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96-21957 RESO RESOLUTION NO. '6-21957 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA AUTHORIZING THE ISSUANCE OF NOT MORE THAN $4,500,000 IN PRINCIPAL AMOUNT OF CITY OF MIAMI BEACH, FLORIDA RESORT TAX REVENUE REF~ING BONDS, SERIES 1996, FOR THE PRINCIPAL PURPOSE OF REFUNDING ALL OR A PORTION OF THE CITY'S OUTSTANDING RESORT TAX REVENUE REFUNDING BOND$, SERIES 1988, PURSUANT TO SECTION 304(H) OF RESOtUTION NO. 88-19369 ADOPTED BY THE CITY ON SEPTE~ER 22, 1988; PROVIDING THAT SAID SERIES 1996 BONDS AND INTEREST THEREON SHALL BE PAYABLE SOLELY FROM PLEDGED FUNDS; PROVIDING CERTAIN DETAILS OF THE SERIES 1996 BONDS; DELEGATING OTHER DETAILS AND MATTERS IN CONNECTION WITH THE ISSUANCE OF THE SERIES 1996 BONDS AND THE REFUNDING OF THE PRIOR BONDS TO THE MAYOR, WITHIN THE LIMITATIONS AND RESTRICTIONS STATED HEREIN; AUTHORIZING THE NEGOTIATED SALE AND AWARD BY THE MAYOR OF THE SERIES 1996 BONDS TO THE UNDERWRITERS, WITHIN THE LIMITATIONS AND RESTRICTIONS STATED HEREIN; APPROVING THE FORM OF AND AUTHORIZING THE MAYOR TO EXECUTE AND DELIVER A BOND PURCHASE AGREEMENT; APPROVING THE FORM OF AND DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND OFFICIAL STATEMENT AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE OFFICIAL STATEMENT; AUTHORIZING A BOOK-ENTRY REGISTRATION SYSTEM WITH RESPECT TO THE SERIES 1996 BONDS; COVENANTING TO PROVIDE CONTINUING DISCLOSURE IN CONNECTION WITH THE SERIES 1996 BONDS IN ACCORDANCE WITH SECURITIES AND EXCHANGE COMMISSION RULE 15c2 -12 AND AUTHORIZING THE FINANCE DIRECTOR TO EXECUTE AND DELIVER A COMMITMENT WITH RESPECT THERETO; APPOINTING A REGISTRAR AND PAYING AGENT FOR THE SERIES 1996 BONDS; PROVIDING FOR A CREDIT FACILITY FOR THE SERIES 1996 BONDS AND COVENANTS FOR THE BENEFIT OF THE ISSUER THEREOF; APPOINTING AN ESCROW AGENT AND APPROVING THE FORM OF AND EXECUTION OF AN ESCROW DEPOSIT AGREEMENT FOR THE PRIOR BONDS; APPROVING THE ISSUANCE OF THE SERIES 1996 BONDS FOLLOWING A PUBLIC HEARING AS REQUIRED BY SECTION 147(f) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED; AUTHORIZING OFFICERS AND EMPLOYEES OF THE CITY TO TAKE ALL NECESSARY ACTIONS IN CONNECTION WITH THE SALE AND DELIVERY OF THE SERIES 1996 BONDS AND THE REFUNDING OF THE PRIOR BONDS AND OTHER RELATED MATTERS; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Miami Beach, Florida (the "City") has heretofore issued its $4,935,000 City of Miami Beach, Florida Resort Tax Revenue Refunding Bonds, Series 1988, of which $3,885,000 are presently outstanding (the "Prior Bonds"), pursuant to Resolution No. 88-19369, adopted by the City on September 22, 1988 (as amended and supplemented from time to time, the "Bond Resolution"); and WHEREAS, the City has determined that by refunding the Prior Bonds it can restructure its payment obligations while obtaining debt service savings; and WHEREAS, Section 304(H) of the Bond Resolution provides for the issuance of additional parity bonds for the purpose, among others, of refunding outstanding bonds issued under the Bond Resolution upon meeting certain conditions contained in said Section 304(H); and WHEREAS, pursuant to Resolution No. 94-21008, adopted by the City on January 5, 1994, the City has pledged the Resort Tax Revenues (as defined in the Bond Resolution) available under Section 304(D) (4) of the Bond Resolution as further security for the payment of the Miami Beach Redevelopment Agency Tax Increment Revenue Bonds (City Center/Historic Convention village) issued from time to time and has covenanted, while said pledge is in effect, not to issue additional parity bonds under the Bond Resolution other than refunding bonds pursuant to Section 304(H) thereof; and WHEREAS, the City has determined that it is desirable to issue additional parity bonds (the "Series 1996 Bonds") pursuant to the provisions of Section 304 (H) of the Bond Resolution and this 009: [04548.00CS.MIA180245lAUTH-RESO-3 2 Resolution for the purpose of providing funds, together with any other available funds of the City, to refund all or a portion of the Prior Bonds, fund any necessary deposit to the Debt Service Reserve Account (as defined in the Bond Resolution) and pay costs of issuance thereof; 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 of the City, who shall rely upon the recommendations of Rauscher pierce Refsnes, Inc., the City's financial advisor (the "Financial Advisor"), the determination of various terms of the Series 1996 Bonds, the final award of the Series 1996 Bonds, including execution of a Bond Purchase Agreement, the Prior Bonds to be refunded and their dates of redemption, if any, and other actions in connection with the issuance of the Series 1996 Bonds and the refunding of the Prior Bonds, all as provided and subject to the limitations contained herein; and WHEREAS, the City has determined that due to the character of the Series 1996 Bonds, current favorable market conditions, time constraints, the complexity of structuring a refunding, the uncertainty inherent in a competitive bidding process and the recommendations of the Financial Advisor, it is in the best interest of the City to authorize the negotiated sale of the Series 1996 Bonds; and WHEREAS, based upon the recommendations of the Financial Advisor, the City has further determined to secure a municipal bond insurance policy (the "Series 1996 Bond Insurance policy") from 009: [04548.00CS.MIA180245lAUTH-RESO-3 3 AMBAC Indemnity Corporation, a Wisconsin-domiciled stock insurance company (the "Series 1996 Bond Insurer") insuring the payment when due of principal of and interest on the Series 1996 Bonds; and WHEREAS, on April 17, 1996, the Commission conducted a public hearing with respect to the issuance of the Series 1996 Bonds, in accordance with the Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), and having had the benefit of such hearing, the Commission desires to approve the issuance of the Series 1996 Bonds as required by Section 147(f) of the Code; NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH: Section 1. The above recitals are incorporated herein as findings. This Resolution supplements the Bond Resolution. All terms used in capitalized form herein and not defined shall have the meanings set forth in the Bond Resolution. Section 2. Additional parity Bonds of the City in an aggregate principal amount not to exceed $4,500,000 are authorized to be issued pursuant to, and subject to the conditions of, Section 304(H) the Bond Resolution and the authority granted to the City by the Act, for the purpose of providing funds, together with any other available funds of the City, to refund all or a portion of the Prior Bonds, fund any necessary deposit to the Debt Service Reserve Account and pay costs of issuance thereof, including the premium due the Series 1996 Bond Insurer with respect to the Series 1996 Bond Insurance Policy. The Series 1996 Bonds shall be designated City of Miami Beach, Florida Resort Tax Revenue Refunding Bonds, Series 1996, shall be issued in fully registered 009: [04548.00CS.MIA180245JAUTH-RESO-3 4 form as provided in Section 202 of the Bond Resolution, shall be in the denominations of $5,000 or any integral multiple thereof and shall be numbered R-1 upwards. The Series 1996 shall be dated and issued at such time, shall be in the form of Serial Bonds and/or Term Bonds, shall have such Interest Payment Dates, shall bear interest at such rates, but not to exceed 8.00% per annum, shall be stated to mature, but not later than December 31, 2022, as to any Term Bonds, shall have Amortization Requirements payable in such amounts and on such dates, and shall be subject to redemption prior to maturity, all as shall be specified in a certificate of the Mayor executed prior to or at the time of the sale of the Series 1996 Bonds (the "Series 1996 Mayor's Certificate"). Term Bonds, if any, will be callable at par with accrued interest, without premium, each year in amounts equal to the respective Amortization Requirements therefor. Except as otherwise required while the Series 1996 Bonds are held in book-entry only form, interest on the Series 1996 Bonds shall be payable by check mailed to the Holders as provided in the Bond Resolution and principal of and redemption premium, if any, on the Series 1996 Bonds shall be payable upon presentation thereof at the principal corporate trust office of the Paying Agent for the Series 1996 Bonds. Notwithstanding the provisions of Section 304 (D) of the Bond Resolution, the City shall, at least three (3) days prior to each Interest Payment Date, principal payment date or redemption date, transfer to the Paying Agent the moneys available to pay the interest, principal or redemption price due on the Series 1996 Bonds on each such date, as applicable. 009: [04548.00CS.MIA180245JAUTH-RESO-3 5 Section 3. In accordance with the provisions of the Bond Resolution, the Series 1996 Bonds shall be limited obligations of the City payable solely from the Pledged Funds which are pledged to the payment thereof in the manner and to the extent provided in the Bond Resolution, and nothing shall be construed as obligating the City to pay the principal, interest and premium, if any, thereon except from the Pledged Funds or as pledging the full faith and credit of the City to such payments. Section 4. It is hereby found and determined that due to the character of the Series 1996 Bonds, current favorable market conditions, time constraints, the complexity of structuring a refunding, the uncertainty inherent in a competitive bidding process and the recommendations of the Financial Advisor, the negotiated sale of the Series 1996 Bonds is in the best interest of the City. The negotiated sale of the Series 1996 Bonds to Raymond James & Associates, Inc. (the "Senior Managing Underwriter") on behalf of itself and Bear, Stearns & Co. Inc., Morgan Stanley & Co. Incorporated and AIBC Investment Services Corporation (collectively wi th the Senior Managing Underwriter, the II Underwri ters ") is hereby authorized at a purchase price of not less than 98% of the aggregate principal amount of the Series 1996 Bonds (not including original issue discount). The Mayor, after consultation with the Financial Advisor and the Finance Director, is hereby authorized to award the Series 1996 Bonds to the Underwriters at a price not less than that set forth in the preceding sentence and as shall be set forth in the Series 1996 Bond Purchase Agreement (as hereinafter defined) . The execution and delivery of the Series 1996 Bond 009: [04548.00CS.MIA1802451AUTH-RESO-3 6 Purchase Agreement for and on behalf of the City by the Mayor shall be conclusive evidence of the City's acceptance of the Underwriters' proposal to purchase the Series 1996 Bonds. Section 5. The Mayor, after consultation with the Financial Advisor and the Finance Director, is hereby authorized to determine the principal amount of Series 1996 Bonds to be issued, the date of the Series 1996 Bonds and the time of issuance thereof, the Interest Payment Dates therefor, the interest rate or rates which the Series 1996 Bonds shall bear, but not to exceed 8.00% per annum, the maturities and dates upon which Amortization Requirements are payable, but not later than December 31, 2022, the redemption features thereof and the principal amounts of the Serial Bond maturities and the Term Bond Amortization Requirements, all of which shall be set forth in the Series 1996 Mayor's Certificate. Section 6. Upon compliance with the requirements of Section 218.385, Florida Statutes, by the Underwriters, the Commission hereby authorizes the Mayor to execute and deliver a Bond Purchase Agreement for the Series 1996 Bonds (the "Series 1996 Bond Purchase Agreement") for and on behalf of the City, in substantially the form presented at the meeting at which this Resolution was considered, subject to such changes, modifications, insertions and omissions and such filling-in of blanks therein as may be determined and approved by the Mayor, after consultation with the Finance Director and the City Attorney. The execution of the Series 1996 Bond Purchase Agreement for and on behalf of the City by the Mayor shall be conclusive evidence of the City's approval of the Bond Purchase Agreement. The Registrar is hereby authorized 009: [04548.00CS.MIA180245JAUTH-RESO-3 7 and directed to authenticate the Series 1996 Bonds and the Finance Director is hereby authorized to cause the Series 1996 Bonds to be delivered to or upon the order of the Underwriters upon payment of the purchase price, as shall be set forth in the Series 1996 Bond Purchase Agreement, and satisfaction of the conditions contained in Section 304(H) of the Bond Resolution. Section 7. The proposed Preliminary Official Statement (the "Series 1996 Preliminary Official Statement") and Official Statement (the "Series 1996 Official Statement") in connection with the issuance of the Series 1996 Bonds are hereby approved in substantially the form of the Series 1996 Preliminary Official Statement presented at the meeting at which this Resolution was considered, subject to such changes, modifications, insertions and omissions and such filling-in of blanks therein as may be determined and approved by the Mayor, after consultation with the Finance Director and the City Attorney. The execution of the Official Statement, for and on behalf of the City by the Mayor and the City Manager shall be conclusive evidence of the City's approval of the Series 1996 Preliminary Official Statement and the Series 1996 Official Statement. The distribution of said Series 1996 Preliminary Official Statement and Series 1996 Official Statement in connection with the marketing of the Series 1996 Bonds and the execution and delivery of the Series 1996 Official Statement by the Mayor and the City Manager are hereby authorized. The Mayor or his designee, after consultation with the Finance Director and the City Attorney, is hereby authorized to make any necessary certifications to the Underwriters regarding a near final 009: [04548.00CS.MIA180245lAUTH-RESO-3 8 or deemed final Series 1996 Official Statement, if and to the extent required by Rule 15c2-12 of the United States Securities and Exchange Commission (the "Rule"). Section 8. The proceeds of the Series 1996 Bonds (including accrued interest, if any) and any other available moneys of the City shall be applied as provided in Section 303(b) of the Bond Resolution, this Resolution, the Escrow Agreement (as hereinafter defined) and a certificate of the Finance Director delivered concurrently with the issuance of the Series 1996 Bonds. Notwithstanding the provisions of Section 303 (b) of the Bond Resolution, sufficient proceeds of the Series 1996 Bonds and/or other available moneys of the City shall be deposited into the Cost of Issuance Fund established under Section 303(a) (2) of the Bond Resolution to provide for the payment of costs of issuance of the Series 1996 Bonds. Section 9. The Series 1996 Bonds shall be executed in the form and manner provided in the Bond Resolution. The Series 1996 Bonds are hereby authorized to be issued initially in book-entry form and registered in the name of The Depository Trust Company, New York, New York ("DTC"), or its nominee which will act as securities depository for the Series 1996 Bonds. The Finance Director is hereby authorized and directed to execute any necessary letters of representations with DTC and, notwithstanding the provisions of the Bond Resolution, to do all other things, comply with all requirements and execute all other such documents as are incidental to such book-entry system. In the event a book-entry 009: [04548.DOCS.MIA180245JAUTH-RESO-3 9 system for the Series 1996 Bonds ceases to be in effect, the Series 1996 Bonds shall be issued in fully certificated form. Section 10. In addition to the notice provisions contained in the Bond Resolution, at least thirty (30) days prior to the redemption of any Series 1996 Bonds, a written notice of redemption shall be mailed, postage prepaid, to all Holders of the Series 1996 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 Holder of a Series 1996 Bond or any defect therein shall not affect the validity of the proceedings of such redemption with respect to any other Holder of a Series 1996 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 1996 Bonds to be redeemed and shall also include the date fixed for redemption and the redemption price to be paid. Section 11. For the benefit of the Holders and beneficial owners from time to time of the Series 1996 Bonds, the City agrees, in accordance with and as the only obligated person with respect to the Series 1996 Bonds under the Rule, to provide or cause to be provided such financial information and operating data, financial statements and notices, in such manner, as may be required for purposes of paragraph (b) (5) of the Rule. In order to describe and specify certain terms of the City's continuing disclosure agreement, including provisions for enforcement, amendment and termination, the Finance Director iB hereby authorized and directed 009: [04548.00CS.MIA180245]AUTH-RESO-3 10 to sign and deliver, in the name and on behalf of the City, a Continuing Disclosure Commitment (the "Continuing Disclosure Commi tment"), in substantially the form presented at the meeting at which this Resolution was considered, subj ect to such changes, modifications, insertions and omissions and such filling- in of blanks therein as may be determined and approved by the Finance Director, after consultation with the City Attorney. The execution of the Continuing Disclosure Commitment, for and on behalf of the City by the Finance Director, shall be deemed conclusive evidence of the City's approval of the Continuing Disclosure Commitment. The agreement formed, collectively, by this paragraph and the Continuing Disclosure Commitment, shall be the City's continuing disclosure agreement for purposes of the Rule, and its performance shall be subject to the availability of Resort Tax Revenues to meet costs the City would be required to incur to perform it. Notwithstanding any other provisions of the Bond Resolution or this Resolution, any failure by the City to comply with any provisions of the Continuing Disclosure Commitment shall not constitute a default under the Bond Resolution and the remedies therefor shall be solely as provided in the Continuing Disclosure Commitment. The Finance Director is further authorized and directed to establish, or cause to be established, procedures in order to ensure compliance by the City with the Continuing Disclosure Commi tment, including the timely provision of information and notices. Prior to making any filing in accordance with such agreement, the Finance Director shall consult with, as appropriate, the City Attorney or the City's bond counsel. The Finance 009: [04548.00CS.MIA180245lAUTH-RESO-3 11 Director, acting in the name and on behalf of the City, shall be entitled to rely upon any legal advice provided by the City Attorney or the City's bond counsel in determining whether a filing should be made. Section 12. First Union National Bank of Florida, Miami, Florida, is hereby appointed as Registrar and Paying Agent for the Series 1996 Bonds and as escrow agent (the IIEscrow Agent") for the Prior Bonds. Section 13. The City is hereby authorized to secure the Series 1996 Bond Insurance Policy insuring payment of the principal of and interest on the Series 1996 Bonds and to pay a premium with respect thereto. The Series 1996 Bond Insurance Policy shall constitute a Credit Facility under the Bond Resolution. For so long as the Series 1996 Bond Insurance Policy is in effect and the Series 1996 Bond Insurer has not defaulted in its obligations thereunder, and notwithstanding any provisions to the contrary contained in the Bond Resolution, the City, the Paying Agent and the Registrar, as applicable, covenant and agree, but solely for the benefit of the Series 1996 Bond Insurer, as follows: A. Consent of the Series 1996 Bond Insurer. Any provision of the Bond Resolution expressly recognizing or granting rights in or to the Series 1996 Bond Insurer may not be amended in any manner which affects the rights of the Series 1996 Bond Insurer without the prior written consent of the Series 1996 Bond Insurer. B. Consent of the Series 1996 Bond Insurer in Lieu of Bondholder Consent. The Series 1996 Bond Insurer's consent shall be required in lieu of the consent of the Holders of the Series 1996 Bonds, when required, for the following purposes: (i) execution and delivery of any supplemental resolution or any amendment, 009: [04548.00CS.MIA180245lAUTH-RESO-3 12 supplement or change to or modification of the Bond Resolution; (ii) removal of the Paying Agent and selection and appointment of any successor paying agent; and (iii) initiation or approval of any action not described in (i) or (ii) above which requires Bondholder consent. C. Consent of the Series 1996 Bond Insurer in the Event of Insolvency. In the event of any reorganization or liquidation of the City, the Series 1996 Bond Insurer shall have the right to vote on behalf of all Holders of the Series 1996 Bonds but shall in no event vote to reduce the principal amount of Series 1996 Bonds Outstanding or to reduce the interest rate which the Series 1996 Bonds bear. D. Rights of the Series 1996 Bond Insurer Upon Default. Anything in the Bond Resolution to the contrary notwithstanding, upon the occurrence and continuance of a default thereunder, the Series 1996 Bond Insurer shall be entitled to all rights of the Holders of the Series 1996 Bonds under the Bond Resolution with respect to such default. E. Notices to the Series 1996 Bond Insurer; Accountings. 1. The City, applicable, Insurer: the Paying Agent shall furnish to or the Registrar, as the Series 1996 Bond a. as soon as practicable after filing thereof, a copy of any financial statement of the City and a copy of any audit and annual report of the City; b. a copy of any notice to be given to the registered owners of the Series 1996 Bonds, including, without limitation, notice of any redemption of or defeasance of Series 1996 Bonds, and any certificate rendered pursuant to the Bond Resolution relating to the security for the Series 1996 Bonds; and c. such additional information it may reasonably request. 2. The Registrar or the City, as applicable, shall notify the Series 1996 Bond Insurer of any failure of the City to provide relevant notices or certificates. 3. The City will permit the Series 1996 Bond Insurer to discuss the affairs, finances and accounts of the City or any information the Series 1996 Bond Insurer may reasonably request regarding the security for the Series 1996 Bonds with appropriate officers of the City. The 009: [04548.DOCS.MIA180245lAUTH-RESO-3 13 Registrar and the City will permit the Series 1996 Bond Insurer to have access to and to make copies of all books and records relating to the Series 1996 Bonds at any reasonable time. 4. The Series 1996 Bond Insurer shall have the right to direct an accounting at the City's expense, and the City's failure to comply with such direction within thirty (30) days after receipt of written notice of the direction from the Series 1996 Bond Insurer shall be deemed as a default hereunder; provided, however, that if compliance cannot occur within such period, then such period will be extended so long as compliance is begun within such period and diligently pursued, but only if such extension would not materially adversely affect the interests of any registered owner of the Series 1996 Bonds. 