., as nominee for DTC, which, in tum, will immediately credit the accounts ofDTC participants. The DTC participants will credit the payments to the Beneficial Owners in accordance with standing instructions and customary practices between DTC and the DTC participants. For a more complete description of the Bonds and the basic documentation pursuant to which Bonds are issued, see the "DESCRIPTION OF THE BONDS" herein. Municipal Bond Insurance Ambac Assurance ("Ambac") has made a corimuitment to issue a financial guarantyinsurancepolicy (the "Financial Guaranty Insurance Policy") relating to the Bonds effective as ofthe date of issuance ofthe Bonds. The Financial Guarantylnsurance Policywill insure payment only on stated maturity dates and on mandatory sinking fund installment dates, in the case of principal, and on stated dates for payment, in the case of interest. See "FINANCIAL GUARANTY INSURANCE" herein. Tax Exemption The legal opinion of Bryant, Miller and Olive, P.A., Bond Counsel, will include an opinion to the effect that assuming compliance with certain covenants, under existing laws, regulations, judicial decisions and rulings, (i) interest on the Bonds is excluded from gross income for purposes of federal income taxation and (ii) the Bonds are exempt from taxation under the laws of the State of Florida, except as to Florida estate taxes and taxes imposed by Chapter 220, Florida Statutes, as amended, on interest, income or profits on debt obligations owned by corporations, banks and savings associations. Interest on the Bonds is not an item of tax preference for purposes of the federal alternative minirrnun tax imposed on individuals or corporations; however, interest on the Bonds may be subject to the alternative minimum tax when any Bond is held by a corporation. For a more complete discussion of tax aspects, see "TAX EXEMPTION," herein. Authority for Issuance The Bonds are being issued, executed and delivered pursuant to Chapter 125, Florida Statutes, Resolution No. 92-146 adopted by the Board of County Commissioners of the County (the"Board") on August 18, 1992, as supplemented and other applicable provisions of law (collectively, the "Act") and pursuant to Resolution No. 95-63, of the Board, adopted May 16, 1995, and as further supplemented by Resolution No. 95-83, adopted by the Board July 11, 1995, as supplemented (the "Resolution"). Offering and Delivery of the Bonds The Bonds are offered when, as and if issued, subject to the opinionon certain legalmatters relating to their issuance by Bryant, Miller and Olive, P.A., Tallahassee, Florida, Bond Counsel, and the satisfaction of certain other conditions. It is anticipated that the Bonds in definitive form will be available for delivery to the Underwriter at DTC in New York, New York, on or about July , 2003. End of Summary Statement iii OFFICIAL STATEMENT relating to $8,320,000* INDIAN RIVER COUNTY, FLORIDA GENERAL OBLIGATION REFUNDING BONDS, SERIES 2003 INTRODUCTION The purpose of this Official Statement, which includes the cover page, the Summary Statement, and the Appendices hereto, is to furnish information with respect to the issuance by Indian River County, Florida (the "County"), of its General ObligationRefunding Bonds, Series 2003 (the "Bonds"). The Bonds in the aggregate principal amount of $8,320,000*, are authorized to be issued by ResolutionNo. 92-146 adopted by the Board of County Commissioners of the County (the"Board") on August 18, 1992, as supplemented by Resolution No. 95-83, adopted by the Board July 11, 1995, as further supplemented (the "Resolution"). The Resolution authorizes the issuance of not to exceed $26,000,000 aggregate principal amount of general obligation bonds, to be issued in one or more series, of which the Bonds are the third series to be issued. The County has previously issued its $15,000,000 Indian River County General Obligation Bonds, Series 1995 (the. "Refunded Bonds") whichwillbe Outstanding in the aggregate principal amount of $8,320,000 after giving effect to the July 1, 2003 principal payment, which are being refunded and redeemed with the proceeds of the Bonds. The County has also previously issued its $11,000,000 General Obligation Bonds, Series 2001, whichwillbe Outstanding in the aggregate principal amount of $9,925,000 after giving effect to the July 1, 2003 principal payment and which rank on a parity with the Bonds (the "Parity Bonds"). See "PARITY BONDS" herein. Capitalized terms used herein shall have the same meanings as given to them in the Resolution, unless otherwise defined herein or where the context would clearly indicate otherwise. The references, excerpts and summaries of all documents referenced herein do not purport to be complete statements of the provisions of such documents, and reference is made to the originals of all such documents for full and complete statements of all matters of fact relating to the Bonds, the security for the payment of the Bonds, and the rights and obligations of owners thereof. Copies of such documents may be obtained from Jeffrey K. Barton, Clerk of the Circuit Court, 1840 25th Street Vero Beach, Florida 32960, upon payment of reproduction costs and postage and handling expenses. The assumptions, estimates, projections and matters ofopinion contained in this Official Statement, whether or not so expressly stated, are set forth as such and not as matters of fact, and no representation is made that any of the assumptions or matters of opinion herein are valid or that any projections or * Preliminary, subject to change. 1 estimates contained herein will be realized. Neither this Official Statement nor any other statement which may have been made verbally or in writing in connection with the Bonds, other than the Resolution, is to be construed as a contract with the owners of the Bonds. AUTHORITY FOR BONDS The Bonds are being issued by the County under the authority of and in full compliance with the Constitution and Statutes of the State of Florida, including particularly Chapter 125, Florida Statutes, ResolutionNo. 92-146 ofthe Board, adopted August 18, 1992, as supplemented (collectively, the "Act") and the vote ofthe electors ofthe CountyonNovember 3, 1992, in accordance with Chapter 100, Florida Statutes Resolution No. 92-146 adopted by the Board on August 18, 1992, as supplemented by ResolutionNo. 95-83, adopted by the Board July 11, 1995, as further supplemented (the "Resolution"). PURPOSE OF ISSUANCE The Bonds are being issued to provide funds, which, together with other available funds of the County, will be used (i) to refund and redeem on the date of closing of the Bonds, all of the Outstanding principal amount of the County's $15,000,000 General Obligation Bonds, Series 1995, which will be Outstanding in the aggregate principal amount of $8,320,000 after giving effect to the July 1, 2003 principal payment; and (ii) to pay certain expenses related to the issuance and sale of the Bonds, including payment of the premium for a policy of financial guaranty insurance. For a complete description of the terms and conditions of the Bonds, reference is made to the Resolution, the form of which is included as Appendix B to this Official Statement, "Form of Bond Resolution." The description of the Resolution, the Bonds and information from reports contained herein do not purport to be comprehensive or definitive, and reference is made to the complete Resolution, on file with the County, for the terms thereof. DESCRIPTION OF THE BONDS General The Bonds will be dated July 1, 2003, will be issued in fully registered, book -entry form, without coupons, in the denominations of $ 5,000 each or integral multiples thereof, and willbear interest at the rates and mature on the dates set forth on the cover page of this Official Statement. Interest on the Bonds will be payable January 1, 2004, and semiannually thereafter (January 1 and July 1 of each year). Principal of and interest on the Bonds w ill be payable in the manner described under "Book -Entry Only System" herein.U.S. Bank, National Association, Ft Lauderdale, Florida, will serve as Registrar and Paying Agent 2 for the Bonds. The Bonds willbear a Certificate of Authentication to be manwilly executed by the Registrar, and no Bond will be valid or obligatory for any purpose unless the Certificate of Authentication thereon has been duly executed by the Registrar. Book -Entry Only System The Depository Trust Company ("DTC"), New York, New York, or its successor, will act as securities depository for the Bonds. The Bonds will be issued as fully registered securities in the name of Cede & Co. (DTC's partnership nominee). One fully -registered Bond certificate for each maturity will be issued, in the aggregate principal amount of such maturity and will be deposited with DTC. So long as Cede & Co. is the registered owner of the Bonds, payments of the principal of and interest due on the Bonds will be payable directly to DTC. References herein to the registered owners of the Bonds shall mean DTC or Cede & Co., and shall not mean the Beneficial Owners referred to below. DTC is a limitedpurpose trust company organized under the New York Banking Law, a 'banking organization"withinthe meaningofthe New York Banking Law, a member ofthe 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 ofthe Securities Exchange Act of 1934. DTC holds securities that its participants (the "Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges in deposited securities through electronic computerized book -entry changes in accounts of the Participants, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the "Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of the Bonds under the DTC system may be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of the Bonds (the "Beneficial Owner") is in turn to be recorded in the records of the applicable DTC Direct or Indirect Participant. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books ofParticipants acting on behalf ofthe BeneficialOwners. Beneficial Owners will not receive certificates representing their ownership interest in Bonds, except in the event that use ofthe book -entry system for the Bonds is discontinued. No Bonds will be registered in the 3 names ofthe Beneficial Owners, except in the event participation in the book -entry system is discontinued as described below. To facilitate subsequent transfers, all Bonds deposited by Participants withDTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Bonds and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners ofthe Bonds; DTC's records reflect only the identityofthe Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The 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 willbe governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices will be sent to Cede & Co.. If less than all of the Bonds within a maturity of a series are being redeemed, DTC's practice is to determine by lot the amount ofthe interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the County as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Bonds will be made to DTC. DTC's practice is to credit Direct Participants accounts on the payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on the payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent or the County, subject to any statutory or regulatory requirements as maybe in effect fromtime to time. Payment of principal and interest to DTC is the responsibility of the County or the Paying Agent, disbursement of such payments to Direct Participants shall be the responsibilityofDTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the County or the Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates will be printed and delivered. The County may decide to discontinue use of the book -entry only system for transfers through DTC (or a successor securities depository). In such event Bond certificates will be printed and delivered. 4 The information in this section concerning DTC and DTC's book -entry only system has been obtained from DTC. Neither the County, the Registrar nor the Underwriter make any representation or warranty regarding the accuracy or completeness thereof. SO LONG AS CEDE & CO., AS NOMINEE FOR DTC, IS THE SOLE BONDHOLDER, THE COUNTY AND THE REGISTRAR SHALL TREAT CEDE & CO. AS THE ONLY OWNER OF THE BONDS FORALLPURPOSES UNDER THE RESOLUTION INCLUDING(1) RECEIPT OF ALL PRINCIPAL OF AND INTEREST ON THE BONDS; (2) RECEIPT OF NOTICES; (3) VOTING; AND (4) REQUESTING OR DIRECTING THE COUNTY AND THE REGISTRAR TO TAKE OR NOT TO TAKE, OR CONSENTING TO, CERTAIN ACTIONS UNDER SUCH RESOLUTION. THE COUNTY 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 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 RESOLUTION TO BE GIVEN TO BONDHOLDERS; (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 BONDS; OR (E) OTHER ACTION TAKEN BY DTC OR CEDE & CO., AS BONDHOLDER. Discontinuance of Securities Depository DTC may discontinue providing its services withrespect to the Bonds at any time by giving notice to the County and discharging its responsibilities withrespect thereto under applicable law, or the County may terminate its participation in the system of book -entry transfers through DTC at any time. In the event that the DTC book -entry only system is discontinued and it is not replacedwithanotherbook-entrysystem, the following provisions will apply: principal of the Bonds will be payable in lawful money of the United States of America at the principal office of the Registrar. Interest on the Bonds will be payable on each January 1 and July 1 by check or draft mailed to the respective addresses ofthe RegisteredOwners thereof as shown on the registration books ofthe County maintained by the Registrar as ofthe record date therefor as set forth in the Resolution; provided, however, that the registered owner of any Bond in the principal amount of $1,000,000 or more may, uponwrittenrequest made to the Registrar and at the expense of such registered owner, direct that payment of interest thereon be made by wire transfer or any other medium acceptable to the County and to such registered owner, all as more specifically provided in the Resolution. The transfer of the Bonds will be registrable and they may be exchanged at the principal office of the Registrar, upon the payment of any taxes, fees or other governmental charges required to be paid with respect to such transfer or exchange. 5 The person in whose name any Bond is registered will be deemed and regarded as the absolute owner thereof for all purposes and payment of or on account of the principal price of any Bond, and the interest on any such Bonds, will be made only to or upon the order of the registered owner thereof or his or her legal representative. Bonds Not Subject to Redemption The Bonds are not subject to redemption prior to their stated dates of maturity. 6 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 Bonds. SOURCES OF FUNDS Par Amount of Bonds Accrued Interest Additional County Funds TOTAL SOURCES USES OF FUNDS Costs of Issuance (1) Deposit to Debt Service Fund Payment of Refunded Bonds TOTAL USES (1) Includes underwriting discount, bond insurance premium, financial, legal and other costs of issuance relating to the Bonds. 7 DEBT SERVICE SCHEDULE The following table presents the annual debt service requirements of the County for the Bonds and the Parity Bonds: Year Ending Parity July 1 Bonds Principal Interest Total 2004 $979,117.50 2005 980,817.50 2006 981,917.50 2007 982,417.50 2008 980,642.50 2009 986,492.50 2010 985,572.50 2011 993,007.50 2012 993,367.50 2013 996,777.50 2014 1,002,977.50 2015 1,005,807.50 2016 1,006,495.00 2017 Totals $12,875,410.00 8 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS The Bonds constitute general obligations of the County, and the full faith, credit and taxing power of the County are pledged for the prompt payment when due of principal, premium, if any, and interest on the Bonds. The Bonds will be payable from ad valorem taxes levied by the County upon the taxable real and personal property within the County, without limitation as to rate or amount, for such purpose (herein the "Ad Valorem Taxes"). The Resolution creates and establishes a Debt Service Fund, which will be held and administered by the County solely for the purpose of paying the principal, premium, if any, and interest on the Bonds, as they become due. All Ad Valorem Taxes levied to pay the Bonds, as collected by the County Tax Collector, must be deposited into the Debt Service Fund. Money deposited in the Debt Service Fund must be held by the County for the payment of the principal, premium, if any, and interest on the Bonds as they severally become due, and may be expended for no other purpose. The Debt Service Fund may be invested in "Authorized Investments" as defined in the Resolution, the form of which is included herein as Appendix B. The Resolutionrequires that the dates and amounts of payment of the principal of and interest on the Bonds be structured by the County in such a manner that the millage rate required to make the maximum annual payment of principal and interest on the Bonds will not exceed 1/2 mill, based on the assessed value of all real property in the County subject to Ad Valorem Taxes, on the date of issuance of the Bonds. This requirement does not limit the security for the Bonds or the rate of tax which may be imposed to provide for the payment of the Bonds. PARITY BONDS The Resolution authorizes the issuance ofnot to exceed $26,000,000 aggregate principal amount of general obligation bonds, to be issued in one or more series, ofwhichthe Bonds are the third series. The County has previously issued its $15,000,000 IndianRiver County General Obligation Bonds, Series 1995 (the "Refunded Bonds") which will be Outstanding in the aggregate principal amount of $8,320,000 after giving effect to the July 1, 2003 principal payment, which are being refunded and redeemed with the proceeds of the Bonds. The County has also previously issued its $11,000,000 General Obligation Bonds, Series 2001 (the "Parity Bonds"), which will be Outstanding in the aggregate principal amount of $9,925,000 after giving effect to the July 1, 2003 principal payment and which rank on a parity with the Bonds. The Parity Bonds constitute "Bonds" under the Resolution for which the full faith and credit and unlimited taxing power of the County are pledged on the same basis as the Bonds. There is no test for issuance of any additional general obligation bonds under the Resolution, other than the limitation discussed 9 above requiring Bonds to be structured so that at the time