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RESOLUTION 88-19369 RESOLUTION NO. 88-19369 A RESOLUTION AUTHORIZING THE ISSUANCE OF NOT MORE THAN $6,000,000 IN AGGREGATE PRINCIPAL AMOUNT OF CITY OF MIAMI BEACH, FLORIDA RESORT TAX REVENUE REFUNDING BONDS, SERIES 1988 TO ADVANCE REFUND THE CITY' S OUTSTANDING EXCISE TAX BONDS, SERIES 1969; PROVIDING FOR THE ISSUANCE OF ADDITIONAL BONDS ON A PARITY THEREWITH; PROVIDING FOR THE RIGHTS AND SECURITY OF ALL BONDS ISSUED PURSUANT TO THIS RESOLUTION; PROVIDING CERTAIN DETAILS OF THE SERIES 1988 BONDS; DELEGATING CERTAIN MATTERS IN CONNECTION WITH THE ISSUANCE OF THE SERIES 1988 BONDS TO THE MAYOR; APPROVING THE FORM AND EXECUTION OF THE ESCROW DEPOSIT AGREEMENT FOR THE REFUNDED BONDS; APPROVING THE FORM AND EXECUTION OF THE BOND PURCHASE AGREEMENT FOR THE SERIES 1988 BONDS; APPROVING THE FORM OF PRELIMINARY OFFICIAL STATEMENT FOR THE SERIES 1988 BONDS AND AUTHORIZING EXECUTION OF THE OFFICIAL STATEMENT FOR THE SERIES 1988 BONDS; AUTHORIZING OFFICIALS OF THE CITY TO TAKE ALL NECESSARY ACTIONS IN CONNECTION WITH THE ISSUANCE OF THE SERIES 1988 BONDS; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, pursuant to the Constitution and the laws of the State of Florida, in particular Chapter 67-930 , Laws of Florida, Acts of 1967 , as amended, and Chapter 166 , Florida Statutes , as amended from time to time, and pursuant to the Miami Beach City Charter, as amended, and Chapter 41, Article V of the Miami Beach City Code, as amended, (collectively, the "Act" ) , the City of Miami Beach, Florida ( the "City" ) is authorized to impose, levy and collect a municipal resort tax upon the rent of every occu- pancy of a room or rooms in any hotel, motel , apartment house, rooming house, tourist or trailer camp subject to certain limi- tations and upon the retail sale price of all items of food, beverages and alcoholic beverages, other than beer or malt bever- ages, sold at retail for consumption on the premises of any place of business required by law to be licensed by the state hotel and restaurant commission or by the state beverage department ( the "Resort Tax" ) ; and WHEREAS, the City has heretofore issued $12 , 000 , 000 in aggregate principal amount of its Excise Tax Bonds, Series 1969 , of which $4,925, 000 are now outstanding (the "Refunded Bonds" ) pursuant to a resolution adopted by the City on February 25, 1969, as amended on April 15, 1970 ( the "1969 Resolution" ) ; and WHEREAS, the City desires to advance refund the Refunded Bonds by issuing its Resort Tax Revenue Refunding Bonds , Series 1988 (the "Series 1988 Bonds" ) in order to remove the lien on the revenues pledged under the 1969 Resolution; and WHEREAS, the City also desires to set forth the provisions pursuant to which it may issue bonds on a parity with the Series 1988 Bonds and to make provision for the rights and security of the holders of all bonds issued hereunder ; and WHEREAS, the City Commission of the City ( the "Commission" ) has determined that it is in the best interest of the City to delegate to the Mayor the determination of various terms of the Series 1988 Bonds, the award of the Series 1988 Bonds , including execution of a Bond Purchase Agreement, and all other actions necessary or desirable in connection with the issuance of the Series 1988 Bonds, subject to the limitations herein; and WHEREAS, for reasons more fully set forth herein, the Com- mission finds and determines it to be in the best interests of the City to authorize the sale of the Series 1988 Bonds on the basis of a negotiated sale rather than a public sale by competi- tive bid; NOW THEREFORE, BE IT DULY RESOLVED BY THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA. ARTICLE I DEFINITIONS, AUTHORITY AND FINDINGS; RESOLUTION CONSTITUTES A CONTRACT SECTION 101. DEFINITIONS. That, as used in this Resolu- tion, the following terms shall have the following meanings: "Accreted Value" shall mean, as of any date of computation with respect to any Capital Appreciation Bond, an amount equal to the principal amount of such Capital Appreciation Bond ( the prin- cipal amount at its initial offering) plus the interest accrued on such Capital Appreciation Bond from the date of delivery to the original purchasers thereof to the Interest Payment Date next preceding the date of computation or the date of computation if an Interest Payment Date, such interest to accrue at a rate not exceeding the legal rate as set forth in the resolution of the Commission providing for the issuance of such Bonds, compounded periodically, plus, with respect to matters related to the pay- ment upon redemption or acceleration of the Capital Appreciation Bonds, if such date of computation shall not be an Interest Pay- ment Date, a portion of the difference between the Accreted Value as of the immediately preceding Interest Payment Date (or the date of original issuance if the date of computation is prior to the first Interest Payment Date succeeding the date of original issuance) and the Accreted Value as of the immediately succeeding Interest Payment Date, calculated based on the assumption that Accreted Value accrues in equal daily amounts on the basis of a year of twelve 30-day months. "Act" shall have the meaning ascribed to it in the recitals to this Resolution. "Amortization Requirements" shall mean such moneys required to be deposited in the Bond Redemption Account for the purpose of the mandatory redemption or payment at maturity of any Term Bonds, the specific amounts and times of such deposits to be determined by the Commission in the resolution authorizing the issuance of such Term Bonds . "Annual Debt Service Requirement" for any period, as applied to the Bonds of any Series, shall mean the respective amounts which are needed to provide: (a) for paying the interest on all Bonds of such Series then Outstanding which is payable on each Interest Payment Date in such period, (b) for paying the principal of all Serial Bonds of such Series then Outstanding which is payable upon the matu- rity of such Serial Bonds in such period, and - 2 - (c) the Amortization Requirements, if any, for the Term Bonds of such Series for such period. For purposes of computing (a) , (b) and (c) above, any principal, interest or Amortization Requirements due on October 1 in a Fiscal Year shall be deemed due in the preceding Fiscal Year . The following rules shall apply in determining the amount of the Annual Debt Service Requirement for any period: (a) The interest rate on Variable Rate Bonds shall be assumed to be 110% of the greater of (A) the daily average interest rate on such Variable Rate Bonds during the twelve months ending with the month preceding the date of calculation or such shorter period that such Variable Rate Bonds shall have been Outstanding under this Resolution, and (B) the actual rate of interest on such Variable Rate Bonds on the date of calculation; provided, however , that so long as the Series 1988 Bonds are insured by the Series 1988 Bond Insurance Policy, the interest rate on Variable Rate Bonds shall be assumed to be ( i) 9 . 2% for purposes of determining the amount required to be deposited in the Debt Service Reserve Account in respect of such Variable Rate Bonds and ( ii) the maximum rate permitted to be borne by said Variable Rate Bonds for purposes of Section 304 (H) hereof. (b) In the case of Put Bonds, the "put" date or dates shall be ignored if the source for payment of said "put" is a Credit Facility or a Liquidity Facility and the stated dates for Amortization Requirements and principal payments shall be used, and in the case of Bonds secured by a Credit Facility or a Liquidity Facility, the terms of the reimbursement obligation to the issuers thereof shall be ignored and the stated dates for Amortization Requirements for Term Bonds and principal payments shall be used; pro- vided, however , that during any period of time after the issuer of a Credit Facility or a Liquidity Facility has advanced funds thereunder, the reimbursement obligation of which is payable from and secured on a parity with the Bonds and before such amount is repaid, Annual Debt Service Requirements shall include the principal amount so advanced and interest thereon, in accordance with the principal repayment schedule and interest rate or rates specified in the Credit Facility or Liquidity Facility, in lieu of the stated principal of and Amortization Requirements and inter- est on such Bonds; (c) In the case of Extendible Maturity Bonds, the Bonds shall be deemed to mature on the later of the stated maturity date or the date to which such stated maturity date has been extended; (d) In the case of Capital Appreciation Bonds, the principal and interest portions of the Accreted Value of Capital Appreciation Bonds becoming due at maturity or by virtue of an amortization requirement shall be included in the calculations of accrued and unpaid Annual Debt Service Requirements in the year in which said principal and inter- est portions are due and payable; (e) In the case of Capital Appreciation and Income Bonds, the principal and interest portions of the Appreci- ated Value of Capital Appreciation and Income Bonds shall be included in the calculations of accrued and unpaid Annual Debt Service Requirements in the year in which said princi- pal and interest portions are due and payable; - 3 - (f) In the case of Balloon Bonds or Interim Bonds, the debt service requirements of the Balloon Bonds or Interim Bonds may be excluded and in lieu thereof the Bal- loon Bonds or Interim Bonds shall be viewed, for purposes of the computation of Annual Debt Service Requirements, as debt securities having a comparable Federal tax status as such Balloon Bonds or Interim Bonds, hypothetically maturing in substantially equal annual payments of principal and inter- est over a period of not more than 30 years from the date of issuance thereof, bearing interest at a fixed rate per annum equal to the average interest rate per annum for such debt securities on the date of issuance of the Balloon Bonds or Interim Bonds and issued by issuers having a credit rating, issued by Moody' s Investors Services, Inc. or any successors thereto or Standard & Poor ' s Corporation or any successors thereto comparable to that of the City, as shown by a cer- tificate of an underwriting or investment banking firm experienced in marketing such securities; and (g) If all or a portion of the principal of or interest on a Series of Bonds is payable from funds irrevoc- ably set aside or deposited for such purpose, together with projected earnings thereon to the extent such earnings are projected to be from Permitted Investments, such principal or interest shall not be included in determining Annual Debt Service Requirements . "Appreciated Value" shall mean ( i) as of any date of compu- tation with respect to any Capital Appreciation and Income Bond up to the Interest Commencement Date set forth in the resolution of the Commission providing for the issuance of such Bond, an amount equal to the principal amount of such Bond (the principal amount at its initial offering) plus the interest accrued on such Capital Appreciation and Income Bond from the date of delivery to the original purchasers thereof to the Interest Payment Date next preceding the date of computation or the date of computation if an Interest Payment Date, such interest to accrue at a rate not exceeding the legal rate as set forth in the resolution of the Commission providing for the issuance of such Bonds , compounded periodically, plus, with respect to the payment upon redemption or acceleration of the Capital Appreciation and Income Bonds, if such date of computation shall not be an Interest Payment Date, a portion of the difference between the Appreciated Value as of the immediately preceding Interest Payment Date (or the date of orig- inal issuance if the date of computation is prior to the first Interest Payment Date succeeding the date of original issuance) and the Appreciated Value as of the immediately succeeding Interest Payment Date calculated based upon an assumption that Appreciated Value accrues in equal daily amounts on the basis of a year of twelve 30-day months and ( ii) as of any date of compu- tation on and after the Interest Commencement Date, the Appreci- ated Value on the Interest Commencement Date. "Balloon Bonds" shall mean any Bonds issued under this Reso- lution, interest on which is payable periodically and twenty five percent ( 25%) or more of the original principal amount of which matures during any one Fiscal Year and for which maturing princi- pal amount Amortization Requirements have not been designated in the resolution of the City authorizing the issuance of such Bonds. "Bonds" shall mean the Series 1988 Bonds, authorized to be issued pursuant to this Resolution, together with any additional parity Bonds hereafter issued pursuant to this Resolution. "Bondholder" , "Holder" , "Holder of Bonds" or "Owner" or any similar term, shall mean any person, who shall be the registered owner of any Outstanding Bond or Bonds. - 4 - "Capital Appreciation Bonds" shall mean any Bonds issued under this Resolution as to which interest is compounded periodi- cally on each of the applicable periodic dates designated for compounding and payable in an amount equal to the then current Accreted Value only at the maturity, earlier redemption or other payment date therefor , all as so designated by subsequent pro- ceedings of the Commission relating to the issuance thereof, and which may be either Serial Bonds or Term Bonds. "Capital Appreciation and Income Bonds" shall mean any Bonds issued under this Resolution as to which accruing interest is not paid prior to the Interest Commencement Date specified in the resolution authorizing such Bonds and the Appreciated Value for such Bonds is compounded periodically on certain designated dates prior to the Interest Commencement Date for such Series of Capi- tal Appreciation and Income Bonds, all as so designated by subse- quent proceedings of the Commission relating to the issuance thereof and which may be either Serial Bonds or Term Bonds. "City" shall mean the City of Miami Beach, Florida. "City Clerk" shall mean the Clerk of the City or the officer succeeding to his principal functions. "City Manager" shall mean the City Manager of the City or his designee or the officer succeeding to his principal func- tions. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated there- under and applicable regulations promulgated under the Internal Revenue Code of 1954, as amended. "Commission" shall mean the City Commission of the City. "County" shall mean Dade County, Florida. "Credit Facility" shall mean an irrevocable letter of cred- it, policy of municipal bond insurance, guaranty, purchase agree- ment, credit agreement or similar facility in which the entity providing such facility irrevocably agrees to provide funds to make payment of the principal of , premium, if any and interest on Bonds. "Defeasance Obligations" shall mean to the extent permitted by law: ( i ) Direct general obligations of, or obligations the payment of the principal of which and the interest on which is unconditionally guaranteed by, the United States of America; and ( ii) Evidences of indebtedness issued by the Bank for Cooperatives, Federal Home Loan Banks, Federal Home Loan Mortgage Corporation ( including participation certificates ) , Federal Land Banks, Federal Financing Banks, or any other agency or instrumentality of the United States of America created by an act of Congress which is substantially similar to the foregoing in its legal relationship to the United States of America; provided that the obligations of such agency or instrumentality are unconditionally guaranteed by the United States of America or any other agency or instru- mentality of the United States of America; and ( iii) Evidences of ownership of proportionate inter- ests in future interest and principal payments on specified obligations described in ( i ) above held by a bank or trust - 5 - company as custodian, under which the owner of the invest- ment is the real party in interest and has the right to proceed directly and individually against the obligor on the underlying obligations described in ( i ) above, and which underlying obligations are not available to satisfy any claim of the custodian or any person claiming through the custodian or to whom the custodian may be obligated; and ( iv) Obligations described in Section 103 (a) of the Internal Revenue Code of 1986 , as amended, which do not permit redemption prior to maturity at the option of the obligor and provision for the payment of the principal of, premium, if any, and interest on which shall have been made by the irrevocable deposit with a bank or trust company acting as a trustee or escrow agent for holders of such obligations or securities described in clauses ( i ) or ( ii ) above, the maturing principal of and interest on which, when due and payable, will provide sufficient monies to pay when due the principal of, premium if any, and interest on such obligations, and which securities described in clauses ( i ) or ( ii ) above are not available to satisfy any other claim, including any claim of the trustee or escrow agent or of any person claiming through the trustee or escrow agent or to whom the trustee or escrow agent may be obligated, including in the event of the insolvency of the trustee or escrow agent or proceedings arising out of such insolvency. Notwithstanding the foregoing, so long as the Series 1988 Bonds are insured by the Series 1988 Bond Insurance Policy, "Defeasance Obligations" shall be limited to direct noncallable obligations of the United States of America, CATs , TIGRs, STRPs or such other Defeasance Obligations described above as may be approved by the Series 1988 Bond Insurer . "Escrow Deposit Agreement" shall mean an Escrow Deposit Agreement by and between the City and a bank or trust company designated as escrow agent by the City thereunder . "Extendible Maturity Bonds" shall mean Bonds the maturities of which, by their terms, may be extended by and at the option of the Holders of the Bonds or the City. "Fiduciaries" shall mean the Paying Agent, the Registrar and any trustee appointed and acting under this Resolution. "Finance Director" shall mean the Finance Director of the City or his designee or the officer succeeding to his principal functions. "Fiscal Year" shall mean that period commencing on October 1, and continuing to and including the next succeeding September 30, or such other annual period as may be prescribed by law or by the City in accordance with law. "Interest Commencement Date" shall mean, with respect to any particular Capital Appreciation and Income Bonds, the date speci- fied in the resolution providing for the issuance of such Bonds, (which date must be prior to the maturity date for such Bonds) after which interest accruing on such Bonds shall be payable semi-annually or otherwise on a periodic basis prior to maturity, with the first such payment date being the applicable Interest Payment Date immediately succeeding such Interest Commencement Date. "Interest Payment Date" shall mean for each Series of Bonds such dates of each Fiscal Year on which interest on the Bonds is payable on any Bonds that are Outstanding , as set forth in the - 6 - proceedings of the City providing for the issuance of such Series of Bonds. "Interim Bonds" shall mean any Bonds issued under this Reso- lution on an interim basis which are expected to be repaid from the proceeds of Bonds or other indebtedness. "Liquidity Facility" shall mean a letter of credit, line of credit, policy of municipal bond insurance, guaranty, purchase agreement or similar facility in which the entity providing such facility agrees to provide funds to pay the purchase price of Put Bonds upon their tender by the Holders of Put Bonds. "Mayor" shall mean the Mayor of the City or in the absence or disability of the Mayor of the City, the Vice Mayor of the City or the officers succeeding to their principal functions . "Mayor ' s Certificate" shall mean the Certificate to be exe- cuted by the Mayor prior to or at the time of the execution of the Bond Purchase Agreement, which Certificate shall provide the details of the Series 1988 Bonds. "Maximum Annual Debt Service" shall mean, at any time and with respect to all of the Bonds or any particular Series of the Bonds (as appropriate) , the greatest Annual Debt Service Require- ment in the then current or any succeeding Fiscal Year . "Outstanding" when used with reference to the Bonds, shall mean, as of any date of determination, all Bonds theretofore authenticated and delivered except ; ( i ) Bonds theretofore cancelled by the Registrar or delivered to the Registrar for cancellation; ( ii ) Bonds which are deemed paid and no longer Out- standing as provided herein; ( iii ) Bonds in lieu of which other Bonds have been issued pursuant to the provisions hereof relating to Bonds destroyed, stolen or lost, unless evidence satisfactory to the Registrar has been received that any such Bond is held by a bona fide purchaser ; and ( iv) For purposes of any consent or other action to be taken hereunder by the Holders of a specified percentage of principal amount of Bonds, Bonds held by or for the account of the City. "Paying Agent" shall mean any bank or trust company or any successor bank or trust company appointed by the City to act as Paying Agent hereunder . "Permitted Investments" shall mean and include such obliga- tions as shall be permitted to be legal investments of the City by the laws of the State. "Pledged Funds" shall mean, collectively, the Resort Tax Revenues and, except for moneys, securities and instruments in the Rebate Fund, all moneys, securities and instruments held in the Funds and Accounts created and established by this Resolu- tion. "Purchasers" shall mean Lazard Freres & Co. , Chase Manhattan Capital Markets Corporation and Raymond, James & Associates , Inc. "Put Bonds" shall mean the Bonds which by their terms may be tendered by and at the option of the owner thereof for payment by the City prior to the stated maturity thereof . - 7 - "Refunded Bonds" shall mean the outstanding City of Miami Beach, Florida Excise Tax Bonds, Series 1969 originally issued in the aggregate principal amount of $12,000,000. "Registrar" shall mean the officer of the City or a bank or trust company appointed by the City, located within or without the State of Florida, who or which shall maintain the registra- tion books of the City and be responsible for the transfer and exchange of the Bonds, and who or which may also be the Paying Agent for the Bonds . "Reserve Account Insurance Policy" shall mean the insurance policy, surety bond or other acceptable evidence of insurance, if any, deposited in the Debt Service Reserve Account in lieu of or in partial substitution for cash or securities on deposit there- in. The issuer providing such insurance shall be a municipal bond insurer rated, at the time of deposit in the Debt Service Reserve Account, in any of the three highest rating categories of either Moody' s Investors Service, Inc. or any successors thereof or Standard & Poor ' s Corporation or any successors thereof . "Reserve Account Letter of Credit" shall mean the irrevoc- able, transferable letter of credit, if any, deposited in the Debt Service Reserve Account in lieu of or in partial substitu- tion for cash or securities on deposit therein. The issuer pro- viding such letter of credit shall be a banking association, bank or trust company or branch thereof rated, at the time of deposit into the Debt Service Reserve Account, in any of the three high- est rating categories of either Moody' s Investors Service, Inc. or any successors thereof or Standard & Poor ' s Corporation or any successors thereof . "Resolution" shall mean this Resolution as the same may from time to time be amended and supplemented in accordance with the terms hereof. "Resort Tax" shall mean the tax described in the recitals to this Resolution levied pursuant to the Act . "Resort Tax Revenues" shall mean the proceeds of the Resort Tax . "Serial Bonds" shall mean the bonds of an issue which shall be stated to mature in annual or semi-annual installments but not including Term Bonds . "Series" shall mean all of the Bonds authenticated and delivered on original issuance and pursuant to this Resolution or any supplemental resolution authorizing such Bonds as a separate Series of Bonds, or any Bonds thereafter authenticated and deliv- ered in lieu of or in substitution for such Bonds pursuant to Article II hereof, regardless of variations in maturity, interest rate or other provisions . "Series 1988 Bonds" shall mean the Resort Tax Revenue Refunding Bonds, Series 1988 authorized to be issued under this Resolution in the aggregate principal amount not to exceed $6 , 000 ,000. "Series 1988 Bond Insurance Policy" shall mean the municipal bond new issue insurance policy issued by the Series 1988 Bond Insurer in respect of the Series 1988 Bonds. The Series 1988 Bond Insurance Policy shall constitute a Credit Facility here- under . "Series 1988 Bond Insurer" shall mean Financial Guaranty Insurance Company, a New York stock insurance company, its suc- - 8 - cessors and assigns. The notice address for the Series 1988 Bond Insurer shall be 175 Water Street, New York, New York 10038, Attention: President. "State" shall mean the State of Florida. "Term Bonds" shall mean the Bonds of any Series which shall be stated to mature on one date and for the amortization of which payments are required to be made into the Bond Redemption Account in the Sinking Fund. "Variable Rate Bonds" shall mean Bonds, which may be either Serial Bonds or Term Bonds, issued with a variable, adjustable, convertible or other similar rate which is not fixed in percent- age for the entire term thereof at the date of issue. Words importing singular number shall include the plural number in each case and vice versa, and words importing persons shall include firms and corporations. Words defined in Section 101 hereof that appear in this Resolution in lower case form shall have the meanings ascribed to them in the definitions in Section 101 unless the context shall otherwise indicate. The words "Bond" , "Owner" , "Holder" and "person" shall include the plural as well as the singular number unless the context shall otherwise indicate. The word "person" shall include corporations and associations, including public bodies, as well as natural persons, unless the context shall otherwise indicate. The word "Bond" or "Bonds" and the words "revenue bond" or "revenue bonds" shall mean any Bond or Bonds or all of the Bonds, as the case may be, issued under the provisions of this Resolution. The word "Resolution" shall include this Resolution and each resolution supplemental hereto. SECTION 102. AUTHORITY FOR THIS RESOLUTION. This resolu- tion is adopted pursuant to the provisions of the Act . SECTION 103. FINDINGS. It is hereby ascertained, deter- mined and, declared: (a) That the City is authorized to levy and collect the Resort Tax pursuant to the Act . (b) It is necessary and desirable to refund the Refunded Bonds in order to release the lien of the holders of the Refunded Bonds on the revenues pledged under the 1969 Resolution. (c) The principal of and interest on the Bonds and all required sinking fund, reserve and other payments shall be payable solely from the Pledged Funds. None of the City, the County, or the State of Florida or any political sub- division thereof or governmental authority or body therein shall ever be required to levy ad valorem taxes to pay the principal of or interest on the Bonds or to make any of the sinking fund, reserve or other payments required by this Resolution or the Bonds, and the Bonds shall not constitute a lien upon any property owned by or situated within the corporate territory of the City, except as provided herein with respect to the Pledged Funds . (d) The estimated Pledged Funds will be sufficient to pay all principal of and interest on the Bonds to be issued hereunder , as the same become due, and to make all sinking fund, reserve or other payments required by this Resolution. - 9 - (e) Due to the character of the Series 1988 Bonds, the complexity of structuring an issue of refunding bonds, prevailing market conditions, and the recommendation of the financial advisor to the City that the sale of the Series 1988 Bonds be by negotiation, the sale of the Series 1988 Bonds on the basis of negotiated sale rather than a public sale by competitive bid is in the best interest of the City and is hereby authorized. SECTION 104. RESOLUTION CONSTITUTES CONTRACT. In conside- ration of the acceptance of the Bonds authorized to be issued hereunder by those who shall own the same from time to time, this Resolution shall be deemed to be and shall constitute a contract between the City and such Bondholders, and the covenants and agreements herein set forth to be performed by the City shall be for the equal benefit, protection and security of the owners of any and all of such Bonds, all of which shall be of equal rank and without preference, priority, or distinction of any of the Bonds over any other thereof except as expressly provided therein and herein. [END OF ARTICLE I ] - 10 - ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF BONDS SECTION 201. AUTHORIZATION OF THE SERIES 1988 BONDS. Sub- ject and pursuant to the provisions of this Resolution, Bonds of the City to be known as Resort Tax Revenue Refunding Bonds, Series 1988 ( the "Series 1988 Bonds" ) , are hereby authorized to be issued in an aggregate principal amount not to exceed Six Million Dollars ($6,000 , 000) , for the purpose of providing funds to advance refund the Refunded Bonds and to pay certain costs of issuance of the Series 1988 Bonds, which Bonds may be issued all at one time or from time to time in Series, and if in Series, may be dated, numbered, and designated as to Series, all as shall be determined in a Mayor ' s Certificate. Subject to the limitations contained herein, the Series 1988 Bonds shall be issued in such aggregate amount, shall be dated, shall mature on such dates and in such amounts, shall be in the form of Serial Bonds or Term Bonds or a combination thereof, shall have such Interest Payment Dates, shall bear interest at such rates not to exceed 10%, shall have such Amortization Requirements, shall be subject to redemption at such times, at such prices and pursuant to such notice provisions, as shall be set forth in a Mayor ' s Certificate. The Series 1988 Bonds shall be insured by the Series 1988 Bond Insurance Policy. The Commission hereby appoints Southeast Bank, N.A. , Miami , Florida, as Registrar and Paying Agent for the Series 1988 Bonds . The Commission hereby approves the distribution of copies of the Preliminary Official Statement ( the "Preliminary Official Statement" ) in substantially the form presented at this meeting with such changes as may be approved by the Mayor . The Mayor and the City Manager or his designee, are hereby authorized to execute the Official Statement ( the "Official Statement" ) on behalf of the City, in substantially the form of the draft of the . Preliminary Official Statement presented at this meeting with such changes therein as shall be necessary to evidence the terms of the Series 1988 Bonds and such additional changes as may be approved by the Mayor , with such execution to constitute conclusive evidence of such officers ' approval and the City ' s approval of any change therein. The use of the Preliminary Official Statement and the final Official Statement in the marketing and sale of the Series 1988 Bonds is hereby approved. The Commission hereby approves the form of the Bond Purchase Agreement ( the "Bond Purchase Agreement" ) , for the purchase of the Series 1988 Bonds by the Purchasers, a copy of which draft form of a Bond Purchase Agreement has been presented at this meeting. Upon compliance by the Purchasers with the requirements of Florida Statutes, Section 218. 385 ( 4 ) , the Mayor is hereby authorized to execute the Bond Purchase Agreement in connection with the sale of the Series 1988 Bonds to the Purchasers, in substantially the form presented at this meeting, subject to such changes, insertions and omissions and such filling-in of blanks therein as may be necessary to evidence the terms of the Series 1988 Bonds and such additional changes as may be approved by the Mayor . The purchase price at which the Series 1988 Bonds shall be awarded to the Purchasers shall be determined by the Mayor in consultation with the financial advisor of the City but shall not be less than 98% of the principal amount of the Series 1988 Bonds (not including original issue discount ) . The execution and delivery by the Mayor of the Bond Purchase Agreement for and on behalf of the City shall be conclusive evidence of the approval of such officer and the City of any such changes, insertions, omissions or filling-in of blanks . - 11 - The Commission hereby appoints Southeast Bank, N.A. to act as escrow agent under the Escrow Deposit Agreement to be entered into between Southeast Bank, N.A. and the City, for the benefit of the owners of the Refunded Bonds which Escrow Deposit Agree- ment shall be substantially in the form presented at this meeting with such changes as may be necessary to provide for the advance refunding of the Refunded Bonds . The form of the Escrow Deposit Agreement is hereby approved and the Mayor is hereby authorized to execute and deliver the Escrow Deposit Agreement with such changes, insertions and omissions and such filling-in of blanks therein as shall be approved by the Mayor . Such execution shall constitute conclusive evidence of the Mayor ' s approval and the City' s approval of any change therein from the form of Escrow Deposit Agreement presented at this meeting. SECTION 202. DESCRIPTION OF BONDS. Unless otherwise speci- fied by the City in subsequent proceedings, any Bonds issued pursuant to this Resolution shall be issued in fully registered form and, if the Registrar issues notice of the availability of exchanging registered Bonds for coupon Bonds, in coupon form. If the Registrar receives an opinion of counsel of recognized stand- ing in the field of law relating to municipal bonds to the effect that the issuance of any of the Bonds in coupon form will not adversely affect the exclusion from gross income for Federal income tax purposes of the interest on any of the Bonds, the Registrar may, at the written direction of the City, mail notice to the registered owners of the Bonds of the availability of exchanging registered Bonds and coupon Bonds . Registered Bonds may then be exchanged for an equal aggregate principal amount of coupon Bonds of the same Series and maturity of any authorized denomination and coupon Bonds may be exchanged for an equal aggregate principal amount in the manner provided in this Resolu- tion. Unless otherwise specified by the City in subsequent pro- ceedings, the Bonds of a Series shall be dated as determined in a Mayor ' s Certificate as to the Series 1988 Bonds and by subsequent resolution of the City relating to the issuance of any other Series of Bonds; shall bear interest, which may be fixed or vari- able, from their date at a rate not exceeding the legal rate per annum, with interest mailed to the registered Holder thereof on each Interest Payment Date by the Paying Agent at the address shown on the registration books of the City (held by the Regis- trar ) at the close of business on the 15th day of the calendar month preceding an Interest Payment Date ( in each case a "Regular Record Date" ) , except for ( i ) Capital Appreciation Bonds which shall bear interest as described under the defined term Accreted Value, payable only upon redemption, acceleration or maturity thereof and ( ii ) Capital Appreciation and Income Bonds which shall bear interest as described under the defined term Appre- ciated Value, payable on the amount due at maturity but only from and after the Interest Commencement Date; shall be lettered and shall be numbered in such manner as determined in a Mayor ' s Cer- tificate as to the Series 1988 Bonds and by subsequent resolution of the City relating to the issuance of any other Series of Bonds; shall be in the denomination of $5,000 or any integral multiple thereof, except for ( i ) Capital Appreciation Bonds, which may be initially issued in any denomination so long as their Accreted Value at maturity shall be $5,000 or any integral multiple thereof and ( ii ) Capital Appreciation and Income Bonds, which may be initially issued in any denomination so long as their Appreciated Value at the Interest Commencement Date shall be $5, 000 or any integral multiple thereof ; and shall mature on such dates, in such years and in such amounts, as determined in a Mayor ' s Certificate as to the Series 1988 Bonds and as provided for by subsequent resolution of the City relating to any other Series of Bonds . Notwithstanding anything in this paragraph to - 12 - the contrary, any interest not punctually paid on a Regular Record Date shall forthwith cease to be payable to the registered Holder on such Regular Record Date and may be paid at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Paying Agent, notice of which shall be given not less than 10 days prior to such special record date to such registered Holder . The Bonds issued hereunder may be Serial Bonds or Term Bonds and may be Variable Rate Bonds, Capital Appreciation Bonds, Capital Appreciation and Income Bonds, Extendible Maturity Bonds, Balloon Bonds, Interim Bonds, Put Bonds and such other types of bonds as may be marketable from time to time, including, without limitation, taxable Bonds and Bonds issued in book entry form, as determined by subsequent proceedings of the City. SECTION 203. REDEMPTION PROVISIONS. The Bonds of each Series, other than the Series 1988 Bonds, may be subject to redemption prior to maturity at such times, at such redemption prices and upon such terms in addition to the terms contained in this Resolution as may be determined by subsequent resolutions of the City, which subsequent resolutions may contain redemption notice provisions. The redemption provisions and the redemption notice provisions for the Series 1988 Bonds shall be established in the manner described in the second paragraph of Section 201 of this Resolution. Unless otherwise provided by subsequent proceedings, in addition to any required redemption notice to Bondholders, the City shall give notice of redemption for Bonds being redeemed to registered securities depositories and to national information services that disseminate redemption notices at least 2 business days in advance of the notice mailed to holders of Bonds by send- ing notice to depositories such as Depository Trust Company of New York, New York, Midwest Securities Trust Company of Chicago, Illinois, Pacific Securities Depository Trust Company of San Francisco, California, and Philadelphia Depository Trust Company of Philadelphia, Pennsylvania and to national information services such as Financial Information Inc. ' s Daily Called Bond Service, Interactive Data Corporation' s Bond Service, Kenny Information Service ' s Called Bond Serve, Moody' s Municipal and Government News Reports and Standard and Poor ' s Called Bond Record. In addition, the Paying Agent shall publish notice of redemption one time in The Bond Buyer of New York, New York or if the Paying Agent believes that such publication is impractical or unlikely to reach a substantial number of owners of the Bonds to be redeemed, in some other financial newspaper or journal which regularly carries notices of redemption of other obligations similar to the Bonds, such publication to be made at least 30 days prior to the date fixed for redemption. Notwithstanding the foregoing additional notice provisions, failure to mail or publish such additional notices or any defect therein shall not affect the validity of any redemption proceed- ings as to which notice of such redemption has been properly given to such Bondholder . So long as the Series 1988 Bonds are insured by the Series 1988 Bond Insurance Policy, notice of redemption in connection with an optional redemption of Bonds shall not be given by the City unless on the date of giving of such notice of redemption the City has on deposit with the Paying Agent sufficient moneys to provide for such redemption. - 13 - SECTION 204. EXECUTION OF BONDS. The Bonds shall be exe- cuted in the name of the City by the Mayor, and the seal of the City or a facsimile thereof shall be affixed thereto or imprinted or reproduced thereon and attested by the City Clerk , either manually or with their facsimile signatures. In case any one or more of the officers who shall have signed or sealed any of the Bonds shall cease to be such officer before the Bonds so signed and sealed shall have been actually sold and delivered, such Bonds may nevertheless be sold and delivered as herein provided and may be issued as if the person who signed and sealed such Bonds had not ceased to hold such office. Any Bond may be signed and sealed on behalf of the City by such person as at the actual time of the execution of such Bond shall hold the proper office, although at the date of such Bonds such person may not have held such office or may not have been so authorized. The Bonds of each Series shall bear thereon a certificate of authentication, in the form set forth in Exhibit A hereto, exe- cuted manually by the Registrar . Only such Bonds as shall bear thereon such certificate of authentication shall be entitled to any right or benefit under this Resolution and no Bond shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the Registrar . Such certificate of the Registrar upon any Bond executed on behalf of the City shall be conclusive evidence that the Bond so authenticated has been duly authenticated and delivered under this Resolution and that the Holder thereof is entitled to the benefits of this Resolution. If the Bonds of a Series have been validated, the validation certificate on the back of each of the Bonds of such Series shall be signed with the facsimile signatures of the present or any future Mayor and City Clerk, and the City may adopt and use for that purpose the facsimile signature of any person who shall have been such Mayor and City Clerk at any time on or after the date of the Bonds, notwithstanding that he may have ceased to be such Mayor and City Clerk at the time when said Bonds shall be actual- ly delivered. , SECTION 205. NEGOTIABILITY, REGISTRATION AND CANCELLA- TION. At the option of the registered Holder thereof and upon surrender thereof at the principal corporate trust office of the Registrar with a written instrument of transfer satisfactory to the Registrar duly executed by the registered Holder or his duly authorized attorney and upon payment by such Holder of any charges which the Registrar or the City may make as provided in this Section, the Bonds may be exchanged for Bonds of the same aggregate principal amount of the same Series and maturity of any other authorized denominations . The Registrar shall keep books for the registration of Bonds and for the registration of transfers of Bonds. The Bonds shall be transferable by the Holder thereof in person or by his attor- ney duly authorized in writing only upon the books of the City kept by the Registrar and only upon surrender thereof together with a written instrument of transfer satisfactory to the Regis- trar duly executed by the Holder or his duly authorized attor- ney. Upon the transfer of any such Bond, the City shall cause to be issued in the name of the transferee a new Bond or Bonds . The City, the Paying Agent and the Registrar may deem and treat the person in whose name any Bond shall be registered upon the books kept by the Registrar as the absolute Holder of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of , premium, if any, and interest on such Bond as the same becomes due and for all other purposes . All such payments so made to any - 14 - such Holder or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the City, the Paying Agent nor the Registrar shall be affected by any notice to the contrary. In the event that default shall be made in the payment of the interest on or the principal of any of the Series 1988 Bonds which would require the Series 1988 Bond Insurer to make payments under the Series 1988 Bond Insurance Policy, the Series 1988 Bond Insurer and its agent shall be provided with access to the books kept by the Registrar for the registration of the Series 1988 Bonds. In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised, the City shall execute and the Registrar shall authenticate and deliver Bonds in accordance with the provisions of this Resolution. All Bonds surrendered in any such exchanges or transfers shall forthwith be delivered to the Registrar and cancelled by the Registrar in the manner provided in this Section. There shall be no charge for any such exchange or transfer of Bonds, but the City or the Registrar may require the payment of a sum sufficient to pay any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer . Neither the City nor the Registrar shall be required (a) to transfer or exchange Bonds of any Series for a period of 15 days next preceding any selection of Bonds of such Series to be redeemed or thereafter until after the mailing of any notice of redemption; or (b) to transfer or exchange any Bonds of any Series called for redemption. Except as may otherwise be provided with respect to Put Bonds in the proceedings of the City providing for the issuance thereof, all Bonds paid or redeemed, either at or before maturity shall be delivered to the Paying Agent when such payment or redemption is made, and such Bonds, together with all Bonds pur- chased by the City, shall thereupon be promptly cancelled. Bonds so cancelled may at any time be destroyed by the Paying Agent , who shall execute a certification of destruction in duplicate by the signature of one of its authorized officers describing the Bonds so destroyed, and one executed certificate shall be filed with the City and the other executed certificate shall be retained by the Paying Agent . SECTION 206. BONDS MUTILATED, DESTROYED, STOLEN OR LOST. In case any Bond shall become mutilated, destroyed, stolen or lost, the City may execute and the Registrar shall authenticate and deliver a new Bond of like Series, date, maturity, denomina- tion and interest rate as the Bond so mutilated, destroyed, stolen or lost; provided that, in the case of any mutilated Bond, such mutilated Bond shall first be surrendered to the City and, in the case of any lost, stolen or destroyed Bond, there shall first be furnished to the City and the Registrar evidence of such loss, theft, or destruction satisfactory to the City and the Registrar , together with indemnity satisfactory to them. In the event any such Bond shall be about to mature or have matured or have been called for redemption, instead of issuing a duplicate Bond, the City may direct the Paying Agent to pay the same with- out surrender thereof . The City and Registrar may charge the Holder of such Bonds their reasonable fees and expenses in con- nection with this transaction. Any Bond surrendered for replace- ment shall be cancelled in the same manner as provided in Section 205 hereof . Any such duplicate Bonds issued pursuant to this Section shall constitute additional contractual obligations on the part of the City, whether or not the lost, stolen or destroyed Bonds - 15 - be at any time found by anyone, and such duplicate Bonds shall be entitled to equal and proportionate benefits and rights as to lien on and source and security for payment from the Pledged Funds, with all other Bonds issued hereunder . SECTION 207. PREPARATION OF DEFINITIVE BONDS; TEMPORARY BONDS. Unless otherwise specified by the City in subsequent proceedings, the definitive Bonds of each Series shall be litho- graphed or printed. Until the definitive Bonds are prepared, the Mayor and City Clerk may execute and the Registrar may authenti- cate, in the same manner as is provided in Section 204, and deliver, in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds, one or more printed, lithographed or typewritten temporary fully registered Bonds, substantially of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued, in authorized denominations or any whole multiples thereof, and with such omissions, insertions and variations as may be appro- priate to such temporary Bonds. The City at its own expense shall prepare and execute and, upon the surrender at the corpo- rate trust office of the Registrar of such temporary Bonds for which no payment or only