5. Notwithstanding any other provision of the Bond Resolution, the Paying Agent or the City, as applicable, shall immediately notify the Series 1996 Bond Insurer if at any time there are insufficient moneys to make any payments of principal of and/or interest on the Series 1996 Bonds as required and immediately upon the occurrence of any default under the Bond Resolution. F. Defeasance Obligations. "Defeasance Obligations" under the Bond Resolution shall be limited to the following: 1. Cash (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with obligations described in paragraph 2. below). 2. Direct obligations of (including obligations issued or held in book entry form on the books of) the Department of the Treasury of the United States of America. G. Permitted Investments. "Permitted Investments" under the Bond Resolution shall be limited to the Defeasance Obligations described under F. above and the following: 009: [04548.00CS.MIA180245JAUTH-RESO-3 14 1. Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including: Export-Import Bank Farm Credit System Financial Assistance Corporation Farmers Home Administration General Services Administration u.s. Maritime Administration Small Business Administration Government National Mortgage Association (GNMA) u.S. Department of Housing & Urban Development (PHA's) Federal Housing Administration. 2. Senior debt obligations rated "AAA" by Standard & Poor's Ratings Group ("S&P") and "Aaa" by Moody's Investors Service, Inc. ("Moody's") issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation and senior debt obligations of other U.S. government sponsored agencies approved by the Series 1996 Bond Insurer. 3. U.S. dollar denominated deposit accounts, federal funds and banker's acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "A-I" or "A-I+" by S&P and "P-I" by Moody's and maturing no more than 360 days after the date of purchase (ratings on holding companies not considered as the rating of the bank) . 4. Commercial paper which is rated at the time of purchase in the single highest classification "A-l+" by S&P and "P-l" by Moody's and which matures not more than 270 days after the date of purchase. 5. Investments in a money market fund rated "AAAm" or "AAAm-G" or better by S&P. 6. Pre-refunded municipal obligations defined as follows: Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice, and A. which are rated, based on an irrevocable escrow account or fund (the "escrow" ), in the highest rating category of S&P and Moody's or any successors thereto; or D09: [04548.DOCS.MIA180245]AUTH-RESO-3 15 B. (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph F. 2. above, which escrow may be applied only to the payment of such principal and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate. 7. Investment agreements approved in writing by the Series 1996 Bond Insurer and supported by appropriate opinions of counsel with notice to S&Pi and 8. Other forms of investments (including repurchase agreements) approved in writing by the Series 1996 Bond Insurer with notice to S&P. H. Valuation of Investments. The "value" of all investments under the Bond Resolution shall be determined as of each March 15 and September 15 as follows: 1. As to investments the bid and asked prices of which are published on a regular basis in The Wall Street Journal (or, if not there, then in The New York Times): the average of the bid and asked prices for such investments so published on or most recently prior to such time of determination. 2. As to investments the bid and asked prices of which are not published on a regular basis in The Wall Street Journal or The New York Times: the average bid price at such time of determination for such investments by any two nationally recognized government securities dealers at the time making a market in such investments or the bid price published by a nationally recognized pricing service. 3. As to certificates of deposit and bankers acceptances: the face amount thereof, plus accrued interest. 4. As to any investment not specified above: the value thereof established by prior agreement between the City and the Series 1996 Bond Insurer. 009: [04548.00CS.MIA180245JAUTH-RESO-3 16 I. Defeasance of Series 1996 Bonds. In the event that the principal and/or interest due on the Series 1996 Bonds shall be paid by the Series 1996 Bond Insurer pursuant to the Series 1996 Bond Insurance Policy, the Series 1996 Bonds shall remain Outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the City, and the assignment and pledge created under the Bond Resolution and all covenants, agreements and other obligations of the City to the registered owners shall continue to exist and shall run to the benefit of the Series 1996 Bond Insurer, and the Series 1996 Bond Insurer shall be subrogated to the rights of such registered owners. J. Payment Procedure Pursuant to the Series 1996 Bond Insurance Policy. 1. At least one (1) day prior to all Interest Payment Dates the Paying Agent will determine whether there will be sufficient funds to pay the principal of or interest on the Series 1996 Bonds on such Interest Payment Date. If the Paying Agent determines that there will be insufficient funds, the Paying Agent shall so notify the Series 1996 Bond Insurer. Such notice shall specify the amount of the anticipated deficiency, the Series 1996 Bonds to which such deficiency is applicable and whether such Series 1996 Bonds will be deficient as to principal or interest, or both. If the Paying Agent has not so notified the Series 1996 Bond Insurer at least one (1) day prior to an Interest Payment Date, the Series 1996 Bond Insurer will make payments of principal or interest due on the Series 1996 Bonds on or before the first (1st) day next following the date on which the Series 1996 Bond Insurer shall have received notice of nonpayment from the Paying Agent. 2. The Registrar shall, after the giving of notice to the Series 1996 Bond Insurer as provided in 1. above, make available to the Series 1996 Bond Insurer and, at the Series 1996 Bond Insurer's direction, to the United States Trust Company of New York, as insurance trustee for the Series 1996 Bond Insurer or any successor insurance trustee (the II Insurance Trustee"), the registration books of the City maintained by the Registrar, and the City shall make available to said parties all records relating to the funds and accounts maintained under the Bond Resolution. 3. The Registrar shall provide the Series 1996 Bond Insurer and the Insurance Trustee with a list of registered owners of Series 1996 Bonds entitled to receive principal or interest payments from the Series 1996 Bond Insurer under the terms of the Series 1996 Bond Insurance policy, 009: [04548.00CS.MIA180245JAUTH-RESO-3 17 and the Paying Agent shall make arrangements with the Insurance Trustee (i) to mail checks or drafts to the registered owners of Series 1996 Bonds entitled to receive full or partial interest payments from the Series 1996 Bond Insurer and (ii) to pay principal upon Series 1996 Bonds surrendered to the Insurance Trustee by the registered owners of Series 1996 Bonds entitled to receive full or partial principal payments from the Series 1996 Bond Insurer. 4. The Paying Agent shall, at the time it provides notice to the Series 1996 Bond Insurer pursuant to 1. above, notify registered owners of Series 1996 Bonds entitled to receive the payment of principal or interest thereon from the Series 1996 Bond Insurer (i) as to the fact of such entitlement, (ii) that the Series 1996 Bond Insurer will remit to them all or a part of the interest payments next coming due upon proof of entitlement to interest payments and delivery to the Insurance Trustee, in form satisfactory to the Insurance Trustee, of an appropriate assignment of the registered owner's right to payment, (iii) that should they be entitled to receive full payment of principal from the Series 1996 Bond Insurer, they must surrender their Series 1996 Bonds (along with an appropriate instrument of assignment in form satisfactory to the Insurance Trustee to permit ownership of such Series 1996 Bonds to be registered in the name of the Series 1996 Bond Insurer) for payment to the Insurance Trustee, and not the Registrar or Paying Agent and (iv) that should they be entitled to receive partial payment of principal from the Series 1996 Bond Insurer, they must surrender their Series 1996 Bonds for payment thereon first to the Paying Agent who shall note on such Series 1996 Bonds the portion of the principal paid by the Paying Agent and then, along with an appropriate instrument of assignment in form satisfactory to the Insurance Trustee, to the Insurance Trustee, which will then pay the unpaid portion of principal. 5. In the event that the Paying Agent has notice that any payment of principal of or interest on a Series 1996 Bond which has become Due for Payment (as defined in the Series 1996 Bond Insurance Policy) and which is made to a Holder by or on behalf of the City has been deemed a preferential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with the final, nonappealable order of a court having competent jurisdiction, the Paying Agent shall, at the time the Series 1996 Bond Insurer is notified pursuant to 1. above, notify all registered owners that in the event that any registered owner's payment is so recovered, such registered owner will be entitled to payment from the 009: [04548.00CS.MIA180245JAUTH-RESO-3 18 Series 1996 Bond Insurer to the extent of such recovery if sufficient funds are not otherwise available, and the Paying Agent shall furnish to the Series 1996 Bond Insurer its records evidencing the payments of principal of and interest on the Series 1996 Bonds which have been made by the Paying Agent and subsequently recovered from registered owners and the dates on which such payments were made. 6. In addition to those rights granted the Series 1996 Bond Insurer under the Bond Resolution, the Series 1996 Bond Insurer shall, to the extent it makes payment of principal of or interest on Seril:=s 1996 Bonds, become subrogated to the rights of thE:! recipients of such payments in accordance with the terms of the Series 1996 Bond Insurance Policy, and to evidence such subrogation (i) in the case of subrogation as to claims for past due interest, the Registrar shall note the Series 1996 Bond Insurer's rights as subrogee on the registration books of the City maintained by the Registrar upon receipt from the Series 1996 Bond Insurer of proof of the payment of interest thereon to the registered owners of the Series 1996 Bonds, and (ii) in the case of subrogation as to claims for past due principal, the Registrar shall note the Series 1996 Bond Insurer's rights as subrogee on the registration books of the City maintained by the Registrar upon surrender of the Series 1996 Bonds by the registered owners thereof togethE::!r with proof of the payment of principal thereof. K. Registrar and Paying Agent Provisions. 1. The Series 1996 Bond Insurer shall receive prior written notice of any Registrar or Paying Agent resignation. 2. Any successor Registrar or payinj Agent shall not be appointed by the City unless the Series 1996 Bond Insurer approves such successor in writing. 3. Notwithstanding any other provisions of the Bond Resolution, in determining whethE:!r the rights of the Holders of the Series 1996 Bonds will be adversely affected by any action taken pursuant to the terms and provisions of the Bond Resolution, the Registrar and Paying Agent shall consider the effect on the Holders of the Series 1996 Bonds as if there were no Series 1996 Bond Insurance Policy. 4. Notwithstanding any other provisions of the Bond Resolution, no removal, resignation or termination of the Registrar or Paying Agent shall take effect until a successor, acceptable to the Series 1996 Bond Insurer, shall be appointed. 009: [04548.00CS.MIA180245lAUTH-RESO-3 19 L. Interested Parties. 1. To the extent that the Bond Resolution confers upon or gives or grants to the Series 1996 Bond Insurer any right, remedy or claim thereunder, the Series 1996 Bond Insurer is hereby explicitly recognized as being a third- party beneficiary thereunder and may enforce any such right, remedy or claim conferred, given or granted thereunder. 2. Nothing in the Bond Resolution expressed or implied is intended or shall be construed to confer upon, or to give or grant to, any person or entity, other than the City, the Series 1996 Bond Insurer, the issuer of any other Credit Facility, Liquidity Facility, Reserve Account Insurance Policy or Reserve Account Letter of Credit, the Paying Agent, the Registrar and the registered owners of the Bonds, any right, remedy or claim under or by reason of any covenant, condition or stipulation of the Bond Resolution, and all covenants, stipulations, promises and agreements in the Bond Resolution contained by and on behalf of the City shall be for the sole and exclusive benefit of the City, the Series 1996 Bond Insurer, the issuer of any other Credit Facility, Liquidity Facility, Reserve Account Insurance Policy or Reserve Account Letter of Credit, the Paying Agent, the Registrar and the registered owners of the Bonds, as applicable. Section 14. The refunding of the Prior Bonds is hereby authorized. The Prior Bonds to be refunded and date or dates of redemption, if any, of the Prior Bonds, the application, if any, of monies on deposit in the funds and accounts established under the Bond Resolution to provide for the refunding of the Prior Bonds and the investment of the proceeds of the Series 1996 Bonds and other monies deposited with the Escrow Agent in the "City of Miami Beach, Florida Resort Tax Revenue Refunding Bonds, Series 1988 Escrow Deposit Trust Fund" established in the Escrow Agreement under the provisions of this Resolution and the Escrow Agreement shall be as provided in the Escrow Agreement or in a certificate of the Finance Director delivered concurrently with the delivery of the Series 1996 Bonds. The Commission hereby authorizes the Mayor to enter 009: [04548.DOCS.MIA180245lAUTH-RESO-3 20 into an Escrow Deposit Agreement (the "Escrow Agreement") for and on behalf of the City with the Escrow Agent providing for the refunding of the Prior Bonds, in substantially the form presented at the meeting at which this Resolution was considered, subject to such changes, modifications, insertions and omissions and such filling-in of blanks therein as may be necessary to provide for the refunding of the Prior Bonds. The execution and delivery by the Mayor of the Escrow Agreement shall be conclusive evidence of the approval of the City of any such changes, insertions, omissions or filling-in of blanks. Section 15. Pursuant to the provisions of the Section 147(f) of the Code, the issuance of the Series 1996 Bonds for the purposes described in this Resolution is hereby approved by the Commission after a public hearing heretofore held by the Commission for the purpose of giving all interested persons an opportunity to express their views on the proposed issuance of the Series 1996 Bonds, notice of which hearing was published on March 31, 1996 in The Miami Herald, a copy of which notice is attached hereto as Exhibit A and made a part hereof. The publication of such notice as above described is hereby ratified. Section 16. The officers, agents and employees of the City, Registrar, Paying Agent and Escrow Agent are hereby authorized and directed to do all acts and things required of them by the provisions of the Series 1996 Bonds, the Bond Resolution, the Series 1996 Bond Purchase Agreement, the Continuing Disclosure Commitment, the Escrow Agreement, the Series 1996 Bond Insurance Policy and this Resolution, for the full, punctual and complete DD9: [04548.DOCS.MIA180245lAUTH-RESO-3 21 performance of all the terms, covenants, provisions and agreements of the Series 1996 Bonds, the Bond Resolution, the Series 1996 Bond Purchase Agreement, the Continuing Disclosure Commitment, the Escrow Agreement, the Series 1996 Bond Insurance Policy and this Resolution. Section 17. This Resolution shall become effective immediately upon its adoption. ;' PASSED AND ADOPTED this 17th day of April, 1996. \ / ..<:1' (Seal) Attest: --R f) WA} ~ City Clerk 009: [04548.00CS.MIA1802451AUTH-RESO-3 22 FORM P,PPROVtD LEGAL ,~~T. By dJi 1/~lL::- Da~e -Wi/%_--, EXHIBIT A NOTICE OF PUBLIC HEARING CITY OF MIAMI BEACH, FLORIDA ~ NOTICE OF PUBUC HEARING "~ , -~ The City of Miami Beach, Florida (the .City"), Jntends to issue not exceeding $4,500,000 of its Resort Tax Revenue Refunding Bonds, Selia 1996 (the .Bonds"), for the purpose of advan~ refunding ~ or a portion Of the City's outstanding Resort Tax Revenue Refundihl'JklJ)~ "Serle$ 1- (the .Prior Bonds"), which Prior Bonds refunded bond$ i$$~ bi the Ctyto rman~" t,he expansion, of, the Miami Beach Con~n>>Pn ~ ~ilter (the .Convention Center"). The Convention Centeris'lo.Cat8.a 'at 190i ~ventiOl\ eeDter Drive, Miami Bea~, Borid~ and is 0Wn'ed b)/the ~ , 11Ie.~ $h~'l\otbe a debt, liability Or obHgatlonof~e Cityf.dr wh1da the fu.DJaith'and credit of the City shaJI, btl' ple<Jged, ,but shaD, be ~ &OIeft ttom p(~sOf the resort tax hMed by the City wltlifn Its corPorare Umtts ad monejs. securities and instruments held in certain funds and accoWlts establisbed under the resolution pursuant- to which the Bo~s sbalI be ISsued. ' ' , ' ' ',~ ~,..~tl~-UWJJiiaq.,Q),P.IIniSsiori oftheCftiWtittKiJda public hearln8, at 2:45 P.M., or as soon thereafter as may be heard, on Wednesday, Aprill~\896" in the City CommlssioJ) O1ambers:l~ed at Citylh,llJ, 170Cr Goft..... Cl!ntet Dri~ t1iami Beadl, F1~da, atW!Hc~ til!'e ~ p~~ . ..Y b&:.~~ ,:~ ' proNt'ed issuarlee of die "B'oh<Js. Ttlt ~m~ts'~.] Bon<tli.nd the proposed ~~ of the ~~~i.re-i~ '.,a ~~~~bJe,tlm~~durif.lg~jl;Jes.Hiou.-.. 9:UO' Al.'ttO'6:dO P.M;, MOnday thrcnf8b Fri4ay. atd.\~~ of the CIt1 Clerk, 1700 CoIMlhtion Center Driv.e.,Mfami Beacb,"t:~naa. this notice II given pursuant to ~oQl:~7 (0 ofi'e Intep1aJ, Rtr!en~'Code of 1986, . amend~'. _. "t~-~"':.{' ,_ ,,:,..' , ~~an~tb ~~9n2~I~F1odd.:siitutils;~cr~:J.lereby ad~ ~ tMlcdtat if a peno.rdecl&lJ appear anY~Qi11Jlade byaoy bo8rd. agency or commissfonWftft tespectlotlny matter considered at Its meetl.. or its hearing. such persc;mm~t,)n$Urethat a verbatim rec:ord of the proceedings is made. .'Yhich. r~cord includes the testimony and evidence upqri which the appealts to be based. This notice does not 'constitute copsent by the City .for the introduction or admission of otherwise lnadmisstbleor irrelevant evidence, nor does itautherize challenges or appeals not otherWIse allowed by bl~> ' ,/ - IN ACCORDANCE WITH THE AMERicANs WITH DlSABIUTIES ACT OF 1990, PERSONS NEErilNG SPEcIAL ACcoMMODATION ro PARTICIPATE IN THIS PROCEEDINGSHOUU> CoNV.CI'THE cm CLERK'S OFFICE NO LATER THAN FOUR (4) DAYS PRIOR ro THE PltOCEEDlNG. TELEPHONE (305) 673-7411 FOR ASSI~ANCE; IF HEARlNG'IMPAlRED, TELEPHONE mE FLORIDA RELAY SERVICE NUMBERS, (800) 955.8771 (TOD) OR (800) 955-8710 (VOICEl, FOR ASSISTANCE. ' J, ~ '+-- 'J,-" ...:. ~ ''-... ~, \A\\\,,~~s ~\'\, '\ \ ~ The Miami Herald A Knight-Ridder Newspaper PUBLISHED DAILY MIAMI, FLORIDA STATE OF FLORIDA COUNTY OF DADE Before the under~gned authority personally appeared: -/!-;~~ l{JJ ~~ who on oath says that he/she is DISPLAY ADVERTISING REPRESENTATIVE RISA KOLYER of The Miami Herald, a daily newspaper publirP~d at County, Florida; that the advertisement for L+ was published in said newsp~p~r in the issues of: -r ~\J.- m; ~ ~.\ QA.D..\Lc~,.<__ ~ e'l ~~, be {l S / ~~c..h. ;?Ii I C{i' ~ Affiant further says that the said Miami Herald is a newspaper published at Miami, in the said Dade County, Florida and that the said newspaper has heretofore been continuously published in said Dade County, Florida, each day and has been entered as second class mail matter at the post office in Miami, in said Dade County, Florida, for a p\riOd f one year next preceding the first 'on of t e ta hed copy of advertisement. ---- :\~~y Pi/I) OFFICIAL NOTARY SEAL o ~'(',.. RISA KOLYER :.1 ~ COMMISSION NUMBER ~ <(' CC401337 ""-:<- f MY COMMISSION EXP OF F\.O AUG. 18 1998 C'J...V "7/ ~O-C~ \ I Sworn to and subscribed before me d- day of ~ ~ , l this A.D. 1990. RMSS&R Draft 4-9-96 PRELIMINARY OFFICIAL STATEMENT DATED ,1996 NEW ISSUE--BOOK-ENTRY ONLY In the opinion of Bond Counsel, under existing law, (i) assuming continuing compliance by the City with certain covenants, interest on the Series 1996 Bonds is excluded from gross income for federal income tax purposes; (ii) interest on the Series 1996 Bonds is not an item of tax preference for purposes of the alternative minimum tax imposed on individuals and corporations, but may be subject to the corporate alternative minimum tax on a portion of such interest; and (iii) the Series 1996 Bonds and the income thereon are exempt from taxation under the laws of the State of Florida, except for estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net income andfranchise taxes imposed by Chapter 220, Florida Statutes, as amended, on interest, income or profits on debt obligations owned by "corporations ", "banks" and "savings associations ", as defined therein. For a more complete discussion of other tax consequences of ownership of the Series 1996 Bonds, see the discussion under the heading "Tax Exemption" herein. $ * CITY OF MIAMI BEACH, FLORIDA Resort Tax Revenue Refunding Bonds, Series 1996 Dated: May 1, 1996 Due: October 1, as shown below The Series 1996 Bonds (the "Series 1996 Bonds") will be initially delivered in book-entry form, registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York, which will act as securities depository for the Bonds. Purchasers will not receive certificates representing their ownership interest in the Series 1996 Bonds purchased. Interest on the Series 1996 Bonds will accrue from the dated date and is payable semiannually on October 1, 1996 and each April 1 and October 1 thereafter. See "The Series 1996 Bonds - Book-Entry Only System." The Series 1996 Bonds are being issued to provide funds that will be sufficient, together with other available moneys of the City, to (i) refund the outstanding portion of the City's Resort Tax Revenue Refunding Bonds, Series 1988 (the "Prior Bonds"), (ii) fund the Debt Service Reserve Account for the Series 1996 Bonds and (iii) pay the cost of issuance of the Series 1996 Bonds, including a premium for municipal bond insurance. The Series 1996 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 1996 Bonds or the redemption premium, if any, or the interest thereon except from the aforementioned source. The issuance of the Series 1996 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 (as herein defined) and the holders of the Series 1996 Bonds shall have no recourse to the City's power of taxation other than the Resort Tax. Payment of the principal of and interest on the Series 1996 Bonds when due will be insured by a municipal bond insurance policy to be issued by AMBAC Indemnity Corporation simultaneously with the delivery of the Series 1996 Bonds. * Preliminary; subject to change. MIA:26473:3 [LOGO] For a discussion of the terms and provisions of such policy, including the limitations thereof, see "Municipal Bond Insurance" herein. MATURITIES, AMOUNTS, INTEREST RATES AND PRICES Year Principal Amount Interest Rate Price or Yield Year Principal Amount Interest Rate Price or Yield $ % Term Bonds Due October 1, - Price % - (Accrued interest to be added) - - This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors must read the entire Official Statement to obtain information essential to making an informed investment decision. The Series 1996 Bonds are offered when, as and if issued and accepted by the Underwriters subject to the unqualified approval of legality by Squire, Sanders & Dempsey, Miami, Florida, Bond Counsel. Certain legal matters will be passed upon for the Underwriters by Ruden, McClosky, Smith. Schuster & Russell, P.A., Miami, Florida and Dennis Scholl, P.A., Miami, Florida. Rauscher Pierce Refines, Inc. has served as Financial Advisor to the City in connection with the issuance of the Series 1996 Bonds. It is expected that the Series 1996 Bonds, in book-entry form, will be available for delivery in New York, New York on or about , 1996. Raymond James & Associates, Inc. AIBC Investment Services Corporation Bear, Stearns & Co. Inc. Morgan Stanley & Co. Incorporated Dated: , 1996 MIA:26473:3 CITY OF MIAMI BEACH MAYOR Seymour Gelber VICE MAYOR Neisen O. Kasdin CITY COMMISSION Sy Eisenberg Susan F. Gottlieb Nancy Liebman David T. Pearlson Martin Shapiro CITY MANAGER Jose Garcia-Pedrosa CITY ATTORNEY Murray H. Dubbin, Esq. FINANCE DIRECTOR Robert J. Nachlinger CITY CLERK Robert Parcher FINANCIAL ADVISOR Rauscher Pierce Refsnes, Inc. BOND COUNSEL Squire, Sanders & Dempsey MIA:26473:3 No dealer, broker, salesman or other person has been authorized by the City or the Underwriters to give any information or to make any representations with respect to the Series 1996 Bonds other than those contained in this Official Statement, and if given or made, such information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell nor the solicitation of an offer to buy, nor shall there be any sale of the Series 1996 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 City of Miami Beach, Florida and other sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation of, the Underwriters. The information and expressions of opinion stated herein are subject to change without notice. The delivery of this Official Statement shall not, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. No registration statement relating to the Bonds has been filed with the Securities and Exchange Commission (the "SEC") or with any state securities agency. The Series 1996 Bonds have not been approved or disapproved by the SEC or any state securities agency, nor has the SEC or any state securities agency passed upon the accuracy or adequacy of this Official Statement. Any representation to the contrary is a criminal offense. IN CONNECTION WITH THE OFFERING OF THE Series 1996 BONDS, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH SERIES 1996 BONDS OFFERED HEREBY AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. MIA:26473:3 11 TABLE OF CONTENTS Page INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 PURPOSE OF THE SERIES 1996 BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 PLAN OF REFUNDING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 ESTIMATED SOURCES AND USES OF FUNDS .................................. 