HomeMy WebLinkAbout1995-083RESOLUTION N0. 95- 83
A RESOLUTION OF INDIAN RIVER COUNTY, FLORIDA AWARDING THE
SALE OF $15,000,000 GENERAL OBLIGATION BONDS OF INDIAN
RIVER COUNTY, FLORIDA; RATIFYING PREVIOUS ACTIONS TAKEN
BY THE DIRECTOR OF MANAGEMENT AND BUDGET IN CONNECTION
THEREWITH; APPROVING THE MATURITIES AND OTHER TERMS OF
SUCH BONDS; AUTHORIZING THE PURCHASE OF MUNICIPAL BOND
INSURANCE; SUPPLEMENTING RESOLUTION NO. 95-63 TO PROVIDE
ADDITIONAL COVENANTS RELATING TO MUNICIPAL BOND INSURANCE
APPLICABLE TO THE BONDS; AMENDING CERTAIN COVENANTS TO
PROVIDE CONTINUING DISCLOSURE CONTAINED IN RESOLUTION NO.
95-75; 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 "Issuer") adopted Resolution No.
95-63 (the "Resolution") to provide for the issuance of not to
exceed $26,000,000 General Obligation Bonds of Indian River County,
Florida payable from ad valorem taxes levied by the Issuer; and
WHEREAS, pursuant to Resolution No. 95-75, the Issuer provided
for the public sale of $15,000,000 of such General Obligation Bonds
(the "Bonds") pursuant to an official Notice of Bond Sale; and
WHEREAS, Resolution No. 95-75 delegated certain responsibili-
ties in connection with the award and issuance of such Bonds to the
Director of Management and Budget, and the Issuer wishes to ratify
the actions taken; and
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY
COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA as follows:
SECTION 1. In accordance with the provisions of Resolution
No. 95-75, the Issuer published a Summary Notice of Sale in zhg
Bond Buyer and distributed an Official Notice of Bond Sale calling
for bids to be received by 11:00 a.m., E.D.T. on July 11, 1995.
Such action is hereby ratified and confirmed.
SECTION 2. In accordance with the provisions of Resolution
95-75 the Director of Management and Budget accepted the bids
submitted pursuant to the Official Notice of Bond Sale, and at the
hour stated in said Official Notice of Bond Sale, bidding was
closed and the bids attached as Exhibit A to this Resolution were
found to have been filed and to comply in all respects with the
terms of the said Notice of Bond Sale. The Official Notice of Bond
Sale set forth the maturities, subject to adjustment as provided
therein, and redemption provisions for the Bonds, and such
maturities, as may have been adjusted, and redemption provisions,
are hereby ratified and approved.
SECTION 3. The bid offering to purchase said Bonds at the
lowest true interest cost in accordance with the Notice of Bond
Sale was the bid of (the "Purchaser")
offering to purchase the Bonds for $ , plus accrued
interest. The bid of the Purchaser is hereby accepted and
$15,000,000 Indian River County, Florida, General obligation Bonds,
Series 1995 are hereby awarded to the Purchaser at the price
offered for the Bonds, bearing interest at the rates set forth in
the bid attached hereto as part of Exhibit A.
SECTION 4. In accordance with the provisions of Resolution
No. 95-75, the County Administrator and the County Attorney deemed
the Preliminary Official Statement final as of June 28, 1995. Such
action is hereby ratified and confirmed. The Preliminary Official
Statement attached to Resolution No. 95-75 as Exhibit F is hereby
ratified and approved. The Chairman of the Board of County
Commissioners and the Director of Management and Budget are
authorized and directed to execute and deliver an Official
Statement in substantially the form of such Preliminary Official
Statement, with such changes, insertions and omissions as shall be
approved by the Chairman of the Board of County Commissioners and
the Director of Management and Budget.
SECTION 5. Pursuant to Section 13 of Resolution No. 95-75,
AMBAC Indemnity Corporation (the "AMBAC Indemnity") has been
selected as the bond insurer, and, pursuant to the Purchaser's bid,
the Purchaser has elected to insure the Bonds. Selection of the
AMBAC Indemnity is hereby ratified and confirmed and payment for
such insurance is hereby authorized from proceeds of the Bonds in
accordance with the Commitment for Municipal Bond Insurance from
AMBAC Indemnity attached hereto as Exhibit B, and the terms,
conditions and agreements relating to the Issuer set forth in such
Commitment for Municipal Bond Insurance are hereby accepted and
incorporated herein. A statement of insurance is hereby authorized
to be printed on or attached to the Bonds for the benefit and
information of the holders of the Bonds.
SECTION 6. In addition to the covenants and agreements of the
Issuer previously contained in the Resolution regarding the rights
of AMBAC Indemnity which are hereby incorporated herein, the Issuer
hereby makes the following additional covenants and agreements for
the benefit of AMBAC Indemnity and the Holders of the Bonds while
the Bond Insurance Policy insuring the Bonds is in full force and
effect:
(A) Definitions.
"AMBAC Indemnity" shall mean AMBAC Indemnity Corporation,
a Wisconsin -domiciled stock insurance company.
"Authorized Investments" shall mean for all purposes,
including defeasance investments in escrow accounts:
(1) Caeh (l.naured at all tlues by the Federal Depoelt
Ineurance cot?oratlon or othemlse collaterallzed slth
obllgatlone degcribed ln paragraph (2', below) t ot
(2) DLrect obllgatLone of (lncludlnE obliEatlons lseued or
held ln book entry fotm on the books of) the Departnent
of the lfreasury of the United Statee of Anerlca.
nAuthorized fnveetmentgo shall mean for all pur?oges
other than defeagance Lnveetuente in refundlng escrow
accounte:
(1) obllgations of any of the following federal agencies
which obllgatlons represent the full faith and credlt of
the Unlted States of Anerl.ca, includlng: Export-rnportBank; Farm Credit systeu FlnancLal Assietance
Corporatl.ont Famere Home AdnlnistratLoni General
Senrices Adulnlstratl.on i U. s . Maritfune Adnlnlstration;Snall BueLnegs Adnlnistratloni covernment Natlonal
Irtortgage Association (cN!{A) i U.S. Departnent of Housingt Urban Developnent (PIlAr e) t and Federal Housing
AdnlnlstratLon;
(2, senior debt obllgatione rated rrAAArr by Standard & Poorf g
Corporatlon (StP) and rr[q6n by Moodyrs Invegtors Ser:rrice,InE. (t{oodyra) Lseued by the Federal Natlonal l,tortgageAeeociation or the Federal Hone lcan l,lortgage
Corporation. Senior debt obllgatlong of other Governnent
Sponeored Agencl.ee approved by AIIBAC Indennity;
(3) fl.S. dollar denoul.nated depoeit accounte, federal funds
and bankerfs acceptaneee wlth domestic connercial banks
whlch have a rating on their Ehort tetm certlficates of
depoeit on the date of purchaee of rrA-1[ or trA-l*o by StP
and oP-lt by Moodyrs and naturl.ng not more than 36O daysafter the date of purchase. (Ratings on holding
coupanies are not considered as the rating of the bank);
({) connerclal paper whlch ls rated at the tlne of purchase
ln the elngle hlghest clasglflcatlon, [A-l+tf by s&P and||P-ln by Uoodyre and whlch natures not nore than 27o daysafter the date of purchaae;
(5) Lnveetuente in a noney narket fund rated oAAAnrt ej rrf$s-
Gi or better by StPi
(6) Pre-refunded tlunlcipal obligationE defined aB follows:
Any bonda or other obllgatLons of any etate of the United
Statee of Anerlca or of any agency, Lnstrurentallty orlocal Eovermental unlt of any euch state which are notcallablc at thc optlon of the obllgor prior to uaturityor as to nhlch Lrrevocable lngtnrctlone have been given
by the obligor to call on the date specified in the
notice; and
(A) which are rated, based on an irrevocable escrow
account or fund (the "escrow"), in the highest rating
category of S&P and Moody Is or any successors thereto; or
(B)(i) which are fully secured as to principal and
interest and redemption premium, if any, by an escrow
consisting only of cash or obligations described in
paragraph A(2) above, which escrow may be applied only to
the payment of such principal of and interest and
redemption premium, if any, on such bonds or other
obligations on the maturity date or dates thereof or the
specified redemption date or dates pursuant to such
irrevocable instructions, as appropriate, and (ii) which
escrow is sufficient, as verified by a nationally
recognized independent certified public accountant, to
pay principal of and interest and redemption premium, if
any, on the bonds or other obligations described in this
paragraph on the maturity date or dates specified in the
irrevocable instructions referred to above, as
appropriate.
(7) investment agreements approved in writing by AMBAC
Indemnity Corporation (supported by appropriate opinions
of counsel) with notice to S&P;
(8) the Local Government Surplus Trust Fund, pursuant to
Chapter 218, Part IV, Florida Statutes; and
(9) other forms of investments (including repurchase
agreements) approved in writing by AMBAC with notice to
S&P.
The value of the above investments shall be determined as
follows:
"Value", which shall be determined as of the end of each
month, means that the value of any investments shall be
calculated as follows:
(1) as to investments the bid and asked prices of which
are published on a regular basis in The Wall Street
Journal (or, if not there, then in The New York
Times): the average of the bid and asked prices for
such investments so published on or most recently
prior to such time of determination;
(2) as to investments the bid and asked prices of which
are not published on a regular basis in The Wall
Street Journal or The New York Times: the average
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by the obligor to call on the date specified in the
notice; and
(A) which are rated, based on an irrevocable escrow
account or fund (the "escrow"), in the highest rating
category of S&P and Moody ' s or any successors thereto; or
(B)(i) which are fully secured as to principal and
interest and redemption premium, if any, by an escrow
consisting only of cash or obligations described in
paragraph A (2 ) above, which escrow may be applied only to
the payment of such principal of and interest and
redemption premium, if any, on such bonds or other
obligations on the maturity date or dates thereof or the
specified redemption date or dates pursuant to such
irrevocable instructions, as appropriate, and (ii) which
escrow is sufficient, as verified by a nationally
recognized independent certified public accountant, to
pay principal of and interest and redemption premium, if
any, on the bonds or other obligations described in this
paragraph on the maturity date or dates specified in the
irrevocable instructions referred to above, as
appropriate.