partial payment has been provided, the Registrar shall authenticate and, without charge to the Holder thereof, deliver in exchange therefor , at the principal corporate trust office of the Registrar , definitive Bonds of the same aggregate principal amount, Series and maturity as the temporary Bonds surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and security as definitive Bonds issued pursuant to this Resolution. SECTION 208. FORM OF BONDS. The text of the Bonds shall be of the tenor set forth in Exhibit A to this Resolution, with such omissions, insertions and variations as may be necessary and desirable and authorized or permitted by this Resolution or a Mayor ' s Certificate. [END OF ARTICLE II ] - 16 - ARTICLE III COVENANTS, FUNDS AND APPLICATION THEREOF SECTION 301. BONDS NOT TO BE INDEBTEDNESS OF THE CITY. The Bonds shall not be and shall not constitute an indebtedness of the City, within the meaning of any constitutional, statutory or charter provisions or limitations; but shall be payable solely, as provided in this Resolution, from the Pledged Funds . No holder or holders of any Bonds issued hereunder shall ever have the right to compel the exercise of the ad valorem taxing power of the City, or taxation in any form of any real or personal property therein, or the application of any other funds of the City to pay the Bonds or the interest thereon or the making of any sinking fund or reserve payments provided for herein. SECTION 302. BONDS SECURED BY PLEDGE OF PLEDGED FUNDS. The payment of the principal of, interest and premium, if any, on all of the Bonds issued hereunder and any additional parity Bonds hereafter issued, as provided herein, shall be secured forthwith equally and ratably by a first lien on and pledge of the Pledged Funds. The Resort Tax Revenues in an amount sufficient to pay the principal of and interest on the Bonds herein authorized and to make the payments into the Sinking Fund (hereinafter created and established) and all other payments provided for in this Resolution, as well as moneys held in the funds and accounts created under this resolution (other than the Rebate Fund) , are hereby irrevocably pledged to the payment of the principal of and interest on the Bonds authorized herein, and other payments pro- vided for herein, as the same become due and payable. The Bonds and the obligation evidenced thereby shall not constitute a lien upon any property of or in the City, but shall constitute a lien only on the Pledged Funds all in the manner provided in this Resolution. SECTION 303. APPLICATION OF BOND PROCEEDS. (a) All moneys received by the City from the sale of the Series 1988 Bonds issued pursuant to this Resolution, unless otherwise provided in a Mayor ' s Certificate shall be simulta- neously disbursed as follows : ( 1) Proceeds derived from the sale of the Series 1988 Bonds equal to the accrued interest on the Series 1988 Bonds shall be deposited in the Interest Account , herein- after created and established, and used for the purpose of paying interest on the Series 1988 Bonds as the same becomes due and payable . ( 2 ) Proceeds derived from the sale of the Series 1988 Bonds shall be deposited in a Cost of Issuance Fund which is hereby created and established and used for the purpose of paying such costs of issuance of the Series 1988 Bonds as the City shall determine are appropriate. ( 3 ) The balance of the proceeds derived from the sale of the Series 1988 Bonds shall be deposited in an irre- vocable escrow fund established pursuant to the Escrow Deposit Agreement and shall be applied in the manner therein set forth. Moneys equal to the Maximum Annual Debt Service of the Series 1988 Bonds shall be deposited by the City to the Debt Service Reserve Account from moneys held in the Reserve Fund under the 1969 Resolution. Any moneys in such Reserve Fund in excess of the amounts required herein shall be applied in the manner stated in a Mayor ' s Certificate. - 17 - (b) All moneys received by the City from the sale of any Series of Bonds, other than the Series 1988 Bonds, authorized and issued pursuant to this Resolution, unless otherwise provided by subsequent proceedings of the City authorizing such Series of Bonds, shall be simultaneously disbursed as follows: ( 1) The accrued interest, if any, derived from the sale of Bonds shall be deposited in the Interest Account , hereinafter created and established, and used for the pur- pose of paying interest on the Bonds as the same becomes due and payable. ( 2) From the proceeds of the sale of such Bonds there may be deposited, together with other moneys lawfully available therefor , if any, in the Debt Service Reserve Account, hereinafter created and established, an amount sufficient to make the amount in the Debt Service Reserve Account equal to the Maximum Annual Debt Service payable on the Bonds Outstanding under the Resolution. ( 3) The balance of the proceeds derived from the sale of such Bonds, other than Bonds issued to refund Out- standing Bonds, together with other moneys lawfully avail- able therefor, if any, shall be deposited in a fund in a bank or trust company which is eligible under State laws to receive deposits of municipal funds, which fund is hereby created, established and designated as the "Construction Fund" . Withdrawals may be made from the Construction Fund upon receipt of a written requisition executed by the duly authorized official of the City, specifying the purpose for which such withdrawal is to be made and certifying that such purpose is included within the scope of the project for which such Series of Bonds was issued and related pur- poses. Such purposes may include the payment of capitalized interest on such Bonds in such amounts as the City shall determine to be appropriate . If for any reason the moneys in the Construction Fund, or any part thereof including any investment earnings on deposit therein, are not necessary for, or are not applied to the purposes provided in this Resolution for the Construction Fund, then such unapplied proceeds, upon certification of a duly authorized officer of the City that such surplus proceeds are not needed for the purposes of the Construction Fund, shall be disbursed in the following order : First , to the Debt Service Reserve Account , hereinafter created and established, to the full extent necessary to make the amount then on deposit therein equal to the Maximum Annual Debt Service pay- able on the Bonds then Outstanding. Second, the balance, if any, to the redemption or purchase or payment of principal of Outstanding Bonds or for any other lawful purpose. Moneys on deposit in the Construction Fund may be invested and reinvested to the fullest extent practicable in Permitted Investments maturing not later than such date or dates on which such moneys will be needed for the purposes of the Construction Fund. The earnings and investment income derived from the moneys and investments on deposit in the Construction Fund shall be deposited and maintained in the Construction Fund and used for the purposes thereof . The proceeds of the sale of the Bonds shall be and constitute trust funds for the purposes hereinabove provided and there is hereby created a lien upon such moneys , until so applied, in favor of the holders of said Bonds . - 18 - ( 4) The balance of the proceeds derived from the sale of such Bonds issued to refund Outstanding Bonds shall be applied to provide for the refunding of such Outstanding Bonds to be refunded in accordance with a resolution adopted by the Commission prior to the issuance of such Bonds . SECTION 304. COVENANTS OF THE CITY. The City hereby cove- nants and agrees with the holders of any and all of the Bonds issued pursuant to this Resolution as follows: A. TAX COVENANTS. (1) The City will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of initial issuance and delivery of the Bonds, would result in inclusion in gross income for Federal income tax pur- poses under Section 103(a) of the Code, of interest on the Bonds. Particularly, the City will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of the initial issuance and delivery of the Bonds, would have caused any of the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code. ( 2 ) The City shall comply with the arbitrage rebate covenants as provided in Section 304(E) hereof. B. LEVY AND COLLECTION OF RESORT TAX. The City does further hereby covenant and agree that as long as any of the principal of or interest on any Series of Bonds issued pursuant to this Resolution is unpaid, or payment thereof not duly pro- vided for , it will not repeal Ordinance 1727 , as amended, codi- fied as Chapter 41, Article V of the City Code pursuant to which the Resort Tax is levied, and will not reduce the rate of the Resort Tax, or amend or modify said City Code provisions, in any manner so as to impair or adversely affect the power and obliga- tion of the City to levy and collect the Resort Tax, or impair or adversely affect in any manner the pledge of the Pledged Funds made herein, or the rights of holders of Bonds issued pursuant to this Resolution, and the City shall be unconditionally and irre- vocably obligated, as long as any of the Bonds, or interest thereon, are outstanding and unpaid, to levy and collect the Resort Tax at not less than the rate now being levied by the City, to the full extent necessary to pay the principal of and interest on the Bonds and any reserves therefor . C. RESORT TAX FUND. As soon as the same are received by the City, all of the Resort Tax Revenues shall be forthwith deposited in a special fund designated as the "Resort Tax Fund" which fund shall be deemed a continuation of the Resort Tax Fund established pursuant to the 1969 Resolution. The Resort Tax Fund shall constitute a trust fund for the purposes provided in this Resolution and shall be maintained separate and distinct from all other funds of the City and used only for the purposes and in the manner provided in this Resolution. D. DISPOSITION OF RESORT TAX REVENUES. There is hereby created and established the "Resort Tax Sinking Fund" (herein- after referred to as the "Sinking Fund" ) . There are also hereby created four ( 4) separate accounts in the Sinking Fund to be known as the "Interest Account , " the "Principal Account , " the "Bond Redemption Account" and the "Debt Service Reserve Account . " The Resort Tax Fund and the Sinking Fund shall be deposited in a bank or trust company in the State which is eligi- ble under State laws to receive deposits of municipal funds . - 19 - All Resort Tax Revenues at any time on deposit in the Resort Tax Fund shall be disposed of only in the following manner : (1) Resort Tax Revenues shall first be used, to the full extent necessary, for deposit into the Interest Account in the Sinking Fund, on the fifteenth ( 15th) day of each month, beginning with the fifteenth ( 15th) day of the first full calendar month following the date on which any or all of the Bonds are delivered to the purchaser thereof, of such sums as shall be sufficient to pay one-sixth ( 1/6th) of the interest becoming due on the Bonds on the next semi-annual Interest Payment Date; provided, however, that such monthly deposits for interest shall not be required to be made into the Interest Account to the extent that money on deposit therein is sufficient for such purpose and, provided fur- ther, that in the event the City has issued additional parity Variable Rate Bonds pursuant to the provisions of this Resolution, Resort Tax Revenues shall be deposited at such other or additional times and amounts as necessary to pay the interest becoming due on the Variable Rate Bonds on the next Interest Payment Date, all in the manner provided in the supplemental resolution authorizing such additional parity Variable Rate Bonds or in a resolution determining the details of Variable Rate Bonds that have been authorized but unissued. In the event the City shall hereafter issue Variable Rate Bonds, the amount required to be deposited in the Interest Account for the payment of interest on such Vari- able Rate Bonds shall be calculated as of the first day of each Fiscal Year and shall be based upon one hundred ten per centum ( 110% ) of the greater of ( i ) the average daily inter- est rate on such Variable Rate Bonds during the preceding Fiscal Year , or ( ii ) the actual rate of interest applicable to such Variable Rate Bonds on the date of calculation. The City shall, on each Interest Payment Date, trans- fer to the Paying Agent moneys in an amount equal to the interest due on such Interest Payment Date or shall advise the Paying Agent of the amount of any deficiency in the amount so transferred so that the Paying Agent may give appropriate notice required to provide for the payment of such deficiency from any Reserve Account Insurance Policy or Reserve Account Letter of Credit on deposit in the Debt Service Reserve Account . In the event that the period to elapse between the date of the delivery of the Bonds and the next semi-annual interest payment date will be other than six ( 6) months, then such monthly payments shall be adjusted to provide the required interest amount becoming due and payable on the next interest payment date. ( 2 ) (a) Resort Tax Revenues shall next be used, to the full extent necessary for deposit in the Principal Account in the Sinking Fund, on the fifteenth ( 15th) day of each month in each year , of one-sixth ( 1/6th) of the princi- pal amount of Serial Bonds which will mature and become due on such semi-annual maturity dates and one-twelfth ( 1/12th) of the principal amount of Serial Bonds which will mature and become due on such annual maturity dates , beginning on such dates , as shall hereafter be determined by subsequent proceedings of the City; provided, however , that such month- ly deposits for principal shall not be required to be made into the Principal Account to the extent that money on deposit therein is sufficient for such purpose. - 20 - The City shall, on the business day prior to each principal payment date, transfer to the Paying Agent moneys in an amount equal to the principal due on such principal payment date or shall advise the Paying Agent of the amount of any deficiency in the amount so transferred so that the Paying Agent may give appropriate notice required to provide for the payment of such deficiency from any Reserve Account Insurance Policy or Reserve Account Letter of Credit on deposit in the Debt Service Reserve Account. In the event the period to elapse between the date of delivery of the Bonds and the next principal payment date will be other than six ( 6) months, in the case of Serial Bonds which mature semi-annually, or twelve (12) months, in the case of Serial Bonds which mature annually, then such monthly payments shall be increased or decreased, as appro- priate, in sufficient amounts to provide the required prin- cipal amount maturing on the next principal payment date. Any monthly payment of Resort Tax Revenues to be deposited as set forth above for the purpose of meeting payments of principal of the Bonds , shall be adjusted, as appropriate, to reflect the frequency of principal payments applicable to such Series . (b) Resort Tax Revenues shall next be used, to the full extent necessary, for deposit into the Bond Redemp- tion Account in the Sinking Fund on the fifteenth ( 15th) day of each month in each year , beginning on such date, of such Amortization Requirements as may be required for the payment of the Term Bonds payable from the Bond Redemption Account, as shall hereafter be determined by subsequent proceedings of the City. The moneys in the Bond Redemption Account shall be used solely for the purchase or redemption of the Term Bonds payable therefrom. The City may at any time purchase any of said Term Bonds at prices not greater than the then redemption price of said Term Bonds . If the Term Bonds are not then redeemable, the City may purchase said Term Bonds at prices not greater than the redemption price of such Term Bonds on the next ensuing redemption date. The City shall be mandatorily obligated to use any moneys in the Bond Redemption Account for the redemption prior to maturity of such Term Bonds in such manner and at such times as shall be determined by subsequent proceedings of the City; provided, that the City shall not be obligated to redeem such Term Bonds prior to maturity unless and until there are suffi- cient moneys on deposit in the Bond Redemption Account to provide for the redemption of at least Twenty-Five Thousand Dollars ($25, 000) principal amount of Term Bonds at any one time. I f , by the application of moneys in the Bond Redemp- tion Account , the City shall purchase or call for redemption in any year Term Bonds in excess of the Amortization Requirements for such year , such excess of Term Bonds so purchased or redeemed shall be credited in such manner and at such times as the Finance Director shall determine over the remaining payment dates . No distinction or preference shall exist in the use of the moneys on deposit in the Resort Tax Fund for payment into the Interest Account , the Principal Account and the Bond Redemption Account, such accounts being on a parity with each other as to payment from the Resort Tax Fund. ( 3) Resort Tax Revenues shall next be used, to the full extent necessary, for deposit into the Debt Service - 21 - Reserve Account on the fifteenth ( 15th) day of each month in each year, beginning with the fifteenth ( 15th) day of the first full calendar month following the date on which any or all of the Bonds issued hereunder are delivered to the pur- chaser thereof, such sums as shall be at least sufficient to pay an amount equal to one-sixtieth ( 1/60) of the difference between the amount on deposit in the Debt Service Reserve Account ( including any Reserve Account Insurance Policy or Reserve Account Letter of Credit ) and the Maximum Annual Debt Service for the Bonds Outstanding, and, provided, further, that no payments shall be required to be made into the Debt Service Reserve Account whenever and as long as the amount deposited therein ( including any Reserve Account Insurance Policy or Reserve Account Letter of Credit) shall be equal to the Maximum Annual Debt Service for the Bonds Outstanding. Notwithstanding the foregoing provisions, in lieu of or in substitute for the required deposits of Resort Tax Revenues ( including existing deposits of Resort Tax Revenues) into the Debt Service Reserve Account, and so long as the Series 1988 Bonds are insured by the Series 1988 Bond Insurance Policy with the prior consent of the Series 1988 Bond Insurer , the City may cause to be deposited into the Debt Service Reserve Account a Reserve Account Insurance Policy or a Reserve Account Letter of Credit for the benefit of the holders of the Bonds Outstanding in an amount equal to the difference between the Maximum Annual Debt Service for the Bonds Outstanding and the sums then on deposit in the Debt Service Reserve Account, if any, which Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be payable or available to be drawn upon, as the case may be, (upon the giving of notice as required thereunder ) on any Interest Payment Date on which a deficiency exists which cannot be cured by moneys in any other fund or account held pursuant to this Resolution and available for such purpose. If a disbursement is made under the Reserve Account Insurance Policy or the Reserve Account Letter, of Credit, the City shall be obligated to either reinstate the maximum limits of such Reserve Account Insurance Policy or Reserve Account Letter of Credit immediately following such disbursement equal to the Maximum Annual Debt Service for the Bonds Outstanding or to deposit into the Debt Service Reserve Account from the Resort Tax Revenues , as herein provided, funds in the amount of the disbursements made under such Reserve Account Insurance Policy or Reserve Account Letter of Credit, or a combination of such alterna- tives as shall equal the Maximum Annual Debt Service for the Bonds Outstanding. In the event that any moneys shall be withdrawn from the Debt Service Reserve Account for payments into the Interest Account , Principal Account and Bond Redemption Account, such withdrawals shall be subsequently restored in the manner described in the first paragraph of this clause ( 3) from the first Resort Tax Revenues or funds available after all required payments have been made into the Interest Account, Principal Account and Bond Redemption Account, including any deficiencies for prior payments unless restored by the reinstatement of the maximum limits of a Reserve Account Insurance Policy or Reserve Account Letter of Credit . Moneys in Debt Service Reserve Account shall be used only for the purpose of making payments of principal of and interest on the Bonds when the moneys in the Resort Tax Fund or any other fund or account held pursuant to this Resolu- - 22 - tion and available for such purpose are insufficient there- for . Any moneys in the Debt Service Reserve Account in excess of the Maximum Annual Debt Service for the Bonds Outstanding may, in the discretion of the City, be trans- ferred to and deposited in the Interest Account , the Prin- cipal Account or the Bond Redemption Account as the City at its option may determine. The Debt Service Reserve Account shall be valued at least once in each Fiscal Year and the value of securities on deposit therein shall be the lower of par , or if pur- chased at other than par , amortized value. Amortized value, when used with respect to securities purchased at a premium above or a discount below par , shall mean the value at any given date obtained by dividing the total premium or dis- count at which such securities were purchased by the number of interest payment dates remaining to maturity on such securities after such purchase and by multiplying the amount so calculated by the number of interest payment dates having passed since the date of purchase; and ( i ) in the case of securities purchased at a premium, by deducting the product thus obtained from the purchase price, and ( ii ) in the case of securities purchased at a discount, by adding the product thus obtained to the purchase price. ( 4) Resort Tax Revenues shall next be used for the payment of any subordinated obligations hereafter issued by the City in accordance with Section 304(G) of this Resolu- tion, which subordinate obligations shall have such lien on the Resort Tax Revenues as the City shall determine in the proceedings authorizing the issuance of such subordinated obligations. ( 5) Thereafter , the balance of any Resort Tax Revenues remaining in said Resort Tax Fund shall, subject to Section 304 (A) , be used by the City for any lawful purposes; provided, however , that none of such Resort Tax Revenues shall ever be used for the purposes provided in this para- graph ( 5) unless all payments required in paragraphs ( 1 ) through ( 4) above, including any deficiencies for prior pay- ments and any amounts due to the issuer of any Reserve Account Insurance Policy or Reserve Account Letter of Credit, have been made in full to the date of such use. Notwithstanding anything in Section 304 (D) ( l) & ( 2 ) to the contrary failure to make the scheduled payments specified therein shall not constitute a breach of the City' s obligations under this Resolution so long as , on the date that any interest or principal payment is due on the Bonds, monies sufficient to make such payment are on deposit in the Interest Account or Principal Account , as the case may be. If the amounts deposited in any month pursuant to such sections shall be less than the amounts required, the requirement shall be cumulative and the amount of the deficiency in any month shall be added to the amount other- wise required to be deposited in each month thereafter until such time as all such deficiencies have been made up. Notwithstanding the foregoing or any other provision herein to the contrary, if any amount applied to the payment of princi- pal of and premium, if any, and interest on the Bonds that would have been paid from an account in the Sinking Fund, is paid instead under a Credit Facility or a Liquidity Facility, amounts deposited in such relevant account may be paid, to the extent required, to the issuer of the Credit Facility or Liquidity Facility having therefore made said corresponding payment . - 23 - E. REBATE FUND. There is hereby created and established the "Rebate Fund" which fund shall be maintained separate and apart from all other funds and accounts held by the City. Not- withstanding anything in this Resolution to the contrary, the City shall transfer or cause to be transferred the amounts required to be transferred in order to comply with the arbitrage rebate covenants contained in a certificate to be executed and delivered by the City in connection with the issuance of each Series of Bonds . The City shall make or cause to be made pay- ments from the Rebate Fund of amounts required to be deposited therein to the United States of America in the amounts and at the times required by such arbitrage rebate covenants . The City covenants for the benefit of the Bondholders that it will comply with the requirements of the arbitrage rebate covenants . There shall be excluded from the pledge and lien of this Resolution the Rebate Fund, together with all moneys and securities from time to time held therein and all investment earnings derived therefrom. The City shall not be required to comply with the requirements of this Section 304 (E) in the event that the City obtains an opinion of nationally recognized bond counsel that ( i ) such compliance is not required in order to maintain the exclusion from gross income for Federal income tax purposes of interest on the Bonds and/or ( ii ) compliance with some other requirement is necessary to maintain the exclusion from gross income for Federal income tax purposes of interest on the Bonds . F. INVESTMENT OF FUNDS. The Resort Tax Fund, the Sinking Fund, including the Interest Account , Principal Account, Bond Redemption Account and Debt Service Reserve Account and the Cost of Issuance Fund and all other special funds (other than the Rebate Fund) created and established by this Resolution shall constitute trust funds in favor of the Bondholders and shall be invested at the direction of the City as provided in this Section 304(F) . Moneys on deposit in the Resort Tax Fund, Interest Account, Principal Account , Bond Redemption Account and Cost of Issuance Fund may be invested in Permitted Investments maturing not later than the dates on which such moneys will be needed for the pur- poses of such fund or account . Moneys on deposit in the Debt Service Reserve Account may be invested in Permitted Investments maturing not later than the final maturity of any of the Bonds. All income and earnings received from the investment and reinvestment of moneys in the Interest Account, the Principal Account and the Redemption Account in the Sinking Fund shall be retained in the respective accounts and applied as a credit against the obligation of the City to transfer moneys from the Resort Tax Fund to such accounts pursuant to Section 304 (D) ( l) and Section 304 (D) ( 2 ) (a) and Section 304 (D) ( 2) (b) of this Resolu- tion, respectively. All income and earnings received from the investment and reinvestment of moneys in the Debt Service Reserve Account in the Sinking Fund shall be retained in the Debt Service Reserve Account and applied as a credit against the obligation of the City to transfer moneys from the Resort Tax Fund to such account, unless the amount in such account shall exceed the Maximum Annual Debt Service, in which event such excess may be applied in the manner set forth for excess amounts in the Debt Service Reserve Account, as described in Section 304 (D) ( 3 ) . All income and earnings received from the investment and reinvestment of moneys in the Cost of Issuance Fund shall be transferred to the Resort Tax Fund. - 24 - For the purpose of investing or reinvesting, the City may commingle moneys in the funds and accounts created and estab- lished hereunder (other than the Rebate Fund) in order to achieve greater investment income; provided that the City shall separate- ly account for the amounts so commingled. The amounts required to be accounted for in each of the funds and accounts designated herein (other than the Rebate Fund) may be deposited in a single bank account provided that adequate accounting procedures are maintained to reflect and control the restricted allocations of the amounts on deposit therein for the various purposes of such funds and accounts as herein provided. The designation and establishment of funds and accounts in and by this Resolution (other than the Rebate Fund) shall not be construed to require the establishment of any completely independent funds and accounts but rather is intended solely to constitute an alloca- tion of certain revenues and assets for certain purposes and to establish such certain priorities for application of certain revenues and assets as herein provided. G. ISSUANCE OF OTHER OBLIGATIONS PAYABLE OUT OF RESORT TAX REVENUES. Except upon the conditions and in the manner pro- vided herein, the City will not issue any other obligations pay- able from the Pledged Funds, nor voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or any other charge having priority to or being on a parity with the lien of the Bonds issued pursuant to this Resolution and the interest thereon, upon any of the Pledged Funds; provided that the City may enter into agreements with issuers of Credit Facilities and Liquidity Facilities which involve liens on Resort Tax Revenues on a parity with that of the Series of Bonds or portion thereof which is supported by such Credit Facilities or Liquidity Facilities . Any other obligations, including any renewal or extension of the Interlocal Agreement and Contract among the City, the Greater Miami Convention and Visitors Bureau and the other governmental entities recited therein, or any simi- lar agreement issued or entered into by the City, in addition to the Bonds authorized by this Resolution or additional parity Bonds issued under the terms, restrictions, and conditions con- tained in this Resolution, shall provide that such obligations are junior , inferior and subordinate in all respects to the Bonds issued pursuant to this Resolution as to lien on and source and security for payment from the Resort Tax Revenues and in all other respects . Nothing in this Resolution shall be deemed to prohibit the City from entering into currency swaps or other arrangements for pledging interest rates on any indebtedness . H. ISSUANCE OF ADDITIONAL PARITY BONDS. No additional parity Bonds, as in this subsection defined, payable on a parity with Bonds issued pursuant to this Resolution out of Pledged Funds shall be issued after the issuance of any Bonds pursuant to this Resolution unless the following, among other conditions, are complied with: ( 1) The City must be current in all deposits into the various funds and accounts and all payments theretofore required to have been deposited or made by it under the provisions of this Resolution and the City must be currently in compliance with the covenants and provisions of this Resolution and any supplemental resolution hereafter adopted for the issuance of additional parity Bonds; unless upon the issuance of such additional parity Bonds the City will be in compliance with all such covenants and provisions . ( 2 ) The amount of the Resort Tax Revenues during the immediate preceding Fiscal Year or any twelve ( 12 ) consecu- tive months selected by the City of the eighteen ( 18) months immediately preceding the issuance of said additional parity - 25 - Bonds, as certified by an independent certified public accountant, were at least equal to one hundred fifty percent ( 150%) of the Maximum Annual Debt Service on ( 1) the Bonds originally issued pursuant to this Resolution and then Out- standing, ( 2 ) any additional parity Bonds theretofore issued and then Outstanding, and ( 3) the additional parity Bonds then proposed to be issued. ( 3) The City need not comply with subparagraph ( 2 ) of this paragraph in the issuance of additional parity Bonds if and to the extent the Bonds to be issued are refunding Bonds, that is, delivered in lieu of or in substitution for Bonds originally issued under this Resolution or previously issued additional parity Bonds, if the City shall cause to be delivered a certificate of the Finance Director of the City setting forth ( i ) the Maximum Annual Debt Service (A) with respect to the Bonds of all Series Outstanding immedi- ately prior to the date of authentication and delivery of such refunding Bonds, and (B) with respect to the Bonds of all Series to be Outstanding immediately thereafter , and ( ii ) that the Maximum Annual Debt Service set forth pursuant to (B) above is no greater than that set forth pursuant to (A) above. Simultaneously with the delivery of any Bonds issued pursuant to Sections ( 2) and ( 3) above for the purpose of refunding any Bonds issued under this Resolution, the City may withdraw from the Sinking Fund amounts theretofore deposited which are allocable to the Bonds being refunded and shall transfer said amounts in accordance with the reso- lution providing for the issuance of the refunding Bonds, provided that after such withdrawal the City shall be in compliance with the provisions of this Resolution. The term "additional parity Bonds" as used in this Resolution shall be deemed to mean additional obligations evidenced by Bonds issued upon the provisions and within the limitations of this subsection payable from the Pledged Funds on a parity with Bonds originally authorized and issued pursuant to this Resolution. Such Bonds shall be deemed to have been issued pursuant to this Resolution the same as the Bonds originally authorized and issued pursuant to this Resolution and all of the covenants and other pro- visions of this Resolution (except as to details of such Bonds evidencing such additional parity obligations incon- sistent therewith) , shall be for the equal benefit, protec- tion and security of the holders of any Bonds originally authorized and issued pursuant to this Resolution and the holders of any Bonds evidencing additional obligations sub- sequently issued within the limitations of and in compliance with this subsection. All of such Bonds, regardless of the time or times of their issuance shall rank equally with respect to their lien on the Pledged Funds and their sources and security for payment therefrom without preference of any Bonds over any other . The term "additional parity Bonds" as used in this Resolution shall not be deemed to include bonds, notes, certificates or other obligations subsequently issued in accordance with this Resolution, the lien of which on the Pledged Funds is subject to the prior and superior lien on the Pledged Funds of Bonds and the City shall not issue any obligations whatsoever payable from the Pledged Funds , which rank equally as to lien and source and security for their payment from such Pledged Funds, with Bonds except in the manner and under the conditions provided in subsection (G) above and this subsection. - 26 - I. BOOKS AND RECORDS. The City will keep separately identifiable accounting records for the receipt of the Pledged Funds by the use of a fund established in accordance with gener- ally accepted accounting principles, and any holder of a Bond or Bonds issued pursuant to this Resolution, shall have the right at all reasonable times to inspect all records, accounts and data of the City relating thereto. The City shall promptly after the close of each Fiscal Year cause the books , records and accounts relating to the Pledged Funds for such Fiscal Year to be properly audited by a qualified, recognized and nationally known independent firm of certified public accountants and shall file the report of such certified public accountants in the office of the Finance Director of the City, and shall mail upon request, and make available generally, said report , or a reasonable summary thereof, to any holder or holders of Bonds issued pursuant to this Resolution. Such audited books, records and accounts shall contain the statements required by generally accepted accounting principles applicable to governmental entities, and a certificate of such certified public accountants disclosing any breach on the part of the City of any covenant herein. J. NO IMPAIRMENT OF CONTRACT. The City has full power and authority to irrevocably pledge the Pledged Funds to the payment of the principal of and interest on the Bonds. The pledge of such Pledged Funds , in the manner provided herein, shall not be subject to repeal , modification or impairment by any subsequent resolution, ordinance or other proceedings of the City so long as any Bonds are Outstanding hereunder . The City shall take all actions necessary and pursue such legal remedies which may be available to it either in law or in equity to prevent or cure any impairment by any entity other than the City within the meaning of this subsection. K. REMEDIES. Any holder of Bonds issued under the provi- sions of this Resolution or any trustee acting for such Bond- holders in the manner hereinafter provided, may either at law or in equity, by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect and enforce any and all rights under the laws of the State, or granted and contained in this Resolution, and may enforce and compel the performance of all duties required by this Resolution or by any applicable stat- utes to be performed by the City or by any officer thereof . Nothing herein, however , shall be construed to grant any Holder of such Bonds any lien on any property of or within the corporate boundaries of the City, except as provided herein. No Holder of Bonds, however , shall have any right in any manner whatever to affect adversely, or prejudice the security of this Resolution or to express any right hereunder except in the manner herein pro- vided, and all proceedings at law or in equity shall be insti- tuted and maintained for the benefit of all Holders of Bonds . The Holder or Holders of Bonds in an aggregate principal amount of more than twenty per centum ( 20% ) of Bonds issued under this Resolution then Outstanding may by a duly executed certi- ficate in writing appoint a trustee for Holders of Bonds issued pursuant to this Resolution with authority to represent such Bondholders in any legal proceedings for the enforcement and protection of the rights of such Bondholders . Such certificate shall be executed by such Bondholders or their duly authorized attorneys or representatives , and shall be filed in the office of the Finance Director of the City. - 27 - Notwithstanding anything in this Resolution to the contrary, so long as the issuer of a Credit Facility or a Liquidity Facility shall not be in default in its payment obligations under such Credit Facility or a Liquidity Facility, said issuer shall be deemed to be the holder of all Bonds so secured for all pur- poses of this Section 304 (K) . L. ENFORCEMENT OF COLLECTIONS. The City will diligently enforce and collect the Resort Tax Revenues and will take all steps, actions and proceedings for the enforcement and collection of such Resort Tax Revenues which shall become delinquent to the full extent permitted or authorized by applicable laws and regulations . All such Resort Tax Revenues shall, as collected, be held in trust to be applied as herein provided and not other- wise. M. DISCHARGE AND SATISFACTION OF BONDS. The covenants, liens and pledges entered into, created or imposed pursuant to this Resolution may be fully discharged and satisfied with respect to all or a portion of the Bonds in any one or more of the following ways : ( 1 ) by paying the principal of and interest on such Bonds when the same shall become due and payable; or ( 2 ) by depositing in the Interest Account, the Prin- cipal Account and the Bond Redemption Account and/or in such other accounts which are irrevocably pledged to the payment of Bonds as the City may hereafter create and establish by resolution, certain moneys which together with other moneys lawfully available therefor , if any, shall be sufficient at the time of such deposit to pay when due the principal, redemption premium, if any, and interest due and to become due on said Bonds on or prior to the redemption date or maturity date thereof ; or ( 3 ) by (a) depositing in the Interest Account, the Principal Account and the Bond Redemption Account and/or such other accounts which are irrevocably pledged to the payment of Bonds as the City may hereafter create and estab- lish by resolution, moneys which together with other moneys lawfully available therefor when invested in such Defeasance Obligations which shall not be subject to redemption prior to their maturity other than at the option of the holder thereof, will provide moneys which shall be sufficient to pay when due the principal, redemption premium, if any, and interest due and to become due on said Bonds on or prior to the redemption date or maturity date thereof and (b) in the case of the discharge of the Series 1988 Bonds and so long as the Series 1988 Bonds are insured by the Series 1988 Bond Insurance Policy, delivering to the Paying Agent a verifica- tion report of a nationally recognized certified public accountant as to the adequacy of such deposit, together with investment earnings thereon, to pay when due the principal , redemption premium, if any, and interest due or to become due on or prior to the redemption date or maturity date of the Series 1988 Bonds . Upon such payment or deposit in the amount and manner provided in this Section 304 (M) , Bonds shall be deemed to be paid and shall no longer be deemed to be Outstanding for the purposes of this Resolution and all liability of the City with respect to said Bonds shall cease , terminate and be completely discharged and extinguished, and the Holders thereof shall be entitled for payment solely out of the moneys or securities so deposited; provided that in the event said Bonds do not mature and are not to be redeemed - 28 - within the next succeeding sixty ( 60) days, the City shall have given the Registrar and Paying Agent irrevocable instructions to give, as soon as practicable, a notice to the Holders of said Bonds by first-class mail, postage pre- paid, stating that the deposit of said moneys or Defeasance Obligations has been made with an appropriate fiduciary institution acting as escrow agent solely for the Holders of said Bond and other Bonds being defeased, and that said Bonds are deemed to have been paid in accordance with this Section and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal of and premium, if any, and interest on said Bonds. ( 4) As to Variable Rate Bonds, whether discharged and satisfied under the provisions of subsection ( 1) , ( 2) or ( 3) above, the amount required for the interest thereon shall be calculated at the maximum rate permitted by the terms of the provisions which authorized the issuance of such Variable Rate Bonds; provided however , that if on any date, as a result of such Variable Rate Bonds having borne interest at less than such maximum rate for any period, the total amount of moneys and Defeasance Obligations on deposit for the payment of interest on such Variable Rate Bonds is in excess of the total amount which would have been required to be deposited on such date in respect of such Variable Rate Bonds in order to fully discharge and satisfy such Bonds pursuant to the provisions of this Section, the City may use the amount of such excess free and clear of any trust , lien, security interest, pledge or assignment secur- ing said Variable Rate Bonds or otherwise existing under this Resolution. ( 5) Notwithstanding any of the provisions of this Resolution to the contrary, Put Bonds and Extendible Maturity Bonds may only be fully discharged and satisfied either pursuant to subsection ( 1) above or by depositing in the Interest Account, the Principal Account and the Bond Redemption Account, or in such other accounts which are irrevocably pledged to the payment of the Put Bonds as the City may hereafter create and establish by resolution, moneys which together with moneys lawfully available there- for , if any, shall be sufficient at the time of such deposit to pay when due the maximum amount of principal of and redemption premium, if any, and interest on such Put Bonds and Extendible Maturity Bonds which could become payable to the Holders of such Bonds upon the exercise of any options provided to the Holders of such Bonds; provided however , that if, at the time a deposit is made pursuant to this subsection ( 5) , the options originally exercisable by the Holder of a Put Bond are no longer exercisable, such Bond shall not be considered a Put Bond and Extendible Maturity Bond for purposes of this subsection ( 5) . ( 6) Notwithstanding the foregoing, all references to the discharge and satisfaction of Bonds shall include the discharge and satisfaction of any issue of Bonds, any por- tion of an issue of Bonds , any maturity or maturities of an issue of Bonds , any portion of a maturity of an issue of Bonds or any combination thereof , provided that the provi- sions of this subsection ( 6) shall not affect the require- ments regarding Put Bonds and Extendible Maturity Bonds set forth in subsection ( 5 ) . In the event that the principal and redemption price, if applicable, and interest due on the Bonds shall be paid by the issuer of a Credit Facility or Liquidity - 29 - Facility pursuant to the terms thereof , the assignment and pledge created hereunder and all covenants, agreements and other obligations of the City to the Bondholders shall con- tinue to exist and the issuer of such Credit Facility or Liquidity Facility shall be subrogated to the rights of such Bondholders . (7) If any portion of the moneys deposited for the payment of the principal of and redemption premium, if any, and interest on any portion of Bonds is not required for such purpose, the City may use the amount of such excess free and clear of any trust, lien, security interest, pledge or assignment securing said Bonds or otherwise existing under this Resolution. N. CONCERNING THE RESERVE ACCOUNT INSURANCE POLICY, THE RESERVE ACCOUNT LETTER OF CREDIT, CREDIT FACILITY AND/OR LIQUID- ITY FACILITY. As long as the City shall have a Reserve Account Insurance Policy and/or a Reserve Account Letter of Credit on deposit in the Debt Service Reserve Account, the City covenants that it will comply with the provisions of the Reserve Account Insurance Policy and/or the reimbursement or similar agreement with respect to the Reserve Account Letter of Credit. As long as any Series of Bonds of the City are secured by a Credit Facility or Liquidity Facility, the City covenants to comply with the requirements and conditions imposed on the City by the issuer of the Credit Facility or Liquidity Facility. Notwithstanding anything in this Resolution to the contrary, the right of any issuer of a Credit Facility or Liquidity Facility, including the Series 1988 Bond Insurer , created under this Resolution shall remain in full force and effect only so long as the applicable Credit Facility or Liquidity Facility, including the Series 1988 Bond Insurance Policy, shall remain in effect and the issuer of such Credit Facility o Liquidity Facility, including the Series 1988 Bond Insurer , shall not be in default in its payment obligations to the holders of Bonds secured by such facility. [END OF ARTICLE III ] - 30 - ARTICLE IV CONCERNING THE FIDUCIARIES SECTION 401. PAYING AGENTS; APPOINTMENT AND ACCEPTANCE OF DUTIES. The City may at any time or from time to time appoint one or more other Paying Agents having the qualifications set forth in Section 408 of this Resolution for a successor Paying Agent; provided that nothing herein shall prevent the City from appointing itself as the Paying Agent hereunder . Each Paying Agent shall signify its acceptance of the duties and obligations imposed upon it by this Resolution by executing and delivering to the City a written acceptance thereof . Unless otherwise pro- vided, the principal corporate trust offices of the Paying Agents are designated as the respective offices or agencies of the City for the payment of the interest on and principal or redemption price of the Bonds . SECTION 402. RESPONSIBILITIES OF FIDUCIARIES. The recitals of facts herein and in the Bonds contained shall be taken as the statements of the City and no Fiduciary assumes any responsibil- ity for the correctness of the same. No Fiduciary makes any representation as to the validity or sufficiency of this Resolu- tion or of any Bonds issued