of issuance, the millage rate required to make the maximum annual debt service payment must not exceed''/ mill of the then assessed value of all taxable lands in the County. AD VALOREM TAX MATTERS Property Assessment Procedure Under Florida (the "State") law the assessment of all properties and the collection of all county, school district and other taxing authorities property taxes are consolidated in the offices of the County Property Appraiser and County Tax Collector. The laws of the State regulating tax assessment are designed to assure a consistent property valuation method statewide. All taxable real property and tangible personal property must be assessed at just value, withcertain exceptions. Real and personal property valuations are determined each year as of January 1 by the Property Appraiser's office. The assessment roll is prepared between January 1 and July 1, with each taxpayer given notice of any increase in assessment. The property owner has the right to file an appeal with the Value Adjustment Board, which considers petitions relating to assessments and exemptions. The Value Adjustment Board certifies the assessment roll upon completion of the hearing of all appeals; however, provision is made by law for certification of the assessment roll prior to completion of the hearings. Millage rates are computed by the various taxing authorities and certified to the Property Appraiser, who applies the millage rates to the assessment roll. This procedure creates the tax roll, which is then turned over to the Tax Collector on or about the first Monday in October. Certain exemptions are available to permanent residents of the State, including, among others, a homestead exemption not exceeding $25,000. By voter referendum held on November 3, 1992, Article VII, Section 4 of the Florida Constitution was amended by adding thereto a subsection which, in effect, limits the increases in assessed just value of homestead property to the lesser of (1) 3% of the assessment for the prior year or (2) the percentage change in the Consumer Price Index for all urban consumers, U.S. CityAverage, allitems 1967=100, or successor reports for the preceding calendar year as initiallyreported by the United States Department of Labor, Bureau of Labor Statistics. Further, the amendment provides that (1) no assessment shall exceed just value; (2) after any change of ownership of homestead property or upon termination of homestead status, such property shall be reassessed at just value as of January 1 of the year following the year of sale or change of status; (3) new homestead property shall be assessed at just value as of January 1 of the year following the establishment of the homestead; and (4) changes, additions, reductions or improvements to homestead shall initially be assessed as provided by general law, 10 and thereafter as provided in the amendment. The effective date ofthe amendment was January 15, 1993, and the base year for determining compliance with the restrictions was 1994. Pursuant to State legislative authorization, the County has enacted an Ordinance providing an additional $25,000 homestead exemption to citizens 65 years or older as of January 1 of the year and whose household income does not exceed $20,000. The $20,000 income limitation is adjusted annually by the percentage change in the average cost -of -living index in the period January 1 to December 31 of the immediate preceding year compared with the same period for the prior year. Ad Valorem Tax Rates There is no limitation as to the rate or amount of ad valorem taxes levied by the County for the purposes of paying debt service on general obligation bonds whose issuance has been approved at a referendum election duly called and held. Ad valorem taxes levied for operating purposes by the County are limited to 10 mills, except for voted levies. In 1973 the State of Florida enacted legislation in order to encourage public awareness of spending and taxing decisions of local elected officials. This legislationwas amended in 1980 by the "TRIM Bill" (Truth in Millage). Under the TRIM Bil], a "roll -back tax rate" is defined as the millage rate that would produce the same ad valorem taxes in each current year as were levied in the previous year, exclusive of any increase in assessments resulting from new construction. Regardless of the tax rates established by the various taxing authorities, each taxpayer is notified by first class marl of his proposed property tax prior to the public hearings required to be held for the adoption of the final budget and millage rate. Levy and Collection of Ad Valorem Taxes All real and tangible personal property taxes are due and payable annually. A notice is mailed to each property owner on the tax roll on November 1 of each year, or as soon thereafter as the tax roll is certified and delivered to the Tax Collector, for taxes levied by the county, school district and other taxing authorities. Taxes may be paid upon receipt of such notice, with discounts at the rate of 4% if paid in the month of November; 3% if paid in the month of December; 2% if paid in the month of January; and 1% if paid in the month of February. Taxes paid during the month of March are without discount. All unpaid real and tangible personal property taxes become delinquent on April 1 of the year following the year in which the taxes are levied. Delinquent real property taxes bear interest at the rate of 18% per year from April 1 until a certificate is sold at auction, from which time the interest rate is in accordance with the bid by the buyer of the certificate. Delinquent tangible personal property taxes also bear interest at a rate of 18% per year from April 1 until paid. Tax certificates for delinquent personal property taxes must be advertised for sale within 45 days after delinquency, and after May 1 the property is subject to levy, seizure and sale. 11 Florida law provides that all taxes are first liens, superior to all other liens, except United States Internal Revenue Service liens, on any property against which the taxes have been assessed, and continue in full force and effect from January 1 ofthe year the taxes are levied until discharged by payment or until barred pursuant to Florida law. The Tax Collector advertises tax certificates for sale once each week for 4 consecutive weeks, and sells tax certificates on or before June 1 for unpaid tax bills. Tax certificates not sold at auction become the property of the County. If the owner of real property subject to a tax certificate does not redeem the certificate within 2 years, the holder of the certificate is entitled to apply for a tax deed of sale, the highest bidder at such sale receiving a tax deed for the property. To redeema tax certificate, the owner of the property must pay all delinquent taxes, the interest that accrued prior to the date of the sale ofthe tax certificate, charges incurred in connection with the sale of the tax certificate, omitted taxes, if any, and interest at the rate shown on the tax certificate (subject to certain statutory limitations) from the date of the sale of the tax certificate to the date of redemption. [Remainder of page intentionally blank] 12 Historical Table of Assessed Value The following table sets forth the assessed and estimated actual value of taxable property in the County for the last ten fiscal years. Fiscal Year Ended 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Just and Taxable Value of Taxable Property Real Property Just Value $6,385,346,500 6,703,739,975 7,011,412,975 7,305,049,473 7,589,071,741 7,807,203,863 8,080,247,333 8,671,573,086 9,109,672,314 10,539,705,283 Personal Property Just Value $364,537,718 372,223,746 430,527,594 530,825,131 554,667,039 622,046,910 652,698,708 764,851,686 725,390,231 707,941,621 Source: (1) Indian River County Property Appraiser. Total Just Value (1) $6,749,884,218 7,075,963,721 7,441,940,569 7,835,874,604 8,143,738,780 8,429,250,773 8,732,946,041 9,436,424,772 9,835,062,545 11,247,646,904 Total Taxable Value (1) $5,160,114,845 5,406,245,871 5,464,325,993 5,718,915,081 5,940,864,817 6,159,944,874 6,420,215,433 6,995,948,262 7,440,896,735 8,541,205,140 Percent of Total Taxable Value To Total Just Value (1) 76.4% 76.4 73.4 73.0 73.0 73.1 73.5 74.1 75.6 75.9 Note: Values are established as of January 1 of the previous calendar year, i.e., January 1, 2001 taxable value apply to the fiscal year ending 2002. 