(7) investment agreements approved in writing by AMBAC
Indemnity Corporation (supported by appropriate opinions
of counsel) with notice to S&P;
(8) the Local Government Surplus Trust Fund, pursuant to
Chapter 218, Part IV, Florida Statutes; and
(9) other forms of investments (including repurchase
agreements) approved in writing by AMBAC with notice to
S&P.
The value of the above investments shall be determined as
follows:
"Value", which shall be determined as of the end of each
month, means that the value of any investments shall be
calculated as follows:
(1) as to investments the bid and asked prices of which
are published on a regular basis in The Wall Street
Journal (or, if not there, then in The New York
Times): the average of the bid and asked prices for
such investments so published on or most recently
prior to such time of determination;
(2) as to investments the bid and asked prices of which
are not published on a regular basis in The Wall
Street Journal or The New York Times: the average
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bid price at such time of determination for such
investments by any two nationally recognized
government securities dealers (selected by the
Paying Agent in its absolute discretion) at the
time making a market in such investments or the bid
price published by a nationally recognized pricing
service;
(3) as to certificates of deposit and bankers'
acceptances: the face amount thereof, plus accrued
interest; and
(4) as to any investment not specified above: the value
thereof established by prior agreement between the
Issuer, the Paying Agent and AMBAC Indemnity
Corporation.
"Municipal Bond Insurance Policy" shall mean the
municipal bond insurance policy issued by AMBAC Indemnity
insuring the payment when due of the principal of and interest
on the Bonds as provided therein.
Any provision herein or of the Resolution expressly
recognizing or granting rights in or to AMBAC Indemnity may
not be amended in any manner which affects the rights of AMBAC
Indemnity hereunder or thereunder without the prior written
consent of AMBAC Indemnity.
Unless otherwise provided in this Section, AMBAC
Indemnity's• consent shall be required in addition to
Bondholder consent, when required, for the following purposes:
(i) execution and delivery of any supplemental resolution;
(ii) removal of the Paying Agent and selection and appointment
of any successor Paying Agent; and (iii) initiation or
approval of any action not described in (i) or (ii) above
which requires Bondholder consent.
Any reorganization or liquidation plan with respect to
the Issuer must be acceptable to AMBAC Indemnity. In the
event of any reorganization or liquidation, AMBAC Indemnity
shall have the right to vote on behalf of all bondholders who
hold AMBAC Indemnity -insured bonds absent a default by AMBAC
Indemnity under the applicable Municipal Bond Insurance Policy
insuring such Bonds.
Anything in herein or in the Resolution to the contrary
notwithstanding, upon the occurrence and continuance of an
event of default as defined therein, AMBAC Indemnity shall be
entitled to control and direct the enforcement of all rights
and remedies granted to the Bondholders under the Resolution.
(C) Notices To Be Given To AMBAC Indemnity.
While the Municipal Bond Insurance Policy is in effect,
the Issuer shall furnish to AMBAC Indemnity:
(i) as soon as practicable after the filing thereof, a
copy of any financial statement of the Issuer and a copy of
any audit and annual report of the Issuer;
(ii) a copy of any notice to be given to the registered
owners of the Bonds, including, without limitation, notice of
any redemption of or defeasance of Bonds, and any certificate
rendered pursuant hereto or to the Resolution relating to the
security for the Bonds; and
(iii) such additional information it may reasonably
request.
The Issuer shall notify AMBAC Indemnity of any failure of
the Issuer to provide relevant notices, certificates, etc.
The Issuer will permit AMBAC Indemnity to discuss the
affairs, finances and accounts of the Issuer or any
information AMBAC Indemnity may reasonably request regarding
the security for the Bonds with appropriate officers of the
Issuer. The Issuer will permit'AMBAC Indemnity to have access
to the Project and have access to and to make copies of all
books and records relating to the Bonds at any reasonable
time.
AMBAC Indemnity shall have the right to direct an
accounting at the Issuer's expense and the Issuer's failure to
comply with such direction within thirty (30) days after
receipt of written notice of the direction from AMBAC
Indemnity shall be deemed a default hereunder and under the
Resolution; provided, however, that if compliance cannot occur
within such period, then such period will be extended so long
as compliance is begun within such period and diligently
pursued, but only if such extension would not materially
adversely affect the interests of any registered owner of the
Bonds.
Notwithstanding any other provision hereof or of the
Resolution, the Issuer shall immediately notify AMBAC
Indemnity if at any time there are insufficient moneys to make
any payments of principal and/or interest as required and
immediately upon the occurrence of any event of default
hereunder.
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(D)
As long as the Municipal Bond Insurance Policy shall be
in full force and effect, the Issuer and Paying Agent agree to
comply with the following provisions:
(a) At least one (1) day prior to all Interest Payment
Dates the Paying Agent will determine whether there will be
sufficient funds in the funds and accounts to pay the
principal of or interest on the Bonds on such Interest Payment
Date. If the Paying Agent determines that there will be
insufficient funds in such funds or accounts, the Paying Agent
shall so notify AMBAC Indemnity. Such notice shall specify
the amount of the anticipated deficiency, the Bonds to which
such deficiency is applicable and whether such Bonds will be
deficient as to principal or interest, or both. If the Paying
Agent has not so notified AMBAC Indemnity at least one (1) day
prior to an Interest Payment Date, AMBAC Indemnity will make
payments of principal or interest due on the Bonds on or
before the first (1st) day next following the date on which
AMBAC Indemnity shall have received notice of nonpayment from
the Paying Agent.
(b) The Paying Agent shall, after giving notice to AMBAC
Indemnity as provided in (a) above, make available to AMBAC
Indemnity and, at AMBAC Indemnity's direction, to the United
States Trust Company of New York, as insurance trustee for
AMBAC Indemnity or any successor insurance trustee (the
"Insurance Trustee"), the registration books of the Issuer
maintained by the Paying Agent and all records relating to the
funds and accounts maintained under the Resolution.
(c) The Paying Agent shall provide AMBAC Indemnity and
the Insurance Trustee with a list of registered owners of
Bonds entitled to receive principal or interest payments from
AMBAC Indemnity under the terms of the Municipal Bond
Insurance Policy, and shall make arrangements with the
Insurance Trustee (i) to mail checks or drafts to the
registered owners of Bonds entitled to receive full or partial
interest payments from AMBAC Indemnity and (ii) to pay
principal upon Bonds surrendered to the Insurance Trustee by
the registered owners of Bonds entitled to receive full or
partial principal payments from AMBAC Indemnity.
(d) The Paying Agent shall, at the time it provides
notice to AMBAC Indemnity pursuant to (a) above, notify
registered owners of Bonds entitled to receive the payment of
principal or interest thereon from AMBAC Indemnity (i) as to
the fact of such entitlement, (ii) that AMBAC Indemnity will
remit to them all or a part of the interest payments next
coming due upon proof of Bondholder entitlement to interest
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payments and delivery to the Insurance Trustee, in form
satisfactory to the Insurance Trustee, of an appropriate
assignment of the registered owner's right to payment, (iii)
that should they be entitled to receive full payment of
principal from AMBAC Indemnity, they must surrender their
Bonds (along with an appropriate instrument of assignment in
form satisfactory to the Insurance Trustee to permit ownership
of such Bonds to be registered in the name of AMBAC Indemnity)
for payment to the Insurance Trustee, and not the Paying
Agent, and (iv) that should they be entitled to receive
partial payment of principal from AMBAC Indemnity, they must
surrender their Bonds for payment thereon first to the Paying
Agent, who shall note on such Bonds the portion of the
principal paid by the Paying Agent, and then, along with an
appropriate instrument of assignment in form satisfactory to
the Insurance Trustee to the Insurance Trustee, which will
then pay the unpaid portion of the principal.
(e) In the event that the Paying Agent has notice that
any payment of principal of or interest on a Bond which has
become Due for Payment and which is made to a Bondholder by or
on behalf of the Issuer has been deemed a preferential
transfer and theretofore recovered from its registered owner
pursuant to the United States Bankruptcy Code by a trustee in
bankruptcy in accordance with the final, nonappealable order
of a court having competent jurisdiction, the Paying Agent
shall, at the time AMBAC Indemnity is notified pursuant to (a)
above, notify all registered owners that in the event that any
registered owner's payment is not recovered such registered
owner will be entitled to payment from AMBAC Indemnity to the
extent of such recovery if sufficient funds are not otherwise
available, and the Paying Agent shall furnish to AMBAC
Indemnity its records evidencing the payment of principal of
and interest on the Bonds which have been made by the Paying
Agent and subsequently recovered from registered owners and
the dates on which such payments were made.
(f) In addition to those rights granted AMBAC Indemnity
under the Resolution, AMBAC Indemnity shall, to the extent it
makes payment of principal of or interest on Bonds, become
subrogated to the rights of the recipients of such payments in
accordance with the terms of the Municipal Bond Insurance
Policy, and to evidence such subrogation (i) in the case of
subrogation as to claims for past due interest, the Paying
Agent shall note AMBAC Indemnity's rights as subrogee on the
registration books of the Issuer maintained by the Paying
Agent upon receipt from AMBAC Indemnity of proof of the
payment of interest thereon to the registered owners of the
Bonds, and (ii) in the case of subrogation as to claims for
past due principal, the Paying Agent shall note AMBAC
Indemnity's rights as subrogee on the registration books of
the Issuer maintained by the Paying Agent upon surrender of
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the Bonds by the registered owners thereof, together with
proof of the payment of principal thereof.
The Paying Agent may be removed at any time, at the
request of AMBAC Indemnity, for any breach of the trust set
forth herein or in the Resolution. AMBAC Indemnity shall
receive prior written notice of any resignation of the Paying
Agent. Any successor Paying Agent shall not be appointed
unless AMBAC approves such successor in writing.
Notwithstanding any other provision hereof or of the
Resolution, in determining whether the rights of the
Bondholders will be adversely affected by any action taken
pursuant to the terms and provisions hereof or of the
Resolution, the Paying Agent shall consider the effect on the
Bondholders as if there were no Municipal Bond Insurance
Policy.
Notwithstanding any other provision hereof or of the
Resolution, no removal, resignation or termination of the
Paying Agent shall take effect until a successor, acceptable
to AMBAC Indemnity, shall be appointed.