2 THE SERIES 1996 BONDS ..................................................... 3 SECURITY FOR THE SERIES 1996 BONDS ...................................... 7 MUNICIPAL BOND INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 DEBT SERVICE REQUIREMENTS ............................................. 18 LITIGATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 TAX EXEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 ORIGINAL ISSUE DISCOUNT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 VERIFICATION OF MATHEMATICAL COMPUTATIONS......................... 20 UNDERWRITING........................................................... 21 FINANCIAL ADVISOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 RATINGS .................................................................. 21 LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 CONTINUING DISCLOSURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 MISCELLANEOUS .......................................................... 22 CERTIFICATE CONCERNING THE OFFICIAL STATEMENT...................... 22 APPENDIX A - APPENDIX B - APPENDIX C - APPENDIX D - APPENDIX E - General Information Regarding the City of Miami Beach and Dade County, Florida The Resolution Continuing Disclosure Commitment Specimen Copy of Municipal Bond Insurance Policy Form of Approving Opinion of Bond Counsel MIA:26473:3 III OFFICIAL STATEMENT RELATING TO $ * CITY OF MIAMI BEACH, FLORIDA RESORT TAX REVENUE REFUNDING BONDS, SERIES 1996 INTRODUCTION The purpose of this Official Statement, including the cover page and all appendices, is to furnish information with respect to the issuance and sale by the City of Miami Beach, Florida (the "City") of $ * aggregate principal amount of Resort Tax Revenue Refunding Bonds, Series 1996 (the "Series 1996 Bonds"). The Series 1996 Bonds are being issued pursuant to a resolution adopted by the City Commission of the City (the "City Commission") on September 22, 1988, as supplemented by a resolution adopted by the City Commission on , 1996 (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 (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 1996 Bonds, reference is made to the proceedings authorizing the issuance of the Series 1996 Bonds. The description of the Series 1996 Bonds and of the documents authorizing and securing the same contained herein constitute summaries of certain provisions thereof, and do not purport to be comprehensive or complete. Reference is made to the Resolution, a copy of which is attached hereto as Appendix B, and to such other documents, copies of which are on file at the offices of the City, for a more complete description of such provisions. The Series 1996 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 hereto. PURPOSE OF THE SERIES 1996 BONDS The Series 1996 Bonds are being issued to provide funds that will be sufficient, together with other available moneys of the City, to (i) refund the outstanding portion of the City's Resort Tax Revenue Refunding Bonds, Series 1988 (the "Prior Bonds"), (ii) fund the Debt Service Reserve Account for the Series 1996 Bonds and (iii) pay the cost of issuance of the Series 1996 Bonds, including a premium for municipal bond insurance. * Preliminary; subject to change. MIA:26473:3 1 PLAN OF REFUNDING Concurrently with delivery of the Series 1996 Bonds, a portion of the proceeds of the Series 1996 Bonds, together with other legally available funds of the City, shall be deposited into an escrow deposit trust fund (the "Escrow Fund") pursuant to the terms and provision of an escrow deposit agreement dated as of the dated date of the Series 1996 Bonds (the "Escrow Deposit AgreemenC), between the City and First Union National Bank of Florida, Miami, Florida, as Escrow Agent. Moneys deposited into the Escrow Fund shall be applied to the purchase of United States of America Treasury obligations which shall mature at such times and bear such interest so as to produce, together with uninvested moneys therein, sufficient moneys to pay the principal of, interest and premium at redemption, if any, ofthe Prior Bonds as the same become due and payable. Upon the deposit of such moneys and the application thereof all in accordance with the Escrow Deposit Agreement, the Prior Bonds will be deemed defeased and no longer outstanding for purposes of the Resolution and the holders of the Prior Bonds shall be entitled to payment solely out of the moneys or securities deposited in the Escrow Fund pursuant to the Escrow Deposit Agreement. See "VERIFICATION OF MATHEMATICAL COMPUTATIONS" herein. The advance refunding of the Prior Bonds is being undertaken to effect a restructuring of payment obligations and debt service savings to the City. ESTIMATED SOURCES AND USES OF FUNDS The following table sets forth the estimated sources and uses of funds (exclusive of accrued interest) from the proceeds of the Series 1996 Bonds: Sources of Funds Principal Amount of Series 1996 Bonds Debt Service Reserve Account for the Prior Bonds Principal Account and Interest Account for the Prior Bonds Original Issue Discount Total Estimated Sources of Funds Uses of Funds Deposit to Escrow Fund Debt Service Reserve Account Costs of Issuance, including Municipal Bond Insurance Premium Underwriters' Discount Total Estimated Uses of Funds MIA:26473:3 2 THE SERIES 1996 BONDS Description of the Series 1996 Bonds The Series 1996 Bonds will bear interest at the rates and mature in the amounts and on the dates as set forth on the cover page of this Official Statement. The Series 1996 Bonds initially will be dated May 1, 1996 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 October 1, 1996. First Union National Bank of Florida, Miami, Florida, is acting as Paying Agent and Registrar for the Series 1996 Bonds. Book-Entry Only System The Series 1996 Bonds will be issued in registered book-entry form only. Beneficial Owners (hereinafter defined) of the Series 1996 Bonds will not receive delivery of bond certificates. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Series 1996 Bonds. The Series 1996 Bonds will be issued as fully registered securities in the name of Cede & Co. (DTC's partnership nominee). THE DESCRIPTION WHICH FOLLOWS OF THE PROCEDURES AND RECORDKEEPING WITH RESPECT TO BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 1996 BONDS, PAYMENT OF INTEREST AND PRINCIPAL ON THE SERIES 1996 BONDS TO DTC P ARTICIP ANTS (AS HEREINAFTER DEFINED) OR BENEFICIAL OWNERS OF THE SERIES 1996 BONDS, CONFIRMATION AND TRANSFER OF BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 1996 BONDS AND OTHER RELATED TRANSACTIONS BY AND BETWEEN DTC, THE DTC PARTICIPANTS AND BENEFICIAL OWNERS OF THE SERIES 1996 BONDS IS BASED SOLEL Y ON INFORMATION FURNISHED BY DTC TO THE CITY FOR INCLUSION IN THIS OFFICIAL STATEMENT. ACCORDINGL Y, THE CITY NEITHER MAKES NOR CAN MAKE ANY REPRESENTATIONS CONCERNING THESE MATTERS. 1. The Depository Trust Com.,pany. DTC will act as securities depository for the Series 1996 Bonds. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning ofthe New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934, as amended. DTC holds securities that its participants (the "DTC Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic book-entry changes in accounts of the DTC Participants, thereby eliminating the need for physical movement of securities certificates. "Direct Participants" include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the "Indirect Participants"). MIA:26473:3 3 2. Purchase of the Series 1996 Bonds. Purchases of Series 1996 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for such Series 1996 Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond (the "Beneficial Owner") is, in turn, to be recorded on the records of the Direct and Indirect Participants. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holding, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 1996 Bonds will be accomplished by entries on the books of Participants acting on behalf of the Beneficial Owners. SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE SERIES 1996 BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE BONDHOLDERS OR REGISTERED OWNERS OF THE SERIES 1996 BONDS SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE SERIES 1996 BONDS. 3. Subsequent Transfers by Beneficial Owners. To facilitate subsequent transfers, all Series 1996 Bonds deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Series 1996 Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 1996 Bonds. DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 1996 Bonds are credited, which mayor may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. 4. Notices: Consents. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to Cede & Co. If less than all of the Series 1996 Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to the Series 1996 Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 1996 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). 5. Payment of the Series 1996 Bonds. Principal and interest payments on the Series 1996 Bonds will be made to DTC. DTC's practice is to credit the accounts of the Direct Participants on the payable date in accordance with their respective holdings shown on the records ofDTC unless DTC has reason to believe that it will not receive payment on the payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent, the Registrar or the City, subject to any statutory and regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the City and/or the Paying Agent for the Series 1996 Bonds, disbursement of such payments to Direct Participants is MIA:26473:3 4 the responsibility of DTC, and disbursement of such payments to the Beneficial Owners is the responsibility of the Direct and Indirect Participants. THE CITY WILL NOT HAVE ANY RESPONSIBILITY OR OBLIGATION TO SUCH DIRECT OR INDIRECT P ARTICIP ANTS, OR THE PERSONS FOR WHOM THEY ACT AS NOMINEES, WITH RESPECT TO THE PAYMENTS TO OR THE PROVIDING OF NOTICE FOR THE DIRECT OR INDIRECT P ARTICIP ANTS, OR THE BENEFICIAL OWNERS OF THE SERIES 1996 BONDS. 6. Procedure in the Event of Revision or Discontinuation of Book-Entry Transfer System. The City shall provide for issuance of Series 1996 Bonds (the "Replacement Series 1996 Bonds") directly to owners of the Series 1996 Bonds other than DTC, or it nominee, but only in the event that (i) DTC determines not to continue to act as securities depository for the Series 1996 Bonds; or (ii) the City has determined in it sole discretion not to continue the book-entry system of transfer. Upon the occurrence of (i) or (ii) above, the City may attempt to locate another qualified securities depository. If the City does not or determines not to locate another qualified securities depository to replace DTC, the City shall have authenticated and delivered Replacement Series 1996 Bonds in certificate form. In the event the City makes the determination to issue Replacement Series 1996 Bonds, and has made provision to notify the Beneficial Owners of Series 1996 Bonds by mailing an appropriate notice to DTC, it shall issue Replacement Series 1996 Bonds to any DTC Participant making such a request. Interest on the Replacement Series 1996 Bonds shall be payable by the Paying Agent, by check or draft mailed to each owner of such Replacement Bond at the address of such owner as it appears in the registration books maintained by the Registrar, and principal on the Series 1996 Bonds will be payable when due upon presentation and surrender of such Series 1996 Bonds at the designated office of the Paying Agent. Replacement Series 1996 Bonds will be transferable only by presentation and surrender at the designated office of the Registrar, duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner of the replacement Bond, or by his attorney duly authorized in writing, in form satisfactory to the Registrar and subject to the other conditions set forth in the Resolution. DTC may determine to discontinue providing its service with respect to the Series 1996 Bonds at any time by giving reasonable notice to the City. Under such circumstances, Series 1996 Bonds are required to be delivered as described above unless a successor securities depository is used. The Beneficial Owner, upon registration of Series 1996 Bonds in the Beneficial Owner's name, will become the registered owner of the Series 1996 Bonds. 7. DTC Practices. The City can make no assurances that DTC, the Direct and Indirect Participants or other nominees of the Beneficial Owners of the Series 1996 Bonds will distribute payments of principal of, or interest on the Series 1996 Bonds, to the Beneficial Owners of such Series 1996 Bonds or that they will do so on a timely basis, or that DTC or any of its Participants will act in a manner described in this Official Statement. The City is not responsible or liable for the failure of DTC, DTC Participants or others to make any payment or give any notice to a Beneficial Owner with respect to the Series 1996 Bonds or any error or delay relating thereto. In the event of any insolvency ofDTC, or ifDTC has insufficient securities to satisfy the claims of the Direct and Indirect Participants, with respect to deposited securities, Direct and Indirect Participants may not be able to obtain all of their deposited securities. MIA:26473:3 5 8. Transfer of Beneficial Interests under State Law. The rights of holders of beneficial interests in the Series 1996 Bonds and the manner of transferring or pledging those interests is also subject to applicable state law. Beneficial Owners of the Series 1996 Bonds may wish to discuss the manner of transferring or pledging their interest in the Series 1996 Bonds with their legal advisors. Optional Redemption Series 1996 Bonds maturing on or prior to October 1, 2006 are not subject to redemption prior to their stated dates of maturity. Series 1996 Bonds maturing on October 1, 2007 and thereafter are subject to redemption on October 1,2006 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, 2006 - September 30, 2007 October 1, 2007 - September 30, 2008 October 1, 2008 and thereafter 102% 101 100 Mandatory Redemption The Series 1996 Bonds maturing on October 1, _ are subject to mandatory sinking fund redemption, by lot, on October 1, _ and on each October 1 thereafter, 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 1996 Bonds for the immediately preceding Fiscal Years, at a redemption price equal to 100% of each Series 1996 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 (October 1) Principal Amount to be Redeemed 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 1996 Bonds to be redeemed at their addresses as they appear on the registration books of the Registrar, but failure to mail such notice to any registered owner of a Series 1996 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 1996 Bond for which notice of redemption shall have been properly given. Each notice shall set forth the CUSIP nwnber, if any, the certificate nwnber, the called amounts of each certificate, date of issue, MIA:26473:3 6 interest rate and maturity date of the Series 1996 Bonds to be redeemed and shall also include the date fixed for redemption and the redemption price to be paid. While the Series 1996 Bonds are in book-entry form as described above, notice of redemption shall only be sent to Cede & Co., as the registered owner of the Series 1996 Bonds. SECURITY FOR THE SERIES 1996 BONDS General The Series 1996 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. The City has pledged, for the payment of the principal of, redemption premiums if any, and interest on the Series 1996 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 1996 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 1996 Bonds shall have no recourse to the City's power of taxation other than the Resort Tax. Flow of Funds 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 SlID.S as shall be sufficient to pay one-sixth (1I6th) 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. 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 MIA:26473:3 7 interest rate and maturity date of the Series 1996 Bonds to be redeemed and shall also include the date fixed for redemption and the redemption price to be paid. While the Series 1996 Bonds are in book-entry form as described above, notice of redemption shall only be sent to Cede & Co., as the registered owner of the Series 1996 Bonds. SECURITY FOR THE SERIES 1996 BONDS General The Series 1996 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. The City has pledged, for the payment of the principal of, redemption premiums if any, and interest on the Series 1996 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 1996 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 1996 Bonds shall have no recourse to the City's power of taxation other than the Resort Tax. Flow of Funds 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 SlilliS as shall be sufficient to pay one-sixth (l/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. 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 (l/6th) of the principal amount of Serial Bonds which will mature and MIA:26473:3 7 become due on such semi-annual maturity dates and one-twelfth (1I12th) 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 Amortization 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 Account to provide for the redemption of at least Twenty-Five Thousand Dollars ($25,000) principal amount of Term Bonds at anyone 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 (l5th) day of each month in each year, beginning with the fifteenth (l5th) 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 (l/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 MIA:26473:3 8 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. For further information regarding the application of Resort Tax Revenues see "Appendix B- The Resolution." Debt Service Reserve Account On the date of issuance of the Series 1996 Bonds, the Debt Service Reserve Account will be funded in an amount equal to the maximum annual principal and interest requirement on the Series 1996 Bonds. The initial funding of the Debt Service Reserve Account will be provided by moneys on deposit therein with respect to the Prior 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, 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 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 Pursuant to the Resolution, the City may issue additional Bonds on a parity with the Series 1996 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 "SECURITY FOR THE SERIES 1996 BONDS-- The Resort Tax" herein for a description of such purposes. Such additional Bonds may only be issued upon compliance with the following conditions: MIA:26473:3 9 (I) 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 ofthe 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. (2) The amount ofthe 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%) ofthe 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 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 (8) 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 Series 1996 Bonds are being issued pursuant to the provisions of this clause (3). Subordinate Bonds The City may also issue obligations payable from Resort Tax Revenues on a subordinate basis to the Bonds without meeting the conditions contained above. The City has approved the issuance by the Miami Beach Redevelopment Agency (the "Agency") of its Tax Increment Revenue Bonds, Series 1993 (City CenterIHistoric Convention Village), currently outstanding in the aggregate principal amount of $24,075,000 (the "1993 Tax Increment Bonds"), which bonds are secured in part by a pledge by the City of the Resort Tax Revenues on a basis subordinate to the lien of the Prior Bonds and any bonds issued to refund the Prior Bonds, which will include the Series 1996 Bonds. In addition, the Agency, with the approval of the City, intends to issue in the summer of 1996 additional Tax Increment Revenue Bonds, (City CenterIHistoric Convention Village) in an estimated aggregate principal amount of $50,000,000 (the "1996 Tax Increment Bonds"), which will be on a parity with the 1993 Tax Increment Bonds with respect to the lien on the Resort Tax Revenues and subordinate to the lien thereon of the Series 1996 Bonds. Pursuant to the provisions of the bond resolution of the City pledging the Resort Tax Revenues to secure the 1993 Tax Increment Bonds and the 1996 Tax Increment Bonds (the "Subordinate Pledge Resolution"), the City has covenanted that while such pledge is in effect, it will not issue additional parity bonds under the Resolution other than refunding