13 Fiscal Year Ended Historical Ad Valorem Millage Rates Property Tax Rates - Direct and All Overlapping Governments Per $1,000 Assessed Value County -Wide Independent Taxing District Taxing District (1) County School Board (2) Other Total Countywide (3) (2) ities Other 1993 5.65490 9.56260 2.72080 17.93830 4.58254 1.63707 1994 5.77090 9.84460 2.58730 18.20280 4.61054 2.01939 1995 5.95235 10.19830 2.26023 18.41088 4.29846 2.71708 1996 5.92350 10.34800 2.74083 19.01233 4.40633 2.00503 1997 5.92330 10.31900 2.64544 18.87740 3.84790 1.70220 1998 5.80800 10.14000 2.49690 18.84490 3.78756 1.51850 1999 5.73690 10.15000 2.59470 18.48160 3.68094 1.73635 2000 5.54870 9.61400 2.69490 17.85760 3.29626 1.52091 2001 5.54080 9.55700 2.70780 17.80560 3.19996 1.62899 2002 5.52340 9.08200 2.56070 17.16610 3.05086 1.61045 (1) Per Florida State Statute 200.071, no ad valorem tax millage shall be levied against real property and tangible personal property by counties in excess of 10 mils, except for voted levies. (2) Composite tax rate. (3) Average tax rate. 14 The following table shows the amounts billed and the percent collected for ad valorem property taxes levied by the County for the last 10 fiscal years. Property Tax Levies and Collections Fiscal Total Percent of Delinquent Total Percent of Total Year Tax Current Levy Tax Tax Collections Ended Tax Collections Collected Collections Collections To Levy 1993 $37,683,977 $36,337,153 96.43% $ 87,830 $36,424,983 96.66% 1994 39,304,957 37,518,799 95.46 169,530 37,688,329 95.89 1995 37,475,209 35,835,361 95.62 667,860 36,503,221 97.41 1996 42,507,452 40,907,378 96.24 15,228 40,922,606 96.27 1997 43,767,639 42,474,085 97.04 93,054 42,567,139 97.26 1998 45,087,396 43,498,326 96.48 65,517 43,563,843 96.62 1999 47,178,979 44,985,116 95.35 132,335 45,117,451 95.63 2000 50,599,662 48,936,993 96.72 108,698 49,045,691 96.93 2001 53,727,318 52,148,971 97.07 158,661 52,307,632 97.36 2002 59,184,019 56,856,770 96.07 95,364 56,952,134 96.23 All taxes are due and payable on November 1st of each year or as soon thereafter as the assessment roll is certified and delivered to the TaxCollector. All unpaid taxes become delinquent on April 1 following the year in which they are assessed. Discounts are allowed for each payment at the rate of 4% in the month ofNovember, 3% in December, 2% in January and 1% in February. The taxes paid in March receive no discount. Delinquent taxes on real property bear interest of 18% per year. On or prior to June 1 following the tax year, certificates are sold for all delinquent taxes on real property. After sale, tax certificates bear interest of 18% per year or at any lower rate bid by the buyer. Application for a tax deed onany unredeemed tax certificates may be made by the certificate holder after a period of two years. Unsold certificates are held by the County. Delinquent taxes on personal property bear interest of 18% per year until the tax is satisfied either by seizure and sale of the property or by the five (5) year statute of limitations. The County does not accrue its portion of the County -held certificates due to the immaterial amount. 15 Comparative Ratios of Bonded Debt The following table shows the comparative ratios ofnet bonded debt to taxable assessed valuations and net per capita bonded indebtedness for the last 10 fiscal years. Ratio of Net General Bonded Debt to Taxable Value and Net Bonded Debt Per Capita Ratio of Net Net Bonded , Bonded Gross Debt Debt to Debt Per Fiscal General Service Net (2) Assessed Capita Year Obligation Monies Bonded (1) Taxable Value Ended Bonded Debt Available Debt Population Value 1993 $ 1,335,000 $ 703,750 $ 631,250 95,641 $5,160,114,845 0.0001 $ 6.60 1994 0 0 0 97,415 5,406,245,871 0.0000 0.00 1995 15,000,000 0 15,000,000 100,261 5,464,325,993 0.0027 149.61 1996 14,280,000 368,731 13,911,269 102,211 5,718,915,081 0.0024 136.10 1997 13,535,000 661,037 12,873,963 104,605 5,940,864,817 0.0022 123.07 1998 12,755,000 885,904 11,869,096 106,675 6,159,944,874 0.0019 111.26 1999 11,945,000 1,072,959 10,872,041 109,579 6,420,215,433 0.0017 99.22 2000 11,100,000 1,357,461 9,742,539 112,947 6,995,948,262 0.0014 86.25 2001 10,215,000 1,609,998 8,605,002 115,716 7,440,896,735 0.0012 74.36 2002 19,810,000 1,085,999 18,724,001 118,149 8,541,205,140 0.0022 158.48 Source: (I) U.S. Census and Bureau of Business and Economic Research, University of Florida (2) Indian River County Property Appraiser 16 Ten Largest Taxpayers The following table sets forth the 10 largest taxpayers inthe County, based upon assessed valuation as of January 1, 2001 (fiscal year ending September 30, 2002). Percent of 2001 Total Taxable Taxpayer Type of Business Taxable Value Va1ue'1) Disney Vacation Development, Inc. Resort $69,069,073 0.72% Florida Power & Light Electric Utility 61,098,500 0.74 BellSouth Telecommunications Telephone Utility 58,655,192 0.62 Windsor Properties Land Development 50,376,579 0.53 I.R Mall Association Ltd. Regional Shopping Center 47,574,020 0.50 The New Piper Aircraft Aircraft Manufacturer 34,121,169 0.36 John's Island Club, Inc. Club and Golf Course 30,849,571 0.32 Adult Community Total Services Retirement Community 30,514,130 0.32 Prime Outlet Center Ltd. Regional Shopping Center 29,737,070 0.31 Wal-Mart Stores Inc. Retail 28,577,908 0.30 Total $440,573,212 4.62% (I) Total taxable value $8,541,205,140 Source: Indian River County Property Appraiser Note: Values are established as of January1 ofthe previous year, i.e., January 1, 2001, taxable values apply to the fiscal year ending 2002. 17 FINANCIAL GUARANTY INSURANCE The following information has been furnished by Ambac Assurance for use in this Official Statement. Payment Pursuant to Financial Guaranty Insurance Policy Ambac Assurance has made a commitment to issue a financial guaranty insurance policy (the "Financial Guaranty Insurance Policy") relating to the Obligations effective as ofthe date of issuance ofthe Obligations. Under the terms of the Financial Guaranty Insurance Policy, Ambac Assurance will pay to The Bank of New York, in New York, New York or any successor thereto (the "Insurance Trustee") that portion of the principal of and interest on the Obligations which shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Obligor (as such terms are defined in the Financial Guaranty Insurance Policy). Ambac Assurance will make such payments to the Insurance Trustee on the later ofthe date on which such principal and interest becomes Due for Payment or within one business day following the date on which Ambac Assurance shall have received notice of Nonpayment from the Trustee/Paying Agent/Bond Registrar. The insurance will extend for the term of the Obligations and, once issued, cannot be canceled by Ambac Assurance. The Financial Guaranty Insurance Policy will insure payment only on stated maturity dates and on mandatory sinking fund installment dates, in the case of principal, and on stated dates for payment, in the case of interest. If the Obligations become subject to mandatory redemption and insufficient funds are available for redemption of all outstanding Obligations, Ambac Assurance will remain obligated to pay principal of and interest on outstanding Obligations on the originally scheduled interest and principal payment dates including mandatory sinking fund redemption dates. In the event of any acceleration of the principal of the Obligations, the insured payments will be made at such times and in such amounts as would have been made had there not been an acceleration. In the event the Paying Agent has notice that any payment of principal of or interest on an Obligation which has become Due for Payment and which is made to a Holder by or on behalf of the Obligor has been deemed a preferential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy Code in accordance witha final, nonappealable order ofa court of competent jurisdiction, such registered owner will be entitled to payment fromAmbac Assurance to the extent of such recovery if sufficient funds are not otherwise available. The Financial Guaranty Insurance Policy doesnot insure any risk other than Nonpayment, as defined in the Policy. Specifically, the Financial Guaranty Insurance Policy does not cover 18 1. payment on acceleration, as a result of a call for redemption (other than mandatory sinking fund redemption) or as a result of any other advancement of maturity. 2. payment of any redemption, prepayment or acceleration premium. 3. nonpayment ofprincipal or interest caused by the insolvency or negligence of any Trustee , Paying Agent or Bond Registrar, if any. If it becomes necessary to call upon the Financial Guaranty Insurance Policy, payment ofprincipal requires surrender of Obligations to the Insurance Trustee together with an appropriate instrument of assignment so as to permit ownership of such Obligations to be registered in the name ofAmbac Assurance to the extent of the payment under the Financial Guaranty Insurance Policy. Payment of interest pursuant to the Financial Guaranty Insurance Policy requires proof of Holder entitlement to interest payments and an appropriate assignment of the Holder's right to payment to Ambac Assurance. Upon payment of the insurance benefits, Ambac Assurance will become the owner of the Obligation, appurtenant coupon, if any, or right to payment of principal or interest on such Obligation and will be fully subrogated to the surrendering Holder's rights to payment. The insurance provided by the Financial Guaranty Insurance Policy is not covered by the Florida Insurance Guaranty Association. Ambac Assurance Corporation Ambac Assurance Corporation ("Ambac Assurance") is a Wisconsin -domiciled stock insurance corporation regulated by the Office of the Commissioner of Insurance of the State of Wisconsin and licensed to do business in 50 states, the District of Columbia, the Territory of Guam and the Commonwealth ofPuerto Rico, with admitted assets of approximately $6,115,000,000 (unaudited) and statutory capital ofapproximately $3,703,000,000 (unaudited) as of December 31, 2002. Statutory capital consists of Ambac Assurance's policyholders' surplus and statutory contingency reserve. Standard & Poor's Credit Markets Services, a Division of The McGraw-Hill Companies, Moody's Investors Service and Fitch, Inc. have each assigned a triple-A financial strength rating to Ambac Assurance. Ambac Assurance has obtained a Wiling from the Internal Revenue Service to the effect that the insuring of an obligationbyAmbac Assurance will not affect the treatment for federal income tax purposes of interest on such obligation and that insurance proceeds representing maturing interest paid by Ambac Assurance under policy provisions substantially identical to those contained in its financial guaranty insurance policy shall be treated for federal income tax purposes in the same manner as if such payments were made by the Obligor of the Obligations. 