(F) Third -Party Beneficiary. To the extent that this
resolution or the Resolution confers upon or gives or grants
to AMBAC Indemnity any right, remedy or claim under or by
reason hereof or of the Resolution, AMBAC Indemnity is hereby
explicitly recognized as being a third -party beneficiary
hereunder or thereunder and may enforce any such right, remedy
or claim conferred, given or granted hereunder or thereunder.
(G) Parties Interested Herein. Nothing in the
Resolution expressed or implied is intended or shall be
construed to confer upon, or to give or grant to, any person
or entity, other than the Issuer, AMBAC Indemnity, the Paying
Agent and the registered owners of the Bonds, any right,
remedy or claim under or by reason hereof or of the Resolution
or any covenant, condition or stipulation hereof or thereof,
and all covenants, stipulations, promises and agreements
herein and in the Resolution contained by and on behalf of the
Issuer shall be for the sole and exclusive benefit of the
Issuer, AMBAC Indemnity, the Paying Agent and the registered
owners of the Bonds.
(H) Defeasance. Notwithstanding anything herein or in
the Resolution to the contrary, in the event that the
principal and/or interest due on the Bonds shall be paid by
AMBAC Indemnity Corporation pursuant to the Municipal Bond
Insurance Policy, the Bonds shall remain Outstanding for all
purposes, not be defeased or otherwise satisfied and not be
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considered paid by the Issuer, and the assignment and pledge
hereunder and all covenants, agreements and other obligations
of the Issuer to the registered owners shall continue to exist
and shall run to the benefit of AMBAC Indemnity, and AMBAC
Indemnity shall be subrogated to the rights of such registered
owners.
SECTION 7. In order to revise certain covenants made by the
Issuer in connection with its responsibility to provide continuing
disclosure pursuant to Rule 15c2-12 promulgated by the Securities
and Exchange Commission, Section 11 of Resolution No. 95-75 is
hereby amended in its entirety to read as follows:
A. The Issuer hereby agrees, in accordance with the
provisions of Rule 15c2-12 (the "Rule"), promulgated by the
Securities and Exchange Commission (the "Commission") pursuant to
the Securities Exchange Act of 1934, to provide or cause to be
provided, to each nationally recognized municipal securities
information repository ("NRMSIR") designated by the Commission in
accordance with the Rule, and to the appropriate state information
depository ("SID"), if any, designated by the State of Florida, the
following annual financial information and operating data (the
"Annual Information"), commencing with the fiscal year ending
September 30, 1996:
1. The assessed value of taxable property within the County,
Issuer tax levies and collections, including property tax rates for
the Issuer and all overlapping taxing entities, and computation of
direct and overlapping debt; all generally consistent with such
information as it is included in the final Official Statement for
the Bonds.
2. The audited general purpose financial statements of the
Issuer utilizing generally accepted accounting principles
applicable to governmental units, as described in the Official
Statement, except as may be modified from time to time and
described in such financial statements.
The information in paragraph 1 above will be available on or
before June 1 of each year for the preceding fiscal year and will
be made available, in addition to the NRMSIR's and the SID, to each
holder of Bonds who requests such information. Audited financial
statements of the Issuer may be available separately from the
information in paragraph 1 above, and will be provided as soon as
practical after acceptance of such statements from the auditors by
the Issuer. The audited financial statements are generally
available within 6 months of the end of the fiscal year. If the
audited financial statements are not available by June 1, the
Issuer will provide unaudited general purpose financial statements
at the time the information in paragraph 1 is distributed.
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B. The Issuer agrees to provide or cause to be provided, in
a timely manner, to each NRMSIR or to the Municipal Securities
Rulemaking Board ("MSRB"), and the SID, notice of the occurrence of
any of the following events with respect to the Bonds, if material:
(1) principal and interest payment delinquencies;
(2) non-payment related defaults;
(3) unscheduled draws on debt service reserves
reflecting financial difficulties;
(4) unscheduled draws on credit enhancements reflecting
financial difficulties;
(5) substitution of credit or liquidity providers, or
their failure to perform;
(6) adverse tax opinions or events affecting the tax-
exempt status of the security;
(7) modifications to rights of security holders;
(8) bond calls;
(9) defeasance;
(10) release, substitution, or sale of property securing
repayment of the securities; and
(11) rating changes
C. The Issuer agrees to provide or cause to be provided, in
a timely manner, to (i) each NRMSIR or to the MSRB and (ii) the
SID, notice of its failure to provide the Annual Information with
respect to itself on or prior to the date set forth in paragraph A
above.
D. The obligations of the Issuer hereunder shall remain in
effect only so long as the Bonds are outstanding. The Issuer
reserves the right to terminate its obligation to provide the
Annual Information and notices of material events, as set forth
above, if and when the Issuer no longer remains an obligated person
with respect to the Bonds, within the meaning of the Rule.
E. The Issuer agrees that its undertaking pursuant to the
Rule set forth in this Section is intended to be for the benefit of
the owners of the Bonds, and shall be enforceable by such owners;
provided, that solely in the event the Issuer fails to timely file
the Annual Information in accordance with paragraph A above, any
owner of the Bonds shall have the right to enforce, on behalf of
all owners of the Bonds, the Issuer's undertaking to make such
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filing on a timely basis; provided, the right of any such owner to
enforce the provisions of this undertaking shall be limited to a
right to obtain specific enforcement of the Issuer's obligations
hereunder, and any failure by the Issuer to comply with the
provisions of this undertaking shall not be default or an event of
default with respect to the Bonds.
F. Notwithstanding the foregoing, the NRMSIR's to which
information shall be provided shall include those NRMSIR's which
have been approved by the SEC prior to the date of issuance of the
Bonds. In the event the SEC approves any additional NRMSIR's after
the date of issuance of the Bonds, the Issuer shall, if the Issuer
is notified of such additional NRMSIR's, provide such information
to the additional NRMSIR's. Failure to provide information to any
new NRMSIR whose status as a NRMSIR is unknown to the Issuer shall
not constitute a breach of the foregoing covenant.
G. Additionally, the requirements of paragraph A above do
not necessitate the preparation of any separate annual report
addressing only the Bonds. These requirements may be met by the
filing of a combined bond report or the Issuer's Comprehensive
Annual Financial Report; provided, such report includes all of the
required information and is available by June 1. Additionally, the
Issuer may incorporate any information provided in any prior filing
with each NRMSIR or included in any final official statement of the
Issuer; provided, such final official statement is filed with the
MSRB.
H. The Issuer reserves the right to modify from time to time
the specific types of information provided or the format of the
presentation of such information, to the extent necessary or
appropriate in the judgment of the Issuer; provided, the Issuer
agrees that any such modification will be done in a manner
consistent with the Rule.
SECTION 8. The Chairman of the Board of County Commissioners,
the Director of Management and Budget, the County Administrator and
the County Attorney or any other appropriate officers of the Issuer
are hereby authorized and directed to execute any and all
certifications or other instruments or documents required by the
Resolution, Resolution No. 95-75, the Official Notice of Bond Sale
or any other document referred to above as a prerequisite or
precondition to the issuance of the Bonds and any representation
made therein shall be deemed to be made on behalf of the Issuer.
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SECTION 9. This resolution shall take effect immediately upon
its adoption.
PASSED AND ADOPTED the 11 day of July—8 1995.
( SEAL)
ATTEST.,
Cou ty C1drk f1
13
BOARD F COUNTY COMMISSIONERS
INDIVRIVER COUNT, FLORIDA
ennetn K. Mac
APPROVED Ac TO FORM
ADQ LEGAL SUFFICIENCY:
Charles P. Vitunac
,County Altorney
EXHIBIT A
BIDS RECEIVED
EXHIBIT B
COMMITMENT FOR MUNICIPAL BOND INSURANCE
A�M
AMBAC Indemnity Corporation
One State Street Plaza
New York, New York 10004
(212) 668-0340 Fax: (212) 509-9190
July 6, 1995
Robert C. Reid, Esq.
Bryant, Miller and Olive, P.A.
201 South Monroe Street
Suite 500
Tallahassee, FL 32301
RE: 515,000,000 Indian River County, Florida, General Obligation Bonds, Series 1995, dated July 1, 1995.
Dear Mr. Reid:
Enclosed please find the original and one certified copy of the Commitment for Municipal Bond Insurance,
Commitment No. 12235 (the "Commitment"), relating to the above -captioned obligations (the "Bonds"). The original
of this Commitment should be delivered to or held on behalf of the issuer of the Bonds, and if not exercised, should be
disregarded.
Please note the following:
I . If this issue of Bonds sells with AMBAC insurance, please notify Janine Feudi at (212) 208-3301, who will assign
a closing coordinator who will be responsible for the financing throughout the closing. Enclosed in AMBAC's
STANDARD PACKAGE is the bond legend which should appear on the Bonds. The policy number to be printed
as part of the bond legend can be obtained from the closing coordinator.
2. In order to ensure a timely closing, please notify your closing coordinator as soon as possible if you will require
rating letters from Fitch Investors Service, Inc., Moody's Investors Service or Standard & Poor's Corporation. If
any requests are made of you by any rating agency for documentation regarding this issue or any related or parity
debt issue, please respond promptly since this will facilitate the timely receipt of the rating letters.
NOTE: ENCLOSED FIND INFORMATION REGARDING MOODY'S RATINGS AND FEES FOR
INSURED ISSUES AND STANDARD & POOR'S RATINGS AND FEES FOR INSURED ISSUES AND
ASSIGNMENT OF INSURER'S CLAIMS -PAYING RATINGS TO INSURED ISSUES. (Fitch Investors
Service, Inc., Moody's Investors Service and Standard & Poor's Corporation assess separate rating fees
which are payable directly to them. All questions regarding the payment of such fees must be addressed to
the applicable rating agency.)
3. if requested, an opinion of AMBAC's counsel regarding the fairness and accuracy of the language included in the
Official Statement describing AMBAC and the Policy will be delivered at closing. The delivery of such opinion
is dependent upon the prior review of such official statement by our legal department.
4. Enclosed for your use in preparing the Official Statement are (i) a sample Municipal Bond Insurance Policy (the
"Policy") and any applicable endorsements thereto; and (ii) AMBAC's STANDARD PACKAGE, which includes
suggested Official Statement disclosure language and the official AMBAC logo.