thereunder or as to the security afforded by this Resolution, and no Fiduciary shall incur any liability in respect thereof . The Registrar shall, however , be responsible for its representation contained in its certificate of authentication of the Bonds. No Fiduciary shall be under any responsibility or duty with respect to the application of any moneys paid by such Fiduciary in accordance with the provisions of this Resolution to or upon the order of the City or any other Fiduciary. No Fiduciary shall be under any obligation or duty to perform any act which would involve it in expense or liability or to institute or defend any suit in respect thereof, or to advance any of its own moneys, unless properly indemnified. No Fiduciary shall be liable in connection with the performance of its duties hereunder except for its own negligence, misconduct or default . SECTION 403. EVIDENCE ON WHICH FIDUCIARIES MAY ACT. (a) Each Fiduciary, upon receipt of any notice, resolu- tion, request, consent, order , certificate, report , opinion, bond, or other paper or document furnished to it pursuant to any provision of this Resolution, shall examine such instrument to determine whether it conforms to the requirements of this Resolu- tion and shall be protected in acting upon any such instrument believed by it to be genuine and to have been signed or presented by the proper party or parties . Each Fiduciary may reasonably consult with counsel, who may or may not be of counsel to the City, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it under this Resolution in good faith and in accor- dance therewith. (b) Whenever any Fiduciary shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action under this Resolution, such matter (unless other evidence in respect thereof be therein specifically prescribed) may be deemed to be conclusively proved and estab- lished by a certificate of the Mayor , City Manager or his designee, and such certificate shall be full warrant for any action taken or suffered in good faith under the provisions of this Resolution upon the faith thereof; but in its discretion the Fiduciary may in lieu thereof accept other evidence of such fact or matter or may require such further or additional evidence as it may deem reasonable. (c) Except as otherwise expressly provided in this Resolu- tion, any request, order , notice or other direction required or - 31 - permitted to be furnished pursuant to any provision thereof by the City to any Fiduciary shall be sufficiently executed in the name of the City by the Mayor , City Manager or designee of either of them. SECTION 404. COMPENSATION. The City may agree with any Fiduciary to pay to such Fiduciary from time to time reasonable compensation for all services rendered under this Resolution, and also all reasonable expenses, charges, counsel fees and other disbursements, including those of its attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Resolution. The City may also agree with any Fiduciary to indemnify any Fiduciary for any and all of its reasonable fees, costs and expenses resulting from any claim, liability or the like incurred in and about the performance of its powers and duties under this Resolution. SECTION 405. CERTAIN PERMITTED ACTS. Any Fiduciary, indi- vidually or otherwise, may become the owner of any Bonds, with the same rights it would have if it were not a Fiduciary. To the extent permitted by law, any Fiduciary may act as depositary for , and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Bondholders or to effect or aid in any reorganization growing out of the enforcement of the Bonds or this Resolution, whether or not any such committee shall rep- resent the Holders of a majority in principal amount of the Bonds then Outstanding. SECTION 406. MERGER OR CONSOLIDATION. Any entity into which any Fiduciary may be merged or converted or with which it may be consolidated or any entity resulting from any merger , conversion or consolidation to which it shall be a party or any entity to which any Fiduciary may sell or transfer all or sub- stantially all of its corporate trust business, provided such entity shall be a bank or trust company organized under the laws of any state of the United States or a national banking associa- tion or shall be a successor entity to the City, if the City is acting as fiduciary hereunder ; and shall be authorized by law to perform all duties imposed upon it by this Resolution, shall be the successor to such Fiduciary without the execution or filing of any paper or the performance of any further act . SECTION 407. ADOPTION OF AUTHENTICATION. In case any of the Bonds contemplated to be issued under this Resolution shall have been authenticated but not delivered, any successor Regis- trar may adopt the certificate of authentication of any predeces- sor Registrar so authenticating such Bonds and deliver such Bonds so authenticated; and in case any of the said Bonds shall not have been authenticated, any successor Registrar may authenticate such Bonds in the name of the predecessor Registrar , or in the name of the successor Registrar , and in all such cases such cer- tificate shall be fully effective. SECTION 408. RESIGNATION OR REMOVAL OF PAYING AGENT AND APPOINTMENT OF SUCCESSOR. Any Paying Agent may at any time resign and be discharged of the duties and obligations created by this Resolution by giving at least 60 days ' written notice to the issuer of a Credit Facility or Liquidity Facility, the City, and the other Paying Agents . Any Paying Agent may be removed at any time by an instrument filed with such Paying Agent and the issuer of each Credit Facility or Liquidity Facility and signed by the Mayor, City Manager or his designee. Any successor Paying Agent shall be appointed by the City and shall be, if other than the City or its successor entity, a bank or trust company organized under the laws of any state of the United States or a national banking association, willing and able to accept the office on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Resolution. The City - 32 - shall notify the issuer of each Credit Facility or Liquidity Facility of the appointment of any successor Paying Agent . In the event of the resignation or removal of any Paying Agent , such Paying Agent shall pay over , assign and deliver any moneys held by it as Paying Agent to its successor . SECTION 409. REGISTRAR. The Registrar for the Bonds shall be appointed by subsequent proceedings of the City. Any Regis- trar may at any time resign and be discharged of the duties and obligations created by this Resolution by giving at least 60 days ' written notice to the issuer of each Credit Facility or Liquidity Facility and the City. The Registrar may be removed at any time by an instrument filed with such Registrar and the issuer of each Credit Facility or Liquidity Facility and signed by the Mayor, City Manager or his designee, provided that a suc- cessor Registrar has been appointed by the City. The resignation or removal of the Paying Agent as Registrar pursuant to this Section 409 shall not simultaneously constitute a resignation or removal of the Paying Agent . Any Paying Agent acting as Regis- trar, however , who resigns or is removed as Paying Agent pursuant to Section 408 of this Resolution shall automatically cease to be Registrar , and the City may, at its option, appoint a successor Registrar other than the successor Paying Agent . SECTION 410. VACANCY. If at any time hereafter any Fidu- ciary shall resign, be removed, be dissolved, or otherwise become incapable of acting, or if the bank or trust company acting as any Fiduciary shall be taken over by any governmental official , agency, department or board, the position of Fiduciary shall thereupon become vacant. If the position of such Fiduciary shall become vacant for any of the foregoing reasons or for any other reasons, the City shall appoint a successor Fiduciary and shall publish notice of any such appointment by it made once in each week for two ( 2 ) successive weeks in a daily newspaper of general circulation or a financial journal published in the Borough of Manhattan, City and State of New York . At any time within one year after any such vacancy shall have occurred, the Holders of a majority in aggregate principal amount of the Bonds hereby secured and then Outstanding, by an instrument or concurrent instruments in writing, executed by such Bondholders or their attorneys in fact or legal representatives and filed with the City, may appoint a successor Fiduciary which shall supersede such Fiduciary theretofore appointed by the City. Photostatic copies of each such instrument shall be deliv- ered promptly by the City to the predecessor Fiduciary and to the Fiduciary so appointed by the Bondholders. If no appointment of a successor Fiduciary shall be made pursuant to the foregoing provisions of this Section, the Holder of any Bond Outstanding hereunder or any retiring Fiduciary may apply to any court of competent jurisdiction to appoint a succes- sor Fiduciary. Such court may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a suc- cessor Fiduciary. Any Fiduciary hereafter appointed, if not the City or its successor entity, shall be a bank or trust company authorized by law to exercise corporate trust powers and subject to examination by federal or state authority, of good standing and having at the time of its appointment a combined capital and surplus aggregate not less than Fifty Million Dollars ( $50 , 000 , 000 ) . [END OF ARTICLE IV] - 33 - ARTICLE V EXECUTION OF INSTRUMENTS BY BONDHOLDERS AND PROOF OF OWNERSHIP OF BONDS SECTION 501. PROOF OF EXECUTION OF DOCUMENTS AND OWNERSHIP. (a) Any request, direction, consent or other instrument in writing required by this Resolution to be signed or executed by Bondholders may be in any number of concurrent instruments of similar tenor and may be signed or executed by such Bondholders in person or by their attorneys or legal representatives appointed by an instrument in writing. Proof of the execution of any such instrument and of the ownership of Bonds shall be suffi- cient for any purpose of this Resolution and shall be conclusive in favor of the Fiduciary with regard to any action taken by it under such instrument if made in the following manner : ( 1) The fact and date of the execution by any person of any such instrument may be proved by the verification of any officer in any jurisdiction who, by the laws thereof, has power to take affidavits within such jurisdiction, to the effect that such instrument was subscribed and sworn to before him, or by an affidavit of a witness to such execu- tion. Where such execution is in behalf of a person other than an individual, such verification shall also constitute sufficient approval of the authority of the signor thereof . ( 2) The ownership of Bonds shall be proved by the registration books required to be maintained pursuant to the provisions of this Resolution. Nothing contained in this Article shall be construed as limiting the Fiduciary to such proof, it being intended that the Fiduciary may accept any other evidence of the matters herein stated which it may deem sufficient. (b) If the City shall solicit from the Holders any request, direction, consent or other instrument in writing re- quired or permitted by this Resolution to be signed or executed by the Holders, the City may, at its option, fix in advance a record date for determination of Holders entitled to give each request, direction, consent or other instrument, but the Autho- rity shall have no obligation to do so. If such a record date is fixed, such request, direction, consent or other instrument may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of Bonds have authorized or agreed or consented to such request, direction, consent or other instrument, and for that purpose the Bonds shall be computed as of such record date. (c) Any request or consent of the Holder of any Bond shall bind every future Holder of the same Bond in respect of anything done by the Fiscal Agent in pursuance of such request or consent . [END OF ARTICLE V] - 34 - ARTICLE VI MISCELLANEOUS PROVISIONS SECTION 601. MODIFICATION OR AMENDMENT. Except as other- wise provided in the second paragraph hereof, no adverse material modification or amendment of this Resolution, or of any resolu- tion amendatory hereof or supplemental hereto, may be made with- out the consent in writing of ( i ) the Holders of more than fifty ( 50% ) per centum in aggregate principal amount of the Bonds then Outstanding or ( ii ) in case less than all of the several Series of Bonds then Outstanding are affected by the modification or amendment, the Holders of more than fifty ( 50%) per centum in aggregate principal amount of the Bonds of each Series so affected and Outstanding at the time such consent is given; pro- vided, however , that no modification or amendment shall permit a change in the maturity of such Bonds or a reduction in the rate of interest thereon, or affecting the promise of the City to pay the principal of and interest on the Bonds, as the same mature or become due, from the Pledged Funds, or reduce the percentage of Holders of Bonds required above for such modification or amend- ment, without the consent of the Holders of all the Bonds . For the purposes of this Section 601, to the extent any Series of Bonds is secured by a Credit Facility or Liquidity Facility, then the consent of the issuer of the Credit Facility or Liquidity Facility shall constitute the consent of the Holders of such Series. Any provision of this Resolution expressly recognizing or granting rights in or to the Series 1988 Bond Insurer may not be amended in any manner which affects the rights of the Series 1988 Bond Insurer hereunder without the prior written consent of the Series 1988 Bond Insurer . The consent of the Series 1988 Bond Insurer shall be required in addition to Bondholder consent , when required, for the execution and delivery of any supplemental resolution or any amendment, supplement or change to or modifica- tion of other documents relating to the security for the Bonds . The City shall provide the Series 1988 Bond Insurer with a full transcript of all proceedings relating to the adoption of any supplemental resolution, regardless of whether the consent of the Series 1988 Bond Insurer was required for such adoption. This Resolution may be amended, changed, modified and altered without the consent of the Holders of Bonds or any Credit Facility or Liquidity Facility: (a) to cure any ambiguity or formal defect or omis- sion in this Resolution or in any supplemental resolutions or to correct or supplement any provision contained herein which may be defective or inconsistent with any other provi- sions contained herein; or (b) to grant to or confer upon the Bondholders any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Bond- holders or (c) to add to the conditions , limitations and re- strictions on the issuance of Bonds under the provisions of this Resolution, other conditions , limitations and restric- tions thereafter to be observed; or (d) to add to the covenants and agreements of the City in this Resolution other covenants and agreements thereafter to be observed by the City or to surrender any right or power herein reserved to or conferred upon the City; or - 35 - (e) to permit the issuance of Bonds, the interest on which is intended to be excludible from gross income for Federal income tax purposes under the Code to the Holders thereof in coupon form, if as a condition precedent to the adoption of such supplemental resolution, there shall be delivered to the City an opinion of counsel of recognized standing relating to municipal bonds to the effect that the issuance of Bonds in coupon form is then permitted by law and that the issuance of such Bonds in coupon form would not cause interest on such Bonds to be included in gross income for Federal income tax purposes under the Code to the Holders thereof; or (f) to permit the City to issue Bonds the interest on which is not excludible from gross income for Federal income tax purposes under the Code to the Holders thereof ; or (g) to qualify the Bonds or any of the Bonds for registration under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended; or (h) to qualify this Resolution as an "indenture" under the Trust Indenture Act of 1939, as amended; or ( i ) to make such changes as may be necessary to adjust the terms hereof so as to facilitate the issuance of Variable Rate Bonds , Capital Appreciation Bonds, Capital Appreciation and Income Bonds , Put Bonds, Extendible Matur- ity Bonds, Balloon Bonds, Interim Bonds and such other Bonds as may be marketable from time to time; or ( j ) to permit Bonds to be issued in book entry form with or without physical bonds; or (k ) to make such changes as may be necessary to comply with the provisions of the Code relating to the ex- clusion of interest on the Bonds from gross income there- under ; or ( 1 ) to make such changes as may evidence the right and interest herein of an issuer of a Credit Facility or a Liquidity Facility that secures any Series of Bonds . If at any time the City shall so request the Paying Agent , the Paying Agent shall cause a notice of a proposed supplemental resolution requiring the consent of Bondholders to be mailed, postage prepaid, to all Holders of Bonds then Outstanding at their addresses as they appear on the registration books . Such notice shall briefly set forth the nature of the proposed supple- mental resolution and shall state that a copy thereof is on file at the principal corporate trust office of the Paying Agent for inspection by all Bondholders . The Paying Agent shall not , how- ever, be subject to any liability to any Bondholder by reason of its failure to mail the notice required by this Section, and any such failure shall not affect the validity of such supplemental resolution when consented to or approved as provided in this Section. Whenever , at any time after the date of the mailing of such notice, the City shall deliver to the City Clerk an instrument or instruments purporting to be executed by the Holders of at least a majority in aggregate principal amount of the Bonds then Out- standing, which instrument or instruments shall refer to the proposed supplemental resolutions described in such notice and shall specifically consent to and approve the adoption thereof , and the City shall deliver to the City Clerk a certificate signed by the Mayor that the Holders of such required percentage of - 36 - Bonds have filed such consents, the City may adopt such supple- mental resolutions in substantially such form without liability or responsibility to any Holder of any Bond, whether or not such Holder shall have consented thereto. It shall not be necessary for the consent of the Holders to approve the particular form of any proposed supplemental resolution, but it shall be sufficient if such consent shall approve the substance thereof. If the Holders of more than fifty per centum ( 50% ) in aggre- gate principal amount of the Bonds of each Series as affected and Outstanding at the time of the execution of such supplemental resolution shall have consented to and approved the adoption thereof as herein provided, no Holder shall have any right to object to the adoption of such supplemental resolution, or to object to any of the terms and provisions therein contained, or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the City from adopting the same or from taking any action pursuant to the pro- visions thereof . The consent of the Holders of any additional Series of Bonds to be issued hereunder shall be deemed given if the underwriters or initial purchasers for resale consent in writing to such sup- plemental resolution and the nature of the amendment effected by such supplemental resolution is disclosed in the official state- ment or other offering document pursuant to which such additional Series of Bonds is offered and sold to the public. SECTION 602. SEVERABILITY OF INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions of this Resolution should be held contrary to any express provision of law or contrary to the policy of express law, though not express- ly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions , and shall in no way affect the validity of any of the other provisions of this Resolution or of the Bonds issued hereunder . SECTION 603. SALE OF BONDS. Except as otherwise provided in Section 201 with respect to the Series 1988 Bonds , the Bonds shall be issued and sold at one time or from time to time and at such price or prices consistent with the provisions of the Act and the requirements of this Resolution as the City shall here- after determine by resolution. SECTION 604. CAPITAL APPRECIATION BONDS; CAPITAL APPRE- CIATION AND INCOME BONDS. (a) For the purposes of ( i ) receiving payment of the redemption price if a Capital Appreciation Bond is redeemed prior to maturity, or ( ii ) computing the amount of Bonds held by the registered owner of a Capital Appreciation Bond in giving to the City any notice, consent, request or demand pursuant to this Resolution for any purpose whatsoever , the principal amount of a Capital Appreciation Bond shall be deemed to be its Accreted Value. (b) For the purpose of ( i ) receiving payment of the redemption price if a Capital Appreciation and Income Bond is redeemed prior to maturity, or ( ii ) computing the amount of Bonds held by the registered owner of a Capital Appreciation and Income Bond in giving to the City any notice, consent , request or demand pursuant to this Resolution for any purpose whatsoever , the principal amount of a Capital Appreciation and Income Bond shall be deemed to be its Appreciated Value. SECTION 605. UNCLAIMED MONEY. Notwithstanding any pro- visions of this Resolution, any money held by the Paying Agent - 37 - for the payment of the principal or redemption price of, or interest on, any Bonds and remaining unclaimed for five ( 5) years after the principal of all of the Bonds has become due and pay- able (whether at maturity or upon call for redemption) , if such money were so held at such date, or five ( 5) years after the date of deposit of such money if deposited after such date when all of the Bonds became due and payable, shall be repaid to the City free from the provisions of this Resolution, and all liability of the Paying Agent with respect to such money shall thereupon cease; provided, however , that before the repayment of such money to the City as aforesaid, the City shall first publish at least once in a financial newspaper or journal published and/or of general circulation in New York, New York, a notice, in such form as may be deemed appropriate by the City with respect to the Bonds so payable and not presented, and with respect to the pro- visions relating to the repayment to the Issuer of the money held for the payment thereof. SECTION 606. INFORMATION FOR SERIES 1988 BOND INSURER. The City agrees to provide the Series 1988 Bond Insurer with the following information: ( i ) The annual audit of the City as well as its budget within 120 days of the end of each Fiscal Year . ( ii ) Upon the issuance of additional debt, whether on a parity with the Series 1988 Bonds or not, a copy of the official statement circulated in connection with such issu- ance, within 30 days of the bond sale. SECTION 607. REPEAL OF PRIOR AUTHORIZATION. Resolution No. 75-14745 adopted on June 18 , 1975 by the Commission, as amended, and providing for the issuance of $10 ,000,000 Excise Tax Bonds, Series 1975 under which no bonds are currently outstanding is hereby repealed. SECTION 608. TIME OF. TAKING EFFECT. This Resolution shall take effect immediately upon its adoption. ADOPTED by the City at a meeting of the Commission held on the 22nd day of September , 1988. / ikrit Ma, or (SEAL) Attest : FORM APPROVED —flev LEGAL DEPT. City Clerk __._ �. By Date /° -?,V8 8 - 38 - r"STM EXHIBIT A [Form of Bond] (Face of Bond) No. R- $ UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF MIAMI BEACH, FLORIDA RESORT TAX REVENUE BONDS, SERIES Date of Interest Maturity Original Rate Date Issuance CUSIP REGISTERED OWNER: DOLLARS PRINCIPAL AMOUNT KNOW ALL MEN BY THESE PRESENTS that the City of Miami Beach, Florida ( the "City" ) , for value received, hereby promises to pay to the registered owner specified above, or registered assigns, on the date specified above, but solely from the sources herein- after mentioned, upon presentation and surrender hereof , at the principal corporate trust office of , as paying agent ( said and/or any bank or trust company to become successor paying agent being herein called the "Paying Agent" ) , the principal sum specified above with interest thereon at the rate per annum specified above, payable on the first day of and of each year , commencing on . Principal of this Bond is payable at the office of the Paying Agent in lawful money of the United States of America. Interest on this Bond is payable by check or draft of the Paying Agent made payable to the registered owner as its name and address shall appear on the registry books of , as Registrar ( said and any successor Registrar being herein called the "Registrar" ) at the close of business on the fifteenth day of the calendar month preceding each interest payment date or the date on which the principal of this Bond is to be paid ( the "Regular Record Date" ) . Any interest not punc- tually paid on a Regular Record Date shall forthwith cease to be payable to the registered owner on such Regular Record Date and may be paid at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Paying Agent , notice whereof shall be given not less than 10 days prior to such special record date to such registered owner . Such interest shall be payable from the most recent interest payment date next preceding the date of authentication to which interest has been paid, unless the date of authentication is an 1 or 1 to which interest has been paid, in which case from the date of authentication, or unless the date of authenti- cation is prior to , 19 , in which case from , 19 , or unless the date of authentication is between a Record Date and the next succeeding interest payment date, in which case from such interest payment date. A-1 This Bond is one of an authorized issue of Bonds of the City designated as its "Resort Tax Revenue Bonds, Series " (herein called the "Series Bonds" ) , in the aggregate principal amount of Dollars ($ ) of like date, tenor, and effect, except as to number, date of maturity and interest rate, issued for the purpose of ) under the authority of and in full compliance with the Constitu- tion and Statutes of the State of Florida, including particularly Chapter 67-930 , Laws of Florida , as amended, Chapter 166 , Florida Statutes, as amended from time to time, and other applicable provisions of law, and a resolution duly adopted by the City Commission of the City on 19 (hereinafter referred to as the "Resolution" ) and is subject to all the terms and conditions of the Resolution. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE SIDE HEREOF AND SUCH FURTHER PROVI- SIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH ON THE FRONT SIDE HEREOF. It is hereby certified and recited that all acts, conditions and things required to exist, to happen, and to be performed, precedent to and in the issuance of this Bond exist, have hap- pened and have been performed in regular and due form and time as required by the Laws and Constitution of the State of Florida applicable thereto, and that the issuance of this Bond, and of the issue of Bonds of which this Bond is one, is in full compli- ance with all constitutional, statutory or charter limitations or provisions. IN WITNESS WHEREOF, the City of Miami Beach, Florida has caused this Bond to be signed by the Mayor , either manually or with his facsimile signature, and the seal of the City of Miami Beach, Florida or a facsimile thereof to be affixed hereto or imprinted or reproduced hereon, and attested by the City Clerk, either manually or with his facsimile signature. CITY OF MIAMI BEACH, FLORIDA MAYOR (SEAL) Attest : CITY CLERK A-2 FORM OF CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds delivered pursuant to the within mentioned Resolution. Date of Authentication: as Registrar By: Authorized Officer A-3 [Back of Bond] This Bond is payable from and secured by a lien on and pledge of the Resort Taxes levied by the City within its corpo- rate limits and other moneys held in certain funds and accounts established under the Resolution (collectively, the "Pledged Funds" ) , all in the manner provided in the Resolution. The City is not obligated to pay this Bond or the interest hereon except from the Pledged Funds pledged thereto, and the full faith and credit of the City are not pledged for the payment of this Bond and this Bond does not constitute an indebtedness of the City within the meaning of any constitutional, statutory or other provision or limitation; and it is expressly agreed by the Holder of this Bond that such Holder shall never have the right to require or compel the exercise of the ad valorem taxing power of the City, or taxation in any form of any real or personal prop- erty therein, for the payment of the principal of and interest on this Bond or the making of any other Sinking Fund and other pay- ments provided for in the Resolution. It is further agreed between the City and the Holder of this bond that this Bond and the obligation evidenced thereby shall not constitute a lien upon property of or in the City, but shall constitute a lien only on the Pledged Funds, all in the manner provided in the Resolution. [Redemption Provisions ] Additional Parity Bonds may be issued by the City from time to time upon the conditions and within the limitations and in the manner provided in the Resolution. The original registered owner, and each successive regis- tered owner of this Bond shall be conclusively deemed to have agreed and consented to the following terms and conditions : 1 . The Registrar shall keep books for the registration of Bonds and for the registration of transfers of Bonds as provided in the Resolution. The Bonds shall be transferable by the regis- tered owner thereof in person or by his attorney duly authorized in writing only upon the books of the City kept by the Registrar and only upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner or his duly authorized attorney. Upon the transfer of any such Bond, the City shall issue in the name of the transferee a new Bond or Bonds . 2 . The City, the Paying Agent and the Registrar may deem and treat the person in whose name any Bond shall be registered upon the books kept by the Registrar as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Bond as the same becomes due, and for all other purposes . All such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the City, the Paying Agent , nor the Registrar shall be affected by any notice to the contrary. 3 . At the option of the registered owner thereof and upon surrender hereof at the principal corporate trust office of the Registrar with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner or his duly authorized attorney and upon payment by such registered owner of any charges which the Registrar or the City may make as provided in the Resolution, the Bonds may be exchanged for Bonds of the same series and maturity of any other authorized denominations . A-4 4 . In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised, the City shall execute and the Registrar shall authenticate and deliver Bonds in accor- dance with the provisions of the Resolution. There shall be no charge for any such exchange or transfer of Bonds, but the City or the Registrar may require payment of a sum sufficient to pay any tax , fee or other governmental charge required to be paid with respect to such exchange or transfer . Neither the City nor the Registrar shall be required (a) to transfer or exchange Bonds for a period of 15 days next preceding an interest payment date on such Bonds or next preceding any selection of Bonds to be redeemed or thereafter until after the mailing of any notice of redemption; or (b) to transfer or exchange any Bonds called for redemption. A-5 [FORM OF ABBREVIATIONS FOR BONDS] The following abbreviations, when used in the inscription on the face of the within Bond, shall be construed as though they were written out in full according to applicable laws or regula- tions. TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with the right of survivor- ship and not as tenants in common UNIFORM GIFT MIN ACT - Custodian (Cust) (Minor ) under Uniform Gifts to Minors Act (State) Additional abbreviations may also be used though not in the above list. [FORM OF ASSIGNMENT FOR BONDS] For value received, the undersigned hereby sells, assigns and transfers unto the within Bond, and all rights thereunder , and hereby irrevocably constitutes and appoints , attorney to transfer the said Bond on the bond register , with full power of substitution in the premises . Dated: Please insert Social Security or other identifying number of transferee: Signature guaranteed: NOTICE: The transferor ' s signature to this Assignment must correspond with the name as it appears on the face of the within Bond in every particular without alteration or any change whatever . A-6 ATTACHMENT A CITY OF MIAMI BEACH, FLORIDA and SOUTHEAST BANK, N.A. , as Escrow Agent ESCROW DEPOSIT AGREEMENT DATED AS OF OCTOBER 1, 1988 si 1 ESCROW DEPOSIT AGREEMENT THIS ESCROW DEPOSIT AGREEMENT made and entered into as of October 1, 1988, by and between THE CITY OF MIAMI BEACH, FLORIDA, a municipal corporation in the State of Florida (the "City" ) , and SOUTHEAST BANK, N.A. , a national banking association, as escrow agent hereunder ( the "Escrow Agent" ) : WITNESSET H: WHEREAS, the City has, pursuant to Resolution No. 12650 , as amended (the "Prior Resolution" ) , heretofore issued and there are now outstanding $4 ,925, 000 Excise Tax Bonds, Series 1969 ( the "Refunded Bonds" ) , as more particularly described in Schedule A attached hereto; and WHEREAS, in order to provide for the refunding of the Refunded Bonds , the City has authorized and issued pursuant to Resolution No. ( the "1988 Resolution" ) its Resort Tax Revenue Refunding Bonds, Series 1988 ( the "Bonds" ) , in the aggregate principal amount of $ ; and WHEREAS, a portion of the proceeds derived from the sale of the Bonds [and certain other moneys transferred from the Reserve Fund established under the Prior Resolution (the "Reserve Fund" ) ] will be applied to pay the purchase price of certain direct non- callable obligations of the United States of America ( "Federal Securities" ) , which principal amount of Federal Securities will mature and produce investment income and earnings at such times and in such amounts as , together with monies held uninvested, will be sufficient to pay when due, whether at maturity or upon the redemption thereof , all of the principal of , redemption pre- mium, if any, and interest on the Refunded Bonds; and WHEREAS, in order to provide for the proper and timely application of the moneys deposited in the trust created hereby, the maturing principal amount of the Federal Securities purchased therewith, and investment income and earnings derived therefrom to the payment of the Refunded Bonds, all as contemplated in Section 303 of the 1988 Resolution and Sections 3 . 04 and 4 . 02 of the Prior Resolution, it is necessary to enter into this Escrow Deposit Agreement with Southeast Bank , N.A. , as escrow agent ( the "Escrow Agent" ) on behalf of the holders and owners from time to time of the Refunded Bonds; NOW, THEREFORE, the City, in consideration of the foregoing and the mutual covenants herein set forth and in order to secure the payment of the principal of , redemption premium, if any, and interest on all of the Refunded Bonds according to their tenor and effect , does by these presents hereby grant, warrant, demise, release, convey, assign, transfer , alien, pledge, set over and confirm, unto the Escrow Agent, and to its successors in the trust hereby created, and to it and its assigns forever , all and singular the property hereinafter described to wit : DIVISION I All right, title and interest of the City in and to $ derived from proceeds of its Bonds deposited with the Escrow Agent upon issuance and delivery of the Bonds and execution of and delivery of this Agreement [and $ in moneys transferred from the Reserve Fund] . DIVISION II All- right, title and interest of the City in and to all income derived from or accruing to [ ( i ) ] the Federal Securities , the purchase price of which was paid from proceeds of the Bonds and more particularly described in [Part I of ] Schedule B attached hereto and made a part hereof [and ( ii ) the Federal Securities, the purchase price of which was paid from transferred moneys out of the Reserve Fund and more particularly described in Part II of Schedule B attached hereto and made a part hereof ] . DIVISION III Any and all other property of every kind and nature from time to time hereafter , by delivery or by writing of any kind, conveyed, pledged, assigned or transferred as and for additional security hereunder by the City or by anyone in its behalf to the Escrow Agent , for the benefit of the Refunded Bonds , which is hereby authorized to receive the same at any time as additional security hereunder . DIVISION IV All property which is by :he express provisions of this Agreement required to be subject to the pledge hereof and any additional property that may, from time to time hereafter , by delivery or by writing of any kind, by the City or by anyone in its behalf , be subject to the pledge hereof and the Escrow Agent is hereby authorized to receive the same at any time as addi- tional security hereunder . 2 - . TO HAVE AND TO HOLD, all and singular , the Trust Estate (as such term is hereinafter defined) , including all additional pro- perty which by the terms hereof has or may become subject to the encumbrances of this Agreement , unto the Escrow Agent , and its successors and assigns, forever in trust, however , for the bene- fit and security of the holders and owners from time to time of the Refunded Bonds ; but if the Refunded Bonds shall be fully and promptly paid when due, whether at maturity or upon the redemp- tion thereof, in accordance with the terms thereof and hereof, then this Agreement shall be and become void and of no further force and effect; otherwise the same shall remain in full force and effect, and upon the trust and subject to the covenants and conditions hereinafter set forth. ARTICLE I DEFINITIONS Section 1 .01 . Definitions . In addition to words and terms elsewhere defined in this Escrow Deposit Agreement ( the "Agree- ment" ) , the following words and terms as used in this Agreement shall have the following meanings, unless some other meaning is plainly intended. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in the 1988 Ordinance. "Prior Resolution" shall mean Resolution No. 12650 duly adopted by the City Council of the City on February 25 , 1969 , as amended from time to time . "1988 Resolution" shall mean Resolution No. duly adopted by the City Commission of the City on , 1988, as supplemented. "Trust Estate" , "trust estate" or "pledged property" shall mean the property, rights and interest which are subject to the lien of this Agreement . Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter gen- ders . Words importing the singular number shall include the plural number and vice versa unless the context shall otherwise indicate. The word "person" shall include corporations , asso- ciations, natural persons and public bodies unless the context shall otherwise indicate. Reference to a person other than a natural person shall include its successors . 3 ARTICLE II ESTABLISHMENT OF ESCROW DEPOSIT TRUST FUND; FLOW OF FUNDS Section 2 . 01 . Creation of Escrow Deposit Trust Fund. There is hereby created and established with the Escrow Agent a special and irrevocable trust fund designated the Escrow Deposit Trust Fund ( the "Escrow Deposit Trust Fund" ) to be held in the custody of the Escrow Agent separate and apart from other funds of the City or of the Escrow Agent . Concurrently with the execution of this Agreement, the County herewith deposits or causes to be deposited with the Escrow Agent , and the Escrow Agent acknowledges receipt of, imme- diately available moneys in the amount of $ , [con- sisting con- sisting of $ from proceeds of the Bonds to be depo- sited in the Escrow Deposit Trust Fund and $ in other available moneys transferred from the Reserve Fund] . $ of said amount when invested in Federal Secur- ities, [ together with $ of the moneys transferred from the Reserve Fund remaining uninvested in the Escrow Deposit Trust Fund, ] will provide moneys sufficient to pay the principal of, redemption premium, if any, and interest on the Refunded Bonds, when due and payable, whether at maturity or upon the redemption thereof , as more particularly described in Schedule C hereof . The Bond proceeds received by the Escrow P.gent will be sufficient to purchase $ principal amount of Federal Securities, all as listed in Schedule B [ , Part I and the other available moneys (other than $ in cash to remain uninvested) received by the Escrow Agent will be sufficient to purchase $ principal amount of Federal Securities , all as listed in Schedule B, Part II ] which will mature in prin- cipal amounts and earn income and earnings at such times, so that sufficient moneys will be available, with the moneys remaining uninvested, to pay, as the same mature or are redeemed and become due , all principal of , redemption premium, if any, and interest on the Refunded Bonds . Notwithstanding, if the amounts deposited in the Escrow Deposit Trust Fund are insufficient to make said payments of principal, redemption premium and interest , the City shall deposit the amount of any deficiency immediately upon notice from the Escrow Agent . Section 2 . 02 . Irrevocable Trust Created. The deposit of moneys and Federal Securities in the Escrow Deposit Trust Fund shall constitute an irrevocable deposit of said moneys and Federal Securities for the benefit of the holders and owners of the Refunded Bonds, except as provided herein with respect to substitutions permitted under Section 2 . 04 hereof and amendments permitted under Section 4 . 01 hereof . The holders and owners of the Refunded Bonds shall have an express lien on all moneys and - 4 - .a principal of and earnings on the Federal Securities deposited in the Escrow Deposit Trust Fund until applied in accordance with this Agreement . The matured principal of the Federal Securities and the interest thereon shall be held in trust by the Escrow Agent, and shall be transferred in the necessary amounts as here- inafter set forth, to the paying agents for the Refunded Bonds for the payment of the principal of, redemption premium, if any, and interest on the Refunded Bonds as the same become due and payable, whether at maturity or upon the redemption thereof , as more specifically set forth in Schedule C hereof. Section 2 . 03 . Purchase of Federal Securities . The Escrow Agent is hereby directed to immediately purchase the Federal Securities listed on Schedule B. The Escrow Agent shall purchase the Federal Securities solely from the moneys deposited in the Escrow Deposit Trust Fund. The Escrow Agent shall apply the moneys deposited in the Escrow Deposit Trust Fund, and the Federal Securities purchased therewith, together with all income or earnings thereon, in accordance with the provisions hereof . The Escrow Agent shall have no power or duty to invest any moneys held hereunder or to make substitutions of the Federal Securities held hereunder or to sell , transfer or otherwise dispose of the Federal Securities acquired hereunder except as provided in this Agreement . [The Escrow Agent is hereby directed not to invest the $ in cash that will be deposited in the Escrow Deposit Trust Fund from the Reserve Fund simultaneously with the execution herewith] . Section 2 . 04 . Substitution of Certain Government Obliga- tions . (a) If so directed by the City on the date hereof, the Escrow Agent shall accept in substitution for all or a por- tion of the Federal Securities listed in Schedule B, Federal Securities which are not subject to redemption prior to maturity ( the "Substituted Securities" ) , and the principal of and interest on which, together with any Federal Securities listed in Schedule B for which no substitution is made and moneys held uninvested by the Escrow Agent , will meet the requirements of payment of all principal of , redemption premium, if any, and interest on the Refunded Bonds as set forth in Schedule C hereof . The foregoing notwithstanding, the substitution of Substituted Securities for any of the Federal Securities listed in Schedule B may be effected only upon compliance with Section 2. 04 (b) ( 1 ) and ( 2) below. (b) If so directed by the City at any time during the term of this Agreement , the Escrow Agent shall , upon receipt of the opinion and verification required by ( 1) and ( 2) respect- ively, below, sell , transfer , exchange or otherwise dispose of , or request the redemption of, all or a portion of the Federal - 5 - 4 � Securities then held in the Escrow Deposit Trust Fund and shall substitute for such Federal Securities other Federal Securities , designated by the City, and acquired by the Escrow Agent with the proceeds derived from the sale, transfer , disposition or redemp- tion of or by the exchange of, such Federal Securities held in the Escrow Deposit Trust Fund: ( 1) The Escrow Agent shall have received an opinion of nationally recognized counsel in the field of law relating to municipal bonds stating that such substitution will not adversely affect the exclusion from gross income for Federal income tax purposes of interest on the Refunded Bonds or the Bonds and is not inconsistent with the statutes and regulations applicable to the Refunded Bonds and the Bonds ; and ( 2 ) The Escrow Agent shall have received veri- fication from an independent certified public accountant stating that the principal of and interest on the substi- tuted Federal Securities, together with any Federal Securi- ties and a stated dollar amount of cash remaining in the Escrow Deposit Trust Fund, if any, will be sufficient with- out reinvestment , to pay the remaining principal of , redemp- tion premium, if any, and interest on the Refunded Bonds as set forth in Schedule C hereof . Any moneys resulting from the sale, transfer , disposition or redemption of the Federal Securities held hereunder and the sub- stitution therefor of other Federal Securities not necessary for the payment of principal of, redemption premium, if any, and interest on the Refunded Bonds, shall be deposited in the Sinking Fund created and established by the 1988 Resolution and used for the purposes described therein. Section 2 . 05 . Reinvestment of Certain Funds Received. The Escrow Agent shall immediately reinvest all or a portion of the amounts received from the maturing principal of or interest on the Federal Securities listed in Schedule B in the United States Treasury Certificates of Indebtedness - State and Local Govern- ment Series ( for which subscriptions for purchase will be filed pursuant to the next succeeding paragraph) bearing interest at a rate of 0% in the amounts and maturities and on the dates set forth in Schedule D hereof . Subscriptions for the purchase of such obligations shall be filed by either the City or its designee with the Federal Reserve Bank at least 15 days (but not more than 60 days ) prior to the actual date of purchase, or at such time as may be required by the rules and regulations relating to the purchase of such obli- gations . - 6 - �.� Section 2 . 06 . Transfers from Escrow Deposit Trust Fund. As the principal of the Federal Securities set forth in Schedule B shall mature and be paid, and the investment income and earnings thereon are paid, the Escrow Agent shall no later than each interest or principal payment or redemption date for the Refunded Bonds, as specified in Schedule C hereof , transfer from the Escrow Deposit Trust Fund to the paying agents for the Refunded Bonds amounts sufficient to pay the principal of , redemption premium, if any, and interest on the Refunded Bonds coming due, as specified in Schedule C hereof . [The Escrow Agent is hereby instructed and the Escrow Agent hereby agrees to (a) pay at maturity all Refunded Bonds as the same are due and payable and (b) pay interest on the Refunded Bonds as the same is due and payable. ] [Note: If Refunded Bonds to be redeemed, add pro- visions for notice of redemption here. ] Section 2 . 