19 Ambac Assurance makes no representationregardingthe Obligations or the advisabilityofinvesting in the Obligations and makes no representation regarding, nor has it participated in the preparation of, the Official Statement other than the information supplied by Ambac Assurance and presented under the heading "FINANCIAL GUARANTY INSURANCE". Available Information The parent company of Ambac Assurance, Ambac Financial Group, Inc. (the "Company"), is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "SEC"). These reports, proxy statements and other information can be read and copied at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1 -800 -SEC -0330 for further information on the public reference room. The SEC maintains an intemet site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding companies that file electronically with the SEC, including the Company . These reports, proxy statements and other information can also be read at the offices of the New York Stock Exchange, Inc. (the "NYSE"), 20 Broad Street, New York, New York 10005. Copies of Ambac Assurance's financial statements prepared in accordance with statutory accounting standards are available from Ambac Assurance. The address of Ambac Assurance's administrative offices and its telephone number are One State Street Plaza, 19th Floor, New York, New York 10004 and (212) 668-0340. Incorporation of Certain Documents by Reference The following documents filed by the Company withthe SEC (File No. 1-10777) are incorporated by reference in this Official Statement: 1. The Company's Current Report on Form 8-K dated January 23, 2003 and filed on January 24, 2003; 2. The Company's Current Report on Form 8-K dated February 25, 2003 and filed on February 28, 2003; 3. The Company's Current Report on Form 8-K dated February 25, 2003 and filed on March 4, 2003; 4. The Company's Current Report on Form 8-K dated March 18, 2003 and filed on March 20, 2003; 20 5. The Company's Current Report on Form 8-K dated March 19, 2003 and filed on March 26, 2003; 6. The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002 and filed on March 28, 2003; 7. The Company's Current Report on Form 8-K dated March 25, 2003 and filed on March 31, 2003; and 8. The Company's Current Report on Form 8-K dated April 17, 2003 and filed on April 21, 2003. All documents subsequently filed by the Company pursuant to the requirements of the Exchange Act after the date ofthis Official Statement willbe available for inspection in the same manner as described above in "Available Information". THE COUNTY General Indian River County (the "County") was established in 1925 by an act of the Florida Legislature, separating it from St. Lucie County. The County encompasses approximately 497 square miles and is located in the middle of Florida on the eastern coast, approximately 100 miles southeast of Orlando and approximately 135 miles north of Miami. The County is bounded on the northby Brevard County, on the south by St. Lucie County, on the west by Osceola and Okeechobee Counties and on the east by the Atlantic Ocean. The City of Vero Beach is the seat of County government and the largest city in the County. Other incorporated cities located within the County are Fellsmere, Indian River Shores, Orchid and Sebastian. There are approximately 100 miles of waterfront land in the County, including about 23 miles of Atlantic beaches. 21 County Government Indian River County is governed by a five member Board of County Commissioners (the "Commission"). Each member represents one of five districts, elected at large (Countywide) for staggered terms of four years. The Commission elects the Chairman and the Vice -Chairman. A County Administrator is appointed by the Board and is responsible for implementing the policies set forth by the Commission. The Administrator is charged withthe fiscal control of the resources of the County as well. Shown below is a listing of the Commissioners by district and the expiration of their respective term: Term Expires District Commissioner November District 1 Fran B. Adams 2004 District 2 Arthur R. Neuberger 2006 District 3 Kenneth R. Macht, Chairman 2004 District 4 Thomas S. Lowther 2006 District 5 Caroline D. Ginn, Vice Chairman 2004 Indian River County, on a whole, has a number of taxing authorities that can set ad valoremmillage rates for various purposes. These consist of county, school, municipality, water management and independent authorities. However, as used throughout this document, Indian River County shall refer to only those county responsibilities under the Board of County Commissioners. Other elected officials, Constitutional Officers serving county -wide are a Property Appraiser, Tax Collector, Supervisor of Elections, Sheriff and Clerk of the Circuit Court who also serves as the Clerk to the Board of County Commissioners. COUNTY FINANCIAL MATTERS The County's accounting records forgeneralgovemmentaloperations aremaintainedonamodified accrual basis, with revenues being recorded when available and measurable and expenditures being recorded when the services or goods are received and the liabilities are incurred. Accounting records for the County's proprietary funds are maintained on the accrual basis. The County operates on a fiscal year ("Fiscal Year") of October 1 to September 30. Internal accounting controls for the County are designed to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits 22 likely to be derived, and the evaluation of costs and benefits requires estimates and judgements by management. Financial Statements and Annual Audit Florida law requires that the financial statements of the County be audited on an annual basis. Following the end of each fiscal year, a Comprehensive Annual Financial Report (the "CAFR") is prepared by the Finance Department of the County, under the supervision of the Clerk of the Circuit Court. The basic financial statements, as well as the combining, individual fund, account group and supporting financial statements of the County, (collectively the "Financial Statements") included in the CAFR, are audited by an independent certified public accounting firm on an annual basis. The County retains Harris, Cotherman & Associates, Vero Beach, Florida, for such services. The general purpose financial statements of the County as of and for the year ended September 30, 2002, included in this Official Statement, have been audited by Harris, Cotherman& Associates, independent auditors, as stated in their report appearing herein as Appendix A. REFERENDUM The Bonds were approved by a referendum of the voters of the County held November 3, 1992. LITIGATION General The County is a defendant from time to time in various lawsuits, including, in particular, litigation related to zoning and other land use regulation matters. It is the opinion of the County Attorney that the County has meritorious defenses against current pending litigation; provided, however, that there is no assurance that the County will not incur some liability. The Bonds There is no pending or, to the knowledge of the County, threatened litigation against the County which in any way questions or affects (1) the validity of the Bonds, or any proceedings or transactions relating to their issuance, sale, delivery or payment; (2) the pledge of the Ad Valorem Taxes to secure payment of the Bonds; or (3) the collection and application of the Ad Valorem Taxes in accordance with the provisions of the Resolution. 