Please send all drafts of the Official Statement to AMBAC's Closing Department, attention of your closing
coordinator. Receipt, by the closing coordinator, of SIX COPIES of the FINAL OFFICIAL STATEMENT
will ensure timely preparation of AMBAC's Policy for submission to the rating agencies.
5. Please refer to page 2 of this Commitment for conditions which must be satisfied prior to AMBAC's release of its
Policy. Drafts of all financing documents and legal opinions should be sent to the closing coordinator assigned to
the financing.
6. Lastly, TWO final UNBOUND transcripts must be sent to your closing coordinator as soon as possible after
closing.
If you have any questions, please do not hesitate to contact Janine Feudi or me.
Sincerely,
'
Robert M. Sakariasusen
Client Information Services
Enclosures
cc: Arthur H. Diamond
Fishkind & Associates, Inc.
12424 Research Parkway
Suite 275
Oralndo, FL 32826
Joseph Baird
Director of Management & Budget
Indian River County
1840 25th Street
Vero Beach, FL 32906
Brenda Certo, AMBAC
Commitment for Municipal Bond Insurance
Issuer: INDIAN RIVER COUNTY, FLORIDA
Bonds: $15,000,000 General Obligation Bonds, Series 1995,
dated July 1, 1995, maturing on July 1 in the years 1996
through 20?0, both inclusive.
AMBAC Indemnity Corporation
c% CT Corporation Systems
222 West Washington Avenue
Madison, Wisconsin 53703
Administrative Office:
One State Steeet Plaza
New York, New York 10004
Commitment Number: 12235
Date of Commitment: July 5, 1995
Expiration Date: October 3, 1995
Insurance premium: 0.182% of the total
principal and interest due on the Bonds. (Fitch
Investors Service, Inc., Moody's Investors
Service and Standard do Poor's Corporation
assess separate rating fees which are payable
directly to them. AN questions regarding the
payment of such fees must be addressed to the
applicable rating agency.)
AMBAC Indemnity Corporation (AMBAC) A Wisconsin Stock Insurance
Company
hereby commits to issue a Municipal Bond Insurance Policy (the "Policy") relating to the above-described debt obligations
(the "Bonds"). substantially in the form imprinted in this Commitment, subject to the terms and conditions contained herein or
added hereto (see conditions set forth on page 2 and following).
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 Municipal Bond 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 Bonds 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 Bonds, otherwise required, not to be required to
purchase the Bonds on the date scheduled for the issuance and delivery thereof.
3. There shall be no material change in or affecting the Bonds (including, without limitation, the security for the Bonds)
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 Bonds from the descriptions thereof heretofore provided to AMBAC.
4. The Bonds shall contain no reference to AMBAC, the Policy or the municipal bond insurance evidenced thereby except
as may be approved by AMBAC.
S. 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 Bonds, 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 Bonds are exempt from
federal income taxation, that the issuer must comply with certain covenants under and pursuant to the new tax
law and that the issuer 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 opinM as if it were addressed to AMBAC.
(b) A letter from bond counsel or counsel to the purchaser or otherwise from another person acceptable to AMBAC
to the effect that the financing documents, the official statement (or any similar disclosure document) and the
various legal opinions executed and delivered in connection with the issuance and sale of the Bonds are
substantially in the forms theretofore submitted to AMBAC for review, with only such amendments,
modifications or deletions as approvI4 by AMBAC.
(c) A certified'of caslor's check for or evidence of wire transfer of an amount equal to the insurance premium at the
time of the issuance and delivery of the Bonds. If the amount of premium exceeds $100,000.00, payment must
be made by federal funds wire transfer.
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 the AMBAC Indemnity 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 ustyAnce polig, sureq nd, guaranty or indemnification or any other policy,
contract or agreement whit i provides for payment of all oviiny rtion 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 bonds.
8. Any provisions or requirements of the Purchase Contract or Mid Purchase Agreement referencing AMBAC must be
sent to the attention of Janine Feudi not less •dmwfive• (3) business days prior to closing. If such provisions or
requirements are not received within that time, compliance may not be possible.
Authorized icer
t
Commitment for Municipal Bond Insurance
Issuer: INDIAN RIVER COUNTY, FLORIDA
Bonds: $15,000,000 General Obligation Bonds, Series 1995,
dated July 1, 1995, maturing on July 1 in the years 19%
through 2010, both inclusive.
AMBAC Indemnity Corporation
do CT Corporation Systems
222 West Washington Avenue
Madison, Wisconsin 53703
Administrative Office:
One State Street Plan
New York, New York 10004
Commitment Number: 12235
Date of Commitment: July 5, 1995
Expiration Date: October 3. 1995
Insurance premium: 0.182% of the total
principal and interest due an the Bonds. (Fitch
Inveators Service, Inc., Moody's Investors
Service and Standard & Poor's Corporation
assess separate cedog teas which are payable
directly to them. AU questions regarding the
payment of such fees must be addressed to the
applicable eating agency)
AMBAC Indemnity Corporation (AMBAC) A Wisconsin Stock Insurance
Company
hereby commits to issue a Municipal Bond Insurance Policy (the "Policy") relating to the above-described debt obligations
(the "Bonds% substantially in the form imprinted in this Commitment, subject to the terms and conditions contained herein or
added hereto (see conditions set forth on page 2 and following).
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 Municipal Bond 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 Bonds 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 Bonds. otherwise required. not to be required to
purchase the Bonds on the date scheduled for the issuance and delivery thereof.
3. There shall be no material change in or affecting the Bonds (including, without limitation, the security for the Bonds)
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 Bonds from the descriptions thereof heretofore provided to AMBAC.
4. The Bonds shall contain no reference to AMBAC. the Policy or the municipal bond insurance evidenced thereby except
as may be approved by AMBAC.
S. 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 instance and sale of the Bonds. including, without
limitation. the unqualifned 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 Bonds are exempt from
federal income taxation, that the issuer must comply with certain covenants under and pursuant to the new tax
law and that the issuer has.the legal power to comply with- mch 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) A letter from bond counsel or counsel to the purchaser or otherwise from another person acceptable to AMBAC
to the effect that the financing documents, the official statement (or any similar disclosure document) and the
various legal opinions executed and delivered in connection with the issuance and sale of the Bads are
substantially in the forms theretofore submitted to AMBAC for review, with only such amendments,
modifications or deletions as approved by AMBAC.
(c) A certified or cashier's dock for or evidence of wire transfer of an amour equal to the insurance premium at the
time of the issuance and delivery of the Bonds. If the amount of premium exceeds $100.000.00, payment must
be made by federal hinds wire transfer.
6. Unless expressly waived in whole or in part by AMBAC, the financing documents and the OrticW Statement shall
contain (a) the terms and provisions provided in the AMBAC hmkmnky STANDARD PACKAGE transmitted
herewith and (b) any additional oral or written provisions or conttne is 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 bonds.
S. Any provisions or requirements of the Purchase Contract or Bond Purchase Agreement referencing AMBAC must be
sent to the attention of Janine Feudi not less flan five (S) business days prior to closing. If such provisions or
requirements are not received within dot time, compliance may not be possible.
�(� Authorized Wiicer
Policy issued to:
The i
yoth
limits
la %
duly
virtu
AMBAC indemnity Corporation
c/o CT Corporation Systems
44 East Mifflin Street
Madison, Wisconsin 53703
Administrative Office:
One State Street Plaza
New York, New York 10004
Attached to and forming part of
Effective Date of Endorsement:
Attt DAW- mairmfury V.Orporauon
II ~ ` CO��
President /4, '�,teoM•�". •� Secretary
040
Authorized iReprimntauve
its or
by its
, by
AMBAC Indemnity Corporation
Municipal Bond Insurance Policy c o CT Corporation Systems
4.4 East Mifflin St., Madison, Wisconsin 53703
Administrative Office:
One State Street Plaza, New York, NY 10004
'Iclephone: (2 12) 668-0140
Issuer: Policy Number:
Bonds: Premium:
AMBAC Indemnity Corporation (AMBAC) A Wisconsin Stock Insurance Company
in consideration of the payment of the premium and subject to the• terms of this Policy, hereby agrees to pay
Company of New York, as trustee, or its successor (the "Insurance Trustee"), for the benefit of Bon
cipal of and interest on the above-described debt obligations (the "Bonds*') which shall become Due fi ayn
reason of Nonpayment by the Issuer.
AMBAC will make such payments to the Insurance Trustee within one ( 1) business
ment. Upon a Bondholder's presentation and surrender to the Insurance Trustee of :
canceled and in bearer form and free of any adverse claim, the Insurance Trustee
principal and interest which is then Due for Payment but is unpaid. Upon suet
surrendered Bonds and coupons and shall be fully subrogated to ,ill of r ,Bon C
In cases where the Bonds are issuable only in a form whereby
Insurance Trustee shall disburse principal to a Bondholder as a
of the unpaid Bond, uncanceled and free of any adverse claim,
Insurance. Trustee, duly executed by the Bondholder or
such Bond to be registered in the name of AMBAC or it o t
is payable to registered Bondholders or their assi ns, th Ins
upon presentation to the Insurance Trustee of p a the •laim
delivery to the Insurance Trustee of an in t t of ssi me
claimant Bondholder or such Bondholder' dul aut 'zc rep
the interest in respect of which th u cc me
payment on registered Bonds t ext t IF t in!^e di
iced StatesTrust
portion of the prin-
Lall be unpaid by
A, AC of Nonpay-
rtc nt coupons, un-
der the face amount of
become the owner of the
irincip b e� tet i Gdholders or their assigns, the
d o r e at n and surrender to the Insurance Trustee
'e er iins u of assignment, in form satisfactory to the
�t ik 's a o ed representative, so as to permit ownership of n se. •h c e onds are issuable only in a form whereby interest
rice stn s disburse interest to it Bondholder as aforesaid only
th i • on entitled to the payment of interest on the Bond and
It ii for satisfactory to the Insurance Trustee, duly executed by the
it c, transferring to AMBAC all rights under such Bond to receive
ade. AMBAC shall he subrogated to all the Bondholders' rights to
bursements so made.