07 . Investment of Certain Moneys Remaining in Escrow Deposit Trust Fund. Subject to the provisions of Section 2 . 04 and 2 . 05, the Escrow Agent shall invest and reinvest , at the direction of the City, in Federal Securities any moneys remaining from time to time in the Escrow Deposit Trust Fund until such time that they are needed. Such moneys shall be reinvested in Federal Securities maturing no later than the next interest pay- ment or redemption date or principal payment date of the Refunded Bonds, or for such shorter periods or at such interest rates that the Escrow Agent shall be directed to invest by the City, which periods or interest rates shall be set forth in an opinion from a nationally recognized law firm on the subject of municipal bonds , which opinion shall also be to the effect that such reinvestment of such moneys will not , under the statutes, rules and regula- tions then in force and applicable to the Refunded Bonds and the Bonds , cause the interest on the Refunded Bonds and the Bonds to be included in gross income for Federal income tax purposes and that such investment is not inconsistent with the statutes and regulations applicable to the Refunded Bonds and the Bonds . Any interest income resulting from reinvestment of moneys pursuant to this Section 2 . 07 shall be transferred to the City for deposit in the Sinking Fund created and established by the 1988 Resolution and used for the purposes described therein. Section 2 . 08 . Escrow Deposit Trust Fund Constitutes Trust Fund. The Escrow Deposit Trust Fund created and established pursuant to this Agreement shall be and constitute a trust fund for the purposes provided in this Agreement and shall be kept separate and distinct from all other funds of the City and the Escrow Agent and used only for the purposes and in the manner provided in this Agreement . Section 2 . 09 . Transfer of Funds After All Payments Required by this Agreement are Made . After all of the transfers by the Escrow Agent to the respective paying agents for payment of the - 7 - principal of, redemption premium, if any, and interest on the Refunded Bonds have been made, all remaining moneys and securi- ties, together with any income and interest thereon, in the Escrow Deposit Trust Fund shall be transferred to the City by the Escrow Agent and deposited in the Sinking Fund created and established by the 1988 Resolution and used for the purposes de- scribed therein; provided, however , that no such transfer (except transfers made in accordance with Sections 2 . 04 and 2 . 07 ) to the City shall be made until all of the principal of, redemption premium, if any, and interest on the Refunded Bonds have been paid. ARTICLE III CONCERNING THE ESCROW AGENT Section 3 . 01 . Liability of Escrow Agent . The Escrow Agent shall not be liable for the accuracy of the calculations as to the sufficiency of moneys and of the principal amount of the securities and the earnings thereon to pay the Refunded Bonds . So long as the Escrow Agent applies any moneys, securities and the interest earnings therefrom to pay the Refunded Bonds as provided herein, and complies fully with the terms of this Agree- ment , the Escrow Agent shall not be liable for any deficiencies in the amounts necessary to pay the Refunded Bonds caused by such calculations . The Escrow Agent shall have no lien, security interest or right of set-off whatsoever upon any of the moneys or investments in the Escrow Deposit Trust Fund for the payment of fees and expenses for services rendered by the Escrow Agent under this Agreement . Section 3 . 02 . Permitted Acts . The Escrow Agent and its affiliates may become the owner of or may deal in the Refunded Bonds as fully and with the same rights as if it were not the Escrow Agent . ARTICLE IV MISCELLANEOUS Section 4 . 01 . Amendments to this Agreement . This Agreement is made for the benefit of the City and the holders and owners from time to time of the Refunded Bonds and it shall not be repealed, revoked, altered or amended without the written consent of all such holders and owners , the Escrow Agent and the City; provided, however , that the City and the Escrow Agent may, with- out the consent of , or notice to, such holders and owners, enter - 8 - ft into such agreements supplemental to this Agreement as shall not adversely affect the rights of such holders and owners and shall not be inconsistent with the terms and provisions of this Agree- ment , for any one or more of the following purposes: (a) to cure any ambiguity or formal defect or omis- sion in this Agreement; and (b) to grant or confer upon the Escrow Agent for the benefit of the holders and owners of the Refunded Bonds any addi- tional rights, remedies, powers, or authority that may be con- ferred or lawfully granted upon the Escrow Agent . Prior to any repeal, revocation, alteration or amendment of this Agreement, the City shall , if the Refunded Bonds are then rated by Moody ' s Investors Service, Inc. ( "Moody ' s" ) provide written notice of such proposed repeal , revocation, alteration or amendment to Moody ' s at the following address : 99 Church Street New York , New York 10007 Att : Municipal Rating Desk/Refunded Bonds The Escrow Agent shall be entitled to rely exclusively upon an unqualified opinion of nationally recognized attorneys on the subject of municipal bonds with respect to compliance with this Section. Section 4 . 02 . Severability. If any one or more of the covenants or agreements provided in this Agreement on the part of the City or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and construed to be several from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Agreement . Section 4 . 03 . Agreement Binding . All the covenants, pro- mises and agreements in this Agreement contained by or on behalf of the City or by or on behalf of the Escrow Agent shall bind and inure to the benefit of their respective successors and assigns , whether so expressed or not . Section 4 . 04 . Termination. This Agreement shall terminate when all transfers and payments required to be made by the Escrow Agent under the provisions hereof shall have been made. Section 4 . 05 . Florida Law Governs . This Agreement shall be governed by and construed in accordance with the laws of the State of Florida . - 9 - / 0 Section 4 . 06 . Execution by Counterparts . This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument . Section 4 . 07 . Schedules and Exhibits. All schedules and exhibits referred to in and attached to this Agreement are hereby incorporated herein and made a part for all purposes . IN WITNESS WHEREOF, each of the parties hereto has cause this Agreement to be executed by its duly authorized officers and its corporate seal to be hereunto affixed and attested as of the date first above written. CITY OF MIAMI BEACH, FLORIDA ( SEAL) By: Mayor Attest : FORM APPROVED LEGAL DEPT. BY '61:4X 7e. City Clerk 9 8 8 SOUTHEAST BANRIiF ateN . . , OW Agent ( SEAL) By: Vice President Attest : 7 ' - 10 - STATE OF FLORIDA ) SS: COUNTY OF DADE On the day of October , in the year 1988, before me personally came ALEX DAOUD, to me known, who, being by me duly sworn, did depose and say that he resides in the City of Miami Beach, Florida; that he is the Mayor of the City of Miami Beach, Florida, the municipal corporation described in and which exe- cuted the above instrument; that he knows the seal thereof; that the seal affixed to said instrument is the corporate seal of the City of Miami Beach, Florida; that it was so affixed by order of the City Commission of the City of Miami Beach, Florida; and that he signed his name thereto by like order . My Commission Expires : NOTARY PUBLIC, STATE OF FLORIDA (SEAL) STATE OF FLORIDA ) SS: COUNTY OF DADE ) On the day of October , in the year 1988 , before me personally came , to me known, who, being by me duly sworn, did depose and say that he resides in ; that he is Vice President of Southeast Bank , N.A. , the banking association described in and which executed the above instrument ; that he knows the seal of said corporation; that the seal affixed to said instrument is the corporate seal of said corporation; that it was so affixed by order of the Board of Directors of said banking association; and that he signed his name thereto by like authority. My Commission Expires : NOTARY PUBLIC, STATE OF FLORIDA (SEAL) - 11 - SCHEDULE A REFUNDED BONDS Maturity Date Interest Principal (April 1) Rate Amount 1989 7 . 70% $605 , 000 1990 7 . 70 635 , 000 1991 7 . 70 665, 000 1992 7 .70 700 ,000 1993 7 . 70 735, 000 1994 7 .70 775 , 000 1995 6 . 50 810, 000 A-1 13 SCHEDULE B Investment of Bond Proceeds [And Other Available Moneys] Part I Investment of Bond Proceeds: Maturity Principal Interest Date Amount Rate $ o 0 Purchase Price: $ Part II Investment of Other Available Moneys: Maturity Principal Interest Date Amount Rate $ o 0 Purchase Price: $ B-1 SCHEDULE C Schedule of Payments on Refunded Bonds Date Debt Service C-1 4 SCHEDULE D Reinvestment of Bond Proceeds in 0% Federal Securities Reinvestment Date Amount Maturity Date D-1 ATTACHMENT B PRELIMINARY OFFICIAL STATEMENT DATED , 1988 NEW ISSUE CITY OF MIAMI BEACH, FLORIDA $6,000,000* RESORT TAX REVENUE REFUNDING BONDS, SERIES 1988 Dated: October 1, 1988 Due: October 1, as shown below The Series 1988 Resort Tax Revenue Refunding Bonds ( the "Series 1988 Bonds" ) shall be issued in registered form only, in denominations of $5, 000 each or any integral multiple thereof . Interest on the Series 1988 Bonds is payable from October 1, 1988 commencing on April 1 , 1989 , and semi-annually on each October 1 and April 1 thereafter until maturity or prior redemption, by check or draft mailed to the persons in whose names the Series 1988 Bonds are registered as of the close of business on the 15th day of the calendar month immediately preceding an interest payment date, drawn on Southeast Bank, N.A. , Miami , Florida ( the "Bond Registrar and Paying Agent" ) . Principal of and redemption w premium, if any, on the Series 1988 Bonds will be payable at the principal corporate trust office of the Paying Agent . Upon 0 redemption, the principal of, and premium, if any, on the Series 1988 Bonds and interest accrued thereon to the date of redemption % are payable at the principal corporate trust office of the Paying w Agent. The Series 1988 Bonds will be subject to redemption as set forth herein. The Series 1988 Bonds are being issued to provide funds that will be sufficient to ( i ) advance refund, together with other available moneys, the City of Miami Beach, Florida Excise Tax Bonds (Series 1969 ) , dated April 1, 1969 ( the "Prior Bonds" ) of which $4,925, 000 are currently outstanding, and ( ii ) pay the cost of issuance of the Series 1988 Bonds . The Series 1988 Bonds are payable solely from the City ' s Resort Tax Revenues (as herein defined) and the moneys and investments in the funds and accounts pledged therefor and shall not constitute a debt of the City for which the full faith and credit of the City is pledged, and the City is not obligated to pay the Series 1988 Bonds or the redemption premium, if any, or the interest thereon except from the aforementioned source. The issuance of the Series 1988 Bonds shall not directly or indirectly or contingently obligate the City to levy any tax or pledge any form of taxation whatever therefor other than the Resort Tax and the holders of the Series 1988 Bonds shall have no recourse to the City' s power of taxation other than the Resort Tax. 17 Payment of the principal of and interest on the Series 1988 Bonds when due will be insured by a municipal bond insurance policy to be issued by Financial Insurance Guaranty Company ( "FGIC" ) simultaneously with the delivery of the Series 1988 Bonds. In the opinion of the Bond Counsel, assuming continuing compliance by the City with certain tax covenants, under existing statutes, regulations, rulings and court decisions, interest on the Series 1988 Bonds is excluded from gross income for federal income tax purposes . Bond Counsel is further of the opinion that Series 1988 Bonds and the interest thereon are exempt from taxation under the laws of the State of Florida, except estate taxes and taxes imposed by Chapter 220, Florida Statutes, on interest, income or profits on debt obligations owned by corporations as defined in said Chapter 220. For a more complete discussion of other federal tax consequences of ownership of the Series 1988 Bonds, see the discussion under the heading "Tax Exemption" herein. MATURITIES, AMOUNTS, INTEREST RATES AND PRICES* [to be provided] The Series 1988 Bonds are offered for delivery when, as and if issued and accepted by the Underwriters, subject to prior sale, withdrawal or modification of the offer without notice and subject to receipt of the approving opinion of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. , Miami , Florida, Bond Counsel. Certain legal matters will be passed upon for the City by Arnold M. Weiner , City Attorney, Miami Beach, Florida, and for the Underwriters by their counsel , Kirkpatrick & Lockhart , Miami , Florida. Shearson Lehman Hutton Inc. is acting as Financial Advisor to the City. It is expected that the Series 1988 Bonds will be available for delivery in New York, New York on or about , 1988. LAZARD FRERES & CO. CHASE MANHATTAN CAPITAL MARKETS CORPORATION RAYMOND JAMES & ASSOCIATES, INC. *Preliminary, subject to change Dated: , 1988 18 CITY OF MIAMI BEACH MAYOR Alex Daoud VICE MAYOR Bruce Singer CITY COMMISSION Stanley H. Arkin Abe Resnick Ben Z . Grenald William E. Shockett Sidney Weisburd CITY ATTORNEY CITY MANAGER CITY CLERK Arnold M. Weiner Rob W. Parkins Elaine M. Baker ASSISTANT CITY MANAGERS Richard L. Fosmoen Carla Bernabei Talarico FINANCE DIRECTOR DIRECTOR OF MANAGEMENT AND BUDGET Robert J. Nachlinger Peter F. Liu FINANCIAL ADVISOR Shearson Lehman Hutton Inc. BOND COUNSEL Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. CERTIFIED PUBLIC ACCOUNTANTS Touche Ross & Co. 19 -1- No dealer, broker, salesman or other person has been authorized to give any information or to make any representations, other than as contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 1988 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the City and other sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness . The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall , under any circumstances, create any implication that there has been no change in the information or opinions set forth herein after the date of this Official Statement . IN CONNECTION WITH THE OFFERING OF THE SERIES 1988 BONDS, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 1988 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. . 20 -11- TABLE OF CONTENTS Page INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PURPOSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PLAN OF REFUNDING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ESTIMATED SOURCES AND USES OF FUNDS. . . . . . . . . . . . . . . . . . . . . . . THE SERIES 1988 BONDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . REDEMPTON PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SECURITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BOND INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DEBT SERVICE REQUIREMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RESORTTAX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TAXEXEMPTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LITIGATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LEGALITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VERIFICATION OF MATHEMATICAL COMPUTATIONS. . . . . . . . . . . . . . . . . UNDERWRITING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AUTHORIZATION CONCERNING OFFICIAL STATEMENT. . . . . . . . . . . . . . . APPENDIX A - General Information Regarding the City of Miami Beach APPENDIX B - Summary of Certain Provisions of the Resolution APPENDIX C - Specimen Bond Insurance Policy APPENDIX D - Form of Bond Counsel Opinion -iii- 21 OFFICIAL STATEMENT $6,000,000* CITY OF MIAMI BEACH, FLORIDA RESORT TAX REVENUE REFUNDING BONDS, SERIES 1988 INTRODUCTION The purpose of this Official Statement, including the cover page and appendices, is to furnish information with respect to the issuance and sale by the City of Miami Beach, Florida ( the "City" ) of $6, 000, 000* aggregate principal amount of Resort Tax Revenue Refunding Bonds, Series 1988 ( the "Series 1988 Bonds" ) . The Series 1988 Bonds are being issued pursuant to Resolution No. , duly adopted by the City Commission of the City (the "City Commission" ) on , 1988, and other resolutions of the City, as amended and supplemented (collectively, the "Resolution" ) , the Constitution and laws of the State of Florida, in particular Chapter 67-930, Laws of Florida, Acts of 1967, as amended, Chapter 166, Florida Statutes, as amended, all other applicable provisions of law, Chapter 41 , Article V of the Miami Beach City Code, as amended, and the Miami Beach City Charter , as amended. For a complete description of the terms and conditions of the Series 1988 Bonds, reference is made to the proceedings authorizing the issuance of the Series 1988 Bonds . The description of the Series 1988 Bonds and of the documents authorizing and securing the same contained herein does not purport to be comprehensive or definitive. All references herein to such documents are qualified in their entirety by reference to such documents. All terms used herein with initial capitals which are not otherwise defined herein shall have such meanings as are defined in "Appendix B - Summary of Certain Provisions of the Resolution. " PURPOSE The Series 1988 Bonds are being issued to provide funds that will be sufficient to ( i ) advance refund, together with other available moneys, the City of Miami Beach, Florida, Excise Tax Bonds ( Series 1969 ) , dated April 1, 1969 ( the "Prior Bonds" or the "Series 1969 Bonds" ) , of which $4,925,000 are currently outstanding; and ( ii ) pay the cost of issuance of the Series 1988 Bonds. The Series 1988 Bonds are being issued and the prior *Preliminary, subject to change 22 -1- Bonds are being advance refunded in order to defease certain existing covenants and to restructure the City ' s outstanding debt . PLAN OF REFUNDING To effect the refunding of the Prior Bonds, the City is entering into an Escrow Deposit Agreement ( the "Escrow Agreement" ) , on or prior to delivery of the Series 1988 Bonds, with Southeast Bank, N.A. , Miami, Florida, as Escrow Agent ( the "Escrow Agent" ) . Pursuant to the terms of the Escrow Agreement , the City will deposit a portion of the proceeds of the Series 1988 Bonds and other available monies with the Escrow Agent . A portion of such monies will be applied on or after the date of delivery of the Series 1988 Bonds to the purchase of direct obligations of the United States of America ( the "Federal Securities" ) . The Federal Securities will mature at such times and in such amounts so that sufficient moneys will be available from such maturing principal, together with interest income to be derived from the Federal Securities and other available funds, to pay when due, all principal of, interest and redemption premiums, if any, on the Prior Bonds . The Prior Bonds will be paid therefrom at their maturities until April 1 , 1995. Bond Counsel will deliver an opinion to the effect that by depositing such amounts with the Escrow Agent, and applying a portion of such amounts to the purchase of the Federal Securities as discussed above, and in reliance upon certain mathematical computations of Touche Ross & Co. , independent certified public accountants ( see "Verification of Mathematical Computations" herein) , the pledge of and lien on Resort Tax Revenues in favor of holders of Prior Bonds will no longer be in effect. The maturing principal of, and interest on, the Federal Securities held by the Escrow Agent will not be available to pay principal of, interest on, or redemption premium, if any, with respect to the Series 1988 Bonds . 23 -2- ESTIMATED SOURCES AND USES OF FUNDS It is expected that proceeds of the Series 1988 Bonds will be applied as follows : SOURCES Par Amount of Series 1988 Bonds $ Accrued Interest [Funds Contributed by City] Total Sources $ USES Deposit to Escrow Fund $ Underwriters Discount Accrued Interest Deposit to Debt Service Reserve Account Costs of Issuance, including Bond Insurance Premium Total $ THE SERIES 1988 BONDS Description of the Bonds The Series 1988 Bonds shall be issued in the aggregate principal amount , will bear interest at the rates, and mature in the amounts and on the dates, all as set forth on the cover page of this Official Statement . The Series 1988 Bonds initially will be dated October 1, 1988 and, until maturity or prior redemption, will bear interest therefrom payable semi-annually on April 1 and October 1 of each year (each, an "Interest Payment Date" ) , commencing April 1, 1989 . The Series 1988 Bonds will be issuable only as fully registered bonds in the denomination of $5, 000 or any integral multiple thereof. Interest on the Series 1988 Bonds is payable by check or draft , mailed to the respective persons in whose names the Series 1988 Bonds are registered as of the close of business on the 15th day of the calendar month immediately preceding an Interest Payment Date ( in each case a "Record Date" ) , drawn on Southeast Bank, N.A. , Miami , Florida ( the "Registrar" and the "Paying Agent" ) . If and to the extent there is a default in the payment of the interest due on such Interest Payment Date, the defaulted interest shall be paid to the persons in whose names Series 1988 Bonds are registered with the Bond Registrar as of the close of business on a special record date ( the "Special Record 24 -3- Date" ) established by notice mailed by the Registrar to the registered owners not less than the tenth ( 10th) day preceding such Special Record Date. The principal of and redemption premium, if any, on the Series 1988 Bonds are payable at the principal corporate trust office of the Paying Agent . The Series 1988 Bonds shall be subject to redemption as set forth herein. Transfer and Exchange At the option of the registered Holder thereof and upon surrender thereof at the principle corporate trust office of the Registrar with a written instrument of transfer satisfactory to the Registrar duly executed by the registered Holder or his duly authorized attorney, and upon payment by such Holder of any charges which the Registrar or the City may make as provided in the Resolution, the Bonds may be exchanged for Bonds of the same aggregate principal amount of the same Series and maturity of any other authorized denomination. The Series 1988 Bonds may be transferred on the registration books by the registered owner in person or by his duly authorized attorney, by proper written instrument of transfer in form and with guaranty of signatures satisfactory to the Registrar ; in addition, that the Registrar shall not be required to transfer any Series 1988 Bonds between the Record Date or Special Record Date and any Interest Payment Date or special Interest Payment Date. The Registrar shall not be required (a) to transfer or exchange any Bond for a period of fifteen ( 15 ) days next preceding any selection of Series 1988 Bonds to be redeemed or thereafter until after mailing any notice of redemption; or (b) to transfer or exchange any Series 1988 Bonds called for redemption. Upon the surrender of any Bond for transfer or exchange, a new fully- registered Bond of the same maturity and in the same aggregate principal amount and bearing the same rate of interest will be issued. The person in whose name any Bond shall be registered on the registration books may be deemed and treated as the absolute owner thereof for purpose of receiving payment of the principal of, redemption premium, if any, and the interest due thereon and for all other purposes, and the City and the Registrar shall not be affected by any notice to the contrary. 25 -4- REDEMPTION PROVISIONS Optional Redemption Series 1988 Bonds maturing on or prior to October 1, 1998 are not subject to redemption prior to their stated dates of maturity. Series 1988 Bonds maturing on October 1, 1999 and thereafter are subject to redemption on October 1, 1998 and any time thereafter , at the option of the City, in whole at any time, or in part on any interest payment date, in such order of maturity as the City shall select and by lot with any maturity, at the following redemption prices (expressed as a percentage of the principal amount thereof) together with accrued interest to the date of redemption: Dates of Redemption ( inclusive) Redemption Price October 1, 1998 to September 30, 1999 102% October 1, 1999 to September 30, 2000 101% October 1, 2000 and thereafter 100% Notice of Redemption At least thirty ( 30) days prior to redemption, a written notice of redemption shall be mailed, postage prepaid, to all registered owners of the Series 1988 Bonds to be redeemed at their addresses as they appear on the registration books of the Registrar, but failure so to mail such notice to any registered owner of a Series 1988 Bond shall not affect the validity of the proceedings for such redemption with respect to any other registered owner of a Series 1988 Bond. Each notice shall set forth the CUSIP number, if any, the certificate number , the called amounts of each certificate, date of issue, interest rate and maturity date of the Series 1988 Bonds to be redeemed and shall also include the date fixed for redemption, the redemption price to be paid and the name and address of the redemption agent . SECURITY Payment of the Series 1988 Bonds The payment of the principal of and interest on the Series 1988 Bonds when due will be insured by the Municipal Bond Insurance Policy to be issued by FGIC simultaneously with delivery of the Series 1988 Bonds . See "BOND INSURANCE" . 26 -5- The Series 1988 Bonds are special obligations of the City payable solely from the Resort Tax described below and the moneys and investments in the funds and accounts established under the Resolution and the income derived from said investments, unless otherwise provided in the Resolution. From and after the issuance of the Series 1988 Bonds, the City has pledged, for the payment of the principal of, redemption premium, if any, and interest on the Series 1988 Bonds and all parity bonds issued under the Resolution, all ( i ) revenues derived by the City from the Resort Tax ( the "Resort Tax Revenues" ) , and ( ii ) the moneys and investments in each of the funds and accounts established under the Resolution, and the income derived from said investments . Debt Service Reserve Account On the date of issuance of the Series 1988 Bonds, a reserve account ( the "Debt Service Reserve Account" ) will be funded in an amount equal to the maximum future annual principal and interest debt service of the Series 1988 Bonds . The initial funding of the Debt Service Reserve Account will be provided from the proceeds of the Series 1988 Bonds, together with other moneys which shall be made available upon the advance refunding of the Series 1969 Bonds. In lieu of or in substitution for all or any portion of the moneys in the Debt Service Reserve Account, the City may cause to be deposited an insurance policy or a letter of credit for the benefit of the holders of the Series 1988 Bonds in an amount equal to the amount which would have been required to be placed in the Debt Service Reserve Account . Such insurance policy or letter of credit shall be payable or available to be drawn upon after the giving of notice as required thereunder , on any interest payment date on which a deficiency exists which cannot be cured by moneys in any other fund or account held pursuant to the Resolution and available for such purpose. Moneys in the Debt Service Reserve Account may be used for making payments of principal of and interest on the Bonds only if other moneys held pursuant to the Resolution and available for such purpose are insufficient . Resort Tax Revenues The City has covenanted in the Resolution to maintain a Fund into which all Resort Tax revenues are to be deposited ( the "Resort Tax Fund" ) . Under the Resolution the City' s monthly collections of Resort Tax revenues are deposited in the Resort Tax Fund and must be used in the following order of priority: ( i ) to fund monthly an interest payment account with one-sixth of the interest which will become due on the Bonds on the next semi- annual interest payment date; ( ii) to fund monthly a principal account, in an amount equal to one-twelfth of the next principal installment on the Bonds; ( iii) to fund monthly one-sixtieth of the deficiency, if any, in the Debt Service Reserve Account ( items ( i ) through ( iii ) are referred to hereafter as the "Sinking -6- Fund" ) ; ( iv) to make payments on any other bonds which are subordinate to the Bonds and which are secured by the Resort Tax (of which presently there are none) ; and (v) if all payments required by items ( i ) through ( iv) above have been made, including any deficiencies for prior payments and any amounts due to the issuer of any insurance policy or letter of credit in connection with the Sinking Fund, then on a monthly basis, monies remaining in the Resort Tax Fund may be used by the City for any lawful purpose. Additional Bonds The City may issue additional bonds on a parity with the Series 1988 Bonds as to payment from and lien on the City' s Resort Tax. Such additional Bonds may be issued upon compliance with the following conditions: ( 1) The City must be current in all deposits into the various funds and accounts and all payments theretofore required to have been deposited or made by it under the provisions of the Resolution and the City must be currently in compliance with the covenants and provisions of the Resolution and any supplemental resolution hereafter adopted for the issuance of additional parity Bonds . ( 2) The amount of the Resort Tax Revenues during the immediate preceding Fiscal Year or any twelve (12 ) consecutive months selected by the City of the eighteen ( 18) months immediately preceding the issuance of such additional parity Bonds, as certified by an independent certified public accountant, were at least equal to one hundred fifty percent ( 150%) of the Maximum Annual Debt Service on ( i ) the Bonds originally issued pursuant to the Resolution and then Outstanding, ( ii ) any additional parity Bonds theretofore issued and then Outstanding, and ( iii ) the additional parity Bonds then proposed to be issued. ( 3) The City need not comply with subparagraph ( 2) of this paragraph in the issuance of additional parity Bonds if and to the extent the Bonds to be issued are refunding Bonds, that is, delivered in lieu of or in substitution for Bonds originally issued under the Resolution or previously issued additional parity Bonds, if the City shall cause to be delivered a certificate of the Finance Director of the City setting forth ( i) the Maximum Annual Debt Service (A) with respect to the Bonds of all Series Outstanding immediately prior to the date of authentcation and delivery of such refunding Bonds, and (B) with respect to the Bonds of all Series to be Outstanding immediately thereafter , and ( ii) that the Maximum Annual Debt Service set forth pursuant to (B) above is no greater than that set forth pursuant to (A) above . Proceeds of such additional bonds may be used for any purposes which are authorized pursuant to Chapter 67-930, Laws of Florida, -7 28 Acts of 1967, as amended. See "Resort Tax" for a description of such purposes . BOND INSURANCE Concurrently with the issuance of the Series 1988 Bonds, Financial Guaranty Insurance Company ( "Financial Guaranty" ) will issue its Municipal Bond New Issue Insurance Policy for the Series 1988 Bonds (the "Policy" ) . The Policy unconditionally guarantees the payment of that portion of the principal of and interest on the Series 1988 Bonds which has become due for payment, but shall be unpaid by reason of nonpayment by the City. Financial Guaranty will make such payments to Citibank, N.A. , or its successor as its agent (the "Fiscal Agent" ) , on the later of the date on which such principal and interest is due or on the business day next following the day on which Financial Guaranty shall have received telephonic or telegraphic notice, subsequently confirmed in writing, or written notice by registered or certified mail, from an Owner of Series 1988 Bonds or the Paying Agent of the nonpayment of such amount by the City. The Fiscal Agent will disburse such amount due on any Series 1988 Bond to its owner upon receipt by the Fiscal Agent of evidence satisfactory to the Fiscal Agent of the owner ' s right to receive payment of the principal and interest due for payment and evidence, including any appropriate instruments of assignment, that all of such owner ' s rights to payment of such principal and interest shall be vested in Financial Guaranty. The term "nonpayment" in respect of a Series 1988 Bond includes any payment of principal or interest made to an owner of a Series 1988 Bond which has been recovered from such owner pursuant to the United State Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealable order of a court having competent jurisdiction. The Policy is non-cancellable and the premium will be fully paid at the time of delivery of the Series 1988 Bonds . The Policy covers failure to pay principal of the Series 1988 Bonds on their respective stated maturity dates, or dates on which the same shall have been called for mandatory sinking fund redemption, and not on any other date on which the Series 1988 Bonds may have been accelerated, and covers the failure to pay an installment of interest on the stated date for its payment. Financial Guaranty is a wholly-owned subsidiary of FGIC Corporation (the "Corporation" ) , a Delaware holding company. The following investors or affiliates thereof own approximately 85% of the stock of the Corporation: General Electric Capital Corporation, General Re Corporation, Lumbermens Mutual Casualty Company (affiliated with the Kemper Group) , Shearson Lehman Hutton Inc. , J.P. Morgan & Co. Incorporated and Gerald L. Friedman. The investors of the Corporation are not obligated to pay the debts of or the claims against Financial Guaranty. Financial Guaranty is domiciled in the State of New York and is subject to regulation by -8- _ 29 the State of New York Insurance Department . As of June 30 , 1988, the total capital and surplus of Financial Guaranty was approximately $365, 300,00 . Copies of Financial Guaranty ' s financial statements, prepared on the basis of statutory accounting principles, and the Corporation ' s financial statements, prepared on the basis of generally accepted accounting principles, may be obtained by writing to Financial Guaranty at 175 Water Street, New York, New York 10038, Attention: Communications Department . Financial Guaranty ' s telephone number is ( 212) 607- 3000 . DEBT SERVICE REQUIREMENTS CITY OF MIAMI BEACH, FLORIDA ACTUAL AND PROJECTED DEBT SERVICE COVERAGE RESORT TAX REVENUE BONDS 1984 - 1993 FISCAL TOTAL RESORT TAX TIMES YEAR PRINCIPAL INTEREST DEBT SERVICE COLLECTIONS COVERAGE 1983-84 $ 475,000 $ 533,343 $ 1,028,343 $ 3,417,606 3.32 1984-85 500,000 515,805 1,015,805 3,517,784 3.46 1985-86 525,000 476,342 1,001,342 3,641,790 3.64 1986-87 550,000 434,955 984,955 4,205,157 4.27 1987-88 575,000 391,643 966,643 4,600,000 4.76 1988-89 110,000 342,630 452,630 4,692,000 10.36 1989-90 115,000 336,140 451,140 4,786,000 10.61 1990-91 125,000 329,010 454,010 4,882,000 10.75 1991-92 130,000 321,010 451,010 4,979,000 11.04 1992-93 140,000 311,495 452,495 5,079,000 11.24 (1) Debt Service projection based on estimated issue. (2) 1985-86 estimate based on ten months collections, assumed rate of growth projected at 2%. RESORT TAX Pursuant to Chapter 67-930, Laws of Florida, Acts of 1967 , as amended, and City Ordinance 1727, as amended, codified as Chapter 41, Article V on the City Code, the City imposes, levies and -9- , + X30 collects a municipal resort tax of two percent ( 2%) upon certain rentals of a room or rooms in any hotel, motel, apartment house, rooming house, tourist or trailer camp and a tax not to exceed two percent ( 2%) upon the retail sale price of all items of food, beverages and alcoholic beverages other than beer or malted beverages, sold at retail for consumption on the premises of any place of business required by law to be licensed by the State Hotel and Restaurant Commission or by the State Beverage Department ( the "Resort Tax" ) . Under this Florida Statute, the funds from the collection of the Resort Tax may be used for the following purposes only: creation and maintenance of convention and publicity bureaus, cultural and art centers, enhancement of tourism, publicity and advertising purposes, and for future costs, purchase, building, designing, engineering, planning, repairing, reconditioning, altering, expanding, maintaining, servicing and otherwise operating auditoriums, community houses, convention halls, convention buildings or structures, and other related purposes, including relief from ad valorem taxes heretofore levied for such purposes. The City may increase the Resort Tax upon certain room rents to four percent ( 4% ) upon affirmative vote of the electorate. The City agrees in the Resolution that so long as any of the principal of or interest on the Bonds remains unpaid, it will not repeal Ordinance 1727 , reduce the rate of the Resort Tax, or amend or modify Ordinance 1727 so as to impair or adversely affect the power and obligation of the City to levy and collect the Resort Tax or adversely affect the pledge of the Resort Tax revenues and other funds pledged to pay the principal of and interest on the Bonds . Heretofore, the Resort Tax Revenues were pledged as part of the security for the payment of debt service on the Series 1969 Bonds. As described above, the Series 1969 Bonds will be refunded with a portion of the proceeds of the Series 1988 Bonds, thereby releasing the City from its obligation to dedicate the Resort Tax to payment of debt service on the Series 1969 Bonds . In addition, one-half of the Resort Tax Revenues are pledged to the Miami Beach Visitor and Convention Authority created by ordinances of the City which are codified as Chapter 41, Article VI of the City Code, as amended ( the "Authority" ) . Concurrent with the issuance of the Series 1988 Bonds the Authority and the City shall take such action to subordinate the Authority ' s interest in the Resort Tax Revenues as described above to the City ' s payment obligations under the Resolution, including payment of the Series 1988 Bonds. See "Security-Resort Tax Fund" . The revenue realized by the City from the Resort Tax, after deducting collection and administrative expenses, for the past four fiscal years ended September 30, 1987, and for the ten months ended July 31, 1988, are as follows : -10- 31 Resort Taxes Fiscal Years Ended September 30 Resort Tax Collection ( 1) 1984 $3, 417 ,606 1985 $3 , 517,784 1986 $3,641,790 1987 $4, 205,157 ten months ended 7/31/88 $3,916,830 ( 2 ) TAX EXEMPTION The Internal Revenue Code of 1986, as amended ( the "Code" ) , includes requirements which the City must continue to meet after the issuance of the Series 1988 Bonds in order that interest on the Series 1988 Bonds not be included in gross income for federal income tax purposes. The City ' s failure to meet these requirements may cause interest on the Series 1988 Bonds to be included in gross income for federal income tax purposes retroactive to their date of issuance. The City has covenanted in the Resolution to take the actions required by the Code in order to maintain the exclusion from gross income for federal income tax purposes of interest on the Series 1988 Bonds . In the opinion of Bond Counsel, assuming continuing compliance by the City with the tax covenants referred to above, under existing statutes, regulations, rulings and court decisions, interest on the Series 1988 Bonds is excluded from gross income for federal income tax purposes . Interest on the Series 1988 Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however , interest on the Series 1988 Bonds is taken into account in determining adjusted net book income (adjusted current earnings for taxable years beginning after 1989 ) for purposes of computing the alternative minimum tax imposed on corporations . Bond Counsel is further of the opinion that the Series 1988 Bonds and the interest thereon are exempt from taxation under the laws of the State of Florida, except as to estate taxes and taxes imposed by (1)Based upon information from the City' s financial statements as audited by its independent certified public accountants, Touche Ross & Co. ( 2)Unaudited. -11- 0' 32 Chapter 220, Florida Statutes, on interest, income or profits on debt obligations owned by corporations as defined therein. Except as described above, Bond Counsel will express no opinion regarding the federal income tax consequences resulting from the ownership of, receipt or accrual of interest on, or disposition of the Series 1988 Bonds. Prospective purchasers of Series 1988 Bonds should be aware that the ownership of Series 1988 Bonds may result in other collateral federal tax consequences, including ( i ) the denial of a deduction for interest on indebtedness incurred or continued to purchase or carry Series 1988 Bonds or , in the case of a financial institution, that portion of the owner ' s interest expense allocable to interest on a Series 1988 Bond, ( ii ) the reduction of the loss reserve deduction for property and casualty insurance companies by 15 percent of certain items, including interest on Series 1988 Bonds, ( iii ) for taxable years beginning before 1992, the inclusion of interest on Series 1988 Bonds in "modified alternative minimum taxable income" for purposes of the environmental tax imposed on corporations, ( iv) the inclusion of interest on Series 1988 Bonds in the earnings of certain foreign corporations doing business in the United States for purposes of a branch profits tax, (v) the inclusion of interest on Series 1988 Bonds in the passive income subject to federal income taxation of certain Subchapter S corporations with Subchapter C earnings and profits at the close of the taxable year and (vi) the inclusion in gross income of certain Social Security and Railroad Retirement benefits by reason of receipt of interest on the 1988 Bonds . LITIGATION There is no litigation pending or threatened that seeks to restrain or enjoin the issuance or delivery of the Series 1988 Bonds or the proceedings or authority under which they are to be issued or delivered. There is no litigation pending or threatened which, in any manner, questions the right of the City to pledge its Resort Tax Revenues as described herein to the repayment of the Series 1988 Bonds . There is no litigation pending or threatened which would have a material adverse effect upon the City' s financial condition or its ability to collect the Resort Tax. LEGALITY The Series 1988 Bonds will be accompanied at delivery with an approving opinion of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. , Miami , Florida, Bond Counsel, in substantially the -12- 33 form attached hereto as Appendix D. Certain legal matters will be passed upon for the City by Arnold M. Weiner , City Attorney, Miami Beach, Florida. Certain legal matters will be passed upon for the Underwriters by Kirkpatrick & Lockhart, Miami , Florida, Counsel to the Underwriters. VERIFICATION OF MATHEMATICAL COMPUTATIONS The accuracy of the mathematical computations of the adequacy of the maturing principal amounts of and interest on the securities to be deposited in escrow to pay, when due, the principal of, redemption premiums, if any, and interest on the Prior Bonds, and the mathematical computations supporting the conclusion of Bond Counsel that the Series 1988 Bonds are not "arbitrage bonds" under Section 148 of the Internal Revenue Code of 1986, as amended, will be verified by Touche Ross & Co. , independent certified public accountants . UNDERWRITING Lazard Freres & Co. , Chase Manhattan Capital Markets Corporation and Raymond James & Associates, Inc. ( the "Underwriters" ) have jointly and severally agreed, subject to certain conditions, to purchase the Series 1988 Bonds at an aggregate discount of $ from the initial public offering prices set forth on the cover page of this Official Statement . The Underwriters are committed to purchase all the Series 1988 Bonds if any are purchased. The Underwriters ' obligations are subject to certain conditions precedent . The Underwriters may offer and sell Series 1988 Bonds to certain dealers ( including dealers depositing Series 1988 Bonds into investment trusts) and others at prices lower than the public offering price stated on the cover of this Official Statement . After the initial public offering, the public offering price of the Series 1988 Bonds may be changed from time to time by the Underwriters . OTHER MATTERS The information contained in this Official Statement is presented for the guidance of prospective purchasers of the Series 1988 Bonds described herein. The information has been compiled from official and other sources and, while not guaranteed by the City, is believed to be correct . So far as any statements made in this Official Statement and the appendices attached hereto involve -13- 34 matters of opinion or estimates, whether or not so expressly stated, they are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. AUTHORIZATION CONCERNING OFFICIAL STATEMENT The delivery of this Official Statement has been duly authorized by the City Commission of the City of Miami Beach, Florida. At the time of the delivery of the Series 1988 Bonds, the Mayor and the City Manager will furnish a certificate to the effect that nothing has come to their attention which would lead them to believe that the Official Statement, as of its date and as of the date of delivery of the Series 1988 Bonds, contains any untrue statement of a material fact or omits to state a material fact which should be included therein for the purpose for which the Official Statement is intended to be used, or which is necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading. CITY OF MIAMI BEACH, FLORIDA ALEX DAOUD, Mayor ROB W. PARKINS, City Manager ATTEST: City Clerk FORM APPROVED LE L DEPT. By 4 t -14- 35 APPENDIX A GENERAL INFORMATION - CITY OF MIAMI BEACH Introduction The City of Miami Beach comprises seven square miles of land area and ten square miles of water area located in Dade County, Florida. The weather lends a tropical ambiance to Miami Beach with an average year-round temperature of 75 degrees Fahrenheit, 24 degrees Celsius. The City is linked to mainland Metropolitan Dade County by four causeways - John F. Kennedy at the northern end, Julia Tuttle at the mid-point and the Venetian and MacArthur Causeways at the southern end. The City experienced a building and population boom during the 1920 ' s, 1930 ' s and 1940 ' s . This "boom" is preserved via the Art Deco District, a one square mile neighborhood bounded by 6th and 23rd Streets to the north and south, and by Alton Road and Ocean Drive at its east/west boundaries . This area received official designation as a historic district when listed in the National Register of Historic Places in 1979 . Hundreds of apartments, hotels and retail stores feature the classic architecture of the Art Deco style. The renovation and preservation of these buildings has been undertaken mainly by private investors . During 1985 alone, 508 repair and renovation permits were issued by the City. In the mid-1950 ' s, the airlines began to provide comprehensive service to the area and the City evolved as a major convention destination. During the 1970 ' s, the City was host to both the Democratic and Republican National Conventions . Currently, the Miami Beach Convention Center is undergoing renovations increasing the existing facility to 1 . 1 million square feet . Ground was broken for the expansion of the Center on March 26 , 1986 and construction on the site is expected to be completed in 1988 . The $80 million renovation will modify the Center into four equal-size halls of 125,000 square feet, each housing meeting rooms, concession and catering areas and loading docks . Each hall will have its own canopied entrance, allowing the facility to house four events at a time or one large event . An open 8,000-square foot area in the center of the second floor crossover walkway will transport delegates and conventioneers through elevators, escalators and stairs, and features a circular restaurant and cocktail lounge, providing a 360-degree view of the entire floor space below. 