bonds. It is expected that the 1996 Tax Increment Bonds will be outstanding until the year 2023. The Subordinate Pledge Resolution provides that the City's pledge of the Resort Tax Revenues to secure the 1993 Tax Increment Bonds and the 1996 Tax Increment Bonds shall be MIA:26473:3 10 released and extinguished if the net tax increment revenues pledged to 1993 Tax Increment Bonds and the 1996 Tax Increment Bonds and any bonds issued on a parity therewith for each of the immediately preceding two fiscal years of the Agency, shall have been at least equal to 175% of the maximum annual debt service on the 1993 Tax Increment Bonds and the 1996 Tax Increment Bonds and any bonds issued on parity therewith. If such lien is released and extinguished in accordance with the Subordinate Pledge Resolution, the City will then have the ability to issue additional Bonds on a parity with the Series 1996 Bonds as described above under "Additional Parity Bonds". The Resort Tax Pursuant to the Resort Tax Act, the City Charter and City Ordinance 1727, as amended, codified as Chapter 41, Article V of the City Code, the City imposes, levies and collects a resort tax of two percent (2%) upon rentals of rooms in any hotel, motel, apartment house or rooming house within the City (subject to the exceptions described below) and upon the sale price of all items of food or beverages sold at retail or alcoholic beverages for consumption on the premises of any place of business within the City required by law to be licensed by the state Division of Hotels and Restaurants (the "Resort Tax"). The City Code and the Resort Tax Act provide the following exemptions from imposition ofthe Resort Tax: (a) federal, state and city governments, or any agency thereof; (b) any non-profit religious, educational or charitable institution when engaged in carrying on customary non-profit activities; (c) rents paid by a lessee with a written lease for a term longer than six months; (d) school lunches and hospital meals and rooms; (e) all premises and transactions exempted under state law from the imposition of the state sales tax on transient rentals; (f) transactions ofless than fifty cents; and (g) sales of food or beverages delivered to a person's home under a contract providing for deliveries on a regular schedule when the price of each meal is less than ten dollars. The City estimates that the exempted transactions aggregate approximately ten percent (10%) of all transactions that would otherwise be subject to 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 theretofore levied for such purposes. In November 1992, an increase in the Resort Tax levied upon room rents of one percent (1 %) passed upon affirmative vote of the electorate, which increase will not take effect until a development agreement for a convention center hotel within the City has been signed. Subject to the rights of the holders of the Series 1996 Bonds and the bondholders whose lien on the Resort Tax Revenues is subordinate to lien of the holders of the Series 1996 Bonds, such increase is to be used (A) 50% for public incentives for a convention center hotel development, and upon retirement of all debt related thereto, as in (B) below, and (B) 50% for promotion of tourism related activities and facilities. Although the Agency is currently negotiating a development agreement for a convention center hotel, the City cannot guarantee that the development agreement will be executed and as a result, there is no assurance that such one percent increase in the Resort Tax will in fact take effect. The City has agreed 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 powers and obligation of the City MIA:26473:3 11 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 issued under the Resolution. Pursuant to ordinances of the City which are codified as Chapter 41, Article VI of the City Code, but subject to the prior rights of holders of bonds secured by the Resort Tax Revenues, including the Series 1996 Bonds, the City is required to allocate and appropriate to the Miami Beach Visitor and Convention Authority (the "Authority") created thereunder fifty percent (50%) of the Resort Tax Revenues (but not including any Resort Tax Revenues attributable to the one percent (1 %) increase described above), net of a collection fee to the City of 4% of all Resort Tax Revenues; provided, however, that the City's obligations to the Authority are deemed satisfied to the extent of payments made by the City to the Greater Miami Convention and Visitors Bureau (the "Bureau") under the Interlocal Agreement described below. Pursuant to an Interlocal Agreement among the City, Dade County, the City of Miami, Florida, the Village of Bal Harbour, Florida, and the Bureau, the City is required to annually contribute to the Bureau the lesser of (1) 50% of the net revenues collected from the City's Resort Tax, less $250,000 annually for special events and less $125,000 for collection costs, or (2) the net revenues collected from the Resort Tax, less any and all payments required under any resolutions or ordinances pursuant to which bonds or other indebtedness of the City are issued which are secured by the Resort Tax, including the Series 1996 Bonds, and less $250,000 annually for special events, and less $125,000 for collection costs. In the event that the City determines that the allocation of Resort Tax Revenues to the Bureau would impair the City's obligations with respect to any bonds, the City is required to appropriate to the Bureau an alternative revenue source equal to the Resort Tax Revenues that would otherwise have been required to be paid to the Bureau. Historical Resort Tax Collections and Debt Service Coverage Set forth in the following table is the amount of Resort Tax collections that were collected during the City's fiscal years ended September 30, 1991 through 1995, and compares those amounts to the maximum annual debt service on the Series 1996 Bonds as if the Series 1996 Bonds had been outstanding during those years. MIA:26473:3 12 Historical Resort Tax Collections And Debt Service Coverage Fiscal Year 1991 1992 1993 1994 1995 Resort Tax Revenues $6,103,882 $6,646,379 $7,889,953 $7,582,229 $9,026,927 Series 1996 Bonds(l) Coverage Ratio Source: City of Miami Beach Finance Department (I) Estimated Maximum Annual Debt Service on Series 1996 Bonds, Historical Resort Tax Collections The table on the following page sets forth the City's Resort Tax collections from October, 1985 through September, 1995. MIA:26473:3 13 i ~ 'So Jj ll~ 1~! ~ = . 'l5i-~ ~i~ ("JllI:~ 8 ~ = :::l .s .. .2 '" g:: .... ~ ~I ~ ~ ~I ~ ~ ~ ~ ~ ~ ~ i ~ ~ ~ m ~ ~ ~ II a:: ~ ~. .,., .,., v .... "" ci ~ r- a; 00 v v ~ '" "" o. o .,., .... '" ~ ~ a; :; .... M .0 !:::: M ~ "" ... 00 ~ ~ r- ~ "" ... M N M r- :; 8 "" ... '" t r- ~ on V M ... '" ~ 8 M ~ M .... o ifi. 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Xl ..; H :>: ~ ..s ~ '" .c:: u " 00 '" ;: " ~ " 0.. 8 MUNICIPAL BOND INSURANCE The following information has been furnished by AMBAC Indemnity Corporation ("AMBAC Indemnity") for use in this Official Statement. Reference is made to Appendix D for a specimen of the Municipal Bond Insurance Policy. Payment Pursuant to Municipal Bond Insurance Policy AMBAC Indemnity has made a commitment to issue a municipal bond insurance policy (the "Municipal Bond Insurance Policy") relating to the Series 1996 Bonds effective as of the date of issuance of the Series 1996 Bonds. Under the terms of the Municipal Bond Insurance Policy, AMBAC Indemnity will pay to the United States Trust Company of New York, in New York, New York or any successor thereto (the "Insurance Trustee") that portion of the principal of and interest on the Series 1996 Bonds which shall become Due for Payment but shall be unpaid by reason of Nonpayment by the City (as such terms are defined in the Municipal Bond Insurance Policy). AMBAC Indemnity will make such payments to the Insurance Trustee on the later of the date on which such principal and interest becomes Due for Payment or within one business day following the date on which AMBAC Indemnity shall have received notice of Nonpayment from the Paying Agent. The insurance will extend for the term of the Series 1996 Bonds and, once issued, cannot be canceled by AMBAC Indemnity. The Municipal Bond Insurance Policy will insure payment only on stated maturity dates and on mandatory sinking fund installment dates, in the case of principal, and on stated dates for payment, in the case of interest. If the Series 1996 Bonds become subject to mandatory redemption and insufficient funds are available for redemption of all outstanding Series 1996 Bonds, AMBAC Indemnity will remain obligated to pay principal of and interest on outstanding Series 1996 Bonds on the originally scheduled interest and principal payment dates including mandatory sinking fund redemption dates. In the event of any acceleration of the principal of the Series 1996 Bonds, the insured payments will be made at such times and in such amounts as would have been made had there not been an acceleration. In the event the Paying Agent has notice that any payment of principal of or interest on a Series 1996 Bond which has become Due for Payment and which is made to a Series 1996 Bondholder by or on behalf of the City has been deemed a preferential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy Code in accordance with a fmal, nonappealable order of a court of competent jurisdiction, such registered owner will be entitled to payment from AMBAC Indemnity to the extent of such recovery if sufficient funds are not otherwise available. The Municipal Bond Insurance Policy does not insure any risk other than Nonpayment, as defined in the Policy. Specifically, the Municipal Bond Insurance Policy does not cover: 1. payment on acceleration, as a result of a call for redemption (other than mandatory sinking fund redemption) or as a result of any other advancement of maturity. 2. payment of any redemption, prepayment or acceleration premium. MIA:26473:3 15 3. nonpayment of principal or interest caused by the insolvency or negligence of any Trustee or Paying Agent, if any. If it becomes necessary to call upon the Municipal Bond Insurance Policy, payment of principal requires surrender of Series 1996 Bonds to the Insurance Trustee together with an appropriate instrument of assignment so as to permit ownership of such Series 1996 Bonds to be registered in the name of AMBAC Indemnity to the extent ofthe payment under the Municipal Bond Insurance Policy. Payment of interest pursuant to the Municipal Bond Insurance Policy requires proof of Series 1996 Bondholder entitlement to interest payments and an appropriate assignment of the Series 1996 Bondholder's right to payment to AMBAC Indemnity. Upon payment of the insurance benefits, AMBAC Indemnity will become the owner of the Series 1996 Bond, appurtenant coupon, if any, or right to payment of principal or interest on such Series 1996 Bond and will be fully subrogated to the surrendering Series 1996 Bondholder's rights to payment. The insurance provided by the Municipal Bond Insurance Policy is not covered by the Florida Insurance Guaranty Association. AMBAC Indemnity Corporation AMBAC Indemnity is a Wisconsin-domiciled stock insurance corporation regulated by the Office of the Commissioner of Insurance of the State of Wisconsin and licensed to do business in 50 states, the District of Columbia, the Territory of Guam and the Commonwealth of Puerto Rico, with admitted assets of approximately $2,439,000,000 (unaudited) and statutory capital of approximately $1,3 78,000,000 (unaudited) as of December 31, 1995. Statutory capital consists of AMBAC Indemnity's policyholders' surplus and statutory contingency reserve. AMBAC Indemnity is a wholly owned subsidiary of AMBAC Inc., a 100% publicly-held company. Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., Moody's Investors Service and Fitch Investors Service, L.P. have each assigned a triple-A claims-paying ability rating to AMBAC Indemnity. AMBAC Indemnity has entered into pro rata reinsurance agreements under which a percentage ofthe insurance underwritten pursuant to certain municipal bond insurance programs of AMBAC Indemnity has been and will be assumed by a number of foreign and domestic unaffiliated remsurers. AMBAC Indemnity has obtained a ruling from the Internal Revenue Service to the effect that the insuring of an obligation by AMBAC Indemnity will not affect the treatment for federal income tax purposes of interest on such obligation and that insurance proceeds representing maturing interest paid by AMBAC Indemnity under policy provisions substantially identical to those contained in its municipal bond insurance policy shall be treated for federal income tax purposes in the same manner as if such payments were made by the City of the Series 1996 Bonds. AMBAC Indemnity makes no representation regarding the Series 1996 Bonds or the advisability of investing in the Series 1996 Bonds and makes no representation regarding, nor has it participated in the preparation of, the Official Statement other than the information supplied by AMBAC Indemnity and presented under the heading "MUNICIPAL BOND INSURANCE". MIA:26473:3 16 Available Information The parent company of AMBAC Indemnity, AMBAC Inc. (the "Company"), is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, DC 20549 and at the Commission's regional offices at 7 World Trade Center, New York, New York 10048 and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained from the public reference section of the Commission at 450 Fifth Street, N.W., Washington, DC 20549 at prescribed rates. In addition, the aforementioned material may also be inspected at the offices of the New York Stock Exchange, Inc. (the "NYSE") at 20 Broad Street, New York, New York 10005. The Company's Common Stock is listed on the NYSE. Copies of AMBAC Indemnity's financial statements prepared in accordance with statutory accounting standards are available from AMBAC Indemnity. The address of AMBAC Indemnity's administrative offices and its telephone number are One State Street Plaza, 17th Floor, New York, New York 10004 and (212) 668-0340. Incorporation of Certain Documents by Reference The following documents filed by the Company with the Commission (File No. 1-10777) are incorporated by reference in this Official Statement: 1. The Company's Annual Report on Form 10- K for the fiscal year ended December 31, 1994, filed with the Commission on March 31, 1995; 2. The Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995; 3. The Company's Quarterly Report on Form lO-Q for the quarter ended June 30, 1995; 4. The Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1995, filed with the Commission on November 14, 1995; 5. The Company's Current Report on Form 8-K filed with the Commission on July 18, 1995; and 6. The Company's Current Report on Form 8-K dated January 31, 1996. All documents subsequently filed by the Company pursuant to the requirements of the Exchange Act after the date of this Official Statement will be available for inspection in the same manner as described above in "Available Information". MIA:26473:3 17 DEBT SERVICE REQUIREMENTS The table below shows the debt service payable on the Series 1996 Bonds. October 1 Principal Interest Total 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Total LITIGATION There is no litigation or controversy of any nature now pending for which the City has received service of process or, to the actual knowledge of the City Attorney, threatened against the City which, in the opinion of the City Attorney, will have any material effect on the City's collection of the Resort Tax Revenues. At the time of the delivery of the Series 1996 Bonds, the City will deliver a certificate to the effect that no litigation or other proceedings are pending for which the City has received service of process or, to the actual knowledge of the City Attorney, threatened against the City in any court or other tribunal of competent jurisdiction in any way (i) restraining or enjoining the issuance, sale or delivery of the Series 1996 Bonds or (ii) questioning or affecting the validity of said Series 1996 Bonds or any proceedings of the City taken with respect to the authorization, sale, execution or MIA:26473:3 18 issuance of the Series 1996 Bonds or of the pledge of any moneys or other security provided for the Series 1996 Bonds. T AX EXEMPTION In the opinion of Bond Counsel, under existing law, (i) the interest on the Series 1996 Bonds is excluded from gross income for federal income tax purposes under Section 103(a) of the Internal Revenue Code of 1986, as amended (the "Code"); (ii) interest on the Series 1996 Bonds is not an item of tax preference under Section 57 of the Code for purposes of the alternative minimum tax imposed on individuals and corporations, but may be subject to the corporate alternative minimum tax on a portion of such interest, as described below; and (iii) the Series 1996 Bonds and the income thereon are exempt from taxation under the laws of the State of Florida, except for estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended, on interest, income or profits on debt obligations owned by "corporations," "banks" and "savings associations" as such terms are defined in said Chapter 220. Bond Counsel will express no opinion as to other tax consequences regarding the Series 1996 Bonds. The opinions on federal tax matters will be based on and will assume the accuracy of certain representations and certifications and compliance with certain covenants of the City to be contained in the transcript of proceedings and which are intended to evidence and assure the foregoing, including that the Series 1996 Bonds are and will remain obligations the interest on which is excluded from gross income for federal income tax purposes. Bond Counsel will not independently verify the accuracy of the certifications and representations made by the City. The Code prescribes a number of qualifications and conditions for the interest on state and local obligations to be and to remain excluded from gross income for federal income tax purposes, some of which, including provisions for potential payments by the City to the federal government, require future or continued compliance after issuance in order for the interest to be and to continue to be so excluded from the date of issuance. Noncompliance with these requirements by the City could cause the interest on the Series 1996 Bonds to be included in gross income for federal income tax purposes and to be subject to federal income tax retroactively to the date of their issuance. The City will covenant to take actions required of it for the interest on the Series 1996 Bonds to be and remain excluded from gross income for federal income tax purposes, and not to take any actions that would adversely affect that exclusion. Under Code provisions applicable only to certain corporations (as defined for federal income tax purposes), 75% of the excess of adjusted current earnings (which includes interest on all tax- exempt bonds, including the Series 1996 Bonds) over other alternative minimum taxable income is included in (i) alternative minimwn taxable income which may be subject to a corporate alternative minimum tax, and (ii) modified alternative minimum taxable income which may be subject to an environmental tax for certain taxable years. In addition, interest on the Series 1996 Bonds may be subject to a branch profits tax imposed on certain foreign corporations doing business in the United States and to a tax imposed on excess net passive income of certain S corporations. Under the Code, the exclusion of interest from gross income for federal income tax purposes can have certain adverse federal income tax consequences on items of income or deductions for certain taxpayers, including among them financial institutions, certain insurance companies, MIA:26473:3 19 recipients of Social Security and Railroad Retirement benefits, those that are deemed to incur or continue indebtedness to acquire or carry tax-exempt obligations and individuals otherwise eligible for the earned income credit. The applicability and extent of these or other tax consequences will depend upon the particular tax status or other tax items of the owner of the Series 1996 Bonds. Bond Counsel will express no opinion regarding such consequences. From time to time, there are legislative proposals in Congress which, if enacted, could alter or amend one or more of the federal income tax matters referred to herein or adversely affect the market value of the Series 1996 Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to obligations (such as the Series 1996 Bonds), issued prior to enactment. The discussion of tax matters in this Official Statement applies only in the case of purchasers of the Series 1996 Bonds at their original issuance and at the respective prices indicated on the cover. It does not address any other tax consequences, such as, among others, the consequence of the existence of any market discount to subsequent purchasers of the Series 1996 Bonds. ORIGINAL ISSUE DISCOUNT The Series 1996 Bonds maturing in the years to and including _ (collectively, the "Discount Bonds"), have been offered and sold to the public at an original issue discount ("OlD"). OlD is the excess of the stated redemption price at maturity (original principal amount) over the "issue price" of each Discount Bond. The issue price of a Discount Bond is the initial offering price to the public (other than to bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) at which a substantial amount of the Discount Bonds of the same maturity are sold pursuant to that offering. For federal income tax purposes, OlD accrues to the owner of a Discount Bond over the period to maturity based on the constant interest rate method, compounded semiannually (or over such shorter permitted compounding interval selected by the owner). With respect to a purchaser of a Discount Bond at its issue price in the initial offering, the portion of OlD that accrues during the period that the purchaser owns the Discount Bond (i) is interest excludable from that purchaser's gross income for federal income tax purposes to the same extent and subject to the same considerations discussed above as to other interest on the Series 1996 Bonds, and (ii) is added to that purchaser's tax basis for purposes of determining gain or loss on the maturity, redemption, prior sale or other disposition of that Discount Bond. Owners of Series 1996 Bonds should consult their own tax advisers as to the determination for federal income tax purposes of the amount of OlD accruable each year with respect to such Bonds and as to other federal tax consequences and the treatment of OlD for state and local tax purposes. VERIFICATION OF MATHEMATICAL COMPUTATIONS The arithmetical accuracy of certain computations included in the schedules provided by Raymond James & Associates, Inc. on behalf of the City relating to (a) computation of the adequacy of the maturing principal of and interest earned on the securities and cash deposited in the Escrow Fund to provide for the payment of the principal, interest and premium on the Prior Bonds, and (b) computation of the yields on the Series 1996 Bonds and the securities deposited in the Escrow Fund was examined by KPMG Peat Marwick LLP certified public accountants. Such computations were MIA:26473:3 20 based solely upon assumptions and information supplied by Raymond James & Associates, Inc. on behalf of the City. KPMG Peat