23 LEGAL MATTERS Legal matters incident to the issuance of Bonds and with regard to the tax-exempt status of the interest on Bonds (see "TAX EXEMPTION") are subject to the legal opinion ofBryant, Miller and Olive, P.A., whose fees and expenses for legal services as Bond Counsel will be paid by the County from a portion of the proceeds ofBonds. The signed legal opinion, dated and premised on law in effect as of the date of original delivery of Bonds, will be delivered to the County at the time of original delivery, and the text of the opinion will be printed on Bonds. The proposed text of the legal opinion is set forth as Appendix C hereto. The actual legal opinion to be delivered may vary from that text if necessary to reflect facts and law on the date of delivery. The opinion will speak only as of its date, and subsequent distribution of the opinion by recirculation of the Official Statement or otherwise shall create no implication that Bond Counsel has reviewed or expresses any opinion concerning any of the matters referenced in the opinion subsequent to its date. Certain legal matters incident to the issuance of Bonds will be passed upon for the Countybythe County Attorney and by Nabors, Giblin & Nickerson, P.A., Disclosure Counsel. TAX EXEMPTION Federal Income 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 Bonds in order that interest on the Bonds be and remain excluded from gross income for purposes of federal income taxation. Non-compliance may cause interest on the Bonds to be included in federal gross income retroactive to the date of issuance of the Bonds regardless of the date on which such non-compliance occurs or is ascertained. These requirements include, but are not limited to, provisions whichprescribe yield and other limits within which the proceeds of the 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 County has covenanted in the Resolution to comply with such requirements in order to maintain the exclusion from federal gross income of the interest on the Bonds. In the opinion of Bond Counsel, assuming compliance with the aforementioned covenants, under existing laws, regulations, judicial decisions and rulings, interest on the Bonds is excluded fromgross income of the holders thereof for purposes of federal income taxation. Interest on the 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 Bonds may be subject to the alternative minimum tax when any Bond is held by a corporation. The alternative minimum taxable income of a corporation must be increased by 75% of the 24 excess of such corporation's adjusted current earnings over its alternative minimum taxable income (before this adjustment and the alternative tax net operating loss deduction). "Adjusted Current Earnings" will include interest on the Bonds. 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 disposition ofBonds. Prospective purchasers of Bonds should be aware that the ownership of 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 Bonds, (iii) the inclusionof interest on the Bonds in earnings of certain foreign corporations doing business in the United States for purposes ofa branchprofits tax, (iv) the inclusion of interest on Bonds inpassive income subject to federal income taxation of certain S corporations with Subchapter C earnings and profits at the close of the taxable year, and (v) the inclusion of interest on the 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 BONDS AND THE RECEIPTORACCRUAL OF THE INTEREST THEREON MAY HAVE ADVERSE FEDERAL TAX CONSEQUENCES FORCERTAIN INDIVIDUAL AND CORPORATE REGISTERED OWNERS. PROSPECTIVE REGISTERED OWNERS SHOULD CONSULT WITH THEIRTAX 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 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 ofobligations similar to the 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 Bonds. Florida Tax Matters On the date of delivery of the Bonds, Bond Counsel will issue an opinion to the effect that under existing statutes, regulations and judicial decisions, the Bonds and the income therefrom are exempt from taxation under the laws of the State of Florida, except as to Florida estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended. 25 ADVISORS AND CONSULTANTS The County has retained certain advisors and consultants in connection with the issuance of the Bonds. These advisors and consultants are compensated from a portion of the proceeds of the Bonds, identified as "Costs of Issuance" under the heading "SOURCES AND USES OF FUNDS" herein; and their compensation is, in some instances, contingent upon the issuance of the Bonds and the receipt of the proceeds thereof. Bond Counsel and Disclosure CounseL Bryant, Miller and Olive, P.A., Tallahassee, Florida, represents the County as Bond Counsel. Nabors, Giblin & Nickerson, P.A., Tampa, Florida, represents the County as Disclosure Counsel with respect to the issuance ofthe Bonds. The fees ofBond Counsel and Disclosure Counsel will be paid from proceeds of the Bonds, and such payment is contingent upon the issuance of the Bonds. UNDERWRITING The Bonds are being purchased from the County by WilliamR Hough & Co. (the "Underwriter") at an aggregate purchase price of $ (par less underwriters' discount of $ , plus accrued interest on the Bonds in the amount of $ ). The Underwriter is obligated to purchase all the Bonds if any are purchased. Following the initial public offering, the public offering prices may be changed from time to time by the Underwriter. The Bonds may be offered and sold to certain dealers (including underwriters and other dealers depositing such Bonds into investment trusts) and others at prices lower than the public offering prices set forth on the cover page of this Official Statement. 26 BOND RATINGS Standard & Poor's Public Finance Ratings and Fitch, Inc. have assigned ratings of " " and " ," respectively to the Bonds without regard to the policy of municipal bond insurance. Standard & Poor's Public Finance Ratings and Fitch, Inc. have assigned the Bonds the ratings of "AAA" and "AAA," respectively, based upon the issuance by Ambac of its standard policy o ffinancial guaranty insurance policy insuring the timely payment of the principal of and interest on the Bonds. There is no assurance that any such ratings will continue for any givenperiod 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 such ratings or any of them, may have an adverse effect on the market price of the Bonds. An explanation of the significance of the ratings can be received from the rating agencies. DISCLOSURE MATTERS Certificate as to Official Statement The execution and delivery of this Official Statement has been duly authorized by the County. At the time of delivery of Bonds to the Underwriter, the County will provide to the Underwriter a certificate (whichmaybe included in a consolidated closing certificate of the County), signedbythose County officials who signed this Official Statement, relating to the accuracy and completeness of this Official Statement and to its being a "final official statement" in the judgement of the County for the purposes of SEC Rule 15c2 -12(b)(3). Continuing Disclosure In accordance with the requirements of Rule 15c2-12 (the "Rule") promulgated by the Securities and Exchange Commission, the County has agreed or will agree to provide, (i) to each nationally recognized municipal securities informationrepository("NRMSIR") and, if designated by the State, the state information depository ("SID"), certain annual financial information and operating data, including audited financial statements, generally consistent with the information contained under the subheadings "Historical Table of Assessed Value," "Historical Ad Valorem Millage Rates," "Property Tax Levies" and "Comparative Ratios of Bonded Debt" under the heading "AD VALOREM TAX MA LEERS"; such information is expected to be available on or before June 1 of each year for the fiscal year ending on September 30 of the preceding calendar year, and will be made available, in addition to the NRMSIR's and the SID, to each holder of Bonds who makes request for such information; provided, that if audited financial statements are not available by June 1, the County will provide unaudited financial statements at the time the foregoing information is distributed; 27 (ii) in a timely manner, to each NRMSIR or to the Municipal Securities Rulemaking Board ("MSRB") and to the SID, notice of the occurrence of any of the following events with respect to the Bonds, if material: (a) principal and interest payment delinquencies, (b) non-payment related defaults, (c) unscheduled draws on debt service reserves reflecting financial difficulties, (d) unscheduled draws on credit enhancements reflecting financial difficulties, (e) substitution of credit or liquidity providers, or their failure to perform, (f) adverse tax opinions. or events affecting the tax-exempt status of the security, (g) modifications to rights of security holders, (h) bond calls, (i) defeasances, (j) release, substitution, or sale of property securing repayment of the securities, and (k) rating changes; (iii) in a timely manner, to each NRMSIR or to the MSRB and to the SID, notice of a failure by the County to provide the required annual financial information on or before the date specified in its written continuing disclosure undertaking. The Countyreserves the right to modify from time to time the specific types ofinformationprovided or the format ofthe presentation of such information, to the extent necessary or appropriate inthe judgment of the County; provided, that the County agrees that any such modification will be done in a manner consistent withthe Rule. The County reserves the right to terminate its obligation to provide annual financial information and notices of material events, as set forth above, if and when the County no longer remains an "obligated person" withrespect to the Bonds within the meaning of the Rule. The County acknowledges that its undertaking pursuant to the Rule described under this subheading is intended to be for the benefit ofthe owners ofthe Bonds and shall be enforceable by the owners; provided, that the right to enforce the provisions of this undertaking shall be limited to a right to obtain specific enforcement of the County's 28 obligations hereunder, and any failure by the County to comply with the provisions of this undertaking shall not be an event of default with respect to the Bonds under the Resolution. The