In the event the trustee or yi0f ag t re as notice that any payment of principal of or interest on it Bond which has
become Due for Paym ie a to a ( i0 tier by or on behalf of the Issuer of the Bonds has been deemed it preferential
transfer and ill cret r ver fr its registc ed owner pursuant it) the United States Bankruptcy Code in accordance with a final,
nonappealable or r a co IF to tent jurisdiction, such registered owner will lie entitled to payment from AMBAC to the extent
of such recovery s tent fu re of otherwise available.
As used herein, the o h der means any person other than the Issuer who, at the time of Nonpayment, is the owner of a Band
or of a coupon appertai ond. As used herein, "Due for Payment", when referring to the principal of Bonds, is when the stated
maturity date or a ma edemptton date for the application of a required sinking fund installment has been reached and does not
refer to any earlier date on which payment is due by reitnon of call for redemption (other than by application of required sinking fund
installments), acceleration or other advancement of maturity; and, when referring to interest on the Bonds, is when the stated date for
payment of interest has been reached. As used herein, "Nonpayment" means the failure of the Issuer to have provided sufficient funds
to the paying agent for payment in full of all principal of and interest on the Bonds which are Due fix Payment.
This Policy is noncancelable. The premium on this Policy is not refundable fix any reason, including payment of the Bonds prior ri
maturity. This Policy does not insure against loss of any prepayment or other acceleration payment which at any time may become due
in respect of any Bond, other than at the sole option of AMBAC, nor against any risk other than Nonpayment.
In witness whereof, AMBAC has caused this Policy to be affixed with it facsimile of its corporate seal and to be signed by its dul}
authorized officers in facsimile to become effective as its original seal and signatures and hinding upon AMBAC by virtue of the counter-
signature of its duly authorized representative.
••l%qk
♦ rturrN
C ► •• °� ����' 1
j't '=•fir
•
Ptesidem ; Secretary
•
Effective Date: \��_•
Authorized NepresentauMe
UNITED STATES TRUST COMPANY OF NEW YORK acknowledges that it
has spred to perform the dutks of Insurance Trustee under this Policy,
tome sd64W1illVi titd ter
a'
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may assess the cmdit quOty of ft s wwod obligations (on an widetlyins;rb s �s,� pate a�''
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Bond Pbliey AdministRtioau
Anhur J. Gddo Senior: We phMidan 21M12 -OW, ',
Vincent Orgo. AdminisuWv& Officer 212/412 -MS
Michael Gmitro, Psiainj SpodaHst 2121412-M.
Fax Number 212120MG2'-.
Standard & Poor's Ratings Group
r
Municipal Finance Department
HMO I
Bond Insurance Administration
Fee Policy & Billing Administration
25 Broadway
New York. New York 10004.1064
Telephone 2121412.0355
FAX 212/208-8262
ISSUES COM11TT'CED AND SOLD
COMPETITIVELY
Par Amount-
Issue Name:
i
I
1
Commitment a:
In order to expedite the billing process for Standard &
Poor's rating fees please provide
billing address and contact person information below.
This information should be forwarded
to S&P as soon as an issue sale has been completed.
Name & Title:
Company:
Address:
Telephone a:
Enclosed is a self-addressed envelope to further assist this process. If you should have any
questions, please call Vincent Orgo at S&P 212/412-0355.
Moody's
Public Finance
Department
Moody's Ratings and
Fees for Insured Issues
Assignment of Insurer's Claims -Paying Ratings to Insured Issues 4.
Moody's Investors Service currently rates the insurance
mss -paying ability of AMBAC Indemnity Corporation
(AMBAC) Am for long -tern obligations and MIG 1 for
short -tem notes. Accordingly. obligations insured by
AMBAC will receive the appropriate Moody's rating.
Prior to assigning a rating to an insured obligation.
Moody's will verify that AMBAC's insurance policy for
the issue to be insured guarantees full and timely payment
of all principal and interest when due, and is permanent
and unconditional for the life of the insured obligation.
Upon verification of these conditions Moody's will assign
the Aaa or MIG 1 rating to the insured obligation.
After Moody's assigns the rating, written confirmation of
that action will be provided to AMBAC and made availa-
ble at the closing. The issue and its Aaa or MIG 1 rating
will then be included in all Moody's published ratings
directories and rating verification services.
'Moody's Requirements for Information from Issuers -
In addition to our verification of the insured transaction
prior to the assignment of the Aaa or MIG 1 ratings.
Moody's reviews the underlying credit quality of the
insured obligation.
If the insured obligation is on parity with, or its repayment
source is closely related to, outstanding debt which is rated
by Moody's on an uninsured basis. Moody's will review
the ratings on the outstanding uninsured debt prior to the
closing date of the new insured obligation. Moody's will
require the issuer to provide the same documents normally
required for the rating of any new issue. e.g.. preliminary
official statement, legal documents, financial statements.
etc.
Rating Fee for Insured Issues
Moody's fees for insured issues are determined on the
same basis as fees for non-insured issues. Such fees can be
determined by calling Anita Webb (212) 553-0901 or
Bernie Monis (212) 553.4055. at Moody's.
Moody's billing policy is as follows:
a) Each insured obligation will be billed a rating service
fee.
In the course of our rating review, issuers can also expect a
Moody's analyst to call with questions and to request
additional information. As is the case with all rating
reviews, if sufricient and appropriate information is not
made available Moody's may withdraw the outstanding
parity or related ratings on the uninsured debt.
If the insured obligation is not on parity with or related to
other rated outstanding debt, Moody's still will assess (for
internal purposes) the credit quality of the insured obliga-
tion as a part of Moody's overall evaluation of the credit
quality of the insured portfolio of AMBAC. In addition,
Moody's may from time to time require updated informa-
tion concerning the insured obligation.
b) When insurance is purchased on an issue where
Moody's has not received an application for a rating on
an uninsured basis, the rating fee will be billed to the
purchaser of the insurance.
c) When an issue has received a Moody's rating on an
uninsured basis and the issue is subsequently insured.
Moody's will bill the issuer without an additional
charge for the insurance rating.
NSIBAC Indemnity Corporation
One State Street Pta7a
New York, New York 1000-4
►t ►-t
(.213)668-03.40 Fax: ( 12)> ; ►l)-tflk ► May 1Z,1995
AMBAC INDEMNITY STANDARD PACKAGE
FOR AMBAC -INSURED TRANSACTIONS
(NOT FOR USE IN TEXAS FINANCINGS)
TO: Issuer, Issuers Counsel, Managing Underwriter, Bond Counsel and Underwriters
Counsel
RE: Preparation of Financing Documents for AMBAC indemnity insured Issues
The attached materials have been prepared to assist you in the preparation of documents
for your AMBAC Indemnity Corporation ("AMBAC Indemnity") insured issue. Please modify
the attached exhibits where appropriate and notify us as to any proposed modifications. If
desired, these provisions can be incorporated into one section entitled "Municipal Bond
Insurance" within the applicable Indenture, Resolution, Ordinance, Order or any other
operative financing document (such applicable financing document will be referred to
herein as the "Financing Document"). Please be advised that the provisions contained in
this package are in addition to the conditions listed in the Commitment for Municipal Bond
Insurance and any other comments or changes that may be required by the AMBAC
Indemnity personnel working on this financing. If you have any questions, please call one
of the following persons: Joseph V. Salzano, Eileen L. Kirchoff, Jerry H. Pisecki, Karl T.
Molin, Mary P. McKeon, Kevin J. Doyle or Kathleen A. McDonough.
• Definitions (Exhibit A).
• AMBAC Indemnity consent required for changes to underlying
documentation and exercise of remedies upon default (Exhibit B).
• Notices to be given to AMBAC Indemnity (Exhibit C).
• Permitted Investments and Valuation Provisions (Exhibit D).
• Defeasance Language (Exhibit E).
Description of AMBAC Indemnity Payment Procedure (Exhibit F).
Trustee -related provisions (Exhibit G).
• AMBAC Indemnity as a third -party beneficiary (Exhibit H).
i
• Form of AMBAC Indemnity Certificate of Bond Insurer (Exhibit K).
• AMBAC Indemnity Wiring Instructions (Exhibit L).
EXHIBIT A
DEFINITIONS
The following definitions are those which AMBAC recommends for the Financing
Document:
"AMBAC Indemnity" shall mean AMBAC Indemnity Corporation, a
Wisconsin -domiciled stock insurance company.
"Municipal Bond Insurance Policy" shall mean the municipal bond insurance policy
issued by AMBAC Indemnity insuring the payment when due of the principal of and
interest on the Bonds as provided therein.
EXHIBIT B
AMBAC CONSENT LANGUAGE
AMBAC requires that the Financing Document include the following consent provisions:
A. Consent of AMBAC Indemnity.
Any provision of this [Financing Document] expressly recognizing or granting rights in or
to AMBAC Indemnity may not be amended in any manner which affects the rights of
AMBAC Indemnity hereunder without the prior written consent of AMBAC Indemnity.
B. Consent of AMBAC Indemnity in Addition to Bondholder Consent.
Unless otherwise provided in this Section, AMBAC Indemnity's consent shall be
required in addition to Bondholder consent, when required, for the following purposes:
(i) execution and delivery of any supplemental [Financing Document] . or any
amendment, supplement or change to or modification of the [Loan Agreement, Lease
Agreement, etc.] (ii) removal of the Trustee or Paying Agent and selection and
appointment of any successor trustee or paying agent [required in those transactions in
which the Financing Document provides for a trustee or paying agent]; and (iii) initiation
or approval of any action not described in (i) or (ii) above which requires Bondholder
consent.
C. Consent of AMBAC Indemnity in the Event of Insolvency
Any reorganization or liquidation plan with respect to the [issuer or obligor] must be
acceptable to AMBAC Indemnity. In the event of any reorganization or liquidation,
AMBAC Indemnity shall have the right to vote on behalf of all bondholders who hold
AMBAC Indemnity -insured bonds absent a default by AMBAC Indemnity under the
applicable Municipal Bond Insurance Policy insuring such Bonds.
[In transactions for which acceleration is not a remedy for an event of default, the following
provision is to be included in the Financing Document.]