Marwick LLP has restricted its procedures to examining the arithmetical accuracy of certain computations and has not made any study or evaluation of the assumptions and information upon which the computations are based and, accordingly, has not expressed an opinion on the data used, the reasonableness of the assumptions, or the achievability of future events. UNDERWRITING The Series 1996 Bonds are being purchased by the Underwriters, subject to certain terms and conditions set forth in the purchase contract between the City and the Underwriters, including the approval of certain legal matters by Bond Counsel and the existence of no material adverse change in the condition of the City from that set forth in the Official Statement. The Series 1996 Bonds are being purchased at a purchase price of $ (representing a principal amount of $ and an underwriters' discount of $ and original issue discount of $ ), plus accrued interest. The Series 1996 Bonds are offered for sale to the public at the prices or yields set forth on the cover page of this Official Statement. The Series 1996 Bonds may be offered and sold to certain dealers at prices lower than such offering prices, and such public offering prices may be changed from time to time by the Underwriters. FINANCIAL ADVISOR Rauscher Pierce Refsnes, Inc., Miami, Florida is serving as financial advisor to the City. RATINGS Moody's Investors Service, Inc. and Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc., have assigned the Series 1996 Bonds the ratings of "_" and "_", respectively, with the understanding that the standard policy of municipal bond insurance guaranteeing the timely payment of the principal of and interest on such Series 1996 Bonds, will be issued by upon delivery of the Series 1996 Bonds. There is no assurance that such ratings will continue for any given period of time or that they will not be lowered or withdrawn entirely by the rating agencies, or any of them, if in their judgment, circumstances so warrant. A downward change in or withdrawal of such ratings, or any of them, may have an adverse effect on the market price of the Series 1996 Bonds. An explanation of the significance of the ratings can be received from the rating agencies. LEGAL MATTERS Certain legal matters incident to the authorization and issuance of the Series 1996 Bonds are subject to the approval of Squire, Sanders & Dempsey, Miami, Florida, Bond Counsel, whose approving opinion will be available at the time of delivery of the Series 1996 Bonds. The proposed form of such opinion is attached hereto as Appendix E. Certain legal matters will be passed upon for the Underwriters by Ruden, McClosky, Smith, Schuster & Russell, P.A., Miami, Florida and Dennis Scholl, P.A., Miami, Florida, Co-Counsel to the Underwriters. MIA:26473:3 21 CONTINUING DISCLOSURE The City will covenant for the benefit of Bondholders to provide certain financial information and operating data relating to the City and the Resort Tax Revenues not later than 240 days following the end of each Fiscal Year (the "Annual Report"), and to provide, or cause to be provided, notices of the occurrence of certain enumerated events, if deemed by the City to be material. The Annual Report will be filed by the City with each Nationally Recognized Municipal Securities Information Repository and with any state information depository with which filings are required to be made by the City. The notices of material events will be filed by the City with the Municipal Securities Rulemaking Board or each Nationally Recognized Municipal Securities Information Repository and with any state information depository with which filings are required to be made by the City. The specific nature of the information to be contained in the Annual Report or the notices of material events is contained in "APPENDIX C - Continuing Disclosure Commitment." These covenants have been made in order to assist the Underwriters in complying with S.E.C. Rule 15c2-12(b)(5). MISCELLANEOUS All of the summaries or portions of the Resolution, the Resort Tax Act, the City Charter, the City Code and any other documents described herein are made subject to all of the detailed provisions of such acts or documents, to which reference is hereby made for further information. The foregoing summaries do not purport to be complete statements of any of the provisions of such acts or documents. CERTIFICATE CONCERNING THE OFFICIAL STATEMENT Concurrently with the delivery of the Series 1996 Bonds, the City will furnish its certificate, executed by the Mayor, to the effect that, to the best of his knowledge, this Official Statement as of its date and as of the date of the delivery of the Series 1996 Bonds, does not contain an untrue statement of a material fact and does not omit any material fact which should be included therein for the purpose for which the Official Statement is to be used, or which is necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading. This Official Statement has been duly executed and delivered by the Mayor, the City Manager and the City Clerk of City of Miami Beach, Florida. CITY OF MIAMI BEACH, FLORIDA By: Mayor By: Attest: City Manager City Clerk MIA:26473:3 22 APPENDIX A General Information Regarding the City of Miami Beach and Dade County, Florida MIA:26473:3 APPENDIX A GENERAL INFORMATION REGARDING THE CITY OF MIAMI BEACH AND DADE COUNTY, FLORIDA The following information pertaining to the City of Miami Beach, Florida (the "City") and Dade County, Florida (the "County") is set forth for purposes of background only. The Series 1996 Bonds are payable only from Resort Tax Revenues and moneys in certain funds and accounts under the Resolution, as described in this Official Statement. The Series 1996 Bonds do not constitute a debt, liability or obligation or a pledge of the faith, credit or taxing power of the City, County, the State of Florida, or any political subdivision thereof. INTRODUCTION The City comprises seven square miles of land area and ten square miles of Biscayne Bay. The climate is tropical with an average annual temperature of 75 degrees fahrenheit, 24 degrees Celsius. The City is the home of the Art Deco Historic District consisting of one of the greatest concentrations of this style of architecture in the United States. Within this Historic District is the world famous Ocean Drive, which has been called the "Riviera" of Florida. The economy of the area is based on tourism. For fiscal year 1995, room rents, food and beverage sales accounted for an estimated $500 million in sales in the City. The population demographics of the City have drastically changed over the last fifteen years. In the 1980 Census the average age ofthe population was 65.3 years old. In the 1990 Census the average age had declined to 44.5 and 1995 estimates place it at 44 years old. The City is a group of islands between Biscayne Bay and the Atlantic Ocean and is connected to the mainland by four causeways. The County is the largest county in the southeastern United States in terms of population and one of the largest in terms of land area. The County consists of 2,042 square miles of land area. The population is mainly clustered along the coast with the western area of the County covering a part of the Everglades. There are numerous incorporated municipalities in the County which include Miami, Hialeah and Coral Gables, along with the City. POPULATION The U. S. Bureau of the Census estimated the population ofthe City at 95,160 as of April 1, 1994. According to estimates of the City's Department of Economic and Community Development, the population is expected to increase to 95,881 by the year 2000 based on Census information. The County's population, as estimated by the Metro-Dade County Planning Department, was 1,990,445 for 1994 and they estimate growth to 2,260,000 by 2000. MIA:26473:3 A-I Year 1970 1980 1990 2000 2010 Source: A~e Group 00-14 15-24 25-44 45-64 65-74 75+ Population Projections, City of Miami Beach and Dade County 1970 - 2010 Percent Chan~e Dade County 1,267,800 (1) 1,625,598 (1) 1,937,094 (1) 2,260,000 (3) 2,557,000 (3) Percent Chan~e City of Miami Beach 87,072 (1) 96,298 (1) 92,639 (1) 95,881 (2) 98,757 (2) (1) U. S. Census (2) City Department of Economic Development (3) Metro-Dade Planning Department 28.2% 19.2% 16.7% 13.1% 10.6% (3.8)% 3.5% 3.0% Population Breakdown by A~e. City of Miami Beach. 1980 - 2000 1980 6.5% 7.2% 13.7% 22.0% 24.4% 26.2% 1990 12.0% 9.8% 28.8% 19.3% 11.5% 18.6% 2000 20.6% 8.2% 21.5% 23.2% 10.4% 16.2% Median Age: 65.3 44.5 Source: Metro-Dade County Planning Department 43.7 GOVERNMENT The City of Miami Beach is organized under the Commission-City Manager form of government. The governing body is an elected City Commission of six members and an elected Mayor. The City Commission set policy for the administration of the City and appoints a City Manager and a City Attorney. The City Attorney appoints his staff and the City Manager is responsible for the appointment of the balance of the employees of the City. The City Commissioners are elected to staggered four year terms and the Mayor is elected every two years. Both the City Attorney and the City Manager serve at the pleasure of the City Commission. The City Manager carries out the policies of the City Commission, directs the operations of the City and, with the exception of the City Attorney's Office, has the power to appoint or remove all heads ofthe various Departments. CERTAIN CITY STAFF MEMBERS Jose Garcia-Pedrosa. City Mana~er Appointed City Manager May 18, 1995; Managing Partner, Tew, Garcia-Pedrosa & Beasley, 1990 - 1995; Partner, Tew, Jorden & Schulte, 1984 - 1990; Miami City Attorney, 1982 - 1984 Education: Harvard College, B. A.; Harvard Law School, J. D. MIA:26473:3 A-2 Harry Mavrogenes. Asst. City Manager Appointed Assistant City Manager in 1993; Director of Development, Design and Historic Preservation, 1990 - 1993; Downtown Plan Coordinator, San Jose Redevelopment Agency, 1985- 1990; Principal Planner, San Jose Redevelopment Agency, 1980 - 1985 Education: San Jose State University, B. A. , Urban Planning Robert Nachlinger. City Finance Director Finance Director, City of Miami Beach, November, 1985; Finance Director, City of Beaumont, Texas, 1979-1985; Treasurer, Dallas Independent School District, 1975-1979; Chief Accountant, Dallas County, Texas, 1970-1975 Education: East Texas State University, B. B. A. and M. B. A. with Accounting and Finance Majors Certification: Certified Public Accountant, 1975 SCOPE OF SERVICES The City provides a full range of municipal services, including police, fire, parks, water, sewer, sanitation, streets and zoning. The City is continuing a process of "rightsizing", a process of adjusting the size of the government to the needs of the community. As a result of this process, the nwnber of Departments has been reduced from twenty to twelve. The total workforce has remained approximately the same at 1,500; however, significant shifts have occurred in the personnel assigned to various activities. ECONOMIC AND DEMOGRAPHIC DATA INCOME The mean family income for Miami Beach increased by almost 92 percent, from $23,324 in 1980 to $44,738 in 1990. This compares well to growth rates experienced by Dade County, which experienced mean family growth rates of approximately 59 percent. In 1990, the mean family income for Miami Beach exceeded that of Dade County by 18 percent, while in 1980, they were almost even. MEAN FAMILY INCOMES 1980 -1990 Miami Beach 1980 $23,324 $23,846 1990 $44,738 $37,903 % CHANGE 91.8% Dade County 58.9% Source: U. S. Bureau of the Census, 1980 and 1990 MIA:26473 :3 A-3 Per Capita Personal Income (Current Dollars) 1980 - 1992 Dade County Florida United States Current Percent Current Percent Current Year Dollars ofU. S. Dollars of U. S. Dollars 1980 9,541 100.5 9,245 94.4 9,494 1981 10,704 101.5 10,386 98.5 10,544 1982 11,327 101.9 10,966 98.7 11,113 1983 12,027 103.0 11,633 99.6 11,681 1984 13,249 103.7 12.773 100.0 12,772 1985 13,992 100.6 13,898 99.9 13,910 1986 14,863 101.5 14,630 99.9 14,639 1987 15,689 101.3 15,584 100.6 15,484 1988 16,874 102.3 16,607 100.7 16,491 1989 17,963 101.7 17,715 100.4 17,594 1990 17,823 95.3 18,539 99.2 18,696 1991 18,252 95.6 18,985 99.4 19,091 1992 17,340 86.2 19,797 98.5 20,105 Source: Dade County, Beacon Council EMPLOYMENT Employment figures by type of employment are not currently available for individual cities. They are only available at the county and state levels. City of Miami Beach Employment 1991 -1994 1991 ~ 1993 ~ Labor Force Employed 38,618 38,355 39,600 40,150 Labor Force Unemployed 4,415 5,040 3,917 4,112 Total Labor Force 43,033 43,395 43,517 44,262 Unemployment Rate 10.3% 11.6% 9.0% 9.3% Source: Florida Department of Labor MIA:26473:3 A-4 Analysis The accompanying resolution will authorize the Mayor and all other parties to execute the documents necessary for the issuance of these Resort Tax Refunding Bonds. Attached to the resolution are copies of the Official Statement and the Bond Purchase Agreement related to this transaction. Conclusion With the savings and the ability to issue additional Tax Increment Bonds, this transaction should be approved. JGP/RJN/cp Major Employers on Miami Beach Rank Employer 1. Mount Sinai Medical Center 2. City of Miami Beach 3. Fountainbleu Hilton 4. Miami Heart Institute 5. South Shore Hospital 6. DWG Corporation 7. Doral on the Beach 8. Eden Roc Resort & Spa 9. Alexander Hotel 10. Shawnee Beach Resort Source: Personnel Divisions of Companies Service Number Employed Hospital Government Hotel Hospital Hospital Diversified Ind. Hotel Hotel Hotel Hotel 2,800 1,569 1,172 890 873 600 400 375 230 200 Ten Largest Public and Private Employers Located in Dade County Public Employers Dade County Public Schools Metropolitan Dade County Federal Agencies State of Florida Agencies Jackson Memorial Hospital City of Miami Veterans Affairs Medical Center Miami-Dade Community College Florida International University City of Hialeah 29,720 28,000 18,100 16,000 7,244 3,414 2,710 2,672 2,627 1,600 Private Employers American Airlines University of Miami Southern Bell BellSouth Telecommunications Florida Power and Light Burdines Department Stores IHCA Health Care Corp. Kmart Publix Supermarkets Winn Dixie Stores Source: The Beacon Council, Miami Business Profile, 1994 MIA:26473:3 A-5 8,200 7,219 5,798 5,100 4,122 3,400 3,080 3,000 3,000 2,866 BUILDING PERMITS City of Miami Beach, Florida Value of Building Permits Issued Calendar Years 1983 - 1995 Year New Construction Additions. Rehabilitations. Etc Total Value 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 1988 17,835,490 36,334,701 54,170,191 1989 55,422,320 51,804,525 107,226,845 1990 62,594,905 34,366,872 96,961,777 1991 32,863,120 40,545,996 73,409,116 1992 9,544,515 40,398,741 49,943,256 1993 150,549,661 81,156,235 231,705,896 1994 91,566,442 68,358,627 159,925,069 1995* 177,248,900 37,551,554 214,800,454 Source: City Building Department * - Nine Months through September, 1995 MIA:26473:3 A-6 City of Miami Beach, Florida Direct and Overlapping Tax Rates ($1 per $1,000 of Assessed Value) For Tax Years 1983 Through 1996 Tax General Service City School Year (1) Fund Funds Total District County Other Total 1983 7.480 2.170 9.650 6.500 5.726 0.384 22.260 1984 7.570 2.080 9.650 7.200 6.297 0.399 23.546 1985 8.554 3.648 12.202 7.360 7.059 0.427 27.048 1986 8.554 4.005 12.559 7.316 8.768 0.439 29.082 1987 9.666 4.005 13.671 7.558 8.579 0.513 30.321 1988 9.966 3.705 13.671 7.551 8.965 0.564 30.751 1989 9.966 3.705 13.671 7.693 8.213 0.587 30.164 1990 9.966 3.705 13.671 9.001 7.368 0.602 30.642 1991 9.966 3.200 13 .166 9.104 7.368 0.600 30.238 1992 9.743 2.200 11.943 9.528 8.795 0.599 30.865 1993 9.302 2.545 11.847 9.923 9.236 0.648 31.654 1994 8.238 2.311 10.549 10.266 9.202 0.652 30.669 1995 7.143 2.039 9.182 10.345 9.214 0.696 29.437 1996 7.499 1.862 9.361 10.389 7.946 0.687 28.383 (1) Assessments as of January I of the year listed; bills mailed in October of that year; taxes become delinquent at the end of April of the subsequent year. Source: City of Miami Beach, Comprehensive Annual Financial Report; City of Miami Beach; Adopted Budget 1995/96 Fiscal Year; Dade County Tax Collector MIA:26473:3 A-7 City of Miami Beach, Florida Property Tax Levies and Collections Fiscal Years 1983 - 1995 (Tax Years 1982 - 1994) Assessed Valuations Total Tax Including Excluding Total Collected Percent Year(1) Homesteads Homesteads Tax Levy in Year (2) Collected 1982 $3,915,166,153 $3,174,249,255 $ 30,631,505 $ 30,481,087 99.5% 1983 4,020,957,209 3,244,369,197 30,948,029 30,948,029 98,9 1984 3,932,920, 102 3,153,518,358 38,479,231 36,589,073 95.1 1985 3,870,883,186 3,097,123,808 38,896,778 37,682,843 96.9 1986 3,751,470,889 3,001,176,711 41,029,091 40,776,251 99.4 1987 3,617,648,031 3,009,079,061 41,137,120 41,100,410 99.9 1988 3,786,641,043 3, 105,045,655 42,449,079 41,266,273 97.2 1989 3,939,311,340 3,269,628,413 44,699,090 43,872,953 98.1 1990 4,376,417,088 3,632,426,183 47,824,523 46,497,571 97.2 1991 4,654,936,873 3,863,597,605 46,142,946 45,196,736 97.9 1992 4,726,911,403 3,932,985,608 45,610,535 46,102,609 lOLl 1993 5,354,688,618 4,444,391,552 45,477,364 45,933,970 101.0 1994 6,238,235,311 5,286,640,108 48,541,929 46,726,040 96.3 (1) Assessments as of January 1 of the year listed; bills mailed in October of that year; taxes become delinquent at the end of April of the subsequent year. (2) Actual collections of current and delinquent Real and Personal Property Taxes. (3) Assessments are at 100% offair market value. Source: City of Miami Beach, Comprehensive Annual Financial Report MIA:26473:3 A-8 City of Miami Beach Ten Largest Taxpayers 1995 Owner Type of Property Real Property Assessed Value Suncoast Towers South Assoc. Apartments $ 114,000,000 48,500,000 39,378,298 31,010,000 25,800,000 21,100,500 17,745,000 17,424,000 17,000,000 15.137.844 lIotelerama lIotel Roney Plaza Associates, Ltd. Apartments Richard and Allen Morton Trs. et al Apartments Suncoast Towers East Inc. Apartments Tri-County Community lIospitals lIospital OBR Limited lIotel Miami Beach lIealthcare Group Hospital 5600 Collins Corp. Apartments F orte Towers South Inc. Apartments Total (representing 6.6% of total assessed valuation) $ 347.095.642 Source: Metropolitan Dade County; Department of Property Appraisal; City of Miami Beach Valuation Roll MIA:26473:3 A-9 FILM AND PRINT INDUSTRY The film and print industry has become an important part of the Miami Beach economy. This industry has spent approximately $50 million a year in the City for the production of movies and fashion photographs. Along with this industry, the necessary support infrastructure of talent and model agencies has drawn numerous international agencies to the City. Film and Print Industry Permits Issued and Production Budgets For the Five Years 1990 - 1994 Year Permits Issued Production Bud~ets 1990 1991 1992 1993 1994 1,281 1,604 1,901 1,871 1,827 $ 57,111,250 43,570,250 49,547,200 59,119,950 52,363,600 Source: City of Miami Beach, Office of Public Information, Film and Print Division CONVENTION AND MEETING ACTIVITY As well as the leisure traveler, Dade County and the Miami Beach Convention Center host a large number of conventions each year. Dade County Convention Activity for the Eight Years ended December 31,1994 Number of Number of Number of Total Year Conventions Delegates Room Ni~hts Expenditures 1987 425 475,000 1,176,000 $285,000,000 1988 475 546,000 1,380,000 368,400,000 1989 515 600,000 1,500,000 405,300,000 1990 525 650,000 1,750,000 439,000,000 1991 500 620,000 1,674,000 428,000,000 1992 525 680,000 1,850,000 469,404,000 1993 550 704,000 1,970,000 485,971,200 1994 N/A 857,578 2,401,218 600,304,600 Source: Greater Miami Convention and Visitor's Bureau MIA:26473:3 A-10 TOURISM AND VISITOR ACTIVITY DOMESTIC AND INTERNATIONAL OVERNIGHT VISITORS DADE COUNTY 1993 - 1994 ORIGIN 1994 1993 Latin America: Caribbean 900,600 825,300 Central America 719,800 700,200 South America 1.937.400 1.879.100 Total Latin America 3,557,800 3,404,600 Europe: England 201,200 261,500 Germany 158,200 370,100 Other Europe 579.700 538.200 Total Europe 939,100 1,252,600 Canada 406,200 596,800 Other International 125.600 147.400 Total International 5,028,700 5,401,400 Total Domestic 3.728.600 3.453.300 Total Overnight 8,757,300 8,854,700 Expenditures: Domestic $2,513,470,000 $2,622,816,000 International 4.402.705.000 4.802.167 .000 Total Expenditures $6,916,175,000 $7,424,983,000 OVERNIGHT VISITORS BY REGION*' Miami Beach Downtown Miami North Dade Airport Area South Dade Grove/Gables/Key Biscayne Other 32.9% 15.1% 18.4% 17.3% 8.7% 6.2% 1.4% *Note: Based on a random sampling provided by Strategy Research Corp. Source: Strategy Research Corporation MIA:26473 :3 A-II Transportation The City is located within two hours by air from the major population centers of the northeastern United States and is also at the terminus of a highway network. The Port of Miami has become the world's largest passenger port. Embarkations and debarkations on cruise ships have grown to 2.928 million in 1991 from 1.567 million in 1981, an average compound growth rate of 6.5% per year. The Port estimates that more than 80% of these cruise ship passengers arrive and depart Miami by au. The Port specializes in trailer and container cargo. From 1988 to 1995, the total cargo handled increased from 2.6 million tons to over 5.8 million tons, an increase of 223%. The Port has become the nation's leading export port to Latin America and the Caribbean. The summary of the growth in passengers and cargo for the previous five years is presented below: PASSENGERS AND CARGO HANDLED BY PORT OF MIAMI 1988-1995 Year Ended September 30. Cruise Passen~ers Cargo (in tons) 1988 1989 1990 1991 1992 1993 1994 1995 2,502,411 3,100,055 2,734,816 2,928,532 3,095,487 3,157,130 2,967,081 2,974,703 2,602,556 3,206,417 3,590,937 3,882,284 4,596,481 5,198,293 5,574,252 5,840,815 Source: Dade County Seaport Department Five separate airports owned and operated by Dade County are within easy reach of the City. Miami International Airport ranks 8th in the nation and 11 th in the world in the number of passengers using its facilities. It ranks fourth in the nation and sixth in the world in the movements of domestic and international air cargo. In 1994 the airport served 29.4 million passengers and handled over 1.4 billion pounds of cargo. Statistics from 1988 are presented below: MIA;26473:3 A-12 PASSENGERS AND CARGO HANDLED BY MIAMI INTERNATIONAL AIRPORT 1988-1994 Year Ended September 30. Passengers (In Thousands) Cargo (in tons) 1988 1989 1990 1991 1992 1993 1994 24,210 23,422 25,294 26,709 26,125 28,246 29,351 773,599 869,612 945,773 951,328 1,073,429 1,215,553 1,402,979 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 boccia 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 Holtz Tennis Stadium which houses championship, professional and amateur tournaments. Offshore, the Gulf stream provides a variety of game fish, while the Miami Beach Marina provides an abundance of space to house boats as well as direct access to the Atlantic Ocean and Gulf stream. The Marina is a private development on City owned bay front land in the South Pointe area. Renovation has increased the number of boat slips to 388 making the Marina the largest in the area and a first class facility. In the north part of the City, the public can enjoy a leisurely sail in the quiet waters of Biscayne Bay from the Miami Beach Sailport. The facility, though open to all ages, was specially 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 that are open to the public. The two championship courses, Bayshore and Normandy, offer a clubhouse complete with a restaurant, lounge and pro shop. MIA:26473:3 A-I3 RMSS&R DRAFT 4-9-96 BOND PURCHASE AGREEMENT $ CITY OF MIAMI BEACH, FLORIDA Resort Tax Revenue Refunding Bonds, Series 1996 This Bond Purchase Agreement dated , 1996 ("Bond Purchase Agreement") is entered into by and among the following parties (hereinafter individually called a "Party" and collectively called the "Parties"): CITY OF MIAMI BEACH, FLORIDA, a validly existing political subdivision of the State of Florida (the "City"); and RA YMOND JAMES & ASSOCIATES, INC. (the "Managing Underwriter") and AIBC Investment Services Corporation, Bear, Steams & Co. Inc. and Morgan Stanley & Co. Incorporated (collectively with the Managing Underwriter, the "Underwriters"). MIA:26663:3 MIA:26663:3 Redemption Date (October 1) Principal Amount to be Redeemed A-2 EXHIBIT B [Closing Date] Raymond James & Associates, Inc. As Representative of the Underwriters Boca Raton, Florida Re: $ City of Miami Beach, Florida Resort Tax Revenue Refunding Bonds, Series 1996 Ladies and Gentlemen: We have acted as Bond Counsel in connection with the issuance of the above-captioned bonds (the "Series 1996 Bonds") and related transactions. This opinion is furnished pursuant to the Bond Purchase Agreement dated , 1996 (the "Purchase Agreement") among City of Miami Beach, Florida (the "City") and Raymond James & Associates, Inc., AIBC Investment Services Corporation, Bear, Stearns & Co. Inc. and Morgan Stanley & Co. Incorporated (collectively, the "Underwriters"). All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Purchase Agreement. We have examined such documents and instruments as deemed necessary to render the requested opinion. It is our opinion that: 1. The Basic Documents and the Official Statement have been duly authorized, executed and delivered on behalf of the City. The Basic Documents constitute legal, valid and enforceable agreements of the City in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, moratorium or other laws affecting creditors' right generally and by the availability of equitable remedies. 