requirements of (i) above, do not necessitate the preparation of any separate annual report addressing only the Bonds. The requirements of(i) maybe met by the filing of a combined bond report or the County's Comprehensive Annual Financial Report; provided, such report includes all of the required information and is available by June 1. Additionally, the County may incorporate any information provided in any prior filing with each NRMS IR or included in any final official statement ofthe County, provided such final official statement is filed with the MSRB. The County has never failed to comply in any material respects with any previous undertakings with regard to said Rule to provide annual reports or notices of material events. MISCELLANEOUS The references, excerpts and summaries of all documents, resolutions and ordinances referenced herein do not purport to be complete statements of the provisions of such documents, resolutions and ordinances, and reference is directed to all such documents, resolutions and ordinances for full and complete statements of all matters of fact relating to Bonds, the security for and the repayment of Bonds and the rights and obligations of the holders thereof. INDIAN RIVER COUNTY, FLORIDA /s/Kenneth R. Macht Kenneth R. Macht, Chairman Board of County Commissioners /s/James E. Chandler James E. Chandler County Administrator 29 Appendix A Financial Statements of the County for the Fiscal Year ended September 30, 2002 Appendix B Form of Resolution Appendix C Form of Bond Counsel Opinion Appendix D Form of Ambac Financial Guaranty Insurance. Policy EXHIBIT C FORM OF CONTINUING DISCLOSURE AGREEMENT CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by Indian River County, Florida (the "County") in connection with the issuance of its $ General Obligation Refunding Bonds, Series 2003 (the "Bonds"). The Series 2003 Bonds are being issued pursuant to Chapter 125, Florida Statutes, ResolutionNo. 92-146 adopted by the Board ofCounty Commissioners of the County (the"Board") on August 18, 1992, as supplemented and other applicable provisions of law (collectively, the "Act") and pursuant to Resolution No. 95-63, of the Board, adopted May 16, 1995, and as further supplemented by Resolution No. 95-83, adopted by the Board July 11, 1995, as supplemented (the "Resolution"). The County covenants and agrees as follows: SECTION 1. PURPOSE OF DISCLOSURE CERI'1FICATE. This Disclosure Certificate is being executed and delivered by the County for the benefit of the Bondholders and in order to assist the original underwriters of the Bonds in complying withRule 15c2 -12(b)(5) promulgated by the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934 (the "Rule"). SECTION 2. PROVISION OF ANNUAL INFORMATION. Except as otherwise provided herein, the County shall provide to all ofthe nationally recognized municipal securities information repositories described in Section 4 hereof (the "NRMSIRs"), and to any state information depository that is established within the State of Florida (the "SID"), and, upon written request, to any Bondholder, on or before April 30 of each year, commencing April 30, 2004, the information set forth below in this Section 2. Notwithstanding the immediately preceding sentence, to the extent any such information does not become available to the County before April 30 of any year, the County shall provide such information when it becomes available, but no later than one year following the end of the County's Fiscal Year. (A) the County's Comprehensive Annual Financial Report for the immediately preceding Fiscal Year (the "CAFR"), which shall include the audited financial statements of the County for the immediately preceding Fiscal Year prepared in accordance with Generally Accepted Accounting Principles, as modified by applicable State of Florida requirements and the governmental accounting standards promulgated by the Governmental Accounting Standards Board; provided, however, if the audited financial statements of the County are not completed prior to April 30 of any year, the County shall provide unaudited financial statements on such date and shall provide the audited financial statements as soon as practicable following their completion; and (B) to the extent not set forth in the CAFR, additional financial information and operating data of the type included with respect to the County in the final official statement prepared in connection with the sale and issuance of the Bonds (as amended, the "Official Statement"), as set forth below: 1 1. Updates of information set forth in the Official Statement under the principal caption"AD VALOREM TAX MA1TERS" but only to the extent of the tabular information therein. 2. Description of any indebtedness payable in whole or in part from Ad Valorem Taxes (as defined in the Official Statement). For purposes of this Disclosure Certificate, "Fiscal Year" means the period commencing on October 1 and ending on September 30 of the next succeeding year, or such other period provided by applicable law. SECTION 3. REPORTING SIGNIFICANT EVENTS. The County shall provide to the NRMSIRs or the Municipal Securities Rulemaking Board (the "MSRB") and to the SID, on a timely basis, notice of any of the following events, if such event is material with respect to the Bonds or the County's ability to satisfy its payment obligations with respect to the Bonds: (A) Principal and interest payment delinquencies; (B) Non-payment related defaults; (C) Unscheduled draws on the debt service reserve fund reflecting financial difficulties; (D) Unscheduled draws on credit enhancement reflecting financial difficulties; (E) Substitution of credit or liquidity providers, or their failure to perform; (F) Adverse tax opinions or events affecting the tax-exempt status of the Bonds; (G) Modifications to rights of Bondholders; (H) Calls on the Bonds; (I) Defeasance of the Bonds; (J) Release, substitution, or sale of property securing repayment of the Bonds; (K) Rating changes; and (L) Notice of any failure on the part of the County or any other Obligated Person (as defined herein) to meet the requirements of Section 2 hereof. 2 The County may from time to time, in its discretion, choose to provide notice of the occurrence of certain other events, in addition to those listed in this Section 3, if, in the judgment of the County, such other events are material with respect to the Bonds, but the County does not specifically undertake to commit to provide any such additional notice of the occurrence of any material event except those events listed above. Whenever the County obtains knowledge of the occurrence ofa significant event described in this Section 3, the County shall as soon as possible determine if such event would be material under applicable federal securities law to holders of Bonds, provided, that any event under clauses (D), (E), (F), (K) or (L) above will always be deemed to be material. SECTION 4. NRMSIRs. The NRMSIRs to which the County shall provide the infonnationdescribed in Sections 2 and 3 above, to the extent required, shall be the following organizations, their successors and assigns: Bloomberg Municipal Repository 100 Business Park Drive Skillman, New Jersey 08558 Phone: (609) 279-3225 Fax: (609) 279-5962 http://www.bloomberg.com/markets/muni_contactinfo.html Email: Munis@Bloomberg.com DPC Data Inc. One Executive Drive Fort Lee, NJ 07024 Phone: (201) 346-0701 Fax: (201) 947-0107 http://www.dpcdata.com Email: nrmsir@dpcdata.com FT Interactive Data Attn: NRMSIR 100 William Street New York, New York 10038 Phone: (212) 771-6999 Fax: (212) 771-7390 (Secondary Market Information) (212) 771-7391 (Primary Market Information) http://www.interactivedata.com Email: NRMSIR@F llll.com 3 (E) Standard & Poor's J. J. Kenny Repository 55 Water Street 45th Floor New York, NY 10041 Phone: (212) 438-4595 Fax: (212) 438-3975 www.jjkenny.com/jjkenny/pser_descrip_data_rep.html Email: nrmsir repository@sandp.com Any NRMSIRs that are established subsequently and approved by the SEC. (F) A list ofthe names and addresses of all designated NRMSIRs as ofany date may currently be obtained by calling the SEC's Fax on Demand Service at 202/942-8088 and requesting document number 0206 or by visiting the SEC's website at "www.sec.gov/info/municipal/nrmsir." SECTION 5. NO EVENT OF DEFAULT. Notwithstanding any other provision in the Resolution to the contrary, failure ofthe County to comply with the provisions of this Disclosure Certificate shall not be considered an event of default under the Resolution. To the extent permitted by law, the sole and exclusive remedy of any Bondholder for the enforcement of the provisions hereof shall be an action for mandamus or specific performance, as applicable, by court order, to cause the County to comply with its obligations hereunder. For purposes of this Disclosure Certificate, "Bondholder" shall mean any person who (A) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (B) is treated as the owner of any Bond for federal income tax purposes. SECTION 6. NO PRIOR FAILURE TO COMPLY. The County is not and has not been in default in respect of its continuing disclosure obligations with respect to any other issue of bonds of the County. SECTION 7. INCORPORATION BYREFERENCE. Any or all of the information required herein to be disclosed may be incorporated by reference from other documents, including official statements or debt issues ofthe County or related public entities, which have been submitted to each of the NRMSIRs and the SID, if any, or the SEC. If the document incorporated by reference is a final official statement, it must be available from the MSRB. The County shall clearly identify each document incorporated by reference. SECTION 8. DISSENIINATION AGENTS. The Issuer may, from time to time, appoint or engage a dissemination agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such agent, with or without appointing a successor disseminating agent. 4 SECTION 9. TERMINATION. The County's obligations under this Disclosure Certificate shall terminate upon (A) the legal defeasance, prior redemption or payment in full of all of the Bonds, or (B) the termination of the continuing disclosure requirements of the Rule by legislative, judicial or administrative action. SECTION 10. AMENDMENTS. Notwithstanding any other provision ofthis Disclosure Certificate, the County may amend this Disclosure Certificate, and any provision may be waived, if such amendment or waiver is supported by an opinion of counsel that is nationally recognized in the area of federal securities laws, to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule. SECTION 11. ADDITIONAL INFORMATION. Nothing in this Disclosure Certificate shall be deemed to prevent the County from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in its annual information described in Section 2 hereof or notice of occurrence of a significant event described in Section 3 hereof, in addition to that which is required by this Disclosure Certificate. If the County chooses to include any information in its annual information or notice of occurrence of a significant event in addition to that which is specifically required by this Disclosure Certificate, the County shall have no obligationunder this Disclosure Certificate to update such information or include it in its future annual information or notice of occurrence of a significant event. SECTION 12. OBLIGATED PERSONS. If any person, other than the County, becomes an Obligated Person (as defined in the Rule) relating to the Bonds, the County shall use its best efforts to require such Obligated Person to comply with all provisions of the Rule applicable to such Obligated Person. Dated: INDIAN RIVER COUNTY, FLORIDA 5 • By: Chairman, Board of County Commissioners 9,1 EXHIBIT D COMMITMENT OF AMBAC ASSURANCE CORPORATION Ambac Assurance Corporation One State Street Plaza New York, NY 10004 212.668.0340 A member of Ambac Financial Group, Inc. , COMMITMENT FOR FINANCIAL GUARANTY INSURANCE Obligor: INDIAN RIVER COUNTY, FLORIDA Commitment Number: 24824 Commitment Date: May 13, 2003 Expiration Date: August 12, 2003 Obligations: $8,025,000*, General Obligation Refunding Bonds, Series 2003, dated June 1, 2003 maturing on July 1st in the years 2004 through 2010, both inclusive. Insurance premium: 0.199% of the total principal and interest due on the Obligations. (Fitch, Inc., Moody's Investors Service and Standard & Poor's Credit Markets Services assess separate rating fees which are payable directly to them. Each rating agency will bill separately and all questions regarding the payment of such fees must be addressed to the applicable agency.) Ambac Assurance Corporation ("Ambac"), a Wisconsin Stock Insurance Corporation, hereby commits to issue a Financial Guaranty Insurance Policy (the "Policy") relating to the above- described debt obligations (the "Obligations"), substantially in the form imprinted in this Commitment, subject to the terms and conditions contained herein or added hereto (see conditions set forth herein). To keep this Commitment in effect after the expiration date set forth above, a request for renewal must be submitted to Ambac prior to such expiration date. Ambac reserves the right to refuse wholly or in part to grant a renewal. The Financial Guaranty Insurance Policy shall be issued if the following conditions are satisfied: 1: The documents to be executed and delivered in connection with the issuance and sale of the Obligations shall not contain any untrue or misleading statement of a material fact and shall not fail to state a material fact necessary in order to make the information contained therein not misleading. 2. No event shall occur which -would permit any purchaser of the Obligations, otherwise required, not to be required to purchase the Obligations on the date scheduled for the issuance and delivery thereof 3. There shall be no material change in or affecting the Obligations (including, without limitation, the security for the Obligations or the proposed debt service structure for the Obligations) or the financing documents or the official statement (or any similar disclosure document) to be executed and delivered in connection with the issuance and sale of the Obligations from the descriptions or schedules thereof heretofore provided to Ambac. 4. The Obligations shall contain no reference to Ambac, the Policy or the financial guaranty insurance evidenced thereby except as may be approved by Ambac. * Subject to change, with Ambac's approval. 5. Ambac shall be provided with: (a) Executed copies of all financing documents, the official statement (or any similar disclosure document) and the various legal opinions delivered in connection with the issuance and sale of the Obligations, including, without limitation, the unqualified approving opinion of bond counsel rendered by a law firm acceptable to Ambac. The form of Bond Counsel's approving opinion shall also indicate, if applicable, that the Obligations are exempt from federal income taxation, that the Obligor must comply with certain covenants under and pursuant to the new tax law and that the Obligor has the legal power to comply with such covenants. Such opinion of bond counsel shall be addressed to Ambac or, in lieu thereof, a letter shall be provided to Ambac to the effect that Ambac may rely on such opinion as if it were addressed to Ambac. (b) Evidence of a wire transfer in an amount equal to the insurance premium at the time of the issuance and delivery of the Obligations. 6. Unless expressly waived in whole or in part by Ambac, the financing documents and the Official Statement shall contain (a) the terms and provisions provided in Ambac's STANDARD PACKAGE transmitted herewith, and (b) any additional oral or written provisions or comments submitted by Ambac. 7. Ambac shall receive a copy of any insurance policy, surety bond, guaranty or indemnification or any other policy, contract or agreement which provides for payment of all or any portion of the debt, the costs of reconstruction, the loss of business income or in any way secures, ensures or enhances the income stream anticipated to pay the Obligations. 8. Any provisions or requirements of the Purchase Contract or Bond Purchase Agreement referencing Ambac must be sent to the attention of Danielle Brackett not less than five (5) business days prior to closing. If such provisions or requirements are not received within that time, compliance may not be possible. 9. Review and approval by Ambac at least 5 days prior to the closing of the Escrow Agreement for the defeasance of the applicable Obligations (the "Prior Obligations"). 10: Prior to closing, Ambac must receive certification by an accounting firm acceptable to Ambac that the securities invested are sufficient to pay the Prior Obligations. Upon receipt of this commitment Ambac should be notified which firm will be providing certification. 11. Receipt of an acceptable opinion of counsel addressed to Ambac that the Prior Obligations have been legally defeased. 12. Receipt of an acceptable opinion of counsel addressed to Ambac with regard to the validity and enforceability of the Escrow Agreement. 13. If a forward supply contract is used: (a) Securities delivered to the escrow agreement must be non -callable U.S. Government obligations, which do not mature later than the date needed to pay debt service on the refunded Obligations. (b) The CPA verification must be in form and substance satisfactory to Ambac and must opine that the escrow is sufficient to defease the refunded Obligations whether or not the forward supply contract provider delivers securities to the escrow. (c) The forward supply contract must specify that (i) the purchase price of the securities delivered to the escrow must not exceed the amount of cash received from maturing securities in the escrow, as specified in the verification, and (ii) the maturity value of.the securities delivered to the escrow must not be less than the purchase price paid for such securities. (d) The forward supply contract provider shall have no recourse to the escrow upon any failure of the Obligor or escrow agent to perform its obligations under the forward supply contract. Other than the payment of the purchase price for the securities to be delivered pursuant to the forward supply contract, no payments of any other kind may be made from the escrow in respect of the forward supply contract. (e) The forward supply contract provider must be rated at least A by a nationally recognized rating agency. (f) The forward supply contract shall be in form and substance satisfactory to Ambac. Authorized Officer