D. Ccnsent of AMBAC Indemnity Upon Default.
Anything in this [Financing Document] to the contrary notwithstanding, upon the
occurrence and continuance of an event of default as defined herein, AMBAC Indemnity
shall be entitled to control and direct the enforcement of all rights and remedies granted
to the Bondholders or the Trustee for the benefit of the Bondholders under this
[Financing Document].
[1n transactions for which acceleration is a remedy for an event of default, the
following two provisions must be included in the Financing Document in lieu of
paragraph D above.]
D. Consent of AMBAC Indemnity Upon Default.
Anything in this [Financing Document) to the contrary notwithstanding, upon the
occurrence and : ontinuance of an e-. ant of default as defined herein, AMBAC Indemnity
shall be entitled to control and direct the enforcement of all rights and remedies granted
to the Bondholders or the Trustee for the benefit of the Bondholders under this
[Financing Document], including, without limitation: (i) the right to accelerate the
principal of the Bonds as described in this [Financing Document], and (ii) the right to
annul any declaration of acceleration, and AMBAC Indemnity shall also be entitled to
approve all waivers of events of default.
E. Acceleration Rights
Upon the occurrence of an event of default, the Trustee may, with the consent of
AMBAC' Indemnity, and shall, at the direction of AMBAC Indemnity or _% of the
Bondholders with the consent of AMBAC Indemnity, by written notice to the Issuer and
AMBAC Indemnity, declare the principal of the Bonds to be immediately due and
payable, whereupon that portion of the principal of the Bonds thereby coming due and
the interest thereon accrued to the date of payment shall, without further action, become
and be immediately due and payable, anything in this [Financing Document] or in the
Bonds to the contrary notwithstanding.
5
EXHIBIT C
INFORMATION TO BE GIVEN TO AMBAC
AMBAC requires that the following notice provisions be incorporated in the Financing
Document:
A. While the Municipal Bond Insurance Policy is in effect, the Issuer* or the Trustee [as
appropriate] shall furnish to AMBAC Indemnity (to the attention of the Surveillance
Department, unless otherwise indicated):
(a) as soon as practicable after the filing thereof, a copy of any financial statement of
the Issuer* and a copy of any audit and annual report of the Issuer*;
(b) a copy of any notice to be given to the registered owners of the Bonds, including,
without limitation, notice of any redemption of or defeasance of Bonds, and any
certificate rendered pursuant to this I'Financing Document] relating to the security for
the Bonds; and
(c) such additional information it may reasonably request.
A. The Trustee or Issuer* [as appropriate] shall notify AMBAC Indemnity of any failure of
the Issuer* to provide relevant notices, certificates, etc.
B. The Issuer* will permit AMBAC Indemnity to discuss the affairs, finances and accounts
of the Issuer* or any information AMBAC Indemnity may reasonably request regarding
the security for the Bonds with appropriate officers of the Issuer*. The Trustee or
Issuer* [as appropriate] will permit AMBAC Indemnity to [have access to the Project
and] have access to and to make copies of all books and records relating to the
Bonds at any reasonable time.
C. AMBAC Indemnity shall have the right to direct an accounting at the Issuer's*
expense, and the Issuer's* failure to comply with such direction within thirty (30) days
after receipt of written notice of the direction from AMBAC Indemnity shall be deemed
a default hereunder, provided, however, that if compliance cannot occur within such
period, then such period will be extended so long as compliance is begun within such
period and diligently pursued, but only if such extension would not materially
adversely affect the interests of any registered owner of the Bonds.
D. Notwithstanding any other provision of this [Financing Document], the Trustee or
Issuer* [as appropriate] shall immediately notify AMBAC Indemnity if at any time there
are insufficient moneys to make any payments of principal and/or interest as required
and immediately upon the occurrence of any event of default hereunder.
E. [FOR CALIFORNIA AND INDIANA (ABATEMENT STYLE) LEASES] The Trustee or
Issuer [as appropriate] shall annually certify to AMBAC that the insurance policies
required by Section of the [Leaselindenture] are in full force and effect, and will
provide AMBAC with copies of such policies upon request.
6
*or appropriate obligor on the Bonds.
EXHIBIT D
PERMITTED INVESTMENTS (MODIFIED AS OF JULY 19, 1993)
A. AMBAC Indemnity will allow the following obligations to be used as Permitted
Investments for all purposes, including defeasance investments in refunding escrow
accounts.
(AMBAC Indemnity does not give a premium credit for the investment of accrued
and/or capitalized interest.)
(1) Cash (insured at all times by the Federal Deposit Insurance Corporation or
otherwise collateralized with obligations described in paragraph (2) below), or
(2) Direct obligations of (including obligations issued or held in book entry form on the
books of) the Department of the Treasury of the United States of America.
B. AMBAC Indemnity will allow the following Obligations to be used as Permitted
Investments for all purposes other than defeasance investments in refunding escrow
accounts.
(1) obligations of any of the following federal agencies which obligations represent the
full faith and credit of the United States of America, including:
— Export -Import Bank
— Farm Credit System Financial Assistance Corporation
— Farmers Home Administration
— General Services Administration
— U.S. Maritime Administration
— Small Business Administration
— Government National Mortgage Association (GNMA)
— U.S. Department of Housing & Urban Development (PHA's)
— Federal Housing Administration;
(2) senior debt obligations rated "AAA" by Standard & Poor's Corporation (S&P) and
"Aaa" by Moody's Investors Service, Inc. (Moody's) issued by the Federal National
Mortgage Association or the Federal Home Loan Mortgage Corporation. Senior
debt obligations of other Government Sponsored Aaencies approved by AMBAC
Indemnity:
7
(3) U.S. dollar denominated deposit accounts, federal funds and bankers acceptances
with domestic commercial banks which have a rating on their short term certificates
of deposit on the date of purchase of "A-1" or "A-1+" by S&P and "P-1" by Moody's
and maturing no more than 360 days after the date of purchase. (Ratings on
holding companies are not considered as the rating of the bank);
(4) commercial paper which is rated at the time of purchase in the single highest
classification, "A-1+" by S&P and "P-1" by Moody's and which natures not more
than 270 days after the date of purchase;
(5) investments in a money market fund rated "AAAm" or "AAAm-G" or better by S&P;
(6) Pre -refunded Municipal Obligations defined as follows: Any bonds or other
obligations of any state of the United States of America or of any agency,
instrumentality or local governmental unit of any such state which are not callable at
the option of the obligor prior to maturity or as to which irrevocable instructions have
been given by the obligor to call on the date specified in the notice; and
(A) which are rated, based on an irrevocable escrow account or fund (the "escrow"),
in the highest rating category of S&P and Moody's or any successors thereto; or
(B) (i) which are fully secured as to principal and interest and redemption premium, if
any, by an escrow consisting only of cash or obligations described in paragraph A(2)
above, which escrow may be applied only to the payment of such principal of and
interest and redemption premium, if any, on such bonds or. other obligations on the
maturity date or dates thereof or the specified redemption date or dates pursuant to
such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as
verified by a nationally recognized independent certified public accountant, to pay
principal of and interest and redemption premium, if any, on the bonds or other
obligations described in this paragraph on the maturity date or dates specified in the
irrevocable instructions referred to above, as appropriate; [Pre -refunded Municipal
Obligations meeting the requirements of subsection (B) hereof may not be
used as Permitted Investments for annual appropriation lease transactions
without the prior written approval of SBP.]
(7) investment agreements approved in writing by AMBAC Indemnity Corporation
[supported by appropriate opinions of counsel] with notice to S&P; and
(8) other forms of investments (including repurchase aareements� approved in writing
by AMBAC with notice to S&P.
a
C. The value of the above investments shall be determined as follows:
'Value', which shall be determined as of the end of each month, means that the value of
any investments shall be calculated as follows:
a) as to investments the bid and asked prices of which are published on a regular basis
in The Wall Street Journal (or, if not there, then in The New York Times): the
average of the bid and asked prices for such investments so published on or most
recently prior to such time of determination;
b) as to investments the bid and asked prices of which are not published on a regular
basis in The Wall Street Journal or The New York Times: the average bid price at
such time of determination for such investments by any two nationally recognized
government securities dealers (selected by the Trustee in its absolute discretion) at
the time making a market in such investments or the bid price published by a
nationally recognized pricing service;
c) as to certificates of deposit and bankers acceptances: the face amount thereof, plus
accrued interest; and
d) as to any investment not specified above: the value thereof established by prior
agreement between the Issuer, the Trustee and AMBAC Indemnity Corporation.
9
DEFEASANCE LANGUAGE
A. The definition of "Outstanding" bonds or obligations, or any like concept, should
specifically include bonds or obligations which fall into the category described below.
B. The defeasance section of the Financing Document should include the following
language:
Notwithstanding anything herein to the contrary, in the event that the principal and/or
interest due on the Bonds shall be paid by AMBAC Indemnity Corporation pursuant to
the Municipal Bond Insurance Policy, the Bonds shall remain Outstanding for all
purposes, not be defeased or otherwise satisfied and not be considered paid by the
Issuer, and tt its assignment and pledge of the Trust Estate and all covenants,
agreements and other obligations of the Issuer to the registered owners shall continue
to exist and shall run to the benefit of AMBAC Indemnity, and AMBAC Indemnity shall
be subrogated to the rights of such registered owners.
10
EXHIB; T F
PAYMENT PROCEDURE PURSUANT TO THE MUNICIPAL BOND INSURANCE
POLICY
The following language sets out the applicable procedure for payments under the Municipal
Bond Insurance Policy and should be incorporated into the Financing Document:
As long as the bond insurance shall be in full force and effect, the Issuer, the Trustee and
any Paying Agent agree to comply with the following provisions:
(a) At least one (1) day prior to all Interest Payment Dates the Trustee or Paying
Agent, if any, will determine whether there will be sufficient funds in the Funds and
Accounts to pay the principal of or interest on the Bonds on such Interest Payment
Date. If the Trustee or Paying Agent, if any, determines that there will be insufficient
funds in such Funds or Accounts. the Trustee or Paying Agent, if any, shall so notify
AMBAC Indemnity. Such notice shall specify the amount of the anticipated
deficiency, the Bonds to which such deficiency is applicable and whether such
Bonds will be deficient as to principal or interest, or both. If the Trustee or Paying
Agent, if any, has not so notified AMBAC Indemnity at least one (1) day prior to an
Interest Payment Date, AMBAC Indemnity will make payments of principal or interest
due on the Bonds on or before the first (1 st) day next following the date on which
AMBAC Indemnity shall have received notice of nonpayment from the Trustee or
Paying Agent, if any.