36 The spirit of renewal and transition can be seen throughout the City of Miami Beach. In the South Pointe area, in addition to the Art Deco District renovations, public projects include the $3 . 5 million South Pointe Park, $9 .8 million in infrastructure improvements, the $18 million Police and Courts Facility and the revitalization of the Lummus Park area which includes a continuation of a beachfront promenade. Private development in the South Pointe area includes the Crawdaddy ' s restaurant located in the City ' s South Pointe Park, Penrod' s restaurant to be located in Pier Park on the beach and the South Pointe Towers development, a $355 million project including four condominium towers, a luxury hotel and beach and tennis club. In the City' s middle area, public projects include the expansion of the Miami Beach Convention Center , the $22 million renovation of the Theater of the Performing Arts, as well as the Garden Center and Conservatory expansion, the 21st Street Community Center and Walkway, Island View Park and the Beachfront Park and Promenade, a 1 .8 mile long linear park featuring the natural woods which stretch along the oceanfront from 21st to 46th streets . Private development in the area includes the South Florida Art Center located on Lincoln Road Mall, additions and renovations to the Alexander Hotel, the Fontainebleau Hilton, the Doral Hotel and the Eden Roc Hotel, which are currently in progress or have been completed, and a planned convention center host hotel which is in the site development stage. In the north area, a joint project between the State of Florida and the City of Miami Beach for the expansion of the North Shore Open Space Park is currently under way. The project includes the acquisition of privately owned parcels which block access to the public beaches and the expansion to the north of a beachfront promenade. The City of Miami Beach Planning Department has completed a North Shore Revitalization Strategy focusing on the commercial district along Collins Avenue and down 71st Street . Phase I of the comprehensive plan is a review process and includes the organization of a private non-profit development corporation. Government The City of Miami Beach is organized under the Commission- Manager form of government . The governing body of the City is the City Commission which establishes policies for proper administration of the City. The City Commission is composed of seven members, including the Mayor . The Mayor and Commissioners are elected to their offices by an at-large vote of the citizens; the Vice-Mayor is chosen by majority vote of all members of the City Commission. The Mayor and each Commissioner serve a two year term. The City Commission appoints a City Manager to act as administrative head of the City. The City Manager serves at the pleasure of the City Commission, carries out its policies, directs C-2 37 the operation of the City and has the power to appoint or remove heads of all departments . Certain City Administrative and Financial Staff Members Rob W. Parkins, City Manager Appointed City Manager , April 1982; Appointed Assistant City Manager of Miami Beach, November 1981; CETA Liaison Officer for the City of Miami , May 1981; Assistant to the City Manager , City of Miami, May 1979 to May 1981 . Education: Florida International University, B. S. in Criminal Justice Administration. Member of the International City Managers Association, Florida City and County Managers Association, and Dade County Police Chiefs Association. In addition, Mr . Parkins is a member of various civic and social service organizations. Richard L. Fosmoen, Assistant City Manager Appointed Assistant City Manager of Miami Beach, February 1984; President of Lyceum Enterprises, Inc . ; Planning and Development Consultant, 1981-84; City Manager , Miami, Florida 1980-81; Assistant City Manager , Miami , 1976-80; Assistant City Manager, Grand Rapids, Michigan, 1970-78 . Education: Graduate courses, Wayne State University 1967-68; B.S. in Urban Planning, Michigan State University, 1963 . Carla Bernabei Talarico, Assistant City Manager Appointed Assistant City Manager of Miami Beach, July 1985; Director of Management and Budget, June 1983 to June 1985; Assistant Finance Director, City of Miami, Florida, December 1980 to June 1983; Auditor , City of Miami , December 1978 to December 1980; Auditor , Metropolitan Dade County Internal Audit Department, 1975 to 1978. Education: University of Florida, B.S. degree in Business Administration with a major in Accounting . Certification: Certified Public Accountant , State of Florida. Member of American Women' s Society of CPA' s and Florida Institute of CPA' s . C-3 Robert J. Nachlinger , Finance Director Appointed Finance Director of the City of Miami Beach, November 1985; Finance Officer , City of Beaumont, Texas, 1979- 1985; Treasurer , Dallas Independent School District, Dallas, Texas 1975-1979; Chief Accountant, Dallas County, Dallas, Texas 1970- 1975 . Education: East Texas State University, B.B.A. and M.B.A. with Accounting and Finance Majors . Certification: Certified Public Accountant, State of Texas, 1975 . Peter F. Liu, Director of Management and Budget Appointed Director of Management and Budget of Miami Beach, July 1985; Assistant Budget Director , Miami Beach, January 1984; Senior Management Analyst, City of Miami , Florida, 1981 . Education: Georgia Institute of Technology, M.S. I .M. in Industrial Management; Fordham University, B. S. in Chemistry. Transportation Within three hours by air from the major population centers of the northeastern United States, Miami Beach is also at the terminus of the interstate highway network. The Port of Miami , which serves Miami Beach, is the largest cruise ship port in the world and is one of the largest export/import seaports in the world. The Port of Miami is owned by Dade County and is operated by the Dade County Seaport Department . From 1982 to 1986 , the number of passengers sailing from the Port increased from 1,760, 255 to 2 , 520, 571, an increase of 43 . 2% . The Port of Miami specializes in unitized trailer and container cargo handling concepts . The effective use of equipment and the Port ' s convenient location has combined to make the Port the nation' s leading export port to the Western Hemisphere. From 1982 to 1986, the total cargo handled decreased from over 2 . 6 million tons to over 2 . 4 million tons, a decrease of 9 . 75% . Since 1979 , the Port of Miami has increased in size from 300 acres to 525 acres . The additional space accommodates an increasing number of shippers, buyers, importers, exporters, freight forwarders and cruise passengers who wish to utilize the Port . C-4 39 A five year summary of the changes in both passengers served and cargo handled is indicated below: Year End Cargo September 30 Passengers (Tonnage) 1983 2,002,654 2, 305,645 1984 2, 217,065 2, 287 , 281 1985 2 , 326,685 2, 333, 026 1986 2, 520, 571 2, 406 , 084 1987 2,633,041 2 , 425, 937 Source: Dade County Seaport Department . Miami Beach is also within easy access of five airports within the boundaries of Dade County. The responsibility for their operation is assigned to the Dade County Aviation Department. Miami International Airport ranks 8th in the nation and 9th in the world in the number of passengers using its facilities . It ranks 5th in the nation and 8th in the world in the movement of domestic and international air cargo. Airport services are provided annually to nearly 20 million domestic and international scheduled passengers . The airlines serving the Miami International Airport provide worldwide air routes convenient for importers and exporters . A five-year summary of the passengers served and cargo handled is indicated below: Year End Total Cargo September 30 Passengers ( tonnage) 1983 19 , 318, 379 570 , 627 1984 19 , 245,735 571 ,865 1985 19 ,962, 000 565,736 1986 21,947 , 368 600 , 135 1987 23,800,000 666 ,719 Source: Dade County Aviation Department . Recreation There are numerous parks and playgrounds in the City of Miami Beach. Each park provides different amenities, from tennis and bocce courts to swimming pools and tot lots, to Vita courses and barbecue pits . There are four Vita courses, two swimming pools, and numerous tennis courts, including the Abel Holtz Tennis Stadium which houses championship, professional and amateur tournaments. C-5 40 Offshore, the Gulf Stream provides a variety of game fish, and the newly renovated Miami Beach Marina provides space to house pleasure boats . The $11 million renovation increased the number of wet slips to 388, making the Marina the largest in the area . The Marina is a private development on City-owned bayfront land in the South Pointe area. In the north part of the City, the general public can leisurely sail in the quiet waters of Biscayne Bay from the Miami Beach Sailport . The facility, though open to all ages, was especially designed to teach young adults the basic art of sailing on small prams . The City owns two championship golf courses and one Par 3 course; all are open to the general public. The two championship courses, Bayshore and Normandy, offer clubhouses complete with restaurant, lounge and Pro Shop. C-6 ,. 41 Statistical Information for Miami Beach and Dade County GROWTH INDICATORS MIAMI BEACH AND DARE COUNTY 1987 1986 1985 1984 1983 Auto Tags (Dade County) (1) 1,681,037 1,608,982 1,589,173 1,470,024 1,453,991 Bank Deposits (000) (Dade County) (2) 19,249,288 18,897,084 16,721,801 15,191,696 13,429,861 Bank Loans (000) (Dade County) (3) 16,475,466 16,174,500 14,987,450 12,596,842 9,634,325 Savings & Loan Deposits (000) (Dade County) (4) N/A N/A 12,047,784 17,161,600 Gasoline Taxes (Dade County) (5)* 72,289,011 66,678,039 65,483,158 63,299,670 55,768,717 Sales Taxes (Miami Beach) (5) 26,819,421 22,596,092 23,622,990 22,301,909 23,683,075 State Revenue Sharing (Miami Beach) (5) 3,289,180 2,581,211 2,776,361 2,687,912 2,663,541 Public School Enrollment (Dade County) (6) 245,796 243,313 226,400 223,617 223,854 Sources: (1) Florida Department of Highway Safety and Motor Vehicles; (2) Florida Bankers Association Report (Federal Reserve/FDIC Tapes) ; (3) Florida Division of Banking, Bureau of Examination; (4) Federal Home Loan Bank Board, Atlanta, Georgia; (5) Florida Department of Revenue; (6) Florida Department of Education. * The gasoline tax of 8 cents per gallon was increased to 9.7 cents per gallon effective April, 1983. C-7 42 N/A - not available. POPULATION ESTIMATES Miami Beach State of Florida United States Population Change % Population Change % Population Change % 1980(1) 99,298 4.9 9,471,000 3.7 224,567,000 1.1 1981 96,291 0.0 9,739,000 2.8 226,505,825 1.0 1982 97,335 1.1 10,375,332 6.5 231,023,000 2.0 1983 98,026 1.1 10,591,701 2.1 233,206,000 0.9 1984 97,340 ( .7) 10,930,389 3.2 236,162,000 1.3 1985(2) 96,913 ( .4) 11,287,932 3.3 238,444,000 1.0 1986 99,926 ( .0) 11,653,673 3.2 241,888,000 1.4 1987 97,727 (2.2) 12,043,608 3.2 245,625,000 1.5 (1) U.S. Census (2) Estimated Source: University of Florida, Bureau of Economic and Business Research. CITY OF MIAMI BEACH, FLORIDA VALUE OF BUILDING PERMITS ISSUED LAST TEN YEARS Existing Structures Total New Construction Additions, Rehabilitation, Etc. Value 1978 21,500,430 9,674,560 31,174,990 1979 42,253,075 9,624,967 51,878,042 1980 143,784,370 17,598,119 161,382,489 1981 75,562,126 22,251,183 97,813,309 1982 125,556,022 14,201,833 139,757,855 1983 36,663,625 23,052,215 59,715,840 1984 11,897,784 28,587,383 40,485,167 1985 47,508,992 17,736,022 65,245,014 1986 6,593,335 19,026,892 25,620,227 1987 3,804,616 69,897,353 73,701,969 Source: City of Miami Beach - Building Permit Department. C-8 43 DADE COUNTY, FLORIDA PER CAPITA PERSONAL INCOME (CURRENT DOLLARS) Dade County Florida United States Current Percent Current Percent Current Year Dollars of U.S. Dollars of U.S. Dollars 1976 6,694 104.6 6,094 95.2 6,401 1977 7,250 103.8 6,520 93.4 6,984 1978 8,157 104.9 7,330 94.3 7,776 1979 9,103 105.2 8,202 94.7 8,657 1980 9,754 102.9 9,142 96.4 9,483 1981 11,047 105.3 10,165 96.9 10,495 1982 11,711 105.9 10,875 98.4 11,056 1983 11,704 111.0 10,386 98.5 10,544 1984 11,324 101.9 10,927 98.3 11,113 1985 12,131 103.8 11,593 99.2 11,687 Source: U.S. Department of Commerce, Bureau of Economic Analysis, Unpublished Data. DADE COUNTY, FLORIDA ESTIMATED EMPLOYMENT IN NON-AGRICULTURAL ESTABLISHMENTS September September September 1986 Percent 1985 Percent 1984 Percent Producing Sector Contract Construction 38,700 4.8% 37,000 4.7% 40,100 5.4% Manufacturing 94,000 11.7 95,400 12.3 93,300 12.5 Total Pro- ducing 132,700 16.5 132,400 17.0 133,400 17.9 Services Sector Transportation, Communications, & Utilities 68,800 8.6 70,000 9.1 68,600 9.1 Wholesale Trade 65,400 8.1 60,200 7.7 58,200 7.8 Retail Trade 150,800 18.8 139,900 18.0 132,200 17.7 Finance, Insurance & Real Estate 67,900 8.5 63,000 8.1 62,000 8.3 Services 213,700 26.6 209,700 27.0 195,400 26.1 Government 104,100 12.9 102,200 13.1 97,800 13.1 Total Services 670,700 83.5 645,900 83.0 613,600 82.1 C-9 44 TOTAL 803,400 100.0% 778,300 100.0% 747,000 100.0% UNEMPLOYMENT RATES 1987 1986 1985 1984 1983 1982 1981 USA 5.6% 7.0% 7.2% 7.5% 9.6% 9.7% 7.6% Florida 5.1 5.7 6.0 6.3 8.6 8.2 6.8 Dade County 6.5* 6.7* 7.5* 10.1* 9.8* 10.1* 9.5 Source: State of Florida Department of Labor and Employment. * Includes Haitian and Cuban (Mariel) refugees. DADE COUNTY, FLORIDA TEN LARGEST PUBLIC AND PRIVATE EMPLOYERS 1986 Ten Largest Public Employers Ten Largest Private Employers Dade County Public Schools 29,100 Eastern Airlines 14,000 Metropolitan Dade Southern Bell Telephone County 23,000 & Telegraph Company 6,800 U.S. Federal Agencies 15,700 BurgerKing 6,500 State of Florida Florida Power & Light Agencies 11,600 Company 5,700 Public Health Trust/ Burdines Department Store 5,500 Jackson Memorial Hospital 5,400 University of Miami 5,200 Miami Dade Community Pan American World Airways 4,800 College 4,400 Southeast Bank, N.A. 4,300 City of Miami 3,700 Publix Markets 4,000 Florida International Miami Herald Publishing Co. 3,500 University 2,600 Veterans Administration Medical Center 2,200 City of Miami Beach 1,700 Source: Directory of Dade County Major Employers, Dade County Industrial Development Authority, October, 1985. C-10 `15 FORTUNE 500 COMPANIES WITH OFFICES IN DADE COUNTY Pepsico IT&T Eastman-Kodak IBM Boise Cascade Rockwell International Easton AFA Union Carbide General Electric Cummins Americas Mack Trucks, Exxon Texaco International Paper Inc. Shell Oil Babcock Co. Firestone McGraw Edison Greyhound Burger King Goodyear Pfizer Pitney Bowes Caterpillar Co. Owens-Corning PPG Industries ARCO Metal Co. Ralston-Purina Fiberglass General Tire & Dow Chemical Dictaphone Corp. Fruehauf Corp. Rubber B.F. Goodrich DuPont De Nemours Honeywell Inc. Weyerhauser Knight-Ridder Alcoa Wang Laboratories, Inc. NCR Borden New York Times Xerox Hoover Conagna Ashland Chemical Belcher Oil Polaroid Corp. Westinghouse Motorola Nabisco United Aircraft Service Navistar International CD Medical Technologies International Source: Directory of Dade County Major Employers, Dade County Industrial Development Authority, October, 1985. CITY OF MIAMI BEACH, FLORIDA TEN LARGEST TAXPAYERS 1986 Owner Assessed Values Alexander Muss & Sons $ 84,577,206 Roney Plaza 41,401,150 Seacoast Towers 32,250,000 Morton Towers 21,515,920 Daniel Malone 15,657,004 Carillon Hotel 15,630,700 Ocean Pavilion Hotel 15,438,495 Doral Beach Hotel 14,500,000 Eden Roc Hotel 12,300,000 Southern Bell 11,122,706 Represents 8.7% of Total Taxable Value $264,393,181 Source: Metropolitan Dade County, Florida, Department of Property Appraisal; City of Miami Beach, Florida Valuation Roll. C-ii F'inanrial Guaranty Incuraneo Appendix C t:nmp.ny IC. 1Water Str.'i FG '' Q Nosy York. New lork 10038 (212) b0-30w Municipal Bond New Issue InsurancePolicy iuer: Policy Number: Control Number: -----AA Bonds: Premium; Financial (guaranty- Insilranee Company (" • , c •1 Cu: racy' a New 'ork . oc.k insurance company. in consideration o i . p rent . th . emit and - bjcc o th- terms of this Policy. hereby unc - io liy an revoc. I. -:roes ► jav to Otis _ N.A.. or its succes4or, as its .._nt the ' iseal ; • _•t"). li bene t of B ulcers. that portion of the princi• an 411111k res on i above .1e. gibe• •e. obi. • inns the "Bonds" which shall becon . tile for P •ic but : all be np ' b. r• of Nonpati incrit by the Issuer. F. - A, .rA ty ' I make such a to P t. )1."n tseal Agent on the date such principal or i errs. he, i es D for Rivulet or •n t o - • sines Day next following the day on whir f'i dal :uoalrad.ri,:-.:is.hall ha rte- edotice ofNonpayment. whicheverislater.he l*.en seto► condholderrhefaceamountcif triad aiandi ite,retsogi\ E F�w 'ichitherautisunpaidbyreasnof:NonpayentbytheIssuerhistseal .Agent In form reasonablti satisfactory to it. of (i j evidence cif t Bo 'ho - right to receive payment of the principal or interest Due for Payment and i 1 i 'pence. including any appropriate instruments of assignment. that all of the 13o• n der's rights to payment of such principal or interest Due for Payment shall thereupon vest in Financial Cuaranty. Upon such disbursement_ Financial Guaranty shall become the owner of the Bond. appurtenant coupon or right to payment of principal or interest on such Bond and shall be fully Subrogated to all of the Bondholder's rights thereunder, including the Bondholder's right to payment thereof. This Policy is non-cancellable for any reason. The premium on this Policy is not refundable for any reason. including the payment of the Bonds prior to their maturity. This Policy does not insure against loss of an% prepayment premium which may at any time he payable with respect to any Bond. As used herein. the term "Bondholder" means. as to a particular Bond. the person other than the Issuer who. at the time of Nonpayment. is entitled under the terms of such Bond to payment thereof. "Due for Payment" means. when referring to the principal of a Bond, the stared maturity date thereof or the date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption;, acceleration or other advancement of maturity and means. when referring to SM Service mark use b,' Finanri,.l Pap 1 of 2 Form 9000 Ct,arnnty Insurance Company under license from its parent .�,.., Financial Guaranty Insuranrr Company 173 Teter Street New York. New fork 100.38 (212) 607-3040 Municipal Bond New Issue Insurance Policy interest on a Bond, the stated date for payment of interest. "Ncuipacyrnent" in respect of a Bond means the failure of the Issuer to have provided sufficient funds to the paying agent for payment in full of all principal and interest Due for Payment on such Bond. 'Notir means telephonic or telegraphic notice. subsequently confirmed in writing, or wt.' le notice by registered or certified mail, from a Bondholder or a paving agent - -411/4:01) Financial Guaranty. "Business Day" means any day other than a Sat a Sun.a• •r a v day on which the Fiscal Agent is authorized by law to remain c' -: In Witness Whereof. Financial Guaranty has caused thin !icy be of ed t t. corporate seal and to be signed hti its duly a • . ci offi in •c cimil o be. me effective and binding upon Financial G by vi lie . eco ritersi •ture •f its authorized representative. �r • Preaid• •440k • ye Vice President ec-ti r =• : Authorized Representative Citi !nk. A. nowleclges that it has agreed to perform the duties of Fiscal Agent unde t h•- • . icy. Authorized (icer 1 ►!hr .�rrrlw.-•• ••ti•�►�'.. •�•r .•••, r �•"'���.•art 8,Service mark used by Financial Page 2 at 2 Form 9000 Cuaranty Insurance Company under license from its parent • 48 I a Financial Guaranty lnstaranc,f Cumy.tny FGIC 175 Fater Street . Nevi York, New York 10038 (212) 607-3000 Endorsement To Financial Guaranty- Insurance Company Insurance Policy Policy Number: Control Number: It is further understood that the tern-i "Nonpayment" in respect of a Ion• ' udes a - payment of principal or interest made to a Bondholder by or on be, • tIle 1 -ue.r f s ch Bond w Mich has been recovered from such Bondholder pursti: • the I 'ted :. a A, Bankruptcy Code by a trustee in bankruptcy in accordance ith a mal, ti ap , a a• order of a court having competent jurisdiction. In Witness Whereof, Financial Cuarant • ., eau: this .id, ent o he a ed . its corporate seal and to be signed by ' of y uthori - office csirrn to be e effective and binding upon Fi iii ,al 'uara y by I, t► ' of th ill tersi g of its duly authorized representati WIP i ic'r"....1.', 4.t . \ e•.. . I ily a i&1#I.a.Le Or - 111!i : • •side Executive Vim President rall"A ill saill Petiv.. D: 4 Authorized presentative t ckno� ,c ged as of the Effective Date written abc�vr: 151,46 . Authorized Officer Cldbank, N.A.. as Fiscal Agent VPIsNN►r4.... .4110.►- ..,...r,.ww-,. .. ;... ..•.•,,...“.....n...1.10•..,..w►..*r.a SM Service mark tiled by F inan.ial Page 1 41 Form E-0002 Guaranty iniuran.r Company under license from its parent ._ ern,n s 49 ATTACHMENT C $6,000,000 CITY OF MIAMI BEACH, FLORIDA Resort Rax Refunding Bonds, Series 1988 BOND PURCHASE CONTRACT On October , 1988, Lazard Freres & Co. , Chase Manhattan Capital Markets Corporation and Raymond James & Associates, Inc. (hereinafter collectively referred to as the "Underwriters" ) and the City of Miami Beach, a Florida municipal corporation ( the "City" ) , enter into this Bond Purchase Contract, dated 1988 ( the "Purchase Contract" ) . Upon execution and delivery of this Purchase Contract, it shall be binding upon the City and the Underwriters. Any word capitalized and defined herein shall have the meaning indicated in the Official Statement (as hereinafter defined) . 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements set forth herein, the Underwriters, jointly and severally, hereby agree to purchase from the City for offering to the public and the City hereby agrees to sell and deliver to the Underwriters for such purpose, all (but not less than all) of the City ' s $6 , 000,000 aggregate principal amount of Resort Tax Revenue Refunding Bonds, Series 1988 Bonds ( the "Bonds" ) . The Bonds shall be dated initially as of October 1, 1988, and shall have the maturities and bear interest at the rates set forth in the Official Statement , such interest being payable on April 1, 1989 , and semi-annually thereafter on October 1 and April 1 of each year . The purchase price for the Bonds shall be $ , plus interest accrued from October 1, 1988 to the date of the payment for and delivery of the Bonds pursuant to Section 8 hereof ( such payment and delivery and the other actions contemplated hereby to take place at the time of such payment and delivery being hereinafter referred to as the "Closing" ) . The Preliminary Official Statement of the City relating to the Bonds, dated , 1988, including the cover page and Appendices thereto ( the "Preliminary Official Statement" ) is attached hereto and with such changes and amendments made by the City as shall be approved by the Underwriters is hereinafter referred to as the "Official Statement . Said offer of the Underwriters to purchase the Bonds shall extend until 5 : 00 P.M. , Eastern Standard time, on the date hereof unless previously withdrawn or extended in writing by the Underwriters . 2 . The Bonds . The Bonds shall be described in, and shall be issued and secured under the provisions of Resolution No. and Resolution No. which were duly adopted by the City Commission on , 1988 (collectively, the "Resolution" ) . 50 3 . Authority of Lazard Freres & Co. Lazard Freres & Co. has been duly authorized to execute this Purchase Contract and has been duly authorized to act hereunder by and on behalf of the other Underwriters with respect to all matters related to the sale and delivery of the Bonds . 4 . Offering. It shall be a condition to the City ' s obligations to sell and to deliver the Bonds to the Underwriters and to the Underwriters ' obligations to purchase, to accept delivery of and to pay for the Bonds that the entire $6, 000, 000 aggregate principal amount of the Bonds be issued, sold and delivered by the City and purchased , accepted and paid for by the Underwriters at the Closing. The Underwriters agree to make a bona fide public offering of all of the Bonds, at not in excess of the initial public offering prices or yields as set forth in the Official Statement, plus interest accrued thereon from the date of the Bonds . 5. Good Faith Check . Delivered to the City herewith is a check payable to the Order of the City of Miami Beach, Florida in the amount of $60,000 ( such check being hereinafter referred to as the "Good Faith Check" ) , which shall be held uncashed by the City and returned to the Underwriters at the Closing. No interest shall be paid by the City to the Underwriters upon the amount of the Good Faith Check . In the event the City fails to deliver the Bonds at the Closing, or in the event the City is unable to satisfy the conditions to the obligations of the Underwriters to purchase, accept delivery of and pay for the Bonds, as set forth in this Purchase Contract (unless waived by the Underwriters ) , or in the event such obligations of the Underwriters are terminated by any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and the Good Faith Check shall be immediately returned to the Underwriters . In the event that the Underwriters fail to (other than for a reason permitted hereunder ) to purchase, accept deliver of and pay for the Bonds at the Closing as herein provided, the City shall cash the Good Faith Check and retain the amount thereof as full liquidated damages for such failure and for any defaults hereunder on the part of the Underwriters and, except as set forth in Section 11 and 13 hereof, neither party hereto shall have any further right against the other hereunder . 6 . Use of Documents. The City hereby authorizes the use by the Underwriters of the Resolution, the Official Statement ( including any supplements or amendments thereto) , and the information contained therein, in connection with the public offering and the sale of the Bonds . The City ratifies, approves and consents to the use by the Underwriters prior to the date hereof of the Preliminary Official Statement in connection with the public offering of the Bonds . -2- 5� 7 . Representations, Warranties and Agreements . The City hereby represents, warrants and agrees as follows : (a) The City is and will be at the date of the Closing duly organized and validly existing as a municipal corporation with the powers and authority set forth in Chapter 166, Florida Statutes and Article VIII , Section 2, Constitution of the State of Florida (collectively the "Act" ) ; (b) The City has full legal right, power and authority: ( i ) to enter into this Purchase Contract, the Escrow Deposit Agreement to be entered into by and between the City and Southeast Bank, N.A. , Miami , Florida, as escrow agent ( the "Escrow Agreement" ) in connection with the advance refunding the City ' s outstanding Excise Tax Revenue Bonds , Series 1969 ( the "Prior Bonds" ) , and the Trustee, Registrar and Paying Agent Agreement ( the "Fiduciary Agreement" ) to be entered into by and between the City and Southeast Bank , N.A. , as trustee, registrar and paying agent, ( ii ) to adopt the Resolution, ( iii ) to sell issue and deliver the Bonds to the Underwriters as provided herein, and ( iv) to carry out and consummate the transactions contemplated by this Purchase Contract, the resolution, the Escrow Agreement, the Fiduciary Agreement and the Official Statement and the City has complied, and at the Closing will be in compliance in all respects with the terms of the Act and with the obligations on its part in connection with the issuance of the Bonds contained in the Resolution, the Bonds, the Escrow Agreement, the Fiduciary Agreement, and this Purchase Contract; (c) By all necessary official action, the City has duly adopted the Resolution, had duly authorized and approved the Preliminary Official Statement and the Official Statement, has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations on its part in connection with issuance of the Bonds contained in the Bonds, the Resolution, the Escrow Agreement, the Fiduciary Agreement, and this Purchase Contract and the consummation by it of all other transactions contemplated by this Purchase Contract in connection with the issuance of the Bonds; the Resolution constitutes a legal, valid and binding obligation of the City, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, and similar laws affecting creditors ' rights and subject, as to enforceability, to general principles of equity ( regardless of whether enforcement is sought in a proceeding in equity or at law) ; and the Bonds, when issued, authenticated and delivered in accordance with the Resolution and the Purchase Contract, will constitute legal, valid and binding obligations of the City, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors ' rights and subject, as to enforceability, to general principles of equity ( regardless of whether enforcement is sought in a proceeding in equity or at law) ; -3- 52 (d) The City is not in material breach of material default under any applicable constitutional provision, law or administrative regulation of the State of Florida ( the "State" ) or the United States or any applicable judgment or resolution, agreement, or other material instrument to which the City is a party or to which the City or any of its property, assets or the Resort Tax revenues is otherwise subject, and no event has occurred and is continuing with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument; and the execution and delivery of the Bonds, this Purchase Contract and the Escrow Agreement, the Fiduciary Agreement Agreement and the adoption of the Resolution, and compliance with the provisions on the City' s part contained herein, will not conflict with or constitute a breach of or default under any constitutional provisions, law, administrative regulation, judgment, decree, loan agreement, bond indenture, note, resolution, agreement or any other instrument to which the City is a party or to which the City or any of its property, or the Resort Tax revenues assets is otherwise subject, nor will any execution, delivery, adoption, or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property, the Resort Tax revenues or assets of the parking system of the City , except as provided by the Bonds and the Resolution ( for purposes of this Subsection 7 (d) , "material" shall mean anything which should be disclosed in the Official Statement) ; (e) All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter have been duly obtained which are required for the due authorization by or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by the City of its obligations in connection with the issuance of the Bonds under this Purchase Contract and the Resolution, except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds . ( f) The description of the Bonds and the Resolution in the Official Statement conform in all material respects to the Bonds and the Resolution; (g) The Bonds, when issued, executed and delivered in accordance with the Resolution and sold to the Underwriters as provided herein, will be validly issued and outstanding obligations of the City, entitled to the benefits of the Resolution; and upon such issuance, execution and delivery the Resolution will provide, for the benefit of the holders from time to time of the Bonds, a pledge of the Resort Tax revenues; -4- 53 (h) As of the date hereof, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or , to the knowledge of the officials of the City ( including in particular but without limitation the City Solicitor ) , threatened against the City, affecting or seeing to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or collection of the Revenues, or the pledge of the Resort Tax revenues, or contesting or affecting, as to the City, the validity of enforceability of the Act, the Bonds, the Resolution, the Escrow Agreement, the Fiduciary Agreement, this Purchase Contract, or contesting the tax exempt status of interest on the Bonds, or contesting the completeness or accuracy of the Official Statement or any supplement or amendment thereto, or contesting the powers of the City or any authority for the issuance of the Bonds, the adoption of the Resolution, or the execution and delivery by the City of the Escrow Agreement, the Fiduciary Agreement, ; ( i ) On or prior to the date of the Official Statement the City will furnish to the Underwriters a letter from Touche Ross & Co. , or any other firm retained by the City as its independent auditors for the city, to the effect that : ( i ) they are certified public accountants engaged by the City, and ( ii ) they consent to the use of their name in the Preliminary Official Statement and the Official Statement; ( j ) The City will furnish such normal information, execute such instruments and take such other action in cooperation with the Underwriters as the Underwriters may reasonably request in order ( i ) qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriters may designate and ( ii ) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions, and will;l use its best efforts to continue such qualifications in effect so long as required for the distribution of the Bonds; provided, that the City shall not be required to execute a general or special consent to service of process, jurisdiction or venue or qualify to do business in connection with any such qualifications or determination in any jurisdiction; (k) As of the date thereof, the Preliminary Official Statement did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, mot misleading; ( 1) At the time of the City ' s acceptance hereof, the Official Statement does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; -5- 54 (m) If the Official Statement is supplemented or amended pursuant to subsection (n) of this Section 7 , at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended to such paragraph) at all times subsequent thereto up to and including the date of the Closing, the Official Statement as so supplemented or amended will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading; and (n) If between the date of this Purchase Contract and the date of the Closing, any event shall occur which might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading, the City shall notify the Underwriters thereof, and, if in the opinion of the Underwriters such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City will at its expense supplement or amend the Official Statement in a form and in a manner approved by the Underwriters . 8. Closing. At 10 : 00 a.m. , New York City time, on 1988, or at such earlier or later time as may be mutually as may be agreed upon by the City and the Underwriters, the City will, subject to the terms and conditions hereof, deliver the Bonds to the Underwriters in definitive form, duly executed and authenticated, and the other documents hereinafter mentioned to the Underwriters, and, subject to the terms and conditions hereof, the Underwriters will accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof by Federal Funds check to the order of the City. Delivery and payment as aforesaid shall be made at the offices of Lazard Freres & Co. , in New York, New York, or such other place as may be mutually agreed upon by the City and the Underwriters. The Bonds shall be prepared and delivered as fully registered bonds in such names and such amounts may request and shall be made available to DTC at least one business day before the Closing for purposes of inspection and packaging. 9 . Closing Conditions . The Underwriters have entered into this Purchase Contract in reliance upon the representations and warranties of the City contained herein, and in reliance upon the representations and warranties to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the City of its obligations hereunder , both as of the date hereof and as of the date of the Closing. Accordingly, the Underwriters ' obligations under this Purchase Contract to purchase, to accept delivery of and pay for the Bonds are conditioned upon the performance by the City of its obligations to -6- 55 be performed hereunder and under such documents and instruments at or prior to the Closing, and are also subject to the following additional conditions : (a) The representations and warranties of the City contained herein shall be true, complete and correct on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing; (b) At the time of the Closing, the Resolution shall be in full force and effect in accordance with its terms and shall not have been further amended, modified or supplemented and the Official Statement shall not have been supplemented or amended, except in any such case as may have been agreed to by the Underwriters; (c) At the time of the Closing, all necessary official action of the City and other parties thereto relating to this Purchase Contract, the Escrow Agreement , the Fiduciary Agreement, and the Bonds shall be in full force and effect in accordance with their respective terms and shall not have been amended, modified or supplemented in any material respect, except in each case as may have been agreed to by the Underwriters; (d) At or prior to the Closing, the Underwriters shall have received copies of each of the following documents : ( 1) The Official Statement and each supplement or amendment, if any, thereto, executed by the City on behalf of its Mayor and its City Manager; ( 2) The Resolution certified by the City Clerk under seal as having been duly adopted by the City Commission and as being in effect, with such supplements or amendments as may have been agreed to by the Underwriters and the Escrow Agreement, the Fiduciary Agreement executed by all parties thereto; ( 3) The opinion, dated the date of the Closing and addressed to the City, of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel , P.A. , Miami , Florida, Bond Counsel, in substantially the form included in the Official Statement as Appendix D together with a letter of such counsel, dated the date of the Closing and addressed to the Underwriters, to the effect that the foregoing opinion addressed to the City may be relied upon by the Underwriters to the same extent as if such opinion was addressed to them; ( 4) An opinion, dated the date of the Closing and addressed to the Underwriters, Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. , Bond Counsel, to the effect that ( i ) the information contained under the captions -7- "Introduction" , "Plan of Refunding" , "The 1987 Bonds" , "Security" , "Tax Exemption" , and "Appendix D' of the Official Statement did not as of its date and does not as of the Closing Date contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading (except for financial and statistical information as to which no view need be expressed) ; ( ii ) upon deposit of certain direct obligations of the United State of America ( the "Government Obligations" ) and monies under the Escrow Agreement, all as provided in the Escrow Agreement, the covenants in the City ' s Resolution pursuant to which the Prior Bonds were issued ( the "Prior Resolution" ) for the benefit of the holders of the Prior Bonds will have been defeased, the Prior Bonds will no longer be outstanding and the lien on the revenues pledged under the Prior Resolution shall cease; ( iii ) the monies held in Reserve Account by the Trustee constitute trust funds held solely for the benefit of the holders of the Bonds outstanding in the in accordance with the terms of the Resolution; ( iv) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Resolution is exempt from qualification under the Trust Indenture Act of 1939, as amended; (v) this Purchase Contract , the Fiduciary Agreement and the Escrow Agreement have been duly authorized, executed and delivered by the City and the Resolution has been duly and lawfully adopted by the City and each constitutes a binding and enforceable obligation of the City, enforceable in accordance with its respective terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors ' rights and subject, as to enforceability, to general principles of equity ( regardless of whether enforcement is sought in a proceeding in equity or at law) ; and (vi ) all authorizations, consents, approvals and reviews (other than Federal or State Securities or Blue Sky laws) of governmental bodies or regulatory authorities then required for the City ' s adoption, execution or performance of the Bonds, the Resolution, the Escrow Agreement, the Fiduciary Agreement, and this Purchase Contract have been obtained or effected; ( 5) An opinion, dated the date of the Closing and addressed to the Underwriters, of Arnold M. Weiner , City Attorney (or such other counsel to the City acceptable to the Underwriters) to the effect that ( i ) this Purchase Contract , the Fiduciary Agreement and the Escrow Agreement have been duly authorized, executed and delivered by the City and constitute binding and enforceable agreements of the City in accordance with their respective terms except to the extent that the enforceability of the rights and remedies set forth herein or therein may be limited by bankruptcy, insolvency or other laws affecting creditors ' rights; ( ii ) the City has authorized, executed and delivered the Official Statement; -8- ( iii ) the information in the Official Statement as to matters relating to the City, the Bonds, the Prior Bonds and the Resolution is correct in all material respects and does not omit any statement which, in his opinion, should be included or referred to therein, and, in addition, such counsel shall state that, based upon his review of the Official Statement and without having undertaken to determine independently the accuracy, completeness or fairness of the statement ' contained in the Official Statement (except to the extent expressly set forth in this subparagraph ( iii ) ) , as of the date of the Closing nothing has come to his attention causing him to believe that (A) the Official Statement as of its date contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading (except for the financial and statistical information provided by parties other than the City and contained in the Official Statement, as to all of which no view need be expressed) , or (B) the Official Statement (as supplemented or amended pursuant to paragraph (n) of Section 7 hereof, if applicable) as of the date of the Closing contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading (except as aforesaid) ; ( iv) to the best of his knowledge, the City is not in material breach of or material default under any applicable constitutional provision, law or administrative regulation of the State of Florida or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, material resolution, material agreement or other material instrument to which the City is a party or to which the City or any of its property, Resort Tax or assets is otherwise subject, and to the best of his knowledge, no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument; and the execution of delivery of the Bonds, the Escrow Agreement, the Fiduciary Agreement , this Purchase Contract and the adoption of the Resolution, and compliance with the provisions on the City ' s part contained therein, will not conflict with or constitute a breach of or default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or to which the City or any of its property, the Resort Tax or assets is otherwise subject, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property, the Resort Tax or assets -9- 58 of the City or under the terms of any such law, regulation or instrument; (v) the Resolution has been duly and lawfully adopted by the City the Bonds have been duly and validly issued by the City and each is in full force and effect and constitutes the legal, valid and binding obligation of the City, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors ' rights and subject, as to enforceability, to general principles of equity ( regardless of whether enforcement is sought in a proceeding in equity or at law) , and no other authorization is required; (vi ) to the best of his knowledge, there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court, government agency, public board or body, pending or threatened against or affecting the City, nor, is there any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would have a materially adverse effect upon the transactions contemplated by the Official Statement or the validity of the Bonds, the Resolution, the Escrow Agreement, the Fiduciary Agreement or this Purchase Contract; and (vii ) he confirms the information set forth under the caption "Litigation" in the Official Statement; (6) An opinion, dated the date of the Closing and addressed to the Underwriters, of Kirkpatrick & Lockhart , P.A. , Miami , Florida, counsel for the Underwriters, to the effect that ( i ) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Resolution is exempt from qualification pursuant to the Trust Indenture Act of 1939 , as amended; and ( ii ) based upon their participation in the preparation of the Official Statement as counsel for the Underwriters and without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement, as of the date of the Closing nothing has come to the attention of such counsel causing them to believe that (A) the Official Statement as of its date contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (except for, the information concerning ( the "Bond Insurer" ) and its form of municipal bond insurance policy and the financial and statistical information contained in the Official Statement as to all of which no view need be expressed) , or (B) the Official Statement (as supplemented or amended pursuant to paragraph (n) of Section 7 hereof, if applicable) as of the date of the Closing contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the -10- 59 statements therein, in the light of the circumstances under which they were made, not misleading (except as aforesaid) ; ( 7) A certificate, dated the date of Closing, signed by the Mayor and the City Manager and approved and signed by the City Attorney as to ( iii ) below or other appropriate officials satisfactory to the Underwriters, to the effect that, to the best of their knowledge: ( i) the representations of the City herein are true and correct in all material respects as of the date of Closing; ( ii ) the City has performed all obligations to be performed hereunder as of the date of Closing; ( iii ) no litigation is pending or threatened (A) to restrain or enjoin the issuance or delivery of any of the Bonds, (B) in any way contesting or affecting any authority for the issuance of the Bonds or the validity of the Bonds , the Resolution, the Escrow Agreement, the Fiduciary Agreement or this Purchase Contract, (C) in any way contesting the corporate existence or powers of the City, (D) to restrain or enjoin the collection of the Resort Tax revenues, (E) which may result in any material adverse change in the business, properties, assets or the financial condition of the City or (F) asserting that the Preliminary Official Statement or the Official Statement contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (but in lieu of such certificate, the Underwriters may in their sole discretion accept an opinion of Bond Counsel, acceptable to the Underwriters in form and substance, that in the opinion of Bond Counsel the issues raised in any such pending or threatened litigation are without substance or that the contentions of any plaintiffs therein are without merit) ; ( iv) since September 30, 1988, no material and adverse change has occurred in the financial position or results of operations of the City except as set forth in or contemplated by the Official Statement; (v) the City has not, since September 30, 1988, incurred any material liabilities other than in the ordinary course of business or as set forth in or contemplated by the Official Statement; (vi ) since September 30 , 1988, no material adverse change has occurred in the rate of collection of the Resort Tax revenues; and (vii ) the Official Statement did not as of its date, and does not as of the date of Closing contain any untrue statement of a material fact or omit to state a material fact which should be included therein for the purposes for which the Official Statement is to be used, or which is necessary in order to make the statements contained therein, in the light of the circumstances in which they were made, not misleading; ( 8) A certificate of Touche Ross & Co. , independent certified public accountants, as a to -11- so verification of the accuracy of the arithmetical and mathematical computations ( i ) of the adequacy of the maturing principal amounts of the Government Obligations, purchased in connection with the advance refunding of the Prior Bonds, together with the interest income thereon and uninvested cash, if any, to pay, when due, the entire principal of and redemption premium on the Prior Bonds plus interest accrued or to accrue thereon, as the Prior Bonds shall mature and become due and payable to the maturity thereof or to any earlier redemption date described in the Official Statement, and ( ii ) relating to the determination of compliance with the regulations and rulings promulgated under Section 148 of the Internal Revenue Code of 1986, as amended ( the "Code" ) . Such verification of arithmetical accuracy and mathematical computations shall be based upon information and assumptions supplied by the City and the Underwriters on interpretations of Section 148 of the Code; ( 9 ) An insurance policy of the Bond Insurer insuring the payment, when scheduled, of the principal of and interest on the Bonds; (10 ) An opinion of the general counsel to the Bond Insurer, dated the date of Closing, and addressed to the Underwriters to the effect that he has reviewed the information in the Official Statement under the caption, "Bond Insurance" and in Appendix C - "Form of Municipal Bond Insurance Policy" , and that it is correct in all material respects and does not omit any statement which, in his opinion, should be included or referred to therein; ( 11) Evidence that Moody ' s Investors Service, Inc. and Standard & Poor ' s Corporation have assigned a rating of "Aaa" and "AAA" to the Bonds, respectively; and ( 12) Such additional legal opinions, certificates, instruments and other documents as the Underwriters may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the date of the Closing, of the City' s representations and warranties contained herein and of the statement and information contained in the Official Statement and the due performance or satisfaction by the City on or prior to the date of the Closing of all the agreements then to be performed and conditions then to be satisfied by it. All the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to the Underwriters . -12- 61 b1 If the City shall be unable to satisfy the conditions to the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds contained in this Purchase Contract, or if the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriters nor the City shall be under any further obligation hereunder , except that : ( i) the Good Faith Check shall immediately be returned to the Underwriters by the City; and ( ii ) the respective obligation of the City and the Underwriters set forth in Sections 11 and 13 hereof shall continue in full force and effect . 