2. The City has duly approved the distribution by the Underwriters of the Preliminary Official Statement. The City has duly executed and delivered the Official Statement in accordance with the terms of the Purchase Agreement, and the City has authorized the distribution of the Official Statement and the use thereof by the Underwriters in connection with the public offering of the Series 1996 Bonds in accordance with the terms of the Purchase Agreement. 3. The Series 1996 Bonds and the Bond Resolution conform in form and tenor with the terms and provisions thereof set out in the Official Statement. 4. The information (other than any financial and statistical data contained in the Official Statement as to which no opinion is expressed) set forth in the Official Statement under the headings "INTRODUCTION", "PURPOSE OF THE SERIES 1996 BONDS", "THE SERIES 1996 BONDS" (other than the information under the subheading "Book-Entry Only System", as to which no opinion MIA:26663:3 B-1 Raymond James & Associates, Inc. ,1996 Page 2 is expressed), "SECURITY FOR THE SERIES 1996 BONDS" (other than the information under the subheadings "Historical Resort Tax Collections and Debt Service Coverage" and "Historical Resort Tax Collections", as to which no opinion is expressed), "TAX EXEMPTION", "ORIGINAL ISSUE DISCOUNT" and "CONTINUING DISCLOSURE" and "APPENDIX B -- THE RESOLUTION" and "APPENDIX C - CONTINUING DISCLOSURE COMMITMENT," insofar as such statements constitute summaries of the Bond Resolution, the Series 1996 Bonds, the Continuing Disclosure Commitment and the Constitution and laws of the State of Florida or the United States of America, constitute fair summaries of such documents and said Constitution and laws. 5. The Series 1996 Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Bond Resolution is exempt from qualification under the Trust Indenture Act of 1939, as amended. 6. Upon the deposit of proceeds of the Series 1996 Bonds and certain other moneys with First Union National Bank of Florida, as escrow agent (the "Escrow Agent"), and the investment thereof, all in accordance with the provisions of that certain Escrow Deposit Agreement dated as of May 1, 1996, entered into between the City and the Escrow Agent, and in reliance upon the verification report of KPM G Peat Marwick LLP, of even date herewith, with respect to the refunding and defeasance of the City's Resort Tax Revenue Refunding Bonds, Series 1988 (the "Prior Bonds"), the Prior Bonds will no longer be deemed to be "Outstanding" under the provisions of Resolution No. 88-19369, adopted by the City on September 22, 1988, as supplemented and amended, pursuant to which the Prior Bonds were issued. This opinion is supplemental to our approving opinion dated as of even date herewith with respect to the Series 1996 Bonds. You are authorized to rely upon such approving opinion as if such opinion were addressed to you. Respectfully submitted, SQUIRE, SANDERS & DEMPSEY MIA:26663:3 B-2 EXHIBIT C [Closing Date] City of Miami Beach, Florida Miami Beach, Florida Raymond James & Associates, Inc. As Representative of the Underwriters Boca Raton, Florida New York, New York Re: $ City of Miami Beach, Florida Resort Tax Revenue Refunding Bonds, Series 1996 Ladies and Gentlemen: I am the City Attorney for the City of Miami Beach, Florida and have served in such capacity in connection with the issuance of the above-captioned bonds (the "Bonds") and related transactions. This opinion is furnished pursuant to the Bond Purchase Agreement dated , 1996 (the "Purchase Agreement") among City of Miami Beach, Florida the "City"), Raymond James & Associates, Inc., AIBC Investment Services Corporation, Bear, Stearns & Co. Inc. and Morgan Stanley & Co. Incorporated (collectively, the "Underwriters"). All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Purchase Agreement. I have reviewed such documents and instruments as I deemed necessary to render the requested opinion. Based upon examination of such documents and matters of law as I have determined relevant for the purposes of rendering this opinion, and subject to the reservations set forth herein, I am of the opinion that: 1. The City is a political subdivision of the State of Florida, duly organized and validly existing under the constitution and laws of the State of Florida. 2. The City is authorized by the laws of the State of Florida to execute and deliver the Bonds, the Basic Documents and the Official Statement and to perform its obligations thereunder or as described therein. MIA:26663:3 C-l City of Miami Beach, Florida Raymond James & Associates, Inc. , 1996 Page 2 3. The Bond Resolution has been duly adopted and the execution and delivery by the City of the Bonds, the Basic Documents and the Official Statement, and the performance of its obligations thereunder or as described therein, for and in the name of the City, have been duly authorized by the City. 4. The City has duly authorized the distribution of the Preliminary Official Statement by the Underwriters, has duly approved and executed the Official Statement and has duly authorized the distribution thereof by the Underwriters in connection with the public offering ofthe Bonds. 5. The Bonds and the Basic Documents have been duly authorized, executed and delivered by the City and constitute valid and legally binding obligations of the City enforceable against the City in accordance with their respective terms. 6. To the best of my knowledge, no authorization, approval, consent, license or other action of any court or public or governmental or regulatory authority having jurisdiction over the City that has not been obtained is or will be required for the issuance and sale of the Bonds or the valid and lawful authorization, execution and delivery of, or consummation by the City of the other transactions contemplated by, the Basic Documents and the Official Statement; however, no opinion is given regarding compliance with the registration requirements of state and federal securities laws. 7. The adoption by the City of the Bond Resolution and the execution and delivery by the City of the Bonds, the Basic Documents and the Official Statement and compliance on the City's part with the provisions contained or described therein, will not conflict with, violate or constitute a breach of or a default under (a) any existing law, administrative regulation, published court order or published court decree, or (b) any commitment, mortgage, lease, indenture, agreement, contract or instrument to which the City is a party or by which it or any of its properties is bound. 8. There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body pending and with regard to which the City has received service of process or, to my actual knowledge, threatened against the City affecting, contesting, questioning or seeking to restrain or enjoin any of the following: (i) the powers or the valid existence of the City or the titles of its officers to their respective offices, or (ii) any of the proceedings had or actions taken leading up to the sale, issuance and delivery of the Series 1996 Bonds or the execution, delivery or performance of the Purchase Agreement; or (iii) the delivery, validity or enforceability of the Bonds or the Basic Documents or contesting the power of the City to execute and deliver such documents (to the extent applicable) or to consummate the transactions contemplated therein or in the Official Statement, or (iv) contesting in any way the completeness or accuracy of the Official Statement. There is no action, suit, proceeding, inquiry or investigation, at MIA:26663:3 C-2 City of Miami Beach, Florida Raymond James & Associates, Inc. , 1996 Page 3 law or in equity, before or by any court, governmental agency, public board or body pending and with regard to which the City has received service of process or, to my actual knowledge, threatened against the City, (i) with regard to which an unfavorable decision, ruling or finding would materially and adversely affect the validity or enforceability of the Bonds, the Bond Resolution or the Basic Documents, or (ii) which would have a material adverse effect upon the financial condition or the operations of the City or the collection of the Resort Tax Revenues. 9. Without having undertaken to determine independently the accuracy or completeness of the information in the Official Statement, the statements and information relating to the City, the Basic Documents and the Bonds, including the application of the proceeds thereof, set forth in the Official Statement (except for the financial statements and other financial and statistical data included therein, the information contained under "THE SERIES 1996 BONDS -- Book-Entry Only System", the information contained in the sections entitled "UNDERWRITING" and "MUNICIPAL BOND INSURANCE" or the price of and yield on the Series 1996 Bonds appearing on the cover page, as to which no opinion is expressed) did not on the date of the Official Statement, and do not on the date hereof, contain any untrue statement of material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. All opinions as to the enforceability ofthe legal obligations of the City set forth herein are subject to and limited by bankruptcy, insolvency, reorganization, moratorium, and similar laws in each case relating to or affecting the enforcement of creditors' rights generally, and subject to the enforceability thereof, to the exercise of judicial discretion in accordance with the general principles of equity. Very truly yours, Murray H. Dubbin, Esquire Miami Beach City Attorney MIA;26663;3 C-3 EXHIBIT D [Closing Date] Raymond James & Associates, Inc. As Representative of the Underwriters Boca Raton, Florida Re: $ City of Miami Beach, Florida Resort Tax Revenue Refunding Bonds, Series 1996 Ladies and Gentlemen: We have acted as co-counsel to the Underwriters in connection with the purchase by Raymond James & Associates, Inc., AIBC Investment Services Corporation, Bear, Stearns & Co. Inc. and Morgan Stanley & Co. Incorporated (the "Underwriters") of the above-captioned bonds (the "Series 1996 Bonds") pursuant to the Bond Purchase Agreement dated , 1996 (the "Purchase Agreement") between the Underwriters and the City of Miami Beach, Florida. In that capacity, we hereby deliver the following opinions. Capitalized terms not defined herein shall have the meanings ascribed to them in the Purchase Agreement. We are of the opinion that the Series 1996 Bonds constitute exempt securities within the meaning of Section 3(a)(2) of the Securities Act of 1933, as amended (the "1933 Act"), and it is not necessary in connection with the sale of the Series 1996 Bonds to the public to register the Series 1996 Bonds under the 1933 Act, or to qualify the Bond Resolution under the Trust Indenture Act ofl939, as amended. In our capacity as co-counsel to the Underwriters, we participated in the preparation ofthe Official Statement dated , 1996 (the "Official Statement") relating to the Series 1996 Bonds. Although we do not express an opinion, and do not assume responsibility for, the accuracy, completeness or fairness of the statements contained in the Official Statement, based upon the information made available to us as co-counsel for the Underwriters in the course of our participation in the preparation of the Official Statement, and without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement, nothing has come to our attention that would cause us to believe that the Official Statement (except for the information under the caption "THE SERIES 1996 BONDS -- Book-Entry Only System" and the statistical and financial data included in the Official Statement, as to which no opinion is expressed), as of its date, or as of the date hereof, contained or contains any untrue statement of material fact or omitted or omits to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. MIA:26663:3 D-l Raymond James & Associates, Inc. , 1996 Page 2 MIA:26663:3 This opinion may be relied upon solely by you. Respectfully submitted, RUDEN, McCLOSKY, SMITH, SCHUSTER & RUSSELL, P.A. DENNIS SCHOLL, P.A. D-2 EXHIBIT E UNDERWRITERS' TRUTH-IN-BONDING AND DISCLOSURE STATEMENT , 1996 City of Miami Beach, Florida Miami Beach, Florida Re: $ City of Miami Beach, Florida Resort Tax Revenue Refunding Bonds, Series 1996 The City of Miami Beach, Florida (the "City") is proposing to issue its $ Resort Tax Revenue Refunding Bonds, Series 1996 (the "Series 1996 Bonds") for the purposes described in the Official Statement. The Bonds are expected to be repaid over a period of approximately _ years. At a forecasted true interest rate of %, total interest paid over the life of the Bonds will be $ The source of repayment for the Bonds is the Resort Tax Revenues of the City. Authorizing the Bonds will result in a maximum of approximately $ of the City's Resort Tax Revenues not being available to finance the other services of the City each fiscal year for approximately _ years. In addition, pursuant to the provisions of Sections 218.3 85(4), Florida Statutes, the following disclosure is made: (a) The nature and estimated amounts of expenses to be incurred by Raymond James & Associates, Inc., AlBC Investment Services Corporation, Bear, Stearns & Co. Inc. and Morgan Stanley & Co. Incorporated (collectively, the "Underwriters") in connection with the purchase and re-offering of the Bonds are set forth in Exhibit A attached hereto. (b) No person has entered into an understanding with the Underwriters, or to the knowledge of the Underwriters with the City, for any paid or promised compensation or valuable consideration, directly or indirectly, expressly or implied, to act solely as an intermediary between the City and the Underwriters for the purpose of influencing any transaction in the purchase of the Bonds. (c) The underwriting spread (i.e., the difference between the price at which the Bonds will be initially offered to the public by the Underwriters and the price to be paid to the City for the Bonds, exclusive of accrued interest in both cases) will be $ or % of the principal amount of the Bonds. MIA:26663:3 E-1 City of Miami Beach, Florida , 1996 Page 2 (d) The underwriting spread set forth in paragraph (c) above, includes a management fee ($~$1,000 of Bonds) and a takedown/concession of$ ($-"$1,000 of of$ Bonds). (e) No other fee, bonus or other compensation is estimated to be paid by the Underwriters in connection with the issuance of the Bonds to any person not regularly employed or retained by the Underwriters (including any "finder" as defined in Section 218.386(1)(a), Florida Statutes), except as specifically enumerated as expenses to be incurred by the Underwriters as set forth in Exhibit A. (f) The name and address of each of the Underwriters is: Raymond James & Associates, Inc. 2255 Glades Road, Suite 120A Boca Raton, Florida 33431 AIBC Investment Services Corporation 80 S.W. 8th Street, Suite 2120 Miami, Florida 33130 Bear, Stearns & Co. Inc. 245 Park Avenue, 10th Floor New York, New York 10167 Morgan Stanley & Co. Incorporated 200 South Orange Avenue, Suite 1440 Orlando, Florida 32801 We understand that you do not require any further disclosure from the Underwriters pursuant to Section 218.385(4), Florida Statutes. Very truly yours, RAYMOND JAMES & ASSOCIATES, INC., as Representative of the Underwriters By: Title: MIA:26663:3 E-2 Schedule A $ City of Miami Beach, Florida Resort Tax Revenue Refunding Bonds, Series 1996 Underwriters' Expenses $ Amount $ Per Bond( 1) Computer Time Courier Service and Overnight Mail CUSIP Dalcomp Dalnet DTC Day Loan Fed Funds Miscellaneous PSA Fee Teleconference and Telephone Travel Total Estimated Expenses (1) Totals may not add due to rounding. MIA:26663:3 Schedule A-I SS&D DRAFT #3 4/09/96 CONTINUING DISCLOSURE COMMITMENT TIllS CONTINUING DISCLOSURE COMMITMENT dated as of , 1996, is made by the CITY OF MIAMI BEACH, FLORIDA, a political subdivision duly organized and existing under the Constitution and laws of the State of Florida (the "City"), for the benefit of the holders and beneficial owners from time to time of the City's $ Resort Tax Revenue Refunding Bonds, Series 1996 dated as of , 1996 (the "Bonds"), under the circumstances summarized in the following recitals (with each capitalized term used but not defmed in this Commitment having the meaning assigned to it in Resolution No. 88-19369 adopted by the City on September 22, 1988 (the "General Resolution") and Resolution No. 96- _ adopted by the City and , 1996 (the "Series Resolution") authorizing issuance of the Bonds (the General Resolution and the Series Resolution collectively, the "Bond Resolution ")): A. The City has determined to issue the Bonds pursuant to the Bond Resolution and the Underwriters described in the Series Resolution (collectively, the "Original Purchaser") have agreed to purchase the Bonds. B. The City understands that the Original Purchaser will sell and deliver Bonds to other holders and beneficial owners and that the Bonds will be transferred from time to time from holders and beneficial owners to other holders and beneficial owners who may rely upon the continuing disclosure agreement made by the City in the Series Resolution and this Commitment. C. As a condition to the purchase of the Bonds from the City and the sale of Bonds to holders and beneficial owners, the Original Purchaser is required to reasonably determine that the City has made an agreement for the benefit of holders and beneficial owners of the Bonds in accordance with paragraph (b)(5)(i) of Rule 15c2-12 (the "Rule") promulgated by the Securities and Exchange Commission (the "SEC") pursuant to the Securities Exchange Act of 1934. D. The City made an agreement in the Series Resolution, certain terms of which were to be further described and specified in a Continuing Disclosure Commitment, to provide or cause to be provided such fmancial information and operating data, fmancial statements and notices, in such manner, as may be required for purposes of paragraph (b)(5)(i) of the Rule. NOW, THEREFORE, in consideration of the purchase of the Bonds from the City by the Original Purchaser and the contemplated sale of the Bonds to, and transfer of Bonds between, holders and beneficial owners from time to time, the City hereby sets forth certain terms of its continuing disclosure agreement made for purposes of the Rule and formed, collectively, by Section 11 of the Series Resolution and this Commitment (the "Agreement"), for the benefit of the holders and beneficial owners from time to time of the Bonds, as follows: Section 1. Provision of Annual Information: Audited Financial Statements: and Notices of Events. The City shall provide or cause to be provided: (a) to each nationally recognized municipal securities information repository designated from time to time by the SEC ("NRMSIR"), to any state information depository with which filings are required to be made by the City in accordance with the Rule ("SID") and to the Series 1996 Bond Insurer, (i) annual fmancial information and operating data of the type described in Section 2 ("Annual Information") for each Fiscal Year ending on or after January 1, 1996, not later than the 240th day following the end of each Fiscal Year, and (ii) when and if available, audited fmancial statements of the City for each such Fiscal Year which may be a part of the City's consolidated audited fmancial report (the "Financial Statements"); and (b) to each NRMSIR or to the Municipal Securities Rulemaking Board established by the SEC ("MSRB"), to the SID and to the Series 1996 Bond Insurer, in a timely manner, notice of (i) any Specified Event described in Section 2 if that Event is material, (ii) the City's failure to provide the Annual Information on or prior to the date specified above, and (ill) any change in the accounting principles applied in the preparation of the Financial Statements, any change in its Fiscal Year, and of the Agreement's termination. The City expects that the Financial Statements will be prepared, any such statements will be available together with the Annual Information, and the accounting principles to be applied in the preparation of the Financial Statements will be generally accepted accounting principles as recommended from time to time by the Governmental Accounting Standards Board. Section 2. Annual Information and Specified Events. (a) Annual Information to be provided by the City for each Fiscal Year shall consist of the following: historical Resort Tax collections, Annual Debt Service Requirement, Resort Tax Revenues debt service coverage ratio, incurrence of additional debt payable from the Resort Tax Revenues and changes in the Resort Tax with respect to the percentage rate imposed or the exemptions therefrom. (b) Specified Events shall include the occurrence of the following events, within the meaning of the Rule, with respect to the Bonds: principal and interest payment delinquencies; non-payment related defaults; unscheduled draws on the Debt Service Reserve Account established under the Bond Resolution reflecting fmancial difficulties; unscheduled draws on credit enhancements reflecting financial difficulties; substitution of credit or liquidity providers, or their failure to perform; adverse tax opinions or events affecting the tax-exempt status of the Bonds; modifications to rights of beneficial owners; Bond calls; defeasances; release, substitution, or sale of property securing repayment of the Bonds; and rating changes. Section 3. Amendments. The City reserves the right to amend the Agreement, and noncompliance with any provision of the Agreement may be waived, as may be necessary or appropriate to achieve its compliance with any applicable federal securities law or rule, to cure any ambiguity, inconsistency or formal defect or omission, and to address any change in circumstances arising from a change in legal requirements, change in law, or change in the identity, nature, or status of the City, or type of business conducted by the City. Any such amendment or waiver shall not be effective unless the Agreement (as amended or taking into account such waiver) would have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any applicable ainendments to or official interpretations of the Rule, as well as any change in circumstances, and until the City shall have received either (a) a written opinion of bond or other qualified independent special counsel selected by the City that the amendment or waiver would not materially impair the interests of holders or beneficial owners, or (b) the written consent to the amendment or waiver of the holders of at least a majority of the principal amount of the Bonds then outstanding. Annual Information containing any revised operating data or fmancial information shall explain, in narrative form, the reasons for any such amendment or waiver and the impact of the change on the type of operating data or fmancial information being provided. Section 4. Remedy for Breach. The Agreement shall be solely for the benefit of the holders and beneficial owners from time to time of the Bonds. The exclusive remedy for any breach of the Agreement by the City shall be limited, to the extent permitted by law, to a right of holders and beneficial owners to institute and maintain, or to cause to be instituted and - 2 - D09: [04548. DOCS. MIA 1 8024S]CONT _ DISCL _ NON-TRUSTEED _ GENL_ UNDTKG-3 maintained, such proceedings as may be authorized at law or in equity to obtain the specific performance by the City of its obligations under the Agreement. Any holder or beneficial owner may exercise individually any such right to require the City to specifically perform its obligation to provide or cause to be provided a pertinent filing if such a filing is due and has not been made. Holders and beneficial owners shall not be entitled to institute or maintain any such proceedings individually that assert a breach of the Agreement that is based on the alleged inadequacy of any pertinent filing that has been made. Notwithstanding any other provisions of the Bond Resolution or the Agreement, any failure by the City to comply with any provisions of the Agreement shall not constitute a default under the Bond Resolution. Section 5. Sources of Payments: Extent of Covenants: No Personal Liability. The City shall be required to use only Resort Tax Revenues (as defmed in the Bond Resolution) to pay any costs and expenses to be incurred in the performance of this Agreement by it, and the performance of its obligations hereunder shall be subject to the availability of Resort Tax Revenues for that purpose. This Agreement does not and shall not constitute a general obligation of the City. All covenants, stipulations, obligations and agreements of the City contained in this Agreement are and shall be deemed to be covenants, stipulations, obligations and agreements of the City to the full extent authorized by law. No covenant, stipulation, obligation or agreement of the City contained in this Agreement shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future officer, agent or employee of the City in other than that person's official capacity. Section 6. Termination. The obligations of the City under the Agreement shall remain in effect only for such period that the Bonds are outstanding in accordance with their terms and the City remains an obligated person with respect to the Bonds within the meaning of the Rule. The obligation of the City to provide the Annual Information and notices of the events described above shall terminate, if and when the City no longer remains such an obligated person. IN WITNESS WHEREOF, the City has caused this Commitment to be duly signed and delivered to the Original Purchaser, as part of the Bond proceedings and in connection with the original delivery of the Bonds to the Original Purchaser, on its behalf by its Finance Director, all as of the date set forth above, and the holders and beneficial owners from time to time of the Bonds, shall be deemed to have accepted the Agreement, as contained in Section 11 of the Series Resolution and further described and specified herein, in accordance with the Rule. CITY OF MIAMI BEACH, FLORIDA By Finance Director - 3 - D09:[04548.DOCS.MIA18024S]CONT _DISCL_ NON-TRUSTEED _ GENL _ UNDTKG-3 SS&D DRAFT #3 4/09/96 CITY OF MIAMI BEACH, FLORIDA and FIRST UNION NATIONAL BANK OF FLORIDA, as Escrow Agent ESCROW DEPOSIT AGREEMENT Relating to RESORT TAX REVENUE REFUNDING BONDS, SERIES 1988 DATED AS OF , 1996 ESCROW DEPOSIT AGREEMENT THIS ESCROW DEPOSIT AGREEMENT (the "Agreement" ) made and entered into as of , 1996, by and between the CITY OF MIAMI BEACH, FLORIDA (the "City") and FIRST UNION NATIONAL BANK of FLORIDA, as Escrow Agent (the "Escrow Agent") . ~ ~ ~ ~ ~ ~ ~ ~ ~ ~: WHEREAS, the City has heretofore issued its $4,935,000 aggregate principal amount City of Miami Beach, Florida Resort Tax Revenue Refunding Bonds, Series 1988, dated as of October 1, 1988, presently outstanding in the principal amount of $3,885,000, as more particularly described in Schedule A attached hereto and made part hereof (such outstanding bonds referred to collectively as the "Prior Bonds"), all pursuant to the provisions of Resolution No. 88-19369, adopted by the City Commission of the City (the "Commission") on September 22, 1988 (as supplemented and amended, the "Bond Resolution"); and WHEREAS, the City desires to refund and defease the Prior Bonds; and WHEREAS, the City has issued its $ aggregate principal amount City of Miami Beach, Florida Resort Tax Revenue Refunding Bonds, Series 1996 (the "Bonds"), pursuant to the provisions of the Bond Resolution, a portion of the proceeds of which Bonds is to be deposited with the Escrow Agent to provide, with investment earnings thereon and certain other available moneys, for the refunding and defeasance of the Prior Bonds; and WHEREAS, a portion of the proceeds derived from the sale of the Bonds, together with the other available moneys, will be applied to the purchase of Government Obligations (as such term is hereinafter defined), which will mature and produce investment income and earnings at such time and in such amount, as will be sufficient to pay when due or upon the redemption thereof, the principal of, redemption premium, if any, and interest on the Prior Bonds as more specifically set forth herein; and WHEREAS, in order to provide for the proper and timely application of the moneys deposited hereunder, the maturing principal amount of the Government Obligations purchased therewith, and investment income and earnings derived therefrom to the payment of the Prior Bonds, it is necessary for the City to enter into this Agreement with the Escrow Agent; 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 Prior Bonds according to their tenor and effect, does hereby agree as follows: ARTICLE I CREATION AND CONVEYANCE OF TRUST ESTATE Section 1.01. Creation and Conveyance of Trust Estate. The City hereby grants, warrants, remises, releases, conveys, assigns, transfers, aliens, pledges, sets over and confirms unto the Escrow Agent and to its successors in the trust hereby created, and to it and its assigns forever, all and singular the property hereinafter described, to wit: DIVISION I All right, title and interest in and to (i) $ in moneys deposited directly with the Escrow Agent and derived from the proceeds of the Bonds upon issuance and delivery of the Bonds and execution of and delivery of this Agreement, and (ii) $ in moneys derived from the Debt Service Reserve Account created under the Bond Resolution (such moneys described in (ii) collectively, the "Other Moneys") . DIVISION II All right, title and interest in and to the Government Obligations described in Schedule B attached hereto and made a part hereof, together with the income and earnings thereon. 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 on behalf of the City to the Escrow Agent for the benefit of the Prior Bonds. DIVISION IV All property which is by the express provisions of this Agreement required to be subj ect 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. TO HAVE AND TO HOLD, all and singular, the Trust Estate (as such term is hereinafter defined), including all additional property 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 sole benefit and security of the holders from time to time of the Prior Bonds, but if the principal of, redemption premium, if any, and interest on all of the Prior Bonds shall be fully and promptly paid when due, upon the maturity or redemption thereof, in accordance with the terms thereof, then this Agreement shall be and become 009: [04548.00CS.MIA180245] EOA-3 2 void and of no further force and effect except as otherwise provided herein; otherwise the same shall remain in full force and effect, and upon the trusts and subj ect to the covenants and conditions hereinafter set forth. ARTICLE II DEFINITIONS Section 2.01. Definitions. In addition to words and terms elsewhere defined in this Agreement, the following words and terms as used in this Agreement shall have the following meanings, unless some other meaning is plainly intended. "Government Obligations" shall mean non-callable direct obligations of the United States of America. "Trust Estate", "trust estate" or "pledged property" shall mean the property, rights and interests described or referred to under Divisions I, II, III and IV in Article I above. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Words importing the singular number shall include the plural number and vice versa unless the context shall otherwise indicate. The word "person" shall include corporations, associations, natural persons and public bodies unless the context shall otherwise indicate. Reference to a person other than a natural person shall include its successors. ARTICLE III ESTABLISHMENT OF ESCROW DEPOSIT TRUST FUND; FLOW OF FUNDS Section 3.01. Creation of Escrow Deposit Trust Fund and Deposit of Moneys. There is hereby created and established with the Escrow Agent a special and irrevocable trust fund designated "City of Miami Beach, Florida Resort Tax Revenue Refunding Bonds, Series 1988, Escrow Deposit Trust Fund" (the "Escrow Deposit Trust Fund"), to be held by the Escrow Agent for the sole benefit of the holders of the Prior Bonds and accounted for separate and apart from the other funds of the City and, to the extent required by law, of the Escrow Agent. Concurrently with the delivery of this Agreement, the City herewith causes to be deposited with the Escrow Agent and the Escrow Agent acknowledges receipt of immediately available moneys for deposit in the Escrow Deposit Trust Fund in the amount of $ consisting of $ from the proceeds of the Bonds and $ in Other Moneys, all of which, when invested in Government Obligations (other than $ from the proceeds of the Bonds to be held uninvested), will provide moneys sufficient D09:[04548.DOCS.MIA180245lEDA-3 3 to pay the principal of, redemption premium, and interest on the Prior Bonds, upon the payment at maturity or redemption thereof, as more particularly described in Schedule C attached hereto and made a part hereof. Section 3.02. Payment of Prior Bonds. The Bond proceeds and Other Moneys received by the Escrow Agent will be sufficient to purchase $ par amount of Government Obligations, all as listed in Schedule B attached hereto and made a part hereof, which will mature in principal amounts and earn income at such times, all as described in Schedule B, so that, together with the uninvested moneys held hereunder, sufficient moneys will be available to pay as the same are paid at maturity or redeemed all principal of, redemption premium and interest on the Prior Bonds. Notwithstanding the foregoing, 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 cause to be deposited into the Escrow Deposit Trust Fund the amount of any deficiency immediately upon notice from the Escrow Agent. Section 3.03. Irrevocable Trust Created. The deposit of moneys and Government Obligations or other property hereunder in the Escrow Deposit Trust Fund shall constitute an irrevocable deposit of said moneys and Government Obligations and other property hereunder for the sole benefit of the holders of the Prior Bonds, subject to the provisions of this Agreement. The holders of the Prior Bonds, subject to the provisions of this Agreement, shall have an express lien on all moneys and principal of and earnings on the Government Obligations and other property in the Escrow Deposit Trust Fund. The moneys deposited in the Escrow Deposit Trust Fund and the matured principal of the Government Obligations and other property hereunder and the interest thereon shall be held in trust by the Escrow Agent, and shall be applied for the payment of Prior Bonds, as more specifically set forth in Schedule C hereto. Section 3.04. Purchase of Government Obliqations. The Escrow Agent is hereby directed immediately to purchase the Government Obligations listed on Schedule B from the proceeds of the Bonds and the Other Moneys as described in Sections 3.01 and 3.02 hereof. The Escrow Agent shall purchase the Government Obligations solely from the moneys deposited in the Escrow Deposit Trust Fund as provided in Sections 3.01 and 3.02 hereof. The Escrow Agent shall apply the moneys deposited in the Escrow Deposit Trust Fund and the Government Obligations 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 Government Obligations held hereunder or to sell, transfer or otherwise dispose of the Government Obligations held hereunder except as provided in this Agreement. The Escrow Agent is hereby directed not to invest $ from the proceeds of the Bonds deposited in the Escrow Deposit Trust Fund simultaneously with the delivery of this Agreement. 009: [04548.DOCS.MIA180245lEOA-3 4 The City covenants to take no action in the investment, reinvestment or security of the Escrow Deposit Trust Fund in violation of this Agreement and recognizes that any such action in contravention of this Agreement might cause the Prior Bonds or the Bonds to be classified as "arbitrage bonds" under the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder (the "Code"). Section 3.05. Substitution of Certain Government Obligations. (a) If so directed in writing by the City on the date of delivery of this Agreement, the Escrow Agent shall accept in substitution for all or a portion of the Government Obligations listed in Schedule B, Government Obligations (the "Substituted Securities"), the principal of and interest on which, together with any Government Obligations listed in Schedule B for which no substitution is made and moneys held uninvested by the Escrow Agent, will be sufficient to pay all principal of, redemption premium and interest of the Prior Bonds as set forth in Schedule C hereof. The foregoing notwithstanding, the substitution of Substituted Securities for any of the Government Obligations listed in Schedule B may be effected only upon compliance with Section 3.05(b) (1) and (2) below. (b) If so directed in writing by the City at any time during the term of this Agreement, the Escrow Agent shall sell, transfer, exchange or otherwise dispose of, or request the redemption of, all or a portion of the Government Obligations then held in the Escrow Deposit Trust Fund and shall substitute for such Government Obligations other Government Obligations, designated by the City, and acquired by the Escrow Agent with the proceeds derived from the sale, transfer, disposition or redemption of or by the exchange of such Government Obligations held in the Escrow Deposit Trust Fund, but only upon the receipt by the Escrow Agent of: (1) an opinion of nationally recognized counsel in the field of law relating to municipal bonds stating that such substitution will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Prior Bonds and the Bonds and is not inconsistent with the statutes and regulations applicable to the Prior Bonds and the Bonds; and (2) verification by a firm of independent certified public accountants stating that the principal of and interest on the substituted Government Obligations, together with any Government Obligations and any uninvested moneys remaining in the Escrow Deposit Trust Fund will be sufficient, without reinvestment, to pay the remaining principal of, redemption premium and interest on the Prior Bonds as set forth in Schedule C hereof. 009: [04548.00CS.MIA180245JEOA-3 5 Any moneys resulting from the sale, transfer, disposition or redemption of the Government Obligations held hereunder and the substitution therefor of other Government Obligations not required to be applied for the payment of such principal of, redemption premium and interest on the Prior Bonds (as shown in the verification report described in Section 3.05(b) (2) hereof delivered in connection with such substitution), shall be deposited in the Resort Tax Fund established under the Bond Resolution. Upon any such substitution of Government Obligations pursuant to Section 3.05, Schedule B hereto shall be appropriately amended to reflect such substitution. The Escrow Agent shall be under no duty to inquire whether the Government Obligations as deposited in the Escrow Deposit Trust Fund are properly invested under the Code. The Escrow Agent may rely on all specific directions in this Agreement providing for the investment or reinvestment of the Escrow Deposit Trust Fund. Section 3.06. Transfers from Escrow Deposit Trust Fund. As the principal of the Government Obligations set forth in Schedule B shall mature and be paid, and the investment income and earnings thereon are paid, the Escrow Agent, in its capacity of Paying Agent with respect to the Prior Bonds, shall, no later than the payment date for the Prior Bonds, as specified in Schedule C hereof, apply such moneys to pay the principal of I redemption premium and interest on the Prior Bonds, as specified in Schedule C hereof. The City hereby irrevocably elects to call the Prior Bonds maturing on and after October 1, 1999 for redemption on October 1, 1998 at a redemption price of 102% of the principal amount thereof in accordance with the Bond Resolution. The Escrow Agent, in its capacity of Registrar and Paying Agent with respect to the Prior Bonds, shall perform its responsibilities under the Bond Resolution with respect to the Prior Bonds and is hereby irrevocably instructed to give notice of defeasance as provided in Section 304(M) of the Bond Resolution and notice of redemption as provided in Section 203 of the Bond Resolution and in the Mayor's Certificate dated September 30, 1988. Section 3.07. Investment of Certain Moneys Remaining in Escrow Deposit Trust Fund. Subject to the provisions of Section 3.04, the Escrow Agent shall invest and reinvest, at the written direction of the City, in Government Obligations any moneys remaining from time to time in the Escrow Deposit Trust Fund until such time as they are needed. Such moneys shall be reinvested in such Government Obligations for such periods and at such interest rates, as the Escrow Agent shall be directed to invest by the City, which periods and interest rates shall be set forth in an opinion from nationally recognized counsel in the field of law relating to municipal bonds to the City and to the Escrow Agent, which opinion shall also be to the effect that such reinvestment of such moneys in such Government Obligations for such period and at such interest rates will not, under the statutes and regulations applicable to the Prior Bonds and the Bonds, cause the interest on the Prior D09:[04548.DOCS.MIA180245lEDA-3 6 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 Prior Bonds and the Bonds. Any interest income resulting from reinvestment of moneys pursuant to this Section 3.07 not required to be applied for the payment of the principal of, redemption premium, if any, and interest on the Prior Bonds shall be deposited in the Resort Tax Fund established under the Bond Resolution. Section 3.08. 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, to the extent required by law, of the Escrow Agent and used only for the purposes and in the manner provided in this Agreement. Section 3.09. Transfer of Funds After All Payments Required by this Aqreement are Made. After all of the transfers by the Escrow Agent to the payment of the principal of, redemption premium and interest on the Prior Bonds provided in Schedule C have been made, all remaining moneys and securities, together with any income and interest thereon, in the Escrow Deposit Trust Fund shall be deposited in the Resort Tax Fund established under the Bond Resolution; provided, however, that no such transfers (except transfers made in accordance with Sections 3.05 and 3.07 hereof) shall be made until all of the principal of, premium and interest on the Prior Bonds have been paid. ARTICLE IV CONCERNING THE ESCROW AGENT Section 4.01. Liability of Escrow Agent. The Escrow Agent shall not be liable in connection with the performance of its duties hereunder except for its own negligence, misconduct or default. The Escrow Agent shall not be liable for any loss resulting from any investments made pursuant to the terms of this Agreement. The Escrow Agent shall not be liable for the accuracy of the calculations as to the sufficiency of moneys and of the principal amount of the Government Obligations and the earnings thereon to pay the Prior Bonds. So long as the Escrow Agent applies any moneys, Government Obligations and interest earnings therefrom to pay the Prior Bonds as provided herein, and complies fully with the terms of this Agreement, the Escrow Agent shall not be liable for any deficiencies in the amounts necessary to pay the Prior 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 or expenses for the services rendered by the Escrow Agent under this Agreement. 009: [04548.00CS.MIA180245lEOA-3 7 Section 4.02. Permitted Acts. The Escrow Agent and its affiliates may become the owner of all or may deal in the Prior Bonds as fully and with the same rights as if it were not the Escrow Agent. Section 4.03. Payment to Escrow Agent. The City shall pay to the Escrow Agent reasonable compensation for all services rendered by it hereunder and also its reasonable expenses, charges and other disbursements and those of its attorneys, agents and employees incurred in and about the administration and execution of the trusts hereby created, and the performance of its powers and duties hereunder, including, without limitation, all advances, counsel fees and other expenses reasonably made or incurred by the Escrow Agent in connection with such services. ARTICLE V MISCELLANEOUS Section 5.01. Amendments to this Agreement. This Agreement is made for the benefit of the holders from time to time of the Prior Bonds and shall not be repealed, revoked, altered or amended without the written consent of all such holders of the Prior Bonds, the Escrow Agent, the City and AMBAC Indemnity Corporation; provided, however, that the City and the Escrow Agent may, without the consent of, or notice to, such holders, enter into such agreements supplemental to this Agreement which shall not adversely affect the rights of such holders and shall not be inconsistent with the terms and provisions of this Agreement for anyone or more of the following purposes: (a) to cure any ambiguity or formal defect or omission in this Agreement; or (b) to grant to or confer upon the Escrow Agent for the benefit of the holders of the Prior Bonds any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the Escrow Agent. The Escrow Agent shall be entitled to rely upon an unqualified opinion of a nationally recognized counsel in the field of law relating to municipal bonds with respect to compliance with this Section. Prior to any repeal, revocation, alteration or amendment of this Agreement, the City shall provide written notice of such proposed repeal, revocation, alteration or amendment to Standard & Poor's Ratings Group at its address set forth below: 009: [04548.OOCS.MIA180245lEOA-3 8 Standard & Poor's Ratings Group 25 Broadway New York, New York 10004 Attn: Municipal Ratings Desk/Refunded Bonds Section 5.02. Severability. If anyone or more of the covenants or agreements provided in this Agreement on the part of the City or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and construed to be severable from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Agreement. Section 5.03. Agreement Binding. All the covenants, proposals and agreements in this Agreement contained by or on behalf of the City or by or on behalf of the Escrow Agent shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not. Section 5.04. Notices to Escrow Agent and City. Any notice, demand, direction, request or other instrument authorized or required by this Agreement to be given to or filed with the Escrow Agent or the City, shall be deemed to have been sufficiently given or filed for all purposes of this Agreement if personally delivered and receipted for, or if sent by registered or certified United States mail, return receipt requested, addressed as follows: (a) As to the City - City of Miami Beach, Florida 1700 Convention Center Drive Miami Beach, Florida 33139 Attention: Finance Director (b) As to the Escrow Agent - First Union National Bank of Florida First Union Financial Center, 14th Floor 200 S. Biscayne Boulevard Miami, Florida 33131 Attention: Corporate Trust Department Any party hereto may, by notice sent to the other parties hereto, designate a different or additional address to which notices under this Agreement are to be sent. Section 5.05. 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 5.06. Execution by Counterparts. This Agreement may be executed in several counterparts, all or any of which shall be 009: [04548.DOCS.MIA180245]EDA-3 9 regarded for all purposes as one original and shall constitute and be but one and the same instrument. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by its duly authorized officers and its official seal or corporate seal, as the case may be, to be hereunto affixed and attested as of the date first above written. CITY OF MIAMI BEACH, FLORIDA (SEAL) By: Mayor Attest: By: City Clerk FIRST UNION NATIONAL BANK OF FLORIDA, as Escrow Agent (SEAL) By: Assistant Vice President 009: [04548.00CS.MIA180245] EOA-3 10 SCHEDULE A PRIOR BONDS 009: r04548.00CS.MIA180245lEOA-3 A - 1 SCHEDULE B INVESTMENT OF BOND PROCEEDS AND OTHER MONEYS 009: [04548.00CS.MIA180245] EOA-3 B-1 D09: [04548.DOCS.MIA180245lEDA-3 SCHEDULE C SCHEDULE OF PAYMENTS ON PRIOR BONDS C - 1 CITY OF MIAMI BEACH, FLORIDA NOTICE OF PUBLIC HEARING The City of Miami Beach, Florida (the "City"), intends to issue not exceeding $4,500,000 of its Resort Tax Revenue Refunding Bonds, Series 1996 (the "Bonds"), for the purpose of advance refunding all or a portion of the City's outstanding Resort Tax Revenue Refunding Bonds, Series 1988 (the "Prior Bonds"), which Prior Bonds refunded bonds issued by the City to finance the expansion of the Miami Beach Convention Center (the "Convention Center") . The Convention Center is located at 1901 Convention Center Drive, Miami Beach, Florida, and is owned by the City. The Bonds shall not be a debt, liability or obligation of the City for which the full faith and credit of the City shall be pledged, but shall be payable solely from proceeds of the resort tax levied by the City within its corporate limits and moneys, securities and instruments held in certain funds and accounts established under the resolution pursuant to which the Bonds shall be issued. Please Take Notice that the City Commission of the City will hold a public hearing at 2:45 P.M., or as soon thereafter as may be heard, on April 17, 1996, in the City Commission Chambers located at City Hall, 1700 Convention Center Drive, Miami Beach, Florida, at which time any person may be heard regarding the proposed issuance of the Bonds. The documents regarding the Prior Bonds and the proposed issuance of the Bonds may be examined at reasonable times during business hours, 9:00 A.M. to 5:00 P.M., Monday through Friday, at the offices of the City Clerk, 1700 Convention Center Drive, Miami Beach, Florida. This notice is given pursuant to Section 147(f) of the Internal Revenue Code of 1986, as amended. Pursuant to Section 286.0105, Florida Statutes, the City hereby advises the public that: if a person decides to appeal any decision made by any board, agency or commission with respect to any matter considered at its meeting or its hearing, such person must insure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based. This notice does not constitute consent by the City for the introduction or admission of otherwise inadmissible or irrelevant evidence, nor does it authorize challenges or appeals not otherwise allowed by law. IN ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT OF 1990, PERSONS NEEDING SPECIAL ACCOMMODATION TO PARTICIPATE IN THIS PROCEEDING SHOULD CONTACT THE CITY CLERK'S OFFICE NO LATER THAN FOUR (4) DAYS PRIOR TO THE PROCEEDING. TELEPHONE (305) 673-7411 FOR ASSISTANCE; IF HEARING IMPAIRED, TELEPHONE THE FLORIDA RELAY SERVICE NUMBERS, (800) 955 - 8771 (TDD) OR (800) 955 - 8770 (VOICE), FOR ASSISTANCE. CITY OF MIAMI BEACH, FLORIDA Dated: March 31, 1996. D09: [04548.DOCS.MIA1802451TEFRA-NOTICE CITY OF MIAMI BEACH CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA33139 OFFICE OF THE CITY MANAGER TELEPHONE: (305) 673-7010 FAX: (305) 673-7782 COMMISSION MEMORANDUM NO. ;< ~ l::9 (p April 17, 1996 To: Mayor Seymour Gelber and Members of the City Commission From: Jose Garcia-Pedrosa JJ City Manager 111 Subject: Refunding of the 1988 Resort Tax Revenue Bonds Administrative Recommendation The Administration recommends that the Mayor and City Commission adopt the Resolution. Background The Resort Tax senior lien bonds were issued in 1988, prior to the use ofthis revenue source as a pledge for the Tax Increment Bonds for the City Center Redevelopment Area. In that secondary pledge of the Resort Tax to the Tax Increment Bonds, the City has covenanted not to issue any additional senior lien bonds as long as the Tax Increment Bonds have a possible call on the Resort Tax. Accordingly, this issue will extend the life of these bonds to match the life of the Tax Increment Bonds. The advantage of this extension of maturity is to reduce the annual debt service requirement from $480,000 to $300,000. This will increase the availability of funds for the Tax Increment Bonds sufficient to issue an additional $1.5 million of these bonds. The major reason for this refunding of these existing bonds is savings. These bonds were issued in a period of higher interest rates. Even after extending the maturity of these bonds, the savings that will accrue to the City will approximate 3% of the bond issue. This 3% level is after all costs associated with the issuance of the bonds and is at a level that we would recommend the refunding even without the added benefit of increasing the bondability of the Tax Increment. Agenda Item R. 1 C- Oate ~. \1- q~ TABLE OF CONTENTS ~ ARTICLE I DEFINITIONS SECTION 1.1. Participants...................................................... 1 SECTION 1.2. Contracts, Instruments and Documents ................................ 1 SECTION 1.3. Legal Authorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 SECTION 1.4. Events, Dates and Places ........................................... 2 SECTION 1.5. Other Definitions ................................................. 3 ARTICLE II REPRESENTATIONS AND COVENANTS SECTION 2.1. Representations and Covenants of City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 ARTICLE III AGREEMENT TO PURCHASE SERIES 1996 BONDS SECTION 3.1. Delivery of Documents to Underwriters ...............................7 SECTION 3.2. Agreement to Sell and Purchase Series 1996 Bonds. . . . . . . . . . . . . . . . . . . . . . 8 SECTION 3.3. Public Offering of Series 1996 Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 SECTION 3.4. Good Faith Check ................................................8 ARTICLE IV CLOSING CONDITIONS SECTION 4.1. Performance of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 SECTION 4.2. Delivery of Closing Papers ......................................... 9 SECTION 4.3. Form of Closing Papers; Waiver of Conditions . . . . . . . . . . . . . . . . . . . . . . . . . 11 ARTICLE V TERMINATION; PAYMENT OF EXPENSES SECTION 5.1. Termination.................................................... 11 SECTION 5.2. Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 ARTICLE VI MISCELLANEOUS SECTION 6.1. Parties In Interest; Survival of Represerrtations . . . . . . . . . . . . . . . . . . . . . . . . . 13 SECTION 6.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 SECTION 6.3. Amendment .................................................... 13 SECTION 6.4. Governing Law .................................................14 SECTION 6.5. Captions....................................................... 14 MIA:26663:3 SECTION 6.6. Counterparts.................................................... 14 SECTION 6.7. Severability .................................................... 14 SECTION 6.8. Rights of Managing Underwriter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 SECTION 6.9. Effective Time of this Bond Purchase Agreement. . . . . . . . . . . . . . . . . . . . . . . 14 EXHIBIT A EXHIBIT B EXHIBIT C EXHIBIT D EXHIBIT E MIA:26663:3 ********** Maturities, Amounts, Interest Rates and Price or yields.......................................................................... Opinion of Bond CounseL................................................................ Opinion of City Attorney.................................................................. Opinion of Underwriter's Counsel.................................................... Underwriter's Truth-in-Bonding and Disclosure Statement....................................................................... A-I B-1 C-1 D-1 E-1 11 ARTICLE I DEFINITIONS SECTION 1.1. Participants. In addition to the Parties, various persons and firms will participate in the financing to which this Bond Purchase Agreement relates. Among them are those identified below (hereinafter collectively called the "Participants"): Authorized Party: The persons duly authorized and legally empowered to execute documents on behalf of the City. Bond Counsel: Squire, Sanders & Dempsey, Miami, Florida Bond Re~istrar and Payin~ A~ent: First Union National Bank of Florida, Miami, Florida City Attorney: Murray H. Dubbin, Esq., City Attorney ~ Governin~ Body: City Commission Escrow A~ent: First Union National Bank of Florida, Miami, Florida Financial Advisor: Rauscher Pierce Refsnes, Inc., Miami, Florida Insurer: AMBAC Indemnity Corporation Prior Bonds: The City's Resort Tax Revenue Refunding Bonds, Series 1988. Underwriters' Counsel: Ruden, McClosky, Smith, Schuster & Russell, P .A., Miami, Florida and Dennis Scholl, P .A., Miami, Florida SECTION 1.2. Contracts. Instruments and Documents. Various contracts, instruments and documents are involved in the financing to which this Bond Purchase Agreement relates. Among them are those identified below: Arbitra~e Certificate: The certificate of the City setting forth its reasonable expectations regarding the use of the proceeds of the Series 1996 Bonds, among other matters. Basic Documents: This Bond Purchase Agreement, the Escrow Deposit Agreement and the Continuing Disclosure Commitment. Closin~ Papers: Collectively, the certificates, opinions, instruments and other documents described in Section 4.2 of this Bond Purchase Agreement. MIA:26663:3 Continuin~ Disclosure Commitment: The Continuing Disclosure Commitment delivered by the City on the date of delivery of the Series 1996 Bonds. Escrow Deposit Agreement: The Escrow Deposit Agreement, dated as of 1996, between the City and the Escrow Agent. Insurance Policy: The insurance policy to be issued by the Insurer concurrently with the issuance and delivery of the Series 1996 Bonds. Official Statement: The Official Statement (including the Appendices thereto), dated the date hereof, summarizing the terms of the Series 1996 Bonds and other related matters. Preliminary Official Statement: The Preliminary Official Statement (including the Appendices thereto), dated , 1996, summarizing the terms of the Series 1996 Bonds and related matters. Series 1996 Bonds: The City's $ Bonds, Series 1996. Resort Tax Revenue Refunding SECTION 1.3. Legal Authorities. Various legal authorities are involved in the financing to which this Bond Purchase Agreement relates. Among them are those identified below: Bond Resolution: Resolution No. 88-19369 adopted by the City's Governing Body on September 22, 1988, as supplemented by Resolution No. adopted by the City's Governing Body on ,1996. .cmk: The Internal Revenue Code of 1986, as amended through and including the Closing Date and, to the extent applicable, the Internal Revenue Code of 1954, as amended, and, to the extent applicable, the regulations issued or proposed pursuant thereto. Mayor's Certificate: The Certificate of the Mayor of the City dated the date hereof, providing for among other matters, the fixing of the amount of the Series 1996 Bonds and the maturities, amortization installments, interest rates, and redemption provisions of the Series 1996 Bonds, and fixing other details of the Series 1996 Bonds. SECTION 1.4. Events. Dates and Places. Various dates and places are significant in the financing to which this Bond Purchase Agreement relates. Among them are those identified below: Closing: The consummation of the transaction at which the Series 1996 Bonds are delivered by the City to the Underwriters, and MIA:26663:3 2 paid for by the Underwriters, pursuant to this Bond Purchase Agreement. Closing Date: , 1996, or such other date as the Parties may agree. Closing Time: 1 :00 p.m. Eastern Daylight Time or such other time as the Parties may agree. Place of Closing: Squire, Sanders & Dempsey, Miami, Florida Miami Center, 29th Floor 201 South Biscayne Boulevard Miami, Florida 33131 SECTION 1.5. Other Definitions. All capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Bond Resolution. ARTICLE II REPRESENTATIONS AND COVENANTS SECTION 2.1. Representations and Covenants of City. As an inducement to the other Parties to enter into this Bond Purchase Agreement, the City makes the following representations and covenants, each of which representations shall be true and correct on the date hereof and on the Closing Date as if such representations were made again at the Closing Time: (a) The City is a validly existing political subdivision of the State of Florida. (b) The Bond Resolution was adopted by the City's Governing Body at meetings duly called and held in open session upon requisite prior public notice pursuant to the laws of the State of Florida and the standing resolutions and rules of procedure of the City's Governing Body. The City has full right, power and authority to adopt the Bond Resolution. On the date hereof, the Bond Resolution is, and, at the Closing it shall be, in full force and effect, and no portions thereof have been or shall have been supplemented, repealed, rescinded or revoked. The Bond Resolution constitutes the legal, valid and binding obligation of the City, enforceable in accordance with its terms. The Bond Resolution creates a valid pledge of, and first lien and charge upon, the Resort Tax Revenues for the payment of the Series 1996 Bonds. (c) The City has full right, power and authority to enter into, execute and deliver the Official Statement, the Basic Documents and the Series 1996 Bonds, and to perform its obligations under the Basic Documents and as contemplated by the Official Statement. All permits, consents or licenses, if any, and all notices to or filings necessary to accomplish the foregoing have been obtained or made. When executed and delivered, the Basic Documents and the Series 1996 Bonds shall constitute legal, valid and binding obligations of the City enforceable in accordance with their respective terms and all conditions and requirements of the Bond Resolution relating to the issuance of the Series 1996 Bonds will have been complied with or fulfilled. Upon issuance of the Series 1996 Bonds, there will be no MIA:26663:3 3 indebtedness of the City other than the Series 1996 Bonds outstanding under the Bond Resolution or having a prior or parity lien on the Resort Tax Revenues. (d) The Authorized Party executing the Basic Documents and Official Statement on behalf of the City is authorized for and in the name of the City to execute, deliver and perform the obligations of the City under the Basic Documents and as contemplated by the Official Statement and to execute, deliver, file or record such other incidental papers, documents and instruments as shall be necessary to carry out the intention and purposes of the Basic Documents, the Series 1996 Bonds and the Bond Resolution. On the Closing Date the Series 1996 Bonds will be duly authenticated, executed and delivered by the City in accordance with the Bond Resolution and will be entitled to all the benefits and security thereof. Any certificate signed by the Authorized Party shall be deemed a representation and covenant by the City to the Underwriters as to the statements made therein. (e) No authorization, approval, consent or license of any governmental body or authority, not already obtained, is required for the valid and lawful execution and delivery by the City of the Series 1996 Bonds, the Basic Documents, the Official Statement and the Bond Resolution and the performance of its obligations thereunder or as contemplated thereby; provided, however, that no representation is made concerning compliance with the registration requirements of the federal securities laws or the securities or Blue Sky laws of the various states. (f) The execution and delivery by the City ofthe Series 1996 Bonds, the Basic Documents, the Official Statement and the Bond Resolution and the performance by the City thereunder or as contemplated thereby is permitted by, and will not conflict with or constitute a breach of or default under, any existing law, court or administrative regulation, decree or order or any commitment, indenture, mortgage, lease, contract, agreement or instrument to which the City is a party, or by which it or any of its properties are bound or subject. No event has occurred which, with the lapse of time or the giving of notice or both, would constitute an event of default (as therein defined) under any of the Basic Documents or the Bond Resolution. (g) The Series 1996 Bonds, the Bond Resolution, and the Resort Tax conform to the descriptions thereof set forth in the Official Statement. (h) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body pending and with regard to which the City has received service of process or, to the actual knowledge of the City, threatened against the City affecting, contesting, questioning or seeking to restrain or enjoin any of the following: (i) the powers or valid existence of the City or the titles of the members of the City's Governing Body or its other officers to their respective offices; (ii) any of the proceedings had or actions taken leading up to the sale, issuance and delivery of the Series 1996 Bonds or the execution, delivery or performance of this Bond Purchase Agreement; (iii) the delivery, validity or enforceability of the Series 1996 Bonds or any of the Basic Documents or contesting the power of the City to consummate the transactions contemplated therein and in the Official Statement; (iv) contesting in any way the completeness or accuracy of the Official Statement; (v) wherein an unfavorable decision, ruling or finding would materially and adversely affect the validity or enforceability of the MIA:26663:3 4 Series 1996 Bonds, the Bond Resolution or the Basic Documents; or (vi) which would have a material adverse effect upon the operations of the City or the collection of the Resort Tax Revenues. (i) To the knowledge of the City, the City is not on the date hereof, and will not be on the Closing Date, in default under any instrument to which the City is subject or by which it or its properties are or may be bound or subject, which default would (i) have a material adverse effect on the condition of the City, financial or otherwise, or the collection of the Resort Tax Revenues (other than as disclosed in the Official Statement) or (ii) otherwise materially affect its ability to perform its obligations under the Series 1996 Bonds, the Basic Documents or the Bond Resolution. (j) The City has not been advised by the Commissioner, any District Director or any other official of the Internal Revenue Service that certifications by the City with respect to arbitrage may not be relied upon. (k) The City shall apply the proceeds of the sale of the Series 1996 Bonds in the manner described in the Official Statement and the Arbitrage Certificate and will not take or omit to take any action that will in any way cause or result in the proceeds of the sale of the Series 1996 Bonds to be applied in a manner other than as described in same. (I) There has been no material adverse change in the business, properties or financial condition of the City from that shown in the Official Statement. (m) Between the date hereof and the Closing Date (i) the City will not, without the prior written consent of the Underwriters, issue any bonds, notes or other obligations, (ii) the City will not incur any material liabilities, direct or contingent, other than those in the ordinary course of business, and (iii) there will not have been any adverse change of a material nature in the City's financial position. (n) Appendices A and B to the Preliminary Official Statement and the Official Statement and the statements relating to the City, the Resort Tax, the Series 1996 Bonds, including the application of proceeds thereof, and the Bond Resolution set forth in the Preliminary Official Statement and the Official Statement and the Appendices thereto did not on the respective dates of the Preliminary Official Statement and the Official Statement and do not on the date hereof, contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading. Without having undertaken to determine independently the accuracy or completeness of the information in the Preliminary Official Statement and Official Statement or Appendices thereto, except as to the information noted in the preceding sentence, nothing has come to the City's attention that would lead it to believe that the Preliminary Official Statement and Official Statement and the Appendices