(b) the Trustee or Paying Agent, if any, shall, after giving notice to AMBAC
Indemnity as provided in (a) above, make available to AMBAC Indemnity and, at
AMBAC Indemnity's direction, to the United States Trust Company of New York, as
insurance trustee for AMBAC Indemnity or any successor insurance trustee (the
"Insurance Trustee"), the registration books of the Issuer maintained by the Trustee
or Paying Agent, if any, and all records relating to the Funds and Accounts
maintained under this [Financing Document].
(c) the Trustee or Paying Agent, if any, shall provide AMBAC Indemnity and the
Insurance Trustee with a list of registered owners of Bondi entitled to receive
principal or interest payments from AMBAC Indemnity under the terms of the
Municipal Bond Insurance Policy, and shall make arrangements with the Insurance
Trustee (i) to mail checks or drafts to the registered owners* of Bonds entitled to
receive full or partial interest payments from AMBAC Indemnity and (ii) to pay
principal upon Bonds surrendered to the Insurance Trustee by the registered
owners of Bonds entitled to receive full or partial principal payments from AMBAC
Indemnity.
(d) the Trustee or Paying Agent, if any, shall, at the time it provides notice to
AMBAC Indemnity pursuant to (a) above, notify registered owners of Bonds entitled
to receive the payment of principal or interest thereon from AMBAC Indemnity (i) as
to the fact of such entitlement, (ii) that AMBAC Indemnity will remit to them all or a
part of the interest payments next coming due upon proof of Bondholder entitlement
to interest payments and delivery to the Insurance Trustee, in form satisfactory to
the Insurance Trustee, of an appropriate assignment of the registered owner's right
to payment, (iii) that should they be entitled to receive full payment of principal from
AMBAC Indemnity, they must surrender their Bonds (along with an appropriate
instrument of assignment in form satisfactory to the Insurance Trustee to permit
ownership of such Bonds to be registered in the name of AMBAC Indemnity) for
payment to the Insurance Trustee, and not the Trustee or Paying Agent, if any, and
(iv) that should they be entitled to receive partial payment of principal from AMBAC
Indemnity, they must surrender their Bonds for payment thereon first to the Trustee
or Paying Agent, if any, who shall note on such Bonds the portion of the principal
paid by the Trustee or Paying Agent, if any, and then, along with an appropriate
instrument of assignment in form satisfactory to the Insurance Trustee, to the
Insurance Trustee, which will then pay the unpaid portion of principal.
(e) in the event that the Trustee or Paying Agent, if any, has notice that any payment
of principal of or interest on a Bond which has become Due for Payment and which
is made to a Bondholder by or on behalf of the Issuer has been deemed a
preferential transfer and theretofore recovered from its registered owner pursuant to
the United States Bankruptcy Code by a trustee in bankruptcy in accordance with
the final, nonappealable order of a court having competent jurisdiction, the Trustee
or Paying Agent, if any, shall, at the time AMBAC Indemnity is notified pursuant to
(a) above, notify all registered owners that in the event that any registered owner's
payment is so recovered, such registered owner will be entitled to payment from
AMBAC Indemnity to the extent of such recovery if sufficient funds are not otherwise
available, and the Trustee or Paying Agent, if any, shall furnish to AMBAC Indemnity
its records evidencing the payments of principal of and interest on the Bonds which
have been made by the Trustee or Paying Agent, if any, and subsequently
recovered from registered owners and the dates on which such payments were
made.
(f) in addition to those rights granted AMBAC Indemnity under this [Financing
Document], AMBAC Indemnity shall, to the extent it makes payment of principal of or
interest on Bonds, become subrogated to the rights of the recipients of such
payments in accordance with the terms of the Municipal Bond Insurance Policy, and
to evidence such subrogation (i) in the case of subrogation as to claims for past due
interest, the Trustee or Paying Agent, if any, shall note AMBAC Indemnity's rights as
subrogee on the registration books of the Issuer maintained by the Trustee or
Paying Agent, if any, upon receipt from AMBAC Indemnity of proof of the payment of
interest thereon to the registered owners of the Bonds, and (ii) in the case of
subrogation as to claims -for past due principal, the Trustee or Paying Agent, if any,
shall note AMBAC Indemnity's rights as subrogee on the registration books of the
Issuer maintained by the Trustee or Paying Agent, if any, upon surrender of the
Bonds by the registered owners thereof together with proof of the payment of
principal thereof.
12
EXHIBIT G
TRUSTEE -RELATED PROVISIONS
With respect to transactions involving a trustee or paying agent, AMBAC requires that the
following provisions be incorporated into the Financing Document. Please note that unless
otherwise required by AMBAC, if the financing at hand does not contemplate a trustee or
paying agent, these provisions may be disregarded.
1. 1 he Trustee (or Paying Agent) may be removed at any time, at the request of AMBAC
Indemnity, for any breach of the Trust set forth herein.
2. AMBAC Indemnity shall receive prior written notice of any Trustee (or Paying Agent)
resignation.
3. Every successor Trustee appointed pursuant to this Section shall be a trust company or
bank in good standing located in or incorporated under the laws of the State, duly
authorized to exercise trust powers and subject to examination by federal or state
authority, having a reported capital and surplus of not less than $75,000,000 and
acceptable to AMBAC Indemnity. Any successor Paying Agent, if applicable, shall not
be appointed unless AMBAC approves such successor in writing.
4. Notwithstanding any other provision of this [Financing Document], in determining
whether the rights of the Bondholders will be adversely affected by any action taken
pursuant to the terms and provisions of this [Financing Document], the Trustee (or
Paying Agent) shall consider the effect on the Bondholders as if there were no
Municipal Bond Insurance Policy. .
5. Notwithstanding any other provision of this [Financing Document], no removal,
resignation or termination of the Trustee (or Paying Agent) shall take effect until a
successor, acceptable to AMBAC, shall be appointed.
13
EXHIBIT H
INTERESTED PARTIES
In addition to the provisions listed above, AMBAC also requires the following provision be
incorporated into the Financing Document:
A. AMBAC As Third Party Beneficiary.
To the extent that this [Financing Document] confers upon or gives or grants to AMBAC
any right, remedy or claim under or by reason of this [Financing Document], AMBAC is
hereby explicitly recognized as being a third -party beneficiary hereunder and may
enforce any such right remedy or claim conferred, given or granted hereunder.
B. Parties Interestad Herein.
Nothing in this [Financing Document] expressed or implied is intended or shall be
construed to confer upon, or to give or grant to, any person or entity, other than the
Issuer, the Trustee, AMBAC Indemnity, the Paying Agent, if any, and the registered
owners of the Bonds, any right, remedy or claim under or by reason of this [Financing
Document] or any covenant, condition or stipulation hereof, and all covenants,
stipulations, promises and agreements in this [Financing Document] contained by and
on behalf of the Issuer shall be for the sole and exclusive benefit of the Issuer, the.
Trustee, AMBAC Indemnity, the Paying Agent, if any, and the registered owners of the
Bonds.
EXHIBIT I
AMBAC INDEMNITY OFFICIAL STATEMENT DISCLOSURE
AND SUGGESTED LANGUAGE FOR THE NOTICE OF SALE,
BOND LEGEND, COVER PAGE OF OFFICIAL STATEMENT,
AND RATINGS SECTION OF OFFICIAL STATEMENT
AMBAC INDEMNITY OFFICIAL STATEMENT DISCLOSURE
Payment Pursuant to Municipal Bond Insurance Policy
AMBAC Indemnity has made a commitment to issue a municipal bond insurance policy (the
"Municipal Bond Insurance Policy") relating to the Bonds effective as of the date of
issuance of the Bonds. Under the terms of the Municipal Bond Insurance Policy, AMBAC
Indemnity will pay to the United States Trust Company 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 Bonds which shall becoiie Due for Payment but shall be unpaid by reason
of Nonpayment by the Issuer (as such terms are defined in the Municipal Bond Insurance
Policy). AMBAC Indemnity will make such payments to the Insurance Trustee on the later
of the date on which such principal and interest becomes Due for Payment or within one
business day following the date on which AMBAC Indemnity shall have received notice of
Nonpayment from the Trustee/Paying Agent. The insurance will extend for the term of the
Bonds and, once issued, cannot be canceled by AMBAC Indemnity.
The Municipal Bond 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 Bonds become subject to mandatory redemption
and insufficient funds are available for redemption of all outstanding Bonds, AMBAC
Indemnity will remain obligated to pay principal of and interest on outstanding Bonds 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 Bonds, 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 Trustee/Paying Agent has notice that any payment of principal of or interest
on a Bond which has become Due for Payment and which is made to a Bondholder by or
on behalf of the Issuer has been deemed a preferential transfer and theretofore recovered
from its registered owner pursuant to the United States Bankruptcy Code in accordance
with a final, nonappealable order of a court of competent jurisdiction, such registered owner
will be entitled to payment from AMBAC Indemnity to the extent of such recovery if sufficient
funds are not otherwise available.
15
The Municipal Bond Insurance Policy does not insure any risk other than Nonpayment, as
defined in the Policy. Specifically, the Municipal Bond Insurance Policy does not cover:
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 of principal or interest caused by the insolvency or negligence of any
Trustee or Paying Agent, if any.
If it becomes necessary to call upon the Municipal Bond Insurance Policy, payment of
principal requires surrender of Bonds to the Insurance Trustee together with an appropriate
instrument of assignment so as to permit ownership of such Bonds to be registered in the
name of AMBAC Indemnity to the extent of the payment under the Municipal Bond
Insurance Policy. Payment of interest pursuant to the Municipal Bond Insurance Policy
requires proof of Bondholder entitlement to interest payments and an appropriate
assignment of the Bondholders right to payment to AMBAC Indemnity.
Upon payment of the insurance benefits, AMBAC Indemnity will become the owner of the
Bond, appurtenant coupon, if any, or right to payment of principal or interest on such Bond
and will be fully subrogated to the surrendering Bondholders rights to payment.