10 . Termination. The Underwriters shall have the right to terminate the Underwriters ' obligations under this Purchase Contract to purchase, to accept delivery of and to pay for the Bonds by notifying the City of their election to do so if, after the execution hereof and prior to the Closing: ( i ) the marketability of the Bonds or the market price thereof, in the opinion of the Underwriters, has been materially adversely affected by an Amendment to the Constitution of the United States or by any legislation (A) enacted by the United States, (B) recommended to the Congress or otherwise endorsed for passage, by press release, or other from of notice or otherwise, by the President of the United States, the Chairman or ranking minority member of the Committee of Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representative, the Treasury Department of the United States of the Internal Revenue Service, or (C) favorably reported for passage to either House of the Congress by any committee of such house to which such legislation has been referred for consideration, or by any decision of any court of the United States or by any ruling or regulation ( final, temporary or proposed on behalf of the Treasury Department of the United States, the Internal Revenue Service or any other authority of the United States, or any comparable legislative, judicial or administrative development affecting the Federal tax status of the City, its property or income, or the interest on its bonds ( including the Bonds) ; ( ii ) The United States shall have become engaged in hostilities which have resulted in a declaration of war or a national emergency; ( iii) there shall have occurred the declaration of a national banking moratorium by any authority of the United States or the State of New York or the State of Florida; ( iv) there shall have been any downgrading, suspension or withdrawal, or any official statement as to a possible downgrading, suspension or withdrawal, of any rating by Moody ' s Investors Service, Inc. or Standard & Poor ' s Corporation of any securities issued by the City, including the Bonds; or (v) an event described in Paragraph (n) of Section 7 hereof shall have occurred which in the opinion of the Underwriters requires preparation and publication of a supplement or amendment to the Official Statement . -13- 62 11. Expenses . (a) The Underwriters shall be under no obligation to pay, and the City shall pay, any expense incident to the performance of the City' s obligations hereunder including, but not limited to: ( i ) the cost of preparation, printing, delivery and distribution of the Resolution, Preliminary Official Statement, the Official Statement and any supplements and amendments thereto; ( ii) the cost of preparation and printing of the Bonds; ( iii ) the fees and disbursements of Greenberg, Traurig Hoffman, Lipoff, Rosen & Quentel, P.A. Bond Counsel, Kirkpatrick & Lockhart, Underwriters Counsel, and of Arnold M. Weiner , Esq. , City Attorney; ( iv) the fees and disbursement of Shearson Lehman Hutton Inc. for their services as financial advisor to the City; (v) the fees of Touche Ross & Co. for their services of verification agent in connection with the refunding of the Prior Bonds; (vi ) the fees and disbursements of any other consultants, accountants, experts or advisors retained by the City; (vii ) fees for Bond ratings; and (viii ) Bond Insurance premiums . (b) The Underwriters shall pay: ( i ) the cost of preparation and printing of this Purchase Contract and the Blue Sky and Legal Investment Surveys; ( ii ) all advertising expenses and Blue Sky filing fees in connection with the public offering of the Bonds; ( iii ) all other expenses incurred by them or any of them in connection with the public offering of the Bonds . 12. Notices . Any notice or other communication to be given to the City under this Purchase Contract may be given by delivering same in writing to the City of Miami Beach, Florida, City Hall, 1700 Convention Center Drive, Miami Beach, Florida 33139 , Attention: Director of Finance and any notice or other communication to be given to the Underwriters under this Purchase Contract may be given by delivering the same in writing to Lazard Freres & Co. , One Rockefeller Plaza, New York, New York 10020, Attention: Joel Motley. 13. Parties In Interest. This Purchase Contract is made solely for the benefit of the City and the Underwriters ( including the successors or assigns of any Underwriter ) and no other person shall acquire or have any right hereunder or by virtue hereof. All of the City ' s representations, warranties and agreements contained in this Purchase Contract shall remain operative and in full force and effect, regardless of: ( i ) any investigations made by or on behalf of any of the Underwriters and ( ii ) delivery of and payment for the Bonds pursuant to this Purchase Contract . 14. Effectiveness . This Purchase Contract shall become effective upon the execution by the appropriate City officials of the acceptance hereof by the City and shall be valid and enforceable at the time of such acceptance. To the extent of any conflict between the provisions of this Purchase Contract and any -14- 63 prior contract between the parties hereto, the provisions of this Purchase Contract shall govern. 15. Headings. The headings of the sections of this Purchase Contract are inserted for convenience only and shall not be deemed to be part hereof. LAZARD FRERES & CO. CHASE MANHATTAN CAPITAL MARKETS CORPORATION RAYMOND JAMES & ASSOCIATES, INC. BY: LAZARD FRERES & CO. By: CITY OF MIAMI BEACH, FLORIDA BY: ALEX DAOUD Attest: ELAINE M. BAKER City Clerk FORM APPROVED LE . . DateBy 1 A A IF -15- 64 . a r PRELIMINARY OFFICIAL STATEMENT DATED SEPTEMBER 21, 1988 V NEW ISSUE ' Elige§ WEEMS 211 $4,550,OOO* .2'§ E. CITY OF MIAMI BEACH FLORIDA ,� o Resort Tax Revenue RefundingBonds Series 1988 o a 3r IM° Dated: October 1, 1988 Due: October 1, as shown below c d id` ;°:E The Resort Tax Revenue Refunding Bonds, Series 1988 (the "Series 1988 Bonds") shall be issued in registered form only, in c O ° denominations of$5,000 each or any integral multiple thereof.Interest on the Series 1988 Bonds is payable from October 1,1988 commencing i• on April 1, 1989,and semi-annually on each October 1 and April 1 thereafter until maturity or prior redemption,by check or draft mailed to m the persons in whose names the Series 1988 Bonds are registered as of the close of business on the 15th day of the calendar month immediately .13. 6 preceding an interest payment date,drawn on Southeast Bank,N.A., Miami,Florida (the"Registrar"and the"Paying Agent"). Principal of +, i i and redemption premium,if any,on the Series 1988 Bonds will be payable at the principal corporate trust office of the Paying Agent. Upon E w redemption, the principal of, and premium, if any, on the Series 1988 Bonds and interest accrued thereon to the date of redemption are ...a a payable at the principal corporate trust office of the Paying Agent.The Series 1988 Bonds will be subject to redemption as set forth herein. a-1 i a • The Series 1988 Bonds are being issued to provide funds that will be sufficient, together with other available moneys of the City, to •, 2 g (i) advance refund the City of Miami Beach, Florida Excise Tax Bonds, Series 1969, dated April 1, 1969 (the "Prior Bonds") of which • A w $4,925,000 are currently outstanding, (ii) fund the"Debt Service Reserve Account",as defined herein,and (iii)pay the cost of issuance of the O Q Series 1988 Bonds. c i m $ The Series 1988 Bonds are payable solely from the City's Resort Tax Revenues (as herein defined) and the moneys and investments in the 4 funds and accounts pledged therefor and shall not constitute a debt of the City for which the full faith and credit of the City is pledged,and • the City is not obligated to pay the Series 1988 Bonds or the redemption premium, if any, or the interest thereon except from the aforementioned source.The issuance of the Series 1988 Bonds shall not directly or indirectly or contingently obligate the City to levy any tax i I or pledge any form of taxation whatever therefor other than the Resort Tax (as herein defined) and the holders of the Series 1988 Bonds shall ehave no recourse to the City's power of taxation other than the Resort Tax. 2 Payment of the principal of and interest on the Series 1988 Bonds when due will be insured by a municipal bond new issue insurance policy to be issued by Financial Guaranty Insurance Company simultaneously with the delivery of the Series 1988 Bonds. q c -., mom FGItL I e•-2C E Service mark used by Financial Guaranty Insurance Company,a private company not affiliated with any U.S.government agency. . m In theinionof n op o Bond Counsel, assuming continuing compliance by the City with certain tax covenants, under exisiting statutes, 11, 3 regulations, rulings and court decisions, interest on the Series 1988 Bonds is excluded from gross income for federal income tax purposes. §11.c. However, see "Tax Exemption" herein for a description of the alternative minimum tax on corporations and certain other federal tax `o 2 2 consequences of ownership of the Series 1988 Bonds. Bond Counsel is further of the opinion that the Series 1988 Bonds and the interest gI a thereon are exempt from taxation under the laws of the State of Florida,except as to estate taxes and taxes imposed by Chapter 220,Florida :ab§ Statutes, on interest, income or profits on debt obligations owned by corporations as defined in said Chapter 220. MATURITIES, AMOUNTS, INTEREST RATES AND PRICES' es c 2.2 Price Price -I Principal Interest or Principal Interest or I-2 r, Due Amount Rate Yield Due Amount Rate Yield m 12 t 0 1989 $ 115,000 1997 $ 185,000 2 I 1990 125,000 1998 200,000 1 i 1991 130,000 1999 215,000 8 i sfi 1992 135,000 2000 230,000 1993 145,000 2001 250,000 . —t 1994 155,000 2002 260,000 3.5 1995 165,000 2003 285,000 S. 1996 180,000 c $1,775,000 %Term Bonds Due October 1,2008-Price % i (Accrued Interest to be added) 10 NI = The Series 1988 Bonds are offered for delivery when,as and if issued and accepted by the Underwriters,subject to prior sale,withdrawal or •2 a, modification of the offer without notice and subject to receipt of the approving opinion of Greenberg, Traurig,Hoffman,Lipoff,Rosen&Quentel, w P.A., Miami, Florida, Bond Counsel. Certain legal matters will be passed upon for the City by Arnold M. Weiner, City Attorney, Miami Beach, Florida,and for the Underwriters by their counsel,Kirkpatrick &Lockhart,Miami,Florida. Shearson Lehman Hutton Inc. is acting as Financial y 4a Advisor to the City. It is expected that the Series 1988 Bonds will be available for delivery in New York,New York on or about October ,1988. Lazard Freres & Co. Chase Manhattan Capital Markets 0g I Corporation 1ES X Raymond James & Associates, Inc. a s Iaz o °Preliminary, subject to change a a a 2 2 Dated: , 1988 CITY OF MIAMI BEACH, FLORIDA MAYOR Alex Daoud VICE MAYOR Bruce Singer CITY COMMISSION Stanley H. Arkin Abe Resnick William E. Shockett Ben Z . Grenald Sidney Weisburd CITY ATTORNEY CIT Arnold M. Wei Y MANAGER CITY CLERK rier Rob W. Parkins Elaine M. Baker ASSISTANT CITY MANAGERS Richard L. Fosmoen Carla Bernabei Talarico FINANCE DIRECTOR DIRECTOR OF MANAGEMENT Robert J. Nach AND BUDGET T Peter F. Liu FINANCIAL ADVISOR Shearson Lehman Hutton Inc. BOND COUNSEL Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. CERTIFIED PUBLIC ACCOUNTANTS Touche Ross & Co. -i- No dealer , broker , salesman or other person has been authorized to give any information or to make any representations, other than as contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing . This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 1988 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer , solicitation or sale. The information set forth herein has been obtained from the City and other sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness . The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the information or opinions set forth herein after the date of this Official Statement . IN CONNECTION WITH THE OFFERING OF THE SERIES 1988 BONDS, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 1988 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. _11_ TABLE OF CONTENTS Page INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 PURPOSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 PLAN OF REFUNDING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ESTIMATED SOURCES AND USES OF • • • • • • • • 2 FUNDS. . . . . . . . . . . . . . . . . . . . . . . 3 THE SERIES 1988 BONDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . REDEMPTON PROVISIONS. . . . . . . . • • • • • • • ' 3 SECURITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 BOND INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DEBT SERVICE REQUIREMENTS. . . . . . . . . . . . 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 RESORT TAX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 TAX EXEMPTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 LITIGATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 . . . . . . . . 15 RATINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 . . . . . . . 15 LEGALITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 VERIFICATION OF MATHEMATICAL • • • • • • • • 15 COMPUTATIONS. . . . . . . . . . . . . . . . . 16 UNDERWRITING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 . . . . . . . . 16 OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AUTHORIZATION CONCERNING OFFI • • • • • • • • • 16 CIAL STATEMENT, , , , , , , , , , , , , , , 17 APPENDIX A - General Information Regardingthe City y of Miami Beach, Florida APPENDIX B - Summary of Certain Provisions of the Resolution APPENDIX C - Specimen Bond Insurance Policy APPENDIX D - Form of Bond Counsel Opinion -iii- OFFICIAL STATEMENT $4,550,000* CITY OF MIAMI BEACH, FLORIDA RESORT TAX REVENUE REFUNDING BONDS, SERIES 1988 INTRODUCTION The purpose of this Official Statement , including the cover page and appendices, is to furnish information with respect to the issuance and sale by the City of Miami Beach, Florida ( the "City" ) of $4, 550,000* aggregate principal amount of Resort Tax Revenue Refunding Bonds, Series 1988 ( the "Series 1988 Bonds" ) . The Series 1988 Bonds are being issued pursuant to Resolution No. , duly adopted by the City Commission of the City (the "City Commission" ) on 1988 ( the "Resolution" ) , the Constitution and laws of the State of Florida, in particular Chapter 67-930 , Laws of Florida, Acts of 1967 , as amended ( the "Resort Tax Act" ) , Chapter 166, Florida Statutes, as amended, and all other applicable provisions of law, the Miami Beach City Charter, as amended, and Chapter 41 , Article V of the Miami Beach City Code, as amended. For a complete description of the terms and conditions of the Series 1988 Bonds, reference is made to the proceedings authorizing the issuance of the Series 1988 Bonds. The description of the Series 1988 Bonds and of the documents authorizing and securing the same contained herein does not purport to be comprehensive or definitive. All references herein to such documents are qualified in their entirety by reference to such documents. The Series 1988 Bonds and all other parity bonds issued under the Resolution are herein collectively referred to as the "Bonds" . All other terms used herein in capitalized form which are not otherwise defined herein shall have such meanings as are defined in "Appendix B - Summary of Certain Provisions of the Resolution. " PURPOSE The Series 1988 Bonds are being issued to provide funds that will be sufficient, together with other available moneys of the City, to ( i ) advance refund the City of Miami Beach, Florida, Excise Tax Bonds, Series 1969, dated April 1, 1969 ( the "Prior Bonds" or the "Series 1969 Bonds" ) , of which $4, 925, 000 are currently outstanding; ( ii) fund the "Debt Service Reserve Account" , as defined below; and ( iii ) pay the cost of issuance of the Series 1988 Bonds. The Series 1988 Bonds are being issued *Preliminary, subject to change -1- and the Prior Bonds are being advance refunded in order to release certain existing covenants and to restructure the City ' s outstanding debt . PLAN OF REFUNDING To effect the refunding of the Prior Bonds, the City is entering into an Escrow Deposit Agreement ( the "Escrow Agreement" ) ,, on or prior to delivery of the Series 1988 Bonds, g with Southeast Bank, N.A. , Miami , Florida, as Escrow Agent ( the "Escrow Agent" ) . Pursuant to the terms of the Escrow Agreement, the City will deposit a portion of the proceeds of the Series 1988 Bonds and other available monies with the Escrow Agent . A portion of such monies will be applied on or after the date of delivery of the Series 1988 Bonds to the purchase of direct obligations of the United States of America ( the "Federal Securities" ) . The Federal Securities will mature at such times and in such amounts so that sufficient moneys will be available from such maturing principal, together with interest income to be derived from the Federal Securities and other available funds, to pay when due, all principal al of, interest and redemption premiums , if any, on the Prior Bonds . The Prior Bonds will be paid therefrom on their respective maturitydates, with the last maturity date being April P 1, 1995. Concurrently with the delivery of the Series 1988 Bonds , Bond Counsel will deliver an opinion to the effect that by depositing such amounts with the Escrow Agent, and applying a portion of such amounts to theP urchase of the Federal Securities as discussed above, and in reliance upon certain mathematical computations of Touche Ross & Co. , independent certified public accountants (see "Verification of Mathematical Computations" herein) , the pledge of and lien on Resort Tax Revenues (as hereinafter defined) in favor of the holders of the Prior Bonds will no longer be in effect . The maturing principal of, and interest on, the Federal Securities held by the Escrow Agent will not be available to pay principal al of, interest on, or redemption premium, if any, with respect to the Series 1988 Bonds. -2- ESTIMATED SOURCES AND USES OF FUNDS It is expected that proceeds of the Series 1988 Bonds will be applied as follows : SOURCES Proceeds of Series 1988 Bonds $ Accrued Interest Funds Contributed by City Total Sources $ USES Deposit to Escrow Fund $ Deposit to Debt Service Reserve Account Accrued Interest Underwriters ' Discount Costs of Issuance, including Bond Insurance Premium Total $ THE SERIES 1988 BONDS Description of the Series 1988 Bonds The Series 1988 Bonds shall be issued in the aggregate principal amount , will bear interest at the rates, and mature in the amounts and on the dates, all as set forth on the cover page of this Official Statement . The Series 1988 Bonds initially will be dated October 1 , 1988 and, until maturity or prior redemption, will bear interest therefrom payable semi-annually on April 1 and October 1 of each year (each, an "Interest Payment Date" ) , commencing April 1, 1989 . The Series 1988 Bonds will be issuable only as fully registered bonds in the denomination of $5, 000 or any integral multiple thereof . Interest on the Series 1988 Bonds is payable by check or draft, mailed to the respective persons in whose names the Series 1988 Bonds are registered as of the close of business on the 15th day of the calendar month immediately preceding an Interest Payment Date ( in each case a "Record Date" ) , drawn on Southeast Bank, N.A. , Miami , Florida ( the "Registrar" and the "Paying Agent" ) . If and to the extent there is a default in the payment of the interest due on such Interest Payment Date, the defaulted interest shall be paid to the persons in whose names the Series 1988 Bonds are registered with the Registrar as of the close of business on a special record date ( the "Special Record Date" ) established by notice mailed by the Registrar to the -3- registered owners not less than the tenth ( 10th) day preceding such Special Record Date . The principal of and redemption premium, if any, on the Series 1988 Bonds are payable at the principal corporate trust office of the Paying Agent . The Series 1988 Bonds shall be subject to redemption as set forth herein. Transfer and Exchange At the option of the registered owner thereof and upon surrender thereof at the principal corporate trust office of the Registrar with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner or his duly authorized attorney, and upon payment by such owner of any charges which the Registrar or the City may make as provided in the Resolution, the Series 1988 Bonds may be exchanged for Series 1988 Bonds of the same aggregate principal amount and maturity of any other authorized denomination. The Series 1988 Bonds may be transferred on the registration books by the registered owner in person or by his duly authorized attorney, by proper written instrument of transfer in form and with guaranty of signatures satisfactory to the Registrar ; provided, however , that the Registrar shall not be required to transfer any Series 1988 Bonds between the Record Date or Special Record Date and any Interest Payment Date or special Interest Payment Date . In addition, the Registrar shall not be required (a) to transfer or exchange any Series 1988 Bond for a period of fifteen ( 15 ) days next preceding any selection of Series 1988 Bonds to be redeemed or thereafter until after mailing any notice of redemption; or (b) to transfer or exchange any Series 1988 Bonds called for redemption. Upon the surrender of any Series 1988 Bond for transfer , a new fully-registered Series 1988 Bond of the same maturity and in the same aggregate principal amount and bearing the same rate of interest will be issued. The person in whose name any Series 1988 Bond shall be registered on the registration books may be deemed and treated as the absolute owner thereof for purpose of receiving payment of the principal of , redemption premium, if any, and the interest due thereon and for all other purposes, and the City and the Registrar shall not be affected by any notice to the contrary. REDEMPTION PROVISIONS Optional Redemption Series 1988 Bonds maturing on or prior to October 1 , 1998 are not subject to redemption prior to their stated dates of maturity. Series 1988 Bonds maturing on October 1, 1999 and thereafter are subject to redemption on October 1 , 1998 and any time thereafter , at the option of the City, in whole at any time, or in part on any interest payment date, in such order of maturity as the City shall select and by lot with any maturity, at the following redemption -4- prices (expressed as a percentage of the principal amount thereof) together with accrued interest to the date of redemption: Dates of Redemption ( inclusive) Redemption Price October 1 , 1998 to September 30 , 1999 102% October 1, 1999 to September 30 , 2000 101% October 1 , 2000 and thereafter 100% Mandatory Redemption The Series 1988 Bonds maturing on October 1 , 2008 are subject to mandatory sinking fund redemption, by lot, on October 1 , 2004 and on each October 1 thereafter ( the October 1 , 2008 amount to be paid at maturity rather than redeemed) , from moneys deposited by the City to the credit of the Bond Redemption Account established under the Resolution representing Amortization Requirements in respect of such Series 1988 Bonds for the immediately preceding Fiscal Years , at a redemption price equal to 100% of each Series 1988 Bond (or portion thereof) to be redeemed plus accrued interest to the date fixed for redemption in the amounts and years set forth below: Redemption Date Principal Amount (October 1 ) to be redeemed* 2004 $ 305, 000 2005 325 , 000 2006 355, 000 2007 380 , 000 2008 (Final Maturity) 410 , 000 *Preliminary, subject to change. Notice of Redemption At least thirty ( 30 ) days prior to redemption, a written notice of redemption shall be mailed, postage prepaid, to all registered owners of the Series 1988 Bonds to be redeemed at their addresses as they appear on the registration books of the Registrar , but failure so to mail such notice to any registered owner of a Series 1988 Bond or any defect therein shall not affect the validity of the proceedings for such redemption with respect to any other registered owner of a Series 1988 Bond for which notice of redemption shall have been properly given. Each notice shall set forth the CUSIP number , if any, the certificate number , the called amounts of each certificate, date of issue, interest rate and maturity date of the Series 1988 Bonds to be redeemed and shall also include the date fixed for redemption and the redemption price to be paid. -5- SECURITY Payment of the Series 1988 Bonds The payment of the principal of and interest on the Series 1988 Bonds when due will be insured by the Municipal Bond New Issue Insurance Policy to be issued by Financial Guaranty Insurance Company ( "Financial Guaranty" ) simultaneously with delivery of the Series 1988 Bonds . See "BOND INSURANCE" . The Series 1988 Bonds are special obligations of the City payable solely from the Resort Tax Revenues described below and the moneys and investments in the funds and accounts established under the Resolution and the income derived from said investments, unless otherwise provided in the Resolution. From and after the issuance of the Series 1988 Bonds, the City has pledged, for the payment of theprincipal of, redemption premium, if any, and interest on the Series 1988 Bonds and all parity bonds issued under the Resolution, ( i) revenues derived by the City from the Resort Tax levied by the City pursuant to the Resort Tax Act ( the "Resort Tax" ) ( such revenues herein referred to as the "Resort Tax Revenues" ) , and ( ii ) the moneys and investments in each of the funds and accounts established under the Resolution (other than the Rebate Fund) , and the income derived from said investments. The issuance of the Series 1988 Bonds shall not directly or indirectly or contingently obligate the City to levy any tax or pledge any form of taxation whatever therefor other than the Resort Tax and the holders of the Series 1988 Bonds shall have no recourse to the City ' s power of taxation other than the Resort Tax. Resort Tax Revenues The City has covenanted in the Resolution to maintain a fund into which all Resort Tax Revenues are to be deposited ( the "Resort Tax Fund" ) . Under the Resolution the City' s monthly collections of Resort Tax Revenues are to be deposited in the Resort Tax Fund and must be used in the following order of priority: (1) Resort Tax Revenues shall first be used, to the full extent necessary, for deposit into an "Interest Account" established under the Resolution on the fifteenth ( 15th) day of each month, beginning with the fifteenth ( 15th) day of the first full calendar month following the date on which any or all of the Bonds are delivered to the purchaser thereof, of such sums as shall be sufficient to pay one-sixth ( 1/6th) of the interest becoming due on the Bonds on the next semi-annual Interest Payment Date; provided, however , that such monthly deposits for interest shall not be required to be made into the Interest Account to the extent that money on deposit therein is sufficient for such purpose. -6- In the event that the period to elapse between the date of the delivery of the Bonds and the next semi-annual interest payment date will be other than six ( 6 ) months, then such monthly payments shall be adjusted to provide the required interest amount becoming due and payable on the next interest payment date. ( 2) (a) Resort Tax Revenues shall next be used, to the full extent necessary, for deposit in a "Principal Account" established under the Resolution on the fifteenth ( 15th) day of each month in each year , of one-sixth ( 1/6th) of the principal amount of Serial Bonds which will mature and become due on such semi-annual maturity dates and one-twelfth ( 1/12th) of the principal amount of Serial Bonds which will mature and become due on such annual maturity dates, beginning on such dates, as shall be determined by proceedings of the City; provided, however, that such monthly deposits for principal shall not be required to be made into the Principal Account to the extent that money on deposit therein is sufficient for such purpose. In the event the period to elapse between the date of the delivery of the Bonds and the next principal payment date will be other than six ( 6) months, in the case of Serial Bonds which mature semi-annually, or twelve ( 12) months, in the case of Serial Bonds which mature annually, then such monthly payments shall be increased or decreased, as appropriate, in sufficient amounts to provide the required principal amount maturing on the next principal payment date. Any monthly payment of Resort Tax Revenues to be deposited as set forth above for the purpose of meeting payments of principal of the Bonds, shall be adjusted, as appropriate, to reflect the frequency of principal payments applicable to such Series . (b) Resort Tax Revenues shall next be used, to the full extent necessary, for deposit into a "Bond Redemption Account" established under the Resolution on the fifteenth ( 15th) day of each month in each year , beginning on such date, of such Ammortization Requirements as may be required for the payment of the Term Bonds payable from the Bond Redemption Account, as shall be determined by proceedings of the City. The moneys in the Bond Redemption Account shall be used solely for the purchase or redemption of the Term Bonds payable therefrom. The City may at any time purchase any of said Term Bonds at prices not greater than the then redemption price of said Term Bonds . If the Term Bonds are not then redeemable, the City may purchase said Term Bonds at prices not greater than the redemption price of such Term Bonds on the next ensuing redemption date. The City shall be mandatorily obligated to use any moneys in the Bond Redemption Account for the redemption prior to maturity of such Term Bonds in such manner and at such times as shall be determined by subsequent proceedings of the City; provided, that the City shall not be obligated to redeem such Term Bonds prior to maturity unless and until there are sufficient moneys on deposit in the Bond Redemption -7- Account to provide for the redemption of at least Twenty Five Thousand Dollars ( $25, 000 ) principal amount of Term Bonds at any one time. If, by the application of moneys in the Bond Redemption Account, the City shall purchase or call for redemption in any year Term Bonds in excess of the Amortization Requirements for such year, such excess of Term Bonds so purchased or redeemed shall be credited in such manner and at such times as the Finance Director shall determine over the remaining payment dates . No distinction or preference shall exist in the use of the moneys on deposit in the Resort Tax Fund for payment into the Interest Account , the Principal Account and the Bond Redemption Account , such accounts being on a parity with each other as to payment from the Resort Tax Fund. ( 3) Resort Tax Revenues shall next be used, to the full extent necessary, for deposit into the "Debt Service Reserve Account" established under the Resolution on the fifteenth ( 15th) day of each month in each year , beginning with the fifteenth ( 15th) day of the first full calendar month following the date on which any or all of the Bonds issued hereunder are delivered to the purchaser thereof, such sums as shall be at least sufficient to pay an amount equal to one-sixtieth ( 1/60th) of the difference of the amount on deposit in the Debt Service Reserve Account ( including any Reserve Account Insurance Policy or Reserve Account Letter of Credit, as defined below) and the Maximum Annual Debt Service for the Bonds Outstanding, and, provided, further , that no payments shall be required to be made into the Debt Service Reserve Account whenever and as long as the amount deposited therein ( including any Reserve Account Insurance Policy or Reserve Account Letter of Credit) shall be equal to the Maximum Annual Debt Service for the Bonds Outstanding. In the event that any moneys shall be withdrawn from the Debt Service Reserve Account for payments into the Interest Account, Principal Account and Bond Redemption Account, such withdrawals shall be subsequently restored in the manner described in the previous paragraph from the first Resort Tax Revenues or funds available after all required payments have been made into the Interest Account , Principal Account and Bond Redemption Account, including any deficiencies for prior payments unless restored by the reinstatement of the maximum limits of a Reserve Account Insurance Policy or Reserve Account Letter of Credit . ( 4 ) Resort Tax Revenues shall next be used for the payment of any obligations payable from Resort Tax Revenues on a subordinated basis to the Bonds . ( 5) Resort Tax Revenues may then be used for any lawful purpose. -8- For further information regarding the application of Resort Tax Revenues see "Appendix B - Summary of Certain Provisions of the Resolution. " Debt Service Reserve Account On the date of issuance of the Series 1988 Bonds, the Debt Service Reserve Account will be funded in an amount equal to the maximum future annual principal and interest debt service on the Series 1988 Bonds . The initial funding of the Debt Service Reserve Account will be provided from the reserve fund established for the Series 1969 Bonds, which shall be made available upon the advance refunding of the Series 1969 Bonds . In lieu of or in substitution for all or any portion of the moneys in the Debt Service Reserve Account, the City may cause to be deposited therein, in accordance with the terms of the Resolution and with the consent of Financial Guaranty, an insurance policy (the "Reserve Account Insurance Policy" ) or a letter of credit ( the "Reserve Account Letter of Credit" ) for the benefit of the holders of the Series 1988 Bonds in an amount equal to the amount which would have been required to be placed in the Debt Service Reserve Account . Such Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be payable or available to be drawn upon after the giving of notice as required thereunder , on any interest payment date on which a deficiency exists which cannot be cured by moneys in any other fund or account held pursuant to the Resolution and available for such purpose. Moneys in the Debt Service Reserve Account may be used for making payments of principal of and interest on the Bonds only if other moneys held pursuant to the Resolution and available for such purpose are insufficient . Additional Parity Bonds The City may issue additional Bonds on a parity with the Series 1988 Bonds as to payment from and lien on the City ' s Resort Tax Revenues . Proceeds of such additional Bonds may be used for any purposes which are authorized pursuant to the Resort Tax Act . See "Resort Tax" herein for a description of such purposes . Such additional Bonds may only be issued upon compliance with the following conditions: ( 1 ) The City must be current in all deposits into the various funds and accounts and all payments theretofore required to have been deposited or made by it under the provisions of the Resolution and the City must be currently in compliance with the covenants and provisions of the Resolution and any supplemental resolution thereafter adopted for the issuance of additional parity Bonds; unless upon the issuance of such additional parity Bonds the City will be in compliance with all such covenants and provisions . -9- ( 2 ) The amount of the Resort Tax Revenues during the immediateA receding Fiscal Year or any twelve ( 12 ) consecutive months selected by the City of the eighteen ( 18) months immediately precedingthe issuance of such additional parity Bonds, as c public accountant , were at certified by an independent certified least equal to one hundred fifty percent ( 150% ) of the Maximum Annual Debt Service on ( i ) the Bonds originally issued pursuant to the Resolution and then Outstanding, ( ii ) any additional parity Bonds theretofore issued and then Outstanding, and ( iii ) the additional parity Bonds then proposed to be issued. ( 3 ) The City need not comply with paragraph ( 2 ) above in the issuance of additional parity Bonds if and to the extent the Bonds to be issued are refunding Bonds, that is, delivered in lieu of or in substitution for Bonds originally issued under the Resolution or previously issued additional parity Bonds, if the Cityshall cause to be delivered a certificate of the Finance Director of the City setting forth ( i ) the Maximum Annual Debt Service (A) with respect to the Bonds of all Series Outstanding immediately prior to the date of authentication and delivery of such refundingBonds, and (B) with respect to the Bonds of all Series to be Outstanding immediately thereafter , and ( ii ) that the Maximum Annual Debt Service set forth pursuant to (B) above is no greater than that set forth pursuant to (A) above. The City may also issue obligations payable from Resort Tax Revenues on a subordinate basis to the Bonds without meeting the conditions contained above. BOND INSURANCE Concurrently with the issuance of the Series 1988 Bonds, Financial Guaranty Insurance Company ( "Financial Guaranty" ) will issue its Municipal Bond New Issue Insurance Policy for the Series 1988 Bonds ( the "Policy" ) . The Policy unconditionally guarantees thep y a ment of that portion of the principal of and interest on the Series 1988 Bonds which has become due for payment, but shall be unpaid byreason of nonpayment by the City. Financial Guaranty P will make such"Fiscal Agent" ) , on the later payments to Citibank, N.A. , or its successor as its agent ( the of the date on which such principal al and interest is due or on the business day next following the dayon which Financial Guaranty shall have received telephonic or telegraphic notice, subsequently confirmed in writing, or written notice byregistered or certified mail , from an owner of Series 1988 Bonds or the Paying Agent of the nonpayment of such amount City.bythe Cit . The Fiscal Agent will disburse such amount due on anySeries 1988 Bond to its owner upon receipt by the Fiscal Agent of evidence satisfactory to the Fiscal Agent of the owner ' s 9 p of the principal and interest due for right to receive payment p payment and evidence, including any appropriate instruments of assignment, that all of suchrights owner ' s ri hts to payment of such and interest shall be vested in Financial Guaranty. The principal non term "nonpayment" in respect of a Series 1988 Bond includes any -10- payment of principal or interest made to an owner of a Series 1988 Bond which has been recovered from such owner pursuant to the United State Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealable order of a court having competent jurisdiction. The Policy is non-cancellable and the premium will be fully paid at the time of delivery of the Series 1988 Bonds . The Policy covers failure to pay principal of the Series 1988 Bonds on their respective stated maturity dates, or dates on which the same shall have been called for mandatory sinking fund redemption, and not on any other date on which the Series 1988 Bonds may have been accelerated, and covers the failure to pay an installment of interest on the stated date for its payment . Financial Guaranty is a wholly-owned subsidiary of FGIC Corporation ( the "Corporation" ) , a Delaware holding company. The following investors or affiliates thereof own approximately 85% of the stock of the Corporation: General Electric Capital Corporation, General Re Corporation, Lumbermens Mutual Casualty Company (affiliated with the Kemper Group) , Shearson Lehman Hutton Inc. , J.P. Morgan & Co. Incorporated and Gerald L. Friedman. The investors of the Corporation are not obligated to pay the debts of or the claims against Financial Guaranty. Financial Guaranty is domiciled in the State of New York and is subject to regulation by the State of New York Insurance Department . As of June 30, 1988, the total capital and surplus of Financial Guaranty was approximately $365, 300,000 . Copies of Financial Guaranty ' s financial statements, prepared on the basis of statutory accounting principles, and the Corporation' s financial statements, prepared on the basis of generally accepted accounting principles, may be obtained by writing to Financial Guaranty at 175 Water Street , New York, New York 10038, Attention: Communications Department . Financial Guaranty ' s telephone number is ( 212 ) 607-3000 . DEBT SERVICE REQUIREMENTS City of Miami Beach Resort Tax Revenue Refunding Bonds, Series 1988 Year Principal Interest Total -11- RESORT TAX Pursuant to the Resort Tax Act and City Ordinance 1727 , as amended, codified as Chapter 41 , Article V of the City Code, the City imposes, levies and collects a municipal resort tax of two percent ( 2% ) upon certain rentals of rooms in any hotel , motel , apartment house or rooming house and upon the retail sale price of all items of food, beverages , alcoholic beverages or wine, other than beer or malted beverages , sold at retail for consumption on the premises of any place of business required by law to be licensed by the State Hotel and Restaurant Commission or by the State Beverage Department ( the "Resort Tax" ) . Under the Resort Tax Act , the funds from the collection of the Resort Tax may be used for the following purposes only: creation and maintenance of convention and publicity bureaus, cultural and art centers , enhancement of tourism, publicity and advertising purposes, and for future costs, purchase, building, designing, engineering, planning , repairing, reconditioning, altering, expanding, maintaining, servicing and otherwise operating auditoriums, community houses, convention halls, convention buildings or structures , and other related purposes, including relief from ad valorem taxes heretofore levied for such purposes. The City may increase the Resort Tax levied upon certain room rents to four percent ( 4% ) upon affirmative vote of the electorate. The City agrees in the Resolution that so long as any of the principal of or interest on the Bonds remains unpaid, it will not repeal Ordinance 1727 , reduce the rate of the Resort Tax, or amend or modify Ordinance 1727 so as to impair or adversely affect the power and obligation of the City to levy and collect the Resort Tax or adversely affect the pledge of the Resort Tax Revenues and other funds pledged to pay the principal of and interest on the Bonds. Heretofore, the Resort Tax Revenues were pledged as part of the security for the payment of debt service on the Series 1969 Bonds . As described above, the Series 1969 Bonds will be refunded with a portion of the proceeds of the Series 1988 Bonds , thereby releasing the City from its obligation to dedicate the Resort Tax to payment of debt service on the Series 1969 Bonds . In addition, one-half of the Resort Tax Revenues are pledged to the Miami Beach Visitor and Convention Authority created by ordinances of the City which are codified as Chapter 41 , Article VI of the City Code, as amended ( the "Authority" ) . Concurrent with the issuance of the Series 1988 Bonds the Authority and the City shall take such action to subordinate the Authority ' s interest in the Resort Tax Revenues as described above to the City ' s payment obligations under the Resolution, including payment of the Series 1988 Bonds . -12- The following table presents: ( i) the City's historical Resort Tax Revenues, after deducting collection and administrative expenses, for the past four fiscal years ended September 30, 1987, and projected Resort Tax Revenues for the fiscal year ending September 30, 1988; (ii) the total debt service paid on the Series 1969 Bonds for the four fiscal years ended September 30, 1987 and to be paid for the fiscal year ending September 30, 1988; and ( iii) the coverage ratio ( item ( i) divided by item ( ii) ) : CITY OF MIAMI BEACH HISTORICAL RESORT TAX REVENUES AND COVERAGES SERIES 1969 BONDS FISCAL YEARS ENDED SEPTEMBER 30 FISCAL RESORT TAX SERIES 1969 YEAR COLLECTIONS DEBT SERVICE COVERAGE 1984 $ 3,417,606(1) $ 1,028,343 3.32 1985 3,517,784(1) 1,015,805 3.46 1986 3,641,790(1) 1,001,342 3.64 1987 4,205,157(1) 984,955 4.27 1988 4,600,000(2) 966,643 4.76 (1) Based upon information from the City's financial statements as audited by its independent certified public accountants, Touche Ross & Co. (2) Estimated, based on ten months' unaudited actual collections, with assumed rate of growth for the two final months projected at 2% over prior year. The following table presents projections of: (i) the City's estimated Resort Tax Revenues for the five fiscal years ending September 30, 1993; ( ii) the total debt service estimated to be paid for the same five fiscal years on the Series 1988 Bonds; and ( iii) the estimated coverage ratio: CITY OF MIAMI BEACH PROJECTED RESORT TAX REVENUES AND COVERAGES SERIES 1988 RESORT TAX REVENUE REFUNDING BONDS FISCAL YEARS ENDING SEPTEMBER 30 FISCAL RESORT TAX SERIES 1988 YEAR COLLECTIONS(1) DEBT SERVICE(2) COVERAGE 1989 4,692,000 452,630 10.37 1990 4,786,000 451,140 10.61 1991 4,882,000 454,010 10.75 1992 4,979,000 451,010 11.04 1993 5,079,000 452,495 11.22 (1) Based upon assumption that Resort Tax Revenues, after deductions for collection and administrative expenses, will increase by 2% per year after fiscal 1988. (2) Debt Service projection based on estimated issue size and pricing. -13- TAX EXEMPTION The Internal Revenue Code of 1986 , as amended ( the "Code" ) , includes requirements which the City must continue to meet after the issuance of the Series 1988 Bonds in order that interest on the Series 1988 Bonds not be included in gross income for federal income tax purposes . The City' s failure to meet these requirements may cause interest on the Series 1988 Bonds to be included in gross income for federal income tax purposes retroactive to their date of issuance. The City has covenanted in the Resolution to take the actions required by the Code in order to maintain the exclusion from gross income for federal income tax purposes of interest on the Series 1988 Bonds . In the opinion of Bond Counsel, assuming continuing compliance by the City with the tax covenants referred to above, under existing statutes, regulations, rulings and court decisions, interest on the Series 1988 Bonds is excluded from gross income for federal income tax purposes . Interest on the Series 1988 Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however , interest on the Series 1988 Bonds is taken into account in determining adjusted net book income (adjusted current earnings for taxableY ears beginning after 1989 ) for purposes of computing orations . Bond Counsel the alternative minimum tax imposed on corporations . is further of the opinion that the Series 1988 Bonds and the interest thereon are exempt from taxation under the laws of the State of Florida, except as to estate taxes and taxes imposed by Chapter 220, Florida Statutes , on interest , income or profits on debt obligations owned by corporations as defined therein. Except as described above, Bond Counsel will express no opinion regarding the federal income tax consequences resulting P from the ownership of , receipt or accrual of interest on, or disposition of the Series 1988 Bonds . Prospective purchasers of Series 1988 Bonds should be aware that the ownership of Series 1988 Bonds may result in other collateral federal tax consequences, including ( i ) the denial of a deduction for interest on indebtedness incurred or continued to purchase or carry Series 1988 Bonds or , in the case of a financial institution, that portion of the owner ' s interest expense allocable to interest on a Series 1988 Bond, ( ii ) the reduction of the loss reserve deduction forro ert and casualty insurance companies by 15 percent of P P Y certain items, including interest on Series 1988 Bonds , ( iii ) for taxable years beginning before 1992, the inclusion of interest on Series 1988 Bonds in "modified alternative minimum taxable income" forur oses of the environmental tax imposed on corporations, P P ( iv) the inclusion of interest on Series 1988 Bonds in the earnings of certain foreign corporations doing business in the United States for purposes of a branch profits tax, (v) the inclusion of interest on Series 1988 Bonds in the passive income subject to federal income taxation of certain Subchapter S -14- corporations with Subchapter C earnings and profits at the close of the taxable year and (vi ) the inclusion in gross income of certain Social Security and Railroad Retirement benefits by reason of receipt of interest on the Series 1988 Bonds . LITIGATION There is no litigation pending or threatened that seeks to restrain or enjoin the issuance or delivery of the Series 1988 Bonds or the proceedings or authority under which they are to be issued or delivered. There is no litigation pending or threatened which, in any manner , questions the right of the City to pledge its Resort Tax Revenues as described herein to the repayment of the Series 1988 Bonds . There is no litigation pending or threatened which would have a material adverse effect upon the City ' s financial condition or its ability to collect the Resort Tax. RATINGS It is expected that Moody' s Investors Service, Inc. and Standard & Poor ' s Corporation will give ratings of Aaa and AAA, respectively, to the Series 1988 Bonds on the understanding that upon delivery of the 1988 Bonds, the Policy insuring the payment when due of the principal of and interest on the Series 1988 Bonds will be issued by Financial Guaranty. Such ratings reflect the respective views of such organizations and an explanation of the significance of such ratings may be obtained only from the rating agency furnishing the same . There is no assurance that such ratings will remain in effect for any given period of time or that they will not be revised downwards or withdrawn entirely by either or both such rating agencies, if, in the judgment of either or both, circumstances so warrant . Any such downward revision or withdrawal by such rating agencies, or either of them, may have an adverse effect on the market prices of the 1988 Bonds . LEGALITY The Series 1988 Bonds will be accompanied at delivery with an approving opinion of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. , Miami , Florida, Bond Counsel, in substantially the form attached hereto as Appendix D. Certain legal matters will be passed upon for the City by Arnold M. Weiner , City Attorney, Miami Beach, Florida . Certain legal matters will be passed upon for the Underwriters by Kirkpatrick & Lockhart, Miami, Florida, Counsel to the Underwriters. -15- VERIFICATION OF MATHEMATICAL COMPUTATIONS The accuracy of the mathematical computations of the adequacy of the maturing principal amounts of and interest on the Federal Securities to be deposited with the Escrow Agent to pay, when due, the principal of, redemption premiums, if any, and interest on the Prior Bonds, and the mathematical computations supporting the conclusion of Bond Counsel that the Series 1988 Bonds are not "arbitrage bonds" under Section 148 of the Internal Revenue Code of 1986, as amended, will be verified by Touche Ross & Co. , independent certified public accountants. UNDERWRITING Lazard Freres & Co. , Chase Manhattan Capital Markets Corporation and Raymond James & Associates, Inc. ( the "Underwriters" ) have jointly and severally agreed, subject to certain conditions, to purchase the Series 1988 Bonds at an aggregate discount of $ from the initialpublic offering prices set forth on the cover page of this Official Statement . The Underwriters are committed to purchase all the Series 1988 Bonds if any are purchased. The Underwriters ' obligations are subject to certain conditions precedent. The Underwriters may offer and sell Series 1988 Bonds to certain dealers ( including dealers depositing Series 1988 Bonds into investment trusts) and others at prices lower than the public offering price stated on the cover of this Official Statement . After the initial public offering, the public offering price of the Series 1988 Bonds may be changed from time to time by the Underwriters . OTHER MATTERS The information contained in this Official Statement is presented for the guidance of prospective purchasers of the Series 1988 Bonds described herein. The information has been compiled from official and other sources and, while not guaranteed by the City, is believed to be correct . So far as any statements made in this Official Statement and the appendices attached hereto involve matters of opinion or estimates, whether or not so expressly stated, they are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. -16- AUTHORIZATION CONCERNING OFFICIAL STATEMENT The delivery of this Official Statement has been duly authorized by the City Commission of the City of Miami Beach, Florida. At the time of the delivery of the Series 1988 Bonds, the Mayor and the City Manager will furnish a certificate to the effect that nothing has come to their attention which would lead them to believe that the Official Statement , as of its date and as of the date of delivery of the Series 1988 Bonds, contains any untrue statement of a material fact or omits to state a material fact which should be included therein for the purpose for which the Official Statement is intended to be used, or which is necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading. CITY OF MIAMI BEACH, FLORIDA ALEX DAOUD, Mayor ROB W. PARKINS, City Manager ATTEST: City Clerk -17- i1 1 i yt •• • • • • • • • • • • ) r • , . - .s • _ ar- •..r _ • h f f • •; i • • I APPENDIX A GENERAL INFORMATION - CITY OF MIAMI BEACH, FLORIDA Introduction The City of Miami Beach comprises seven square miles of land area and ten square miles of water area located in Dade County, Florida. The weather lends a tropical ambiance to Miami Beach with an average year-round temperature of 75 degrees Fahrenheit, 24 degrees Celsius . The City is linked to mainland Metropolitan Dade County by four causeways John F. Kennedy at the northern end, Julia Tuttle at the mid-point and the Venetian and MacArthur Causeways at the southern end. The City experienced a building and population boom during the 1920 ' s, 1930 ' s and 1940 ' s . This "boom" is preserved via the Art Deco District, a one square mile neighborhood bounded by 6th and 23rd Streets to the north and south, and by Alton Road and Ocean Drive at its east/west boundaries . This area received official designation as a historic district when listed in the National Register of Historic Places in 1979 . Hundreds of apartments, hotels and retail stores feature the classic architecture of the Art Deco style. The renovation and preservation of these buildings has been undertaken mainly by private investors. During 1985 alone, 508 repair and renovation permits were issued by the City. In the mid-1950 ' s, the airlines began to provide comprehensive service to the area and the City evolved as a major convention destination. During the 1970 ' s, the City was host to both the Democratic and Republican National Conventions . Currently, the Miami Beach Convention Center is undergoing renovations increasing the existing facility to 1 . 1 million square feet . Ground was broken for the expansion of the Center on March 26 , 1986 and construction on the site is expected to be completed in 1988 . The $80 million renovation will modify the Center into four equal-size halls of 125, 000 square feet, each housing meeting rooms, concession and catering areas and loading docks . Each hall will have its own canopied entrance, allowing the facility to house four events at a time or one large event . An open 8, 000-square foot area in the center of the second floor crossover walkway will transport delegates and conventioneers through elevators, escalators and stairs, and features a circular restaurant and cocktail lounge, providing a 360-degree view of the entire floor space below. The spirit of renewal and transition can be seen throughout the City of Miami Beach. In the South Pointe area, in addition to the Art Deco District renovations, public projects include the $3. 5 million South Pointe Park, $9 . 8 million in infrastructure improvements, the $18 million Police and Courts Facility and the revitalization of the Lummus Park area which includes a continuation of a beachfront promenade. Private development in the South Pointe area includes the Crawdaddy ' s restaurant located in the City ' s South Pointe Park, Penrod ' s restaurant to be located in Pier Park on the beach and the South Pointe Towers development , a $355 million project including four condominium towers , a luxury hotel and beach and tennis club. In the City ' s middle area, public projects include the expansion of the Miami Beach Convention Center, the $22 million renovation of the Theater of the Performing Arts, as well as the Garden Center and Conservatory expansion, the 21st Street Community Center and Walkway, Island View Park and the Beachfront Park and Promenade, a 1 .8 mile long linear park featuring the natural woods which stretch along the oceanfront from 21st to 46th streets . Private development in the area includes the South Florida Art Center located on Lincoln Road Mall, additions and renovations to the Alexander Hotel, the Fontainebleau Hilton, the Doral Hotel and the Eden Roc Hotel , which are currently in progress or have been completed, and a planned convention center host hotel which is in the site development stage. In the north area, a joint project between the State of Florida and the City of Miami Beach for the expansion of the North Shore Open Space Park is currently under way. The project includes the acquisition of privately owned parcels which block access to the public beaches and the expansion to the north of a beachfront promenade. The City of Miami Beach Planning Department has completed a North Shore Revitalization Strategy focusing on the commercial district along Collins Avenue and down 71st Street . Phase I of the comprehensive plan is a review process and includes the organization of a private non-profit development corporation. Government The City of Miami Beach is organized under the Commission- Manager form of government . The governing body of the City is the City Commission which establishes policies for proper administration of the City. The City Commission is composed of seven members, including the Mayor . The Mayor and Commissioners are elected to their offices by an at-large vote of the citizens ; the Vice-Mayor is chosen by majority vote of all members of the City Commission. The Mayor and each Commissioner serve a two year term. The City Commission appoints a City Manager to act as administrative head of the City. The City Manager serves at the pleasure of the City Commission, carries out its policies, directs A-2 the operation of the City and has the power to appoint or remove heads of all departments . Certain City Administrative and Financial Staff Members Rob W. Parkins, City Manager Appointed City Manager , April 1982 ; Appointed Assistant City Manager of Miami Beach, November 1981; CETA Liaison Officer for the City of Miami , May 1981 ; Assistant to the City Manager , City of Miami , May 1979 to May 1981 . Education: Florida International University, B. S. in Criminal Justice Administration. Member of the International City Managers Association, Florida City and County Managers Association, and Dade County Police Chiefs Association. In addition, Mr . Parkins is a member of various civic and social service organizations . Richard L. Fosmoen, Assistant City Manager Appointed Assistant City Manager of Miami Beach, February 1984; President of Lyceum Enterprises , Inc . ; Planning and Development Consultant , 1981-84; City Manager , Miami , Florida 1980-81; Assistant City Manager, Miami , 1976-80 ; Assistant City Manager , Grand Rapids, Michigan, 1970-78. Education: Graduate courses , Wayne State University 1967-68; B.S. in Urban Planning, Michigan State University, 1963. Carla Bernabei Talarico, Assistant City Manager Appointed Assistant City Manager of Miami Beach, July 1985; Director of Management and Budget, June 1983 to June 1985; Assistant Finance Director , City of Miami , Florida, December 1980 to June 1983 ; Auditor , City of Miami , December 1978 to December 1980 ; Auditor , Metropolitan Dade County Internal Audit Department , 1975 to 1978 . Education: University of Florida, B. S. degree in Business Administration with a major in Accounting. Certification: Certified Public Accountant , State of Florida. Member of American Women' s Society of CPA' s and Florida Institute of CPA' s . A-3 Robert J. Nachlinger , Finance Director Appointed Finance Director of the City of Miami Beach, City 1985; Finance Officer , of Beaumont, Texas, 1979- Dallas Independent School District , Dallas, Texas 1985, Treasurer , p 1975-1979 ; Chief Accountant , Dallas County, Dallas, Texas 1970- 1975 . Education: East Texas State University, B.B.A. and M.B.A. with Accounting and Finance Majors . Certification: Certified Public Accountant, State of Texas, 1975 . Peter F. Liu, Director of Management and Budget of Management and Budget of Miami Beach, Appointed Director g ach January 1984 ; July 1985 ; Assistant Budget Director , Miami Be , Senior ManagementAnalyst ,Anal st , City of Miami , Florida, 1981 . Institute of Technology, M.S. I .M. in Education: Georgia Industrial Management; Chemistry. Fordham University, B. S. in Transportation • hours byair from the major population centers Within three • ' ed States, Miami Beach is also at the of the northeastern Unit terminus of the interstate highway network . The Port of Miami ,is the largest cruise ship port in the which serves Miami Beach, sea orts in the world and is one of the largest export/importP world. The Port of Miami is ownedby Dade County and is operated by the Dade CountySeaport Department . From 1982 to 1986 , the number of passengers sailing from the Port increased from 1,760 , 255 to 2 ,520 , 571 , an increase of 43 . 2% . in unitized Port of Miami specializes trailer and use of equipment container cargo o handling concepts . The effective g and the Port ' s convenient location has combined to make the Port x ort port to the Western Hemisphere. From the nation' s leading export from over 2 . 6 1982 to 1986 , the total cargo handled decreased million tons to over 2 . 4 million tons , a decrease of 9 . 75% . of Miami has Since 1979 , the Portincreased in size from 300 acres to 525 acres . The additional space accommodates an increasingnumber of shippers, buyers, importers, exporters, P freight forwarders and cruise passengers who wish to utilize the Port. A-4 A five year summary of the changes in both passengers served and cargo handled is indicated below: Year End September 30 Cargo Passengers (Tonnage) 1983 2,002,654 2, 305,645 1984 2, 217 ,065 2 , 287 , 281 1985 2, 326,685 2, 333, 026 1986 2, 520, 571 2, 406 , 084 1987 2, 633,041 2, 425, 937 Source: Dade County Seaport Department. Miami Beach is also within easy access of five airports within the boundaries of Dade County. The responsibility for their operation is assigned to the Dade County Aviation Department . Miami International Airport ranks 8th in the nation and 9th in the world in the number of passengers using its facilities. It ranks 5th in the nation and 8th in the world in the movement of domestic and international air cargo. Airport services are provided annually to nearly 20 million domestic and international scheduled passengers . The airlines serving the Miami International Airport provide worldwide air routes convenient for importers and exporters . A five-year summary of the passengers served and cargo handled is indicated below: Year End Total Cargo September 30 Passengers ( tonnage) 1983 19, 318, 379 570, 627 1984 19,245,735 571,865 1985 19,962,000 565,736 1986 21,947, 368 600 , 135 1987 23,800,000 666,719 Source: Dade County Aviation Department . Recreation There are numerous parks and playgrounds in the City of Miami Beach. Each park provides different amenities, from tennis and bocce courts to swimming pools and tot lots, to Vita courses and barbecue pits . There are four Vita courses, two swimming pools, and numerous tennis courts, including the Abel Holtz Tennis Stadium which houses championship, professional and amateur tournaments. A-5 Offshore, the Gulf Stream provides a variety of game fish, and the newly renovated Miami Beach Marina provides space to house pleasure boats . The $11 million renovation increased the number of wet slips to 388, making the Marina the largest in the area. The Marina is a private development on City-owned bayfront land in the South Pointe area. In the north part of the City, the general public can leisurely sail in the quiet waters of Biscayne Bay from the Miami Beach Sailport . The facility, though open to all ages, was especially designed to teach young adults the basic art of sailing P Y on small prams . The City owns two championship golf courses and one Par 3 course; all are open to the general public. The two championship courses, Ba shore and Normandy, offer clubhouses complete with Bay shore lounge and Pro Shop. A-6 Statistical Information for Miami Beach and Dade County GROWTH INDICATORS MIAMI BEACH AND DARE COUNTY 1987 1986 1985 1984 1983 Auto Tags (Dade County) (1) 1,681,037 1,608,982 1,589,173 1,470,024 1,453,991 Bank Deposits (000) (Dade County) (2) 19,249,288 18,897,084 16,721,801 15,191,696 13,429,861 Bank Loans (000) (Dade County) (3) 16,475,466 16,174,500 14,987,450 12,596,842 9,634,325 Savings & Loan Deposits (000) (Dade County) (4) 15,191,494 14,339,083 13,628,626 12,047,784 17,161,600 Gasoline Taxes (Dade County) (5)* 72,289,011 66,678,039 65,483,158 63,299,670 55,768,717 Sales Taxes (Miami Beach) (5) 26,819,421 22,596,092 23,622,990 22,301,909 23,683,075 State Revenue Sharing (Miami Beach) (5) 3,289,180 2,581,211 2,776,361 2,687,912 2,663,541 Public School Enrollment (Dade County) (6) 245,796 243,313 226,400 223,617 223,854 Sources: (1) Florida Department of Highway Safety and Motor Vehicles; (2) Florida Bankers Association Report (Federal Reserve/FDIC Tapes) ; (3) Florida Division of Banking, Bureau of Examination; (4) Federal Home Loan Bank Board, Atlanta, Georgia; (5) Florida Department of Revenue; (6) Florida Department of Education. * The gasoline tax of 8 cents per gallon was increased to 9.7 cents per gallon effective April, 1983. A-7 POPULATION ESTIMATES Miami Beach State of Florida United States Population Change % Population Change % Population Change % 1980(1) 99,298 4.9 9,471,000 3.7 224,567,000 1.1 1981 96,291 0.0 9,739,000 2.8 226,505,825 1.0 1982 97,335 1.1 10,375,332 6.5 231,023,000 2.0 1983 98,026 1.1 10,591,701 2.1 233,206,000 0.9 1984 97,340 ( .7) 10,930,389 3.2 236,162,000 1.3 1985(2) 96,913 ( .4) 11,287,932 3.3 238,444,000 1.0 1986 99,926 ( .0) 11,653,673 3.2 241,888,000 1.4 1987 97,727 (2.2) 12,043,608 3.2 245,625,000 1.5 (1) U.S. Census (2) Estimated Source: University of Florida, Bureau of Economic and Business Research. CITY OF MIAMI BEACH, FLORIDA VALUE OF BUILDING PERMITS ISSUED LAST TEN YEARS Existing Structures Total New Construction Additions, Rehabilitation, Etc. Value 1978 21,500,430 9,674,560 31, 174,990 1979 42,253,075 9,624,967 51,878,042 1980 143,784,370 17,598,119 161,382,489 1981 75,562,126 22,251,183 97,813,309 1982 125,556,022 14,201,833 139,757,855 1983 36,663,625 23,052,215 59,715,840 1984 11,897,784 28,587,383 40,485,167 1985 47,508,992 17,736,022 65,245,014 1986 6,593,335 19,026,892 25,620,227 1987 3,804,616 69,897,353 73,701,969 Source: City of Miami Beach - Building Permit Department. A-8 DADE COUNTY, FLORIDA PER CAPITA PERSONAL INCOME (CURRENT DOLLARS) Dade County Florida United States Current Percent Current Percent Current Year Dollars of U.S. Dollars of U.S. Dollars 1976 6,694 104.6 6,094 95.2 6,401 1977 7,250 103.8 6,520 93.4 6,984 1978 8,157 104.9 7,330 94.3 7,776 1979 9,103 105.2 8,202 94.7 8,657 1980 9,754 102.9 9,142 96.4 9,483 1981 11,047 105.3 10,165 96.9 10,495 1982 11,711 105.9 10,875 98.4 11,056 1983 11,704 111.0 10,386 98.5 10,544 1984 11,324 101.9 10,927 98.3 11,113 1985 12,131 103.8 11,593 99.2 11,687 Source: U.S. Department of Commerce, Bureau of Economic Analysis, Unpublished Data. DADE COUNTY, FLORIDA ESTIMATED EMPLOYMENT IN NON-AGRICULTURAL ESTABLISHMENTS September September September 1986 Percent 1985 Percent 1984 Percent Producing Sector Contract Construction 38,700 4.8% 37,000 4.7% 40,100 5.4% Manufacturing 94,000 11.7 95,400 12.3 93,300 12.5 Total Pro- ducing 132,700 16.5 132,400 17.0 133,400 17.9 Services Sector Transportation, Communications, & Utilities 68,800 8.6 70,000 9.1 68,600 9.1 Wholesale Trade 65,400 8.1 60,200 7.7 58,200 7.8 Retail Trade 150,800 18.8 139,900 18.0 132,200 17.7 Finance, Insurance & Real Estate 67,900 8.5 63,000 8.1 62,000 8.3 Services 213,700 26.6 209,700 27.0 195;400 26.1 Government 104,100 12.9 102,200 13.1 97,800 13.1 Total Services 670,700 83.5 645,900 83.0 613,600 82.1 TOTAL 803,400 100.0% 778,300 100.0% 747,000 100.0% A-9 UNEMPLOYMENT RATES 1987 1986 1985 1984 1983 1982 1981 USA 5.6% 7.0% 7.2% 7.5% 9.6% 9.7% 7.6% Florida 5.1 5.7 6.0 6.3 8.6 8.2 6.8 Dade County 5.5 6.7 7.5 7.8 9.8 10.1* 9.5* Source: State of Florida Department of Labor and Employment. * Includes Haitian and Cuban (Mariel) refugees. DADE COUNTY, FLORIDA TEN LARGEST PUBLIC AND PRIVATE EMPLOYERS 1986 Ten Largest Public Employers Ten Largest Private Employers Dade County Public Schools 29,100 Eastern Airlines 14,000 Metropolitan Dade Southern Bell Telephone County 23,000 & Telegraph Company 6,800 U.S. Federal Agencies 15,700 BurgerKing 6,500 State of Florida Florida Power & Light Agencies 11,600 Company 5,700 Public Health Trust/ Burdines Department Store 5,500 Jackson Memorial Hospital 5,400 University of Miami 5,200 Miami Dade Community Pan American World Airways 4,800 College 4,400 Southeast Bank, N.A. 4,300 City of Miami 3,700 Publix Markets 4,000 Florida International Miami Herald Publishing Co. 3,500 University 2,600 Veterans Administration Medical Center 2,200 City of Miami Beach 1,700 Source: Directory of Dade County Major Employers, The Beacon Council, Researcr Department, November, 1987. A-10 FORTUNE 500 COMPANIES WITH OFFICES IN DADE COUNTY Pepsico IT&T Eastman-Kodak IBM Boise Cascade Rockwell International Easton AFA Union Carbide General Electric Cummins Americas Mack Trucks, Exxon Texaco International Paper Inc. Shell Oil Babcock Co. Firestone McGraw Edison Greyhound Burger King Goodyear Pfizer Pitney Bowes Caterpillar Co. Owens-Corning PPG Industries ARCO Metal Co. Ralston-Purina FiberglassGeneral Tire & Dow Chemical Dictaphone Corp. Fruehauf Corp. Rubber B.F. Goodrich DuPont De Nemours Honeywell Inc. Weyerhauser Knight-Ridder Alcoa Wang Laboratories, Inc. NCR Borden New York Times Xerox Hoover Conagna Ashland Chemical Belcher Oil Polaroid Corp. Westinghouse Motorola Nabisco United Aircraft Service Navistar International CD Medical Technologies International Source: Directory of Dade County Major Employers, Dade County Industrial Development Authority, October, 1985. CITY OF MIAMI BEACH, FLORIDA TEN LARGEST TAXPAYERS 1986 Owner Assessed Values Alexander Muss & Sons $ 84,577,206 Roney Plaza 41,401,150 Seacoast Towers 32,250,000 Morton Towers 21,515,920 Daniel Malone 15,657,004 Carillon Hotel 15,630,700 Ocean Pavilion Hotel 15,438,495 Doral Beach Hotel 14,500,000 Eden Roc Hotel 12,300,000 Southern Bell 11,122,706 Represents 8.7% of Total Taxable Value $264,393,181 Source: Metropolitan Dade County, Florida, Department of Property Appraisal; City of Miami Beach, Florida Valuation Roll. A-11 EmmisomummimmEmlw , t ••• : ? •::;* ' • • ' . ;:.•r r. L. ••• C.: •••' . * '7" •s •-•'71 f...; • ; • ,• • : ' • r , ,. r ; • •. , - • • e .6 ,••••• : t! f • • "• •1-. • •, : ;:;• 7,, . _ • t 7•- • A4 . , : C e ; • • ' t,; • ; ." _ • , • • • C ' • •• • " • ":'•• *•^; '. • , • ' • - - • `A. t•Ni‘ •‘`'. t • " • • '*-*1 ; • " •••:-•:•;. 1 i'•C• - n • 1 ••.... t'.•• . •.j. • , qPi.2 • • APPENDIX B SUMMARY OF CERTAIN PROVISIONS OF THE RESOLUTION 'I •\. • it 2 . I i - ' I • • ti • • i l -- There follows a summary of certain provisions of the Resolution. This summary does not purport to be a full statement of the terms of the Resolution and reference is made to the Resolution for a full and complete statement of such provisions. Capitalized terms used in this summary that are not defined shall have the meanings ascribed to them in the Resolution. Definitions As used in this Appendix and the Resolution, the following terms shall have the following meanings: "Accreted Value" shall mean, as of any date of computation with respect to any Capital Appreciation Bond, an amount equal to the principal amount of such Capital Appreciation Bond (the principal amount at its initial offering) plus the interest accrued on such Capital Appreciation Bond from the date of delivery to the original purchasers thereof to the Interest Payment Date next preceding the date of computation or the date of computation if an Interest Payment Date, such interest to accrue at a rate not exceeding the legal rate as set forth in the resolution of the Commission providing for the issuance of such Bonds, compounded periodically, plus, with respect to matters related to the payment upon redemption or acceleration of the Capital Appreciation Bonds, if such date of computation shall not be an Interest Payment Date, a portion of the difference between the Accreted Value as of the immediately preceding Interest Payment Date (or the date of original issuance if the date of compu- tation is prior to the first Interest Payment Date succeeding the date of original issuance) and the Accreted Value as of the immediately succeeding Interest Payment Date, calculated based on the assumption that Accreted Value accrues in equal daily amounts on the basis of a year of twelve 30-day months. "Act" shall mean Chapter 67-930, Laws of Florida, Acts of 1967, as amended, and Chapter 166, Florida Statutes, as amended, the Miami Beach City Charter, as amended, and Chapter 41, Article V of the Miami Beach City Code. "Amortization Requirements" shall mean such moneys required to be deposited in the Bond Redemption Account for the purpose of the mandatory redemption or payment at maturity of any Term Bonds, the specific amounts and times of such deposits to be determined by the Commission in the resolution authorizing the issuance of such Term Bonds. "Annual Debt Service Requirement" for any period, as applied to the Bonds of any Series, shall mean the respective amounts which are needed to pro- vide: (a) for paying the interest on all Bonds of such Series then Outstand- ing which is payable on each Interest Payment Date in such period, (b) for paying the principal of all Serial Bonds of such Series then Outstanding which is payable upon the maturity of such Serial Bonds in such period, and (c) the Amortization Requirements, if any, for the Term Bonds of such Series for such period. For purposes of computing (a) , (b) and (c) above, any principal, interest or Amortization Requirements due on October 1 in a Fiscal Year shall be deemed due in the preceding Fiscal Year. B-1 The following rules shall apply in determining the amount of the Annual Debt Service Requirement for any period: (a) The interest rate on Variable Rate Bonds shall be assumed to be 110% of the greater of (A) the daily average interest rate on such Variable Rate Bonds during the twelve months ending with the month pre- ceding the date of calculation or such shorter period that such Variable Rate Bonds shall have been Outstanding under this Resolution, and (B) the actual rate of interest on such Variable Rate Bonds on the date of calcu- lation; provided, however, that so long as the Series 1988 Bonds are insured by the Series 1988 Bond Insurance Policy, the interest rate on Variable Rate Bonds shall be assumed to be (i) 9.2% for purposes of determining the amount required to be deposited in the Debt Service Reserve Account in respect of such Variable Rate Bonds and (ii) the maximum rate permitted to be borne by said Variable Rate Bonds for pur- poses of the issuance of additional parity bonds as provided in the Resolution. (b) In the case of Put Bonds, the "put" date or dates shall be ignored if the source for payment of said "put" is a Credit Facility or a Liquidity Facility and the stated dates for Amortization Requirements and principal payments shall be used, and in the case of Bonds secured by a Credit Facility or a Liquidity Facility, the terms of the reimbursement obligation to the issuers thereof shall be ignored and the stated dates for Amortization Requirements for Term Bonds and principal payments shall be used; provided, however, that during any period of time after the issuer of a Credit Facility or a Liquidity Facility has advanced funds thereunder, the reimbursement obligation of which is payable from and secured on a parity with the Bonds and before such amount is repaid, Annual Debt Service Requirements shall include the principal amount so advanced and interest thereon, in accordance with the principal repayment schedule and interest rate or rates specified in the Credit Facility or Liquidity Facility, in lieu of the stated principal of and Amortization Requirements and interest on such Bonds; (c) In the case of Extendible Maturity Bonds, the Bonds shall be deemed to mature on the later of the stated maturity date or the date to which such stated maturity date has been extended; (d) In the case of Capital Appreciation Bonds, the principal and interest portions of the Accreted Value of Capital Appreciation Bonds becoming due at maturity or by virtue of an amortization requirement shall be included in the calculations of accrued and unpaid Annual Debt Service Requirements in the year in which said principal and interest portions are due and payable; (e) In the case of Capital Appreciation and Income Bonds, the principal and interest portions of the Appreciated Value of Capital Appreciation and Income Bonds shall be included in the calculations of accrued and unpaid Annual Debt Service Requirements in the year in which said principal and interest portions are due and payable; B-2 (f) In the case of Balloon Bonds or Interim Bonds, the debt service requirements of the Balloon Bonds or Interim Bonds may be excluded and in lieu thereof the Balloon Bonds or Interim Bonds shall be viewed, for purposes of the computation of Annual Debt Service Require- ments, as debt securities having a comparable Federal tax status as such Balloon Bonds or Interim Bonds, hypothetically maturing in substantially equal annual payments of principal and interest over a period of not more than 30 years from the date of issuance thereof, bearing interest at a fixed rate per annum equal to the average interest rate per annum for such debt securities on the date of issuance of the Balloon Bonds or Interim Bonds and issued by issuers having a credit rating, issued by Moody' s Investors Services, Inc. or any successors thereto or Standard & Poor' s Corporation or any successors thereto comparable to that of the City, as shown by a certificate of an underwriting or investment banking firm experienced in marketing such securities; and (g) If all or a portion of the principal of or interest on a Series of Bonds is payable from funds irrevocably set aside or deposited for such purpose, together with projected earnings thereon to the extent such earnings are projected to be from Permitted Investments, such prin- cipal or interest shall not be included in determining Annual Debt Service Requirements. "Appreciated Value" shall mean (i) as of any date of computation with respect to any Capital Appreciation and Income Bond up to the Interest Com- mencement Date set forth in the resolution of the Commission providing for the issuance of such Bond, an amount equal to the principal amount of such Bond (the principal amount at its initial offering) plus the interest accrued on such Capital Appreciation and Income Bond from the date of delivery to the original purchasers thereof to the Interest Payment Date next preceding the date of computation or the date of computation if an Interest Payment Date, such interest to accrue at a rate not exceeding the legal rate as set forth in the resolution of the Commission providing for the issuance of such Bonds, compounded periodically, plus, with respect to the payment upon redemption or acceleration of the Capital Appreciation and Income Bonds, if such date of computation shall not be an Interest Payment Date, a portion of the difference between the Appreciated Value as of the immediately preceding Interest Payment Date (or the date of original issuance if the date of computation is prior to the first Interest Payment Date succeeding the date of original issuance) and the Appreciated Value as of the immediately succeeding Interest Payment Date calculated based upon an assumption that Appreciated Value accrues in equal daily amounts on the basis of a year of twelve 30-day months and (ii) as of any date of computation on and after the Interest Commencement Date, the Appreciated Value on the Interest Commencement Date. "Balloon Bonds" shall mean any Bonds issued under the Resolution, inter- est on which is payable periodically and twenty five percent (25%) or more of the original principal amount of which matures during any one Fiscal Year and for which maturing principal amount Amortization Requirements have not been designated in the resolution of the City authorizing the issuance of such Bonds. B-3 "Bonds" shall mean the Series 1988 Bonds, authorized to be issued pursu- ant to the Resolution, together with any additional parity Bonds hereafter issued pursuant to the Resolution. "Bondholder", "Holder", "Holder of Bonds" or "Owner" or any similar term, shall mean any person, who shall be the registered owner of any Outstanding Bond or Bonds. "Capital Appreciation Bonds" shall mean any Bonds issued under the Reso- lution as to which interest is compounded periodically on each of the applic- able periodic dates designated for compounding and payable in an amount equal to the then current Accreted Value only at the maturity, earlier redemption or other payment date therefor, all as so designated by subsequent proceedings of the Commission relating to the issuance thereof, and which may be either Serial Bonds or Term Bonds. "Capital Appreciation and Income Bonds" shall mean any Bonds issued under the Resolution as to which accruing interest is not paid prior to the Interest Commencement Date specified in the resolution authorizing such Bonds and the Appreciated Value for such Bonds is compounded periodically on certain desig- nated dates prior to the Interest Commencement Date for such Series of Capital Appreciation and Income Bonds, all as so designated by subsequent proceedings of the Commission relating to the issuance thereof and which may be either Serial Bonds or Term Bonds. "City" shall mean the City of Miami Beach, Florida. "City Clerk" shall mean the Clerk of the City or the officer succeeding to his principal functions. "City Manager" shall mean the City Manager of the City or his designee or the officer succeeding to his principal functions. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder and applicable regulations promulgated under the Internal Revenue Code of 1954, as amended. "Commission" shall mean the City Commission of the City. "County" shall mean Dade County, Florida. "Credit Facility" shall mean an irrevocable letter of credit, policy of municipal bond insurance, guaranty, purchase agreement, credit agreement or similar facility in which the entity providing such facility irrevocably agrees to provide funds to make payment of the principal of, premium, if any and interest on Bonds. "Defeasance Obligations" shall mean to the extent permitted by law: (i) Direct general obligations of, or obligations the payment of the principal of which and the interest on which is unconditionally guaranteed by, the United States of America; and B-4 (ii) Evidences of indebtedness issued by the Bank for Coopera- tives, Federal Home Loan Banks, Federal Home Loan Mortgage Corporation (including participation certificates), Federal Land Banks, Federal Financing Banks, or any other agency or instrumentality of the United States of America created by an act of Congress which is substantially similar to the foregoing in its legal relationship to the United States of America; provided that the obligations of such agency or instrumental- ity are unconditionally guaranteed by the United States of America or any other agency or instrumentality of the United States of America; and (iii) Evidences of ownership of proportionate interests in future interest and principal payments on specified obligations described in (i) above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor on the underlying obligations described in (i) above, and which underlying obligations are not available to satisfy any claim of the custodian or any person claim- ing through the custodian or to whom the custodian may be obligated; and (iv) Obligations described in Section 103(a) of the Internal Revenue Code of 1986, as amended, which do not permit redemption prior to maturity at the option of the obligor and provision for the payment of the principal of, premium, if any, and interest on which shall have been made by the irrevocable deposit with a bank or trust company acting as a trustee or escrow agent for holders of such obligations or securities described in clauses (i) or (ii) above, the maturing principal of and interest on which, when due and payable, will provide sufficient monies to pay when due the principal of, premium if any, and interest on such obligations, and which securities described in clauses (i) or (ii) above are not available to satisfy any other claim, including any claim of the trustee or escrow agent or of any person claiming through the trustee or escrow agent or to whom the trustee or escrow agent may be obligated, including in the event of the insolvency of the trustee or escrow agent or proceedings arising out of such insolvency. Notwithstanding the foregoing, so long as the Series 1988 Bonds are insured by the Series 1988 Bond Insurance Policy, "Defeasance Obligations" shall be limited to direct noncallable obligations of the United States of America, CATs, TIGRs, STRPs or such other Defeasance Obligations described above as may be approved by the Series 1988 Bond Insurer. "Escrow Deposit Agreement" shall mean an Escrow Deposit Agreement by and between the City and a bank or trust company designated as escrow agent by the City thereunder. "Extendible Maturity Bonds" shall mean Bonds the maturities of which, by their terms, may be extended by and at the option of the Holders of the Bonds or the City. B-5 "Finance Director" shall mean the Finance Director of the City or his designee or the officer succeeding to his principal functions. "Fiscal Year" shall mean that period commencing on October 1, and con- tinuing to and including the next succeeding September 30, or such other annual period as may be prescribed by law or by the City in accordance with law. "Interest Commencement Date" shall mean, with respect to any particular Capital Appreciation and Income Bonds, the date specified in the resolution providing for the issuance of such Bonds, (which date must be prior to the maturity date for such Bonds) after which interest accruing on such Bonds shall be payable semi-annually or otherwise on a periodic basis prior to maturity, with the first such payment date being the applicable Interest Payment Date immediately succeeding such Interest Commencement Date. "Interest Payment Date" shall mean for each Series of Bonds such dates of each Fiscal Year on which interest on the Bonds is payable on any Bonds that are Outstanding, as set forth in the proceedings of the City providing for the issuance of such Series of Bonds. "Interim Bonds" shall mean any Bonds issued under the Resolution on an interim basis which are expected to be repaid from the proceeds of Bonds or other indebtedness. "Liquidity Facility" shall mean a letter of credit, line of credit, policy of municipal bond insurance, guaranty, purchase agreement or similar facility in which the entity providing such facility agrees to provide funds to pay the purchase price of Put Bonds upon their tender by the Holders of Put Bonds. "Mayor" shall mean the Mayor of the City or in the absence or disability of the Mayor of the City, the Vice Mayor of the City or the officers succeed- ing to their principal functions. "Mayor's Certificate" shall mean the Certificate to be executed by the Mayor prior to or at the time of the execution of the Bond Purchase Agreement, which Certificate shall provide the details of the Series 1988 Bonds. "Maximum Annual Debt Service" shall mean, at any time and with respect to all of the Bonds or any particular Series of the Bonds (as appropriate), the greatest Annual Debt Service Requirement in the then current or any succeeding Fiscal Year. "Outstanding" when used with reference to the Bonds, shall mean, as of any date of determination, all Bonds theretofore authenticated and delivered except; (i) Bonds theretofore cancelled by the Registrar or delivered to the Registrar for cancellation; B-6 (ii) Bonds which are deemed paid and no longer Outstanding as provided in the Resolution; (iii) Bonds in lieu of which other Bonds have been issued pursuant to the provisions hereof relating to Bonds destroyed, stolen or lost, unless evidence satisfactory to the Registrar has been received that any such Bond is held by a bona fide purchaser; and (iv) For purposes of any consent or other action to be taken hereunder by the Holders of a specified percentage of principal amount of Bonds, Bonds held by or for the account of the City. "Paying Agent" shall mean any bank or trust company or any successor bank or trust company appointed by the City to act as Paying Agent under the Resolution. "Permitted Investments" shall mean and include such obligations as shall be permitted to be legal investments of the City by the laws of the State. "Pledged Funds" shall mean, collectively, the Resort Tax Revenues and, except for moneys, securities and instruments in the Rebate Fund, all moneys, securities and instruments held in the Funds and Accounts created and estab- lished by the Resolution. "Purchasers" shall mean Lazard Freres & Co. , Chase Manhattan Capital Markets Corporation and Raymond, James & Associates, Inc. "Put Bonds" shall mean the Bonds which by their terms may be tendered by and at the option of the owner thereof for payment by the City prior to the stated maturity thereof. "Refunded Bonds" shall mean the outstanding City of Miami Beach, Florida Excise Tax Bonds, Series 1969 originally issued in the aggregate principal amount of $12,000,000. "Registrar" shall mean the officer of the City or a bank or trust company appointed by the City, located within or without the State of Florida, who or which shall maintain the registration books of the City and be responsible for the transfer and exchange of the Bonds, and who or which may also be the Paying Agent for the Bonds. "Reserve Account Insurance Policy" shall mean the insurance policy, surety bond or other acceptable evidence of insurance, if any, deposited in the Debt Service Reserve Account in lieu of or in partial substitution for cash or securities on deposit therein. The issuer providing such insurance shall be a municipal bond insurer rated, at the time of deposit in the Debt Service Reserve Account, in any of the three highest rating categories of either Moody' s Investors Service, Inc. or any successors thereof or Standard & Poor's Corporation or any successors thereof. B-7 "Reserve Account Letter of Credit" shall mean the irrevocable, transfer- able letter of credit, if any, deposited in the Debt Service Reserve Account in lieu of or in partial substitution for cash or securities on deposit therein. The issuer providing such letter of credit shall be a banking asso- ciation, bank or trust company or branch thereof rated, at the time of deposit into the Debt Service Reserve Account, in any of the three highest rating categories of either Moody's Investors Service, Inc. or any successors thereof or Standard & Poor's Corporation or any successors thereof. "Resolution" shall mean the resolution of the City authorizing the issuance of the Series 1988 Bonds as the same may from time to time be amended and supplemented in accordance with its terms. "Resort Tax" shall mean the tax authorized to be levied under the Act upon the rent of every occupancy of a room or rooms in any hotel, motel, apartment house, rooming house, subject to certain limitations and upon the retail sale price of all items of food, beverages and alcoholic beverages other than beer or malt beverages, sold at retail for consumption on the premises of any place of business required by law to be licensed by the state hotel and restaurant commission or by the state beverage department. "Resort Tax Revenues" shall mean the proceeds of the Resort Tax. "Serial Bonds" shall mean the bonds of an issue which shall be stated to mature in annual or semi-annual installments but not including Term Bonds. "Series" shall mean all of the Bonds authenticated and delivered on original issuance and pursuant to the Resolution or any supplemental resolu- tion authorizing such Bonds as a separate Series of Bonds, or any Bonds there- after authenticated and delivered in lieu of or in substitution for such Bonds pursuant to the Resolution, regardless of variations in maturity, interest rate or other provisions. "Series 1988 Bonds" shall mean the Resort Tax Revenue Refunding Bonds, Series 1988 authorized to be issued under the Resolution in the aggregate principal amount not to exceed $6,000,000. "Series 1988 Bond Insurance Policy" shall mean the municipal bond new issue insurance policy issued by the Series 1988 Bond Insurer in respect of the Series 1988 Bonds. The Series 1988 Bond Insurance Policy shall constitute a Credit Facility under the Resolution. "Series 1988 Bond Insurer" shall mean Financial Guaranty Insurance Company, a New York stock insurance company, its successors and assigns. The notice address for the Series 1988 Bond Insurer shall be 175 Water Street, New York, New York 10038, Attention: President. "State" shall mean the State of Florida. B-8 "Term Bonds" shall mean the Bonds of any Series which shall be stated to mature on one date and for the amortization of which payments are required to be made into the Bond Redemption Account in the Sinking Fund. "Variable Rate Bonds" shall mean Bonds, which may be either Serial Bonds or Term Bonds, issued with a variable, adjustable, convertible or other simi- lar rate which is not fixed in percentage for the entire term thereof at the date of issue. Resolution Constitutes Contract In consideration of the acceptance of the Bonds authorized to be issued under the Resolution by those who shall own the same from time to time, the Resolution shall be deemed to be and shall constitute a contract between the City and such Bondholders, and the covenants and agreements therein set forth to be performed by the City shall be for the equal benefit, protection and security of the owners of any and all of such Bonds, all of which shall be of equal rank and without preference, priority, or distinction of any of the Bonds over any other thereof except as expressly provided therein and in the Resolution. Covenants of the City The City covenants and agrees with the holders of any and all of the Bonds issued pursuant to the Resolution as follows: A. Tax Covenants. (1) The City will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of initial issuance and delivery of the Bonds, would result in inclusion in gross income for Federal income tax purposes under Section 103(a) of the Code, of interest on the Bonds. Particularly, the City will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of the initial issuance and delivery of the Bonds, would have caused any of the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code. (2) The City shall comply with the arbitrage rebate covenants as provided under the subheading "Rebate Fund" below. B. Levy and Collection of Resort Tax. The City has covenanted and agreed that as long as any of the principal of or interest on any Series of Bonds issued pursuant to the Resolution is unpaid, or payment thereof not duly provided for, it will not repeal Ordinance 1727, as amended, codified as Chapter 41, Article V of the City Code pursuant to which the Resort Tax is levied, and will not reduce the rate of the Resort Tax, or amend or modify said City Code provisions, in any manner so as to impair or adversely affect the power and obligation of the City to levy and collect the Resort Tax, or impair or adversely affect in any manner the pledge of the Pledged Funds, or the rights of holders of Bonds issued pursuant to the Resolution, and the City shall be unconditionally and irrevocably obligated, as long as any of the Bonds, or interest thereon, are outstanding and unpaid, to levy and collect B-9 the Resort Tax at not less than the rate now being levied by the City, to the full extent necessary to pay the principal of and interest on the Bonds and any reserves therefor. C. Resort Tax Fund. As soon as the same are received by the City, all of the Resort Tax Revenues shall be forthwith deposited in a special fund designated as the "Resort Tax Fund" which fund shall be deemed a continuation of the Resort Tax Fund established pursuant to the 1969 Resolution. The Resort Tax Fund shall constitute a trust fund for the purposes provided in the Resolution and shall be maintained separate and distinct from all other funds of the City and used only for the purposes and in the manner provided in the Resolution. D. Disposition of Resort Tax Revenues. The Resolution creates and establishes the "Resort Tax Sinking Fund" (hereinafter referred to as the "Sinking Fund"). Also created are four (4) separate accounts in the Sinking Fund to be known as the "Interest Account," the "Principal Account," the "Bond Redemption Account" and the "Debt Service Reserve Account." The Resort Tax Fund and the Sinking Fund shall be deposited in a bank or trust company in the State which is eligible under State laws to receive deposits of municipal funds. All Resort Tax Revenues at any time on deposit in the Resort Tax Fund shall be disposed of only in the following manner: (1) Resort Tax Revenues shall first be used, to the full extent necessary, for deposit into the Interest Account in the Sinking Fund, on the fifteenth (15th) day of each month, beginning with the fifteenth (15th) day of the first full calendar month following the date on which any or all of the Bonds are delivered to the purchaser thereof, of such sums as shall be sufficient to pay one-sixth (1/6th) of the interest becoming due on the Bonds on the next semi-annual Interest Payment Date; provided, however, that such monthly deposits for interest shall not be required to be made into the Interest Account to the extent that money on deposit therein is sufficient for such purpose and, provided further, that in the event the City has issued additional parity Variable Rate Bonds pursuant to the provisions of the Resolution, Resort Tax Revenues shall be deposited at such other or additional times and amounts as necessary to pay the interest becoming due on the Variable Rate Bonds on the next Interest Payment Date, all in the manner provided in the supple- mental resolution authorizing such additional parity Variable Rate Bonds or in a resolution determining the details of Variable Rate Bonds that have been authorized but unissued. In the event the City shall issue Variable Rate Bonds, the amount required to be deposited in the Interest Account for the payment of interest on such Variable Rate Bonds shall be calculated as of the first day of each Fiscal Year and shall be based upon one hundred ten per centum (110%) of the greater of (i) the average daily interest rate on such Variable Rate Bonds during the preceding Fiscal Year, or (ii) the actual rate of interest applicable to such Variable Rate Bonds on the date of calculation. B-10 The City shall, on each Interest Payment Date, transfer to the Paying Agent moneys in an amount equal to the interest due on such Inter- est Payment Date or shall advise the Paying Agent of the amount of any deficiency in the amount so transferred so that the Paying Agent may give appropriate notice required to provide for the payment of such deficiency from any Reserve Account Insurance Policy or Reserve Account Letter of Credit on deposit in the Debt Service Reserve Account. In the event that the period to elapse between the date of the delivery of the Bonds and the next semi-annual interest payment date will be other than six (6) months, then such monthly payments shall be adjusted to provide the required interest amount becoming due and payable on the next interest payment date. (2) (a) Resort Tax Revenues shall next be used, to the full extent necessary for deposit in the Principal Account in the Sinking Fund, on the fifteenth (15th) day of each month in each year, of one- sixth (1/6th) of the principal amount of Serial Bonds which will mature and become due on such semi-annual maturity dates and one-twelfth (1/12th) of the principal amount of Serial Bonds which will mature and become due on such annual maturity dates, beginning on such dates, as shall hereafter be determined by subsequent proceedings of the City; provided, however, that such monthly deposits for principal shall not be required to be made into the Principal Account to the extent that money on deposit therein is sufficient for such purpose. The City shall, on the business day prior to each principal payment date, transfer to the Paying Agent moneys in an amount equal to the principal due on such principal payment date or shall advise the Paying Agent of the amount of any deficiency in the amount so transferred so that the Paying Agent may give appropriate notice required to provide for the payment of such deficiency from any Reserve Account Insurance Policy or Reserve Account Letter of Credit on deposit in the Debt Service Reserve Account. In the event the period to elapse between the date of delivery of the Bonds and the next principal payment date will be other than six (6) months, in the case of Serial Bonds which mature semi-annually, or twelve (12) months, in the case of Serial Bonds which mature annually, then such monthly payments shall be increased or decreased, as appropriate, in sufficient amounts to provide the required principal amount maturing on the next principal payment date. Any monthly payment of Resort Tax Revenues to be deposited as set forth above for the purpose of meeting payments of principal of the Bonds, shall be adjusted, as appropriate, to reflect the frequency of principal payments applicable to such Series. (b) Resort Tax Revenues shall next be used, to the full extent necessary, for deposit into the Bond Redemption Account in the Sinking Fund on the fifteenth (15th) day of each month in each year, beginning on such date, of such Amortization Requirements as may be B-11 required for the payment of the Term Bonds payable from the Bond Redemp- tion Account, as shall hereafter be determined by subsequent proceedings of the City. The moneys in the Bond Redemption Account shall be used solely for the purchase or redemption of the Term Bonds payable there- from. The City may at any time purchase any of said Term Bonds at prices not greater than the then redemption price of said Term Bonds. If the Term Bonds are not then redeemable, the City may purchase said Term Bonds at prices not greater than the redemption price of such Term Bonds on the next ensuing redemption date. The City shall be mandatorily obligated to use any moneys in the Bond Redemption Account for the redemption prior to maturity of such Term Bonds in such manner and at such times as shall be determined by subsequent proceedings of the City; provided, that the City shall not be obligated to redeem such Term Bonds prior to maturity unless and until there are sufficient moneys on deposit in the Bond Redemption Account to provide for the redemption of at least Twenty-Five Thousand Dollars ($25,000) principal amount of Term Bonds at any one time. If, by the application of moneys in the Bond Redemption Account, the City shall purchase or call for redemption in any year Term Bonds in excess of the Amortization Requirements for such year, such excess of Term Bonds so purchased or redeemed shall be credited in such manner and at such times as the Finance Director shall determine over the remaining payment dates. No distinction or preference shall exist in the use of the moneys on deposit in the Resort Tax Fund for payment into the Interest Account, the Principal Account and the Bond Redemption Account, such accounts being on a parity with each other as to payment from the Resort Tax Fund. (3) Resort Tax Revenues shall next be used, to the full extent necessary, for deposit into the Debt Service Reserve Account on the fifteenth (15th) day of each month in each year, beginning with the fifteenth (15th) day of the first full calendar month following the date on which any or all of the Bonds issued under the Resolution are delivered to the purchaser thereof, such sums as shall be at least sufficient to pay an amount equal to one-sixtieth (1/60) of the difference between the amount on deposit in the Debt Service Reserve Account (including any Reserve Account Insurance Policy or Reserve Account Letter of Credit) and the Maximum Annual Debt Service for the Bonds Outstanding, and, provided, further, that no payments shall be required to be made into the Debt Service Reserve Account whenever and as long as the amount deposited therein (including any Reserve Account Insurance Policy or Reserve Account Letter of Credit) shall be equal to the Maximum Annual Debt Service for the Bonds Outstanding. Notwithstanding the foregoing provisions, in lieu of or in substi- tute for the required deposits of Resort Tax Revenues (including existing deposits of Resort Tax Revenues) into the Debt Service Reserve Account, and so long as the Series 1988 Bonds are insured by the Series 1988 Bond B-12 Insurance Policy with the prior consent of the Series 1988 Bond Insurer, the City may cause to be deposited into the Debt Service Reserve Account a Reserve Account Insurance Policy or a Reserve Account Letter of Credit for the benefit of the holders of the Bonds Outstanding in an amount equal to the difference between the Maximum Annual Debt Service for the Bonds Outstanding and the sums then on deposit in the Debt Service Reserve Account, if any, which Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be payable or available to be drawn upon, as the case may be, (upon the giving of notice as required thereunder) on any Interest Payment Date on which a deficiency exists which cannot be cured by moneys in any other fund or account held pursu- ant to the Resolution and available for such purpose. If a disbursement is made under the Reserve Account Insurance Policy or the Reserve Account Letter of Credit, the City shall be obligated to either reinstate the maximum limits of such Reserve Account Insurance Policy or Reserve Account Letter of Credit immediately following such disbursement equal to the Maximum Annual Debt Service for the Bonds Outstanding or to deposit into the Debt Service Reserve Account from the Resort Tax Revenues, as provided in the Resolution, funds in the amount of the disbursements made under such Reserve Account Insurance Policy or Reserve Account Letter of Credit, or a combination of such alternatives as shall equal the Maximum Annual Debt Service for the Bonds Outstanding. In the event that any moneys shall be withdrawn from the Debt Service Reserve Account for payments into the Interest Account, Principal Account and Bond Redemption Account, such withdrawals shall be subse- quently restored in the manner described in the first paragraph of subsection (3) from the first Resort Tax Revenues or funds available after all required payments have been made into the Interest Account, Principal Account and Bond Redemption Account, including any deficiencies for prior payments unless restored by the reinstatement of the maximum limits of a Reserve Account Insurance Policy or Reserve Account Letter of Credit. Moneys in Debt Service Reserve Account shall be used only for the purpose of making payments of principal of and interest on the Bonds when the moneys in the Resort Tax Fund or any other fund or account held pursuant to the Resolution and available for such purpose are insuffi- cient therefor. Any moneys in the Debt Service Reserve Account in excess of the Maximum Annual Debt Service for the Bonds Outstanding may, in the discre- tion of the City, be transferred to and deposited in the Interest Account, the Principal Account or the Bond Redemption Account as the City at its option may determine. The Debt Service Reserve Account shall be valued at least once in each Fiscal Year and the value of securities on deposit therein shall be the lower of par, or if purchased at other than par, amortized value. Amortized value, when used with respect to securities purchased at a pre- mium above or a discount below par, shall mean the value at any given B-13 date obtained by dividing the total premium or discount at which such securities were purchased by the number of interest payment dates remain- ing to maturity on such securities after such purchase and by multiplying the amount so calculated by the number of interest payment dates having passed since the date of purchase; and (i) in the case of securities purchased at a premium, by deducting the product thus obtained from the purchase price, and (ii) in the case of securities purchased at a dis- count, by adding the product thus obtained to the purchase price. (4) Resort Tax Revenues shall next be used for the payment of any subordinated obligations hereafter issued by the City in accordance with the Resolution, which subordinate obligations shall have such lien on the Resort Tax Revenues as the City shall determine in the proceedings authorizing the issuance of such subordinated obligations. (5) Thereafter, the balance of any Resort Tax Revenues remaining in said Resort Tax Fund shall, subject to the tax covenants of the City under the Resolution, be used by the City for any lawful purposes; provided, however, that none of such Resort Tax Revenues shall ever be used for the purposes provided in this paragraph (5) unless all payments required in paragraphs (1) through (4) above, including any deficiencies for prior payments and any amounts due to the issuer of any Reserve Account Insurance Policy or Reserve Account Letter of Credit, have been made in full to the date of such use. Notwithstanding the foregoing or any other provision in the Resolution to the contrary, failure to make the scheduled payments specified therein shall not constitute a breach of the City' s obligations under the Resolution so long as, on the date that any interest or principal payment is due on the Bonds, monies sufficient to make such payment are on deposit in the Interest Account or Principal Account, as the case may be. If the amounts deposited in any month pursuant to the Resolution shall be less than the amounts required, the requirement shall be cumulative and the amount of the deficiency in any month shall be added to the amount otherwise required to be deposited in each month thereafter until such time as all such deficiencies have been made up. Notwithstanding the foregoing or any other provision in the Resolution to the contrary, if any amount applied to the payment of principal of and premium, if any, and interest on the Bonds that would have been paid from an account in the Sinking Fund, is paid instead under a Credit Facility or a Liquidity Facility, amounts deposited in such relevant account may be paid, to the extent required, to the issuer of the Credit Facility or Liquidity Facil- ity having therefore made said corresponding payment. E. Rebate Fund. There is created and established under the Resolu- tion, the "Rebate Fund" which fund shall be maintained separate and apart from all other funds and accounts held by the City. Notwithstanding anything in the Resolution to the contrary, the City shall transfer or cause to be transferred the amounts required to be transferred in order to comply with the arbitrage rebate covenants contained in a certificate to be executed and delivered by the City in connection with the issuance of each Series of B-14 Bonds. The City shall make or cause to be made payments from the Rebate Fund of amounts required to be deposited therein to the United States of America in the amounts and at the times required by such arbitrage rebate covenants. The City covenants for the benefit of the Bondholders that it will comply with the requirements of the arbitrage rebate covenants. There shall be excluded from the pledge and lien of the Resolution the Rebate Fund, together with all moneys and securities from time to time held therein and all investment earnings derived therefrom. The City shall not be required to comply with the requirements of this section in the event that the City obtains an opinion of nationally recognized bond counsel that (i) such compliance is not required in order to maintain the exclusion from gross income for Federal income tax purposes of interest on the Bonds and/or (ii) compliance with some other requirement is necessary to maintain the exclusion from gross income for Federal income tax purposes of interest on the Bonds. F. Investment of Funds. The Resort Tax Fund, the Sinking Fund, including the Interest Account, Principal Account, Bond Redemption Account and Debt Service Reserve Account and the Cost of Issuance Fund and all other special funds (other than the Rebate Fund) created and established by the Resolution shall constitute trust funds in favor of the Bondholders and shall be invested at the direction of the City as provided in this paragraph. Moneys on deposit in the Resort Tax Fund, Interest Account, Principal Account, Bond Redemption Account and Cost of Issuance Fund may be invested in Permitted Investments maturing not later than the dates on which such moneys will be needed for the purposes of such fund or account. Moneys on deposit in the Debt Service Reserve Account may be invested in Permitted Investments maturing not later than the final maturity of any of the Bonds. All income and earnings received from the investment and reinvestment of moneys in the Interest Account, the Principal Account and the Redemption Account in the Sinking Fund shall be retained in the respective accounts and applied as a credit against the obligation of the City to transfer moneys from the Resort Tax Fund to such accounts. All income and earnings received from the investment and reinvestment of moneys in the Debt Service Reserve Account in the Sinking Fund shall be retained in the Debt Service Reserve Account and applied as a credit against the obligation of the City to transfer moneys from the Resort Tax Fund to such account, unless the amount in such account shall exceed the Maximum Annual Debt Service, in which event such excess may be applied in the manner set forth for excess amounts in the Debt Service Reserve Account, as described in the Resolution. All income and earnings received from the investment and reinvestment of moneys in the Cost of Issuance Fund shall be transferred to the Resort Tax Fund. B-15 For the purpose of investing or reinvesting, the City may commingle moneys in the funds and accounts created and established under the Resolution (other than the Rebate Fund) in order to achieve greater investment income; provided that the City shall separately account for the amounts so commingled. The amounts required to be accounted for in each of the funds and accounts designated (other than the Rebate Fund) may be deposited in a single bank account provided that adequate accounting procedures are maintained to reflect and control the restricted allocations of the amounts on deposit therein for the various purposes of such funds and accounts as provided in the Resolu- tion. The designation and establishment of funds and accounts in and by the Resolution (other than the Rebate Fund) shall not be construed to require the establishment of any completely independent funds and accounts but rather is intended solely to constitute an allocation of certain revenues and assets for certain purposes and to establish such certain priorities for application of certain revenues and assets as provided in the Resolution. G. Issuance of Other Obligations Payable out of Resort Tax Revenues. Except upon the conditions and in the manner provided in the Resolution, the City will not issue any other obligations payable from the Pledged Funds, nor voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or any other charge having priority to or being on a parity with the lien of the Bonds issued pursuant to the Resolution and the interest thereon, upon any of the Pledged Funds; provided that the City may enter into agreements with issuers of Credit Facilities and Liquidity Facilities which involve liens on Resort Tax Revenues on a parity with that of the Series of Bonds or portion thereof which is supported by such Credit Facilities or Liquidity Facilities. Any other obligations, or any similar agreement issued or entered into by the City, in addition to the Bonds authorized by the Resolution or additional parity Bonds issued under the terms, restrictions and conditions contained in the Resolution, shall provide that such obligations are junior, inferior and subordinate in all respects to the Bonds issued pursuant to the Resolution as to lien on and source and security for payment from the Resort Tax Revenues and in all other respects. Nothing in the Resolution shall be deemed to prohibit the City from entering into currency swaps or other arrangements for pledging interest rates on any indebtedness. H. Issuance of Additional Parity Bonds. No additional parity Bonds, payable on a parity with Bonds issued pursuant to the Resolution out of Pledged Funds shall be issued after the issuance of any Bonds pursuant to the Resolution unless the following, among other conditions, are complied with: (1) The City must be current in all deposits into the various funds and accounts and all payments theretofore required to have been deposited or made by it under the provisions of the Resolution and the City must be currently in compliance with the covenants and provisions of the Resolution and any supplemental resolution hereafter adopted for the issuance of additional parity Bonds; unless upon the issuance of such additional parity Bonds the City will be in compliance with all such covenants and provisions. B-16 (2) The amount of the Resort Tax Revenues during the immediate preceding Fiscal Year or any twelve (12) consecutive months selected by the City of the eighteen (18) months immediately preceding the issuance of said additional parity Bonds, as certified by an independent certified public accountant, were at least equal to one hundred fifty percent (150%) of the Maximum Annual Debt Service on (1) the Bonds originally issued pursuant to the Resolution and then Outstanding, (2) any addi- tional parity Bonds theretofore issued and then Outstanding, and (3) the additional parity Bonds then proposed to be issued. (3) The City need not comply with subparagraph (2) above in the issuance of additional parity Bonds if and to the extent the Bonds to be issued are refunding Bonds, that is, delivered in lieu of or in substitu- tion for Bonds originally issued under the Resolution or previously issued additional parity Bonds, if the City shall cause to be delivered a certificate of the Finance Director of the City setting forth (i) the Maximum Annual Debt Service (A) with respect to the Bonds of all Series Outstanding immediately prior to the date of authentication and delivery of such refunding Bonds, and (B) with respect to the Bonds of all Series to be Outstanding immediately thereafter, and (ii) that the Maximum Annual Debt Service set forth pursuant to (B) above is no greater than that set forth pursuant to (A) above. Additional parity Bonds issued under the Resolution may be Serial Bonds or Term Bonds and may be Variable Rate Bonds, Capital Appreciation Bonds, Capital Appreciation and Income Bonds, Extendible Maturity Bonds, Balloon Bonds, Interim Bonds, Put Bonds and such other types of bonds as may be marketable from time to time, including, without limitation, taxable Bonds and Bonds issued in book entry form, as determined by subsequent proceedings of the City. I. Remedies. Any holder of Bonds issued under the provisions of the Resolution or any trustee acting for such Bondholders may either at law or in equity, by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect and enforce any and all rights under the laws of the State, or granted and contained in the Resolution, and may enforce and compel the performance of all duties required by the Resolution or by any applicable statutes to be performed by the City or by any officer thereof. Nothing in the Resolution, however, shall be construed to grant any Holder of such Bonds any lien on any property of or within the corporate boundaries of the City, except as provided in the Resolution. No Holder of Bonds, however, shall have any right in any manner whatever to affect adversely, or prejudice the security of the Resolution or to express any right under the Resolution except in the manner provided, and all proceedings at law or in equity shall be instituted and maintained for the benefit of all Holders of Bonds. The Holder or Holders of Bonds in an aggregate principal amount of more than twenty per centum (20%) of Bonds issued under the Resolution then Outstanding may by a duly executed certificate in writing appoint a trustee for Holders of Bonds issued pursuant to the Resolution with authority to represent such Bondholders in any legal proceedings for the enforcement and B-17 protection of the rights of such Bondholders. Such certificate shall be executed by such Bondholders or their duly authorized attorneys or representa- tives, and shall be filed in the office of the Finance Director of the City. Notwithstanding anything in the Resolution to the contrary, so long as the issuer of a Credit Facility or a Liquidity Facility shall not be in default in its payment obligations under such Credit Facility or a Liquidity Facility, said issuer shall be deemed to be the holder of all Bonds so secured for all purposes of this section. J. Enforcement of Collections. The City will diligently enforce and collect the Resort Tax Revenues and will take all steps, actions and proceedings for the enforcement and collection of such Resort Tax Revenues which shall become delinquent to the full extent permitted or authorized by applicable laws and regulations. All such Resort Tax Revenues shall, as collected, be held in trust to be applied as provided in the Resolution and not otherwise. K. Discharge and Satisfaction of Bonds. The covenants, liens and pledges entered into, created or imposed pursuant to the Resolution may be fully discharged and satisfied with respect to all or a portion of the Bonds in any one or more of the following ways: (1) by paying the principal of and interest on such Bonds when the same shall become due and payable; or (2) by depositing in the Interest Account, the Principal Account and the Bond Redemption Account and/or in such other accounts which are irrevocably pledged to the payment of Bonds as the City may create and establish by resolution, certain moneys which together with other moneys lawfully available therefor, if any, shall be sufficient at the time of such deposit to pay when due the principal, redemption premium, if any, and interest due and to become due on said Bonds on or prior to the redemption date or maturity date thereof; or (3) by (a) depositing in the Interest Account, the Principal Account and the Bond Redemption Account and/or such other accounts which are irrevocably pledged to the payment of Bonds as the City may hereafter create and establish by resolution, moneys which together with other moneys lawfully available therefor when invested in such Defeasance Obligations which shall not be subject to redemption prior to their maturity other than at the option of the holder thereof, will provide moneys which shall be sufficient to pay when due the principal, redemp- tion premium, if any, and interest due and to become due on said Bonds on or prior to the redemption date or maturity date thereof and (b) in the case of the discharge of the Series 1988 Bonds and so long as the Series 1988 Bonds are insured by the Series 1988 Bond Insurance Policy, delivering to the Paying Agent a verification report of a nationally recognized certified public accountant as to the adequacy of such deposit, together with investment earnings thereon, to pay when due the principal, redemption premium, if any, and interest due or to become due B-18 on or prior to the redemption date or maturity date of the Series 1988 Bonds. Upon such payment or deposit in the amount and manner provided Bonds shall be deemed to be paid and shall no longer be deemed to be Outstanding for the purposes of the Resolution and all liability of the City with respect to said Bonds shall cease, terminate and be completely discharged and extinguished, and the Holders thereof shall be entitled for payment solely out of the moneys or securities so deposited; provided that in the event said Bonds do not mature and are not to be redeemed within the next succeeding sixty (60) days, the City shall have given the Registrar and Paying Agent irrevocable instructions to give, as soon as practicable, a notice to the Holders of said Bonds by first-class mail, postage prepaid, stating that the deposit of said moneys or Defeasance Obligations has been made with an appropriate fiduciary institution acting as escrow agent solely for the Holders of said Bond and other Bonds being defeased, and that said Bonds are deemed to have been paid in accordance with this section and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal of and premium, if any, and interest on said Bonds. (4) Notwithstanding the foregoing, all references to the dis- charge and satisfaction of Bonds shall include the discharge and sat- isfaction of any issue of Bonds, any portion of an issue of Bonds, any maturity or maturities of an issue of Bonds, any portion of a maturity of an issue of Bonds or any combination thereof. Modification or Amendment Except as otherwise provided in the following paragraph, no adverse material modification or amendment of the Resolution, or of any resolution amendatory hereof or supplemental hereto, may be made without the consent in writing of (i) the Holders of more than fifty (50%) per centum in aggregate principal amount of the Bonds then Outstanding or (ii) in case less than all of the several Series of Bonds then Outstanding are affected by the modifica- tion or amendment, the Holders of more than fifty (50%) per centum in aggre- gate principal amount of the Bonds of each Series so affected and Outstanding at the time such consent is given; provided, however, that no modification or amendment shall permit a change in the maturity of such Bonds or a reduction in the rate of interest thereon, or affecting the promise of the City to pay the principal of and interest on the Bonds, as the same mature or become due, from the Pledged Funds, or reduce the percentage of Holders of Bonds required above for such modification or amendment, without the consent of the Holders of all the Bonds. For the purposes of this section, to the extent any Series of Bonds is secured by a Credit Facility or Liquidity Facility, then the consent of the issuer of the Credit Facility or Liquidity Facility shall constitute the consent of the Holders of such Series. B-19 1 Any provision of the Resolution expressly recognizing or granting rights in or to the Series 1988 Bond Insurer may not be amended in any manner which affects the rights of the Series 1988 Bond Insurer without the prior written consent of the Series 1988 Bond Insurer. The consent of the Series 1988 Bond Insurer shall be required in addition to Bondholder consent, when required, for the execution and delivery of any supplemental resolution or any amendment, supplement or change to or modification of other documents relating to the security for the Bonds. The Resolution may be amended, changed, modified and altered without the consent of the Holders of Bonds or any Credit Facility or Liquidity Facility: (a) to cure any ambiguity or formal defect or omission in the Resolution or in any supplemental resolutions or to correct or supplement any provision contained in the Resolution which may be defective or inconsistent with any other provisions contained therein; or (b) to grant to or confer upon the Bondholders any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Bondholders; or (c) to add to the conditions, limitations and restrictions on the issuance of Bonds under the provisions of the Resolution, other conditions, limitations and restrictions to be observed; or (d) to add to the covenants and agreements of the City in the Resolution other covenants and agreements thereafter to be observed by the City or to surrender any right or power reserved to or conferred upon the City; or (e) to permit the issuance of Bonds, the interest on which is intended to be excludible from gross income for Federal income tax purposes under the Code to the Holders thereof in coupon form, if as a condition precedent to the adoption of such supplemental resolution, there shall be delivered to the City an opinion of counsel of recognized standing relating to municipal bonds to the effect that the issuance of Bonds in coupon form is then permitted by law and that the issuance of such Bonds in coupon form would not cause interest on such Bonds to be included in gross income for Federal income tax purposes under the Code to the Holders thereof; or (f) to permit the City to issue Bonds the interest on which is not excludible from gross income for Federal income tax purposes under the Code to the Holders thereof; or (g) to qualify the Bonds or any of the Bonds for registration under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended; or (h) to qualify the Resolution as an "indenture" under the Trust Indenture Act of 1939, as amended; or (i) to make such changes as may be necessary to adjust the terms of the Resolution so as to facilitate the issuance of Variable Rate Bonds, Capital Appreciation Bonds, Capital Appreciation and Income Bonds, Put Bonds, Extendible Maturity Bonds, Balloon Bonds, Interim Bonds and such other Bonds as may be marketable from time to time; or (j) to permit Bonds to be issued in book entry form with or without physical bonds; or (k) to make such changes as may be necessary to comply with the provisions of the Code relating to the exclusion of interest on the Bonds from gross income; or (1) to make such changes as may evidence the right and interest under the Resolution of an issuer of a Credit Facility or a Liquidity Facility that secures any Series of Bonds. B-20 Financial Guaranty Insurance APPENDIX C Company FGIC 175 Water Street SM New York, New York 10038 (212) 607-3000 ,!,i:%s,...a' V �{','x f0 3 3"J 45:'-3.�L+'YxeS ssx�P,ask:-.� � y **r < _<0 Municipal Bond New Issue Insurance Policy Issuer: Policy Number: Control Number: Bonds: Premium: A Waiti"Va.;:. s`3.t3"'b. .i..i.''«�u:°`. '%:<Sk�..',"°'.rtp,'".,_s,':'..,:,,,.#,,,,,,,,e..,i .,..°�r',.1,',,. .< Financial Guaranty Insurance Company (" • .nc •1 Gua.•nty' a New York ock insurance company, in consideration o e p. ment . th: . emi and bjec to th terms of this Policy, hereby unco. :• io .lly an,' • revoc. el a;rees ,o pay to Citib. -, N.A., or its successor, as its ..•nt the ` iscal A ;i 4 t"), I h. bene"t of BP . olders, that portion of the princi.. an. ►•res. on t • above de ribe. leo obi ;• ons (the "Bonds") which shall beco )ue for P. I e but • all be np.*d b r .on of Nonpayment by the Issuer. Fi o• A,.rat •11 make such o a ent• to t scal Agent on the date such principal y g P P or i eres.be,• es D • for Payme or ,n t o• i usiness Day next following the day on whic Fi : cial uaran shall ha • r•• • ed Notice of Nonpayment, whichever is later. he F ••M4;en ,•1 disb. se to e Bondholder the face amount of principal and interest ich i• the 1 . or ': --: out is unpaid by reason of Nonpayment by the Issuer but on upo ip • the Fiscal Agent in faotisfay to , of ) evidence of t' • Bo 'ho - s right to recescaive paymentorm of the principal ors interestctorDue for Payment and •.ence, including any appropriate instrumentsresue ofsaassignment, that all oef the Bo., older's rights to payment of such principal or interest Due for Payment shall ( ) thereupon vest in Financial Guaranty. Upon such disbursement, Financial Guaranty shall become the owner of the Bond, appurtenant coupon or right to payment of principal or interest on such Bond and shall be fully subrogated to all of the Bondholder's rights thereunder, including the Bondholder's right to payment thereof. This Policy is non-cancellable for any reason. The premium on this Policy is not refundable for any reason, including the payment of the Bonds prior to their maturity. This Policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Bond. As used herein, the term "Bondholder" means, as to a particular Bond, the person other than the Issuer who, at the time of Nonpayment, is entitled under the terms of such Bond to • payment thereof. "Due for Payment" means, when referring to the principal of a Bond, the stated maturity date thereof or the date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity and means, when referring to I '`,,ava v.z.oe '"b"4'"" t" SM:Service mark used by Financial Page 1 of 2 Form 9000 Guaranty Insurance Company under license from its parent company, FGIC Corporation Financial Guaranty Insurance j ::. Company 175 Water Street SM New York,New York 10038 (212) 607-3000 -'.'D s aq'K "Fy+p 5<•yp Q{u " �'.. ' fit' $W YF £,,y S < ' ' .:�.y�'�';�x::h$",re 9*<>.a r�.:. z�.z'.�. ��a�n�'D.�.�� '�.s�'�;s.>3a�.•M6:x>:a '" z �:. a� s�Y.t'��a' '•`. Municipal Bond New Issue Insurance Policy interest on a Bond, the stated date for payment of interest. "Nonpayment" in respect of a Bond means the failure of the Issuer to have provided sufficient funds to the paying agent for payment in full of all principal and interest Due for Payment on such Bond. "Notic " means telephonic or telegraphic notice, subsequently confirmed in writing, or wr to notice by registered or certified mail, from a Bondholder or a paying agent - -.a;k:on Financial Guaranty. "Business Day" means any day other than a Sat •a Sun s a, $r a day on which the Fiscal Agent is authorized by law to remain c •s•.. In Witness Whereof, Financial Guaranty has caused this 'olicy • be of ed t i corporate seal and to be signed by its duly au •• .•d offi, s in :csimil• o be,•me effective and binding upon Financial G by vi ue • e co ntersig .ture of its authorized representative. ‘11P `� ' ' ,41,1micL" Presid . ve Vice President s ecti ' D;, : Authorized Representative ( ) Citi i:nk, .A. P. nowledges that it has agreed to perform the duties of Fiscal Agent unde th' ' u icy. Authorized Officer SM:Service mark used by Financial Page 2 of 2 Form 9000 Guaranty Insurance Company under license from its parent company.FGIC Corporation rill".111.1111111....... Financial Guaranty Insurance r",,t, :?`, Company FGIC 175 Water Street SM New York,New York 10038 (212) 607-3000 ,I, t;i Lam' +0 X3`9'5� '=C: fid `' :::r Asx 7t":;: �,�'.a`�. 1 ` £ Endorsement To Financial Guaranty Insurance Company Insurance Policy Policy Number: Control Number: It is further understood that the term "Nonpayment" in respect of a Bon. ' udes a payment of principal or interest made to a Bondholder by or on be . ' • the i uer 'f such Bond which has been recovered from such Bondholder pursu. • • the 'ted ' a 44k Bankruptcy Code by a trustee in bankruptcy in accordance ith a inal, n s app:: a.' order of a court having competent jurisdiction. C ) ,A1/4 --------. In Witness Whereof, Financial Guarant :s cau- . this :i de ment o be a ed its corporate seal and to be signed b ' .my •uthori.•. office i, .csimi • to be . e effective and binding upon Fin. ' 'al , uara y by t►• of th• o tersi:•' g of its duly authorized representativ• r0j ••-,7----.L. ,Avair 47r. -'''%.7-'5; 1 f ' 1 ar t ' 'side t Executive Vice President * IL. fectiv, Dat: Authorized Representative ckno ••ged as of the Effective Date written above: Authorized officer Citibank,N.A., as Fiscal Agent r ,nswwwnwo. , - ,° y tvu _ SM:Service mark used by Financial Page 1 of 1 Form E-0002 Guaranty Insurance Company under license from its parent company,FGIC Corporation Financial Guaranty Insurance f","4s4" Company FGIC 175 Water Street SM New York, New York 10038 (212) 607-3000 ".Y+c':.. � 'F. �t E3'E 4� rr ®E..$`5 9 t ➢iy 3 .,,5 � 8g r.�'.,5 Endorsement To Financial Guaranty Insurance Company Insurance Policy Policy Number: Control Number: It is further understood that the term "Nonpayment" in respect of a Bon. udes a payment of principal or interest made to a Bondholder by or on be . • the i uer f such Bond which has been recovered from such Bondholder pursu. • • the 'ted ' a Bankruptcy Code by a trustee in bankruptcy in accordance ith a inal, n s app:: a order of a court having competent jurisdiction. In Witness Whereof, Financial Guarant :s cau- .• this : d i ment o be a • ed ' its corporate seal and to be signed b •my uthori.•. office i csimi • to be e effective and binding upon Fin. 'al uara y by t►• of th• o tersi;•' g of its duly authorized representativ• ♦ .J ,Avagive aZ'• - •side t Executive Vice President Alk 1111L. ( ) '9ectiv. Dat: Authorized Representative ckno ••ged as of the Effective Date written above: Authorized Officer Citibank, N.A., as Fiscal Agent SM:Service mark used by Financial Page 1 of 1 Form E-0002 Guaranty Insurance Company under license from its parent company,FGIC Corporation - • • .. .• . .• - • • . • . • • • • .. • 1 APPENDIX D [FORM OF BOND COUNSEL OPINION OF GREENBERG, TRAURIG, HOFFMAN, LIPOFF, ROSEN & QUENTEL, P.A. ] , 1988 The City Commission of the City of Miami Beach, Florida Miami Beach, Florida Ladies and Gentlemen: We have examined the Constitution and laws of the State of Florida, particularly Chapter 67-930 of the Laws of Florida and Chapter 166, Florida Statutes, as amended, the Charter and Code of the City of Miami Beach, Florida ( the "City" ) and Resolution No. ( the "Resolution" ) of the City Commission ( the "Commission" ) of the City and other proofs submitted, relative to the issuance and sale of City of Miami Beach, Florida Resort Tax Revenue Refunding Bonds Series 1988 issued on the date hereof ( the "Bonds" ) and maturing in such amounts and at such times, bearing interest and subject to redemption, all as described in the Official Statement of the City, dated September , 1988, delivered in connection with the issuance of the Bonds . The Bonds are being issued to refund in advance of their maturities the City ' s Excise Tax Bonds, Series 1969 . As to questions of fact material to our opinion, we have relied upon such certified proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation. We have also examined one of said Bonds as executed and authenticated. We assume that all other Bonds have been simi- larly executed and authenticated. Based on the foregoing, we are of the opinion that : 1 . Such proceedings and proofs show lawful authority for the issuance and sale of the Bonds by the City pursuant to the Constitution and laws of the State of Florida, including Chapter 67-930 of the Laws of Florida and Chapter 166 , Florida Statutes, as amended, and the Charter and Code of the City. 2 . The Bonds have been duly authorized, executed and delivered under the provisions of the Resolution. The City Commission of the Cityof Miami Beach, Florida 1988 Page 2 duly adopted by the Commission 3 . The Resolution has been d Y P of the al and constitutes a legal , valid and binding obligation City. valid and binding special obliga- tions4 , The Bonds are legal, therefor solely from the funds pledged of the City payable covenanted to levy the Resort Tax the Resolution. The Cityhas 67-930 of underpursuant to Chapter as defined in the Resolution) p certain of the funds and accounts held under Florida. The Resort Tax revenues andthere- underthe Laws of the Resolution are pledged and premium, payment of the principal of , interestare to the 11 faith and credit of the City if an on the Bonds . The fu of , interest and Y the payment not pledged to of the principal the City is not obligated to m if any, on the Bonds andf . premium, a ment thereof . led y levy or pledge any other taxes for the p g • regulations, rulings and 5 . Under existing statutes , g stated below, interest to the assumption court decisions , subject for federal income tax the Bonds is excluded from gross income on the Bonds is not an item of purposes . Furthermore, interest on minimum ur oses tax preference for p of the federal alternative P however , interest on tax imposed on individuals and corporations; adjusted net book P ' n istaken into account in determining the Bonds for taxable years beginning income (adjusted current earnings• tax for purposes of computing the alternativeminimum otherta after 1989 ) P p express no opinion regarding imposed on corporations . We . p ownership of , receipt P resulting .from .the s , In federal tax consequences dis osition of the Bond or accrual of interest on, orP 5, we have • opinion contained in this paragraph, the rendering the P the requirements of assumed continuing compliance with "Code" ) that mu Internal Revenue Code of 1986, as amended ( themust be met after the issuanceest on st of the Bonds in order that interest income tax the Bonds not be included in gross income for federalcause to meet such purposes . The City ' s failure requirements may income for federal P the Bonds to be included in gross interest on the date of issuance of the income taxpurposes retroactive to Inc the Resolution to comply with The City has covenanted in the exclusion theBonrequirements Code in order to maintain • the of the income for federal income of the interest on the Bonds from gross tax purposes . interest thereon 6 . The Bonds and the ante are exempt froma except as to laws of the State P taxation under the of Florid estate taxes and taxes imposed by Chapter 220 , Florida Statutes,caned bycor- profits on debt obligations o on interest , income or ter 220 , Florida Statutes . pore tions, as defined in said Chap The City Commission of the City of Miami Beach, Florida 1988 Page 3 is that the rights of the holders of the It to be understood Bonds and the enforceability thereof and of the Resolution may be• • insolvency, reorganization, moratorium or subject to bankruptcy, rights similar laws affecting creditors ' g hts heretofore or'ect to • that their enforcement may be sub hereinafter enacted and discretion in accordjudicial ance with general ofthe exercise principles of equity. Respectfully submitted, l • • • • r tai o zi a l 0 (-1.1-_,,..' s. .• , • �, E ;'l, " .` f i f-.1r • , , f • 1 i 1 }, ,, • , r • • .,, - ,,Y w• ,,v, •,. r—,-.: .}N ' t i., - tr 1�:14,...; . • ^ it t .. P. �. .� i. . .• I, vi . s y I{'1 • 1 . f I • 1. . s 4 br 7.- ,4/11 , ' F; T' , I ) N Y,,. . , •- i'