16
FOR TRANSACTIONS INVOLVING VARIABLE RATE BONDS:
The Municipal Bond Insurance Policy does not insure against loss relating to payments of
the purchase price of Bonds upon tender by a registered owner thereof or any preferential
transfer relating to payments of the purchase price of Bonds upon tender by a registered
owner thereof.
ADDITIONAL PARAGRAPH FOR CALIFORNIA TRANSACTIONS:
In the event that AMBAC Indemnity were to become insolvent, any claims arising under the
Policy would be excluded from coverage by the California Insurance Guaranty Association,
established pursuant to the laws of the State of California.
ADDITIONAL PARAGRAPH FOR NEW YORK TRANSACTIONS:
The insurance provided by the Municipal Bond Insurance Policy is not covered by the
property/casualty insurance security fund specified by the insurance laws of the State of
New York.
ADDITIONAL PARAGRAPH FOR FLORIDA TRANSACTIONS:
The insurance provided by the Municipal Bond Insurance Policy is not covered by the
Florida Insurance Guaranty Association.
AMBAC INDEMNITY CORPORATION
AMBAC Indemnity Corporation ("AMBAC Indemnity') is a Wisconsin -domiciled stock
insurance oorporatlon 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, and
the Commonwealth of Puerto Rico, with admitted assets of approximately $2,204,000,000
(unaudited) and statutory capital of approximately $1,237,000,000 (unaudited) as of
March 319 1895. Statutory capital consists of AMBAC Indermitys policyholders' surplus
and statutory contingency reserve. AMBAC Indemnity is a wholly owned subsidiary of
AMBAC Inc., a 100% publicly4wld company. Standard & Poor's Corporation, Moodys
Investors Service and Fitch Investors Service, Inc. have each assigned a triple-A claims -
paying ability rating to AMBAC Indemnity.
Copies of AMBAC Inderrnitys financial statements prepared in accordance with statutory
accounting standards are available from AMBAC Indemnity. The address of AMBAC
Indemnitys administrative offices and its telephone number are One State Street Plaza,
17th Floor, New'York, New York, 10004 and (212) 668-0340.
AMBAC Indemnity has entered into pro rata reinsurance agreements under which a
perrsntage of the insurance underwritten pursuant to certain municipal bond insurance
programs of AMBAC Indemnity has been and will be assumed by a number of foreign and
domestic unaffiliated reinsurers.
AMBAC Indemnity has obtained a ruling from the Internal Revenue Service to the effect
that the insuring of an obligation by AMBAC Indemnity 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 Indemnity under policy provisions
substantially identical to those contained in its municipal bond insurance policy shall be
treated for federal income tax purposes in the same manner as if such payments were
made by the issuer of the Bonds. [THE FOLLOWING MUST BE INCLUDED IN ANNUAL
APPROPRIATION LEASE TRANSACTIONS: No representation is made by AMBAC
Indemnity regarding the federal income tax treabnsnt of payr nents that are made by
AMBAC Indemnity under the terms of the Policy due to nonapproprindon of funds by
the Lessee.]
AMBAC Indemnity makes no representation regarding the Bonds or the advisability of
investing in the Bonds and makes no representation regarding, nor has it participated in the
preparation of, the Official Statement other than the information supplied by AMBAC
Indemnity and presented th
under e heading of
Is
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NOTICE OF SALE
AMBAC Indemnity Corporation ("AMBAC Indemnity") has issued a commitment for
municipal bond insurance relating to the Bonds. All bids may be conditioned upon the
issuance effective as of the date on which the Bonds are issued, of a policy of insurance by
AMBAC Indemnity, insuring the payment when due of principal of and interest on the
Bonds. Each Bond will bear a legend referring to the insurance. The purchaser, holder or
owner is not authorized to make any statements concerning the insurance beyond those
set out here and in the bond legend without the approval of AMBAC Indemnity.
BOND LEGEND
Municipal Bond Insurance Policy No._ (the 'Policy") with respect to payments due for
principal of and interest on this bond has been issued by AMBAC Indemnity Corporation
("AMBAC Indemnity'). The Policy has been delivered to the United States Trust Company
of New York, New York, New York, as the Insurance Trustee under said Policy and will be
held by such Insurance Trustee or any successor insurance trustee. The Policy is on file
and available for inspection at the principal office of the Insurance Trustee and a copy
thereof may be secured from AMBAC Indemnity or the Insurance Trustee. All payments
required to be made under the Policy shall be made in accordance with the provisions
thereof. The owner of this bond acknowledges and consents to the subrogation rights of
AMBAC Indemnity as more fully set forth in the Policy.
COVER PAGE OF OFFICIAL STATEMENT
Payment of the principal of and interest on the Bonds when due will be insured by a
municipal bond insurance policy to be issued by AMBAC Indemnity Corporation
simultaneously with the delivery of the Bonds.
is
EXHIBIT J
FORM OF THE AMBAC LEGAL OPINION
DATE/ADDRESSES
Ladies and Gentlemen:
This opinion has been requested of the undersigned, a Vice President and an Assistant
General Counsel of AMBAC Indemnity Corporation, a Wisconsin stock insurance company
("AMBAC Indemnity"), in connection with the issuance by AMBAC Indemnity of a certain
Municipal Bond Insurance Policy and endorsement thereto, effective as of the date hereof
(the "Policy"), insuring $> in aggregate principal amount of the > (the "Issuer'), > dated >
(the "Bonds").
In connection with my opinion herein, I have examined the Policy, such statutes, documents
and proceedings as I have considered necessary or appropriate in the circumstances to
render the following opinion, including, without limiting the generality of the foregoing,
certain statements contained in the Official Statement of the Issuer dated >, relating to the
Bonds (the "Official Statement") under the headings ">" and ">".
Based upon the foregoing and having regard to legal considerations I deem relevant, I am
of the opinion that:
1. AMBAC Indemnity is a stock insurance company duly organized and validly existing
under the laws of the State of Wisconsin and duly qualified to conduct an insurance
business- in the State of >.
2. AMBAC Indemnity has full corporate power and authority to execute and deliver the
Policy and the Policy has been duly authorized, executed and delivered by AMBAC
Indemnity and constitutes a legal, valid and binding obligation of AMBAC Indemnity
enforceable in accordance with its terms except to the extent that the enforceability (but
not the validity) of such obligation may be limited by any applicable bankruptcy,
insolvency, liquidation, rehabilitation or other similar law or enactment now or hereafter
enacted affecting the enforcement of creditors' rights.
3. The execution and delivery by AMBAC Indemnity of the Policy will not, and the
consummation of the transactions contemplated thereby and the satisfaction of the
terms thereof will not, conflict with or result in a breach of any of the terms, conditions
or provisions of the Certificate of Incorporation or By -Laws of AMBAC Indemnity, or any
restriction contained in any contract, agreement or instrument to which AMBAC
Indemnity is a party or by which it is bound or constitute a default under any of the
foregoing.
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I
4.
I!
5.
Proceedings legally required for the issuance of the Policy have been taken by AMBAC
Indemnity and licenses, orders, consents or other authorizations or approvals of any
governmental boards or bodies legally required for the enforceability of the Policy have
been obtained; any proceedings not taken and any licenses, authorizations or
approvals not obtained are not material to the enforceability of the Policy.
The statements contained in the Official Statement under the heading ">," insofar as
such statements constitute summaries of the matters referred to therein, accurately
reflect and fairly present the information purported to be shown and, insofar as such
statements describe AMBAC Indemnity, fairly and accurately describe AMBAC
Indemnity.
6. The form of Policy contained in the Official Statement under the heading ">" is a true
and complete copy of the form of Policy.
Very truly yours,
Vice President and
Assistant General Counsel
1%.
EXHIBIT K
CERTIFICATE OF BOND INSURER
In connection with the issuance of > in aggregate principal amount of (the
"Issuer") > (the 'Bonds"), AMBAC Indemnity Corporation ("AMBAC") is issuing a municipal
bond insurance policy (the "Insurance Policy") guaranteeing the payment of principal and
interest when due on the Bonds, all as more fully set out in the Insurance Policy.
On behalf of AMBAC, the undersigned hereby certifies that:
(i) the Insurance Policy is an unconditional and recourse obligation of
AMBAC (enforceable by or on behalf of the holders of the Bonds) to pay the scheduled
payments of interest and principal on the Bonds in the event of a Nonpayment as defined in
the Insurance Policy;
(i) the insurance-romium of $ was
determined in arm's length negotiations in accordance with our standard procedures, is
required to be paid as a condition to the issuance of the Insurance Policy and represents a
reasonable charge for the transfer of credit risk;
(i) no portion of such premium represents a payment for any direct or
indirect services other than the transfer of credit risk, including costs of underwriting or
remarketing the Bonds or the cost of insurance for casualty of Bond financed property;
(i) we are not co -obligors on the Bonds and do not reasonably expect that
we will be called upon to make any payment under the Insurance Policy;
(i) the Issuer is not entitled to a refund for the Insurance Policy in the event
that the Bonds are retired prior to their stated maturity;
(i) - we would not have issued the Insurance Policy in the absence of a debt
service reserve fund of the size and type established by the documents pursuant to which
the Bonds are being issued, and it is normal and customary to require a debt service
reserve fund of such a size and type in similar transactions; and
(i) we do not reasonably expect that the project will not be completed or
that the Issuer will not satisfy the temporary period requirements of Treasury Regulation
Section 1.148-2(e)(2).
IN WITNESS WHEREOF, AMBAC Indemnity Corporation has caused this
certificate to be executed in its name on this day of 19 by one of its officers duly
authorized as of such date.
AMBAC INDEMNITY CORPORATION
By:
Vice President and Assistant
General Counsel
EXHIBIT L
AMBAC INDEMNITY CORPORATION WIRING INSTRUCTIONS
(REVISED • AS OF 4110185)
Citibank N.A.
ABA NO. 021000089
For: AMBAC indemnity Corporation
A/C No. 4060S486
Advise: Pamela Dottin (212) 208-3308
*** Please indicate Policy Number on wire ***
POLICY NUMBER CAN BE OBTAINED FROM AMBAC INDEMNITY'S CLOSING
DEPARTMENT.
CALL JANINE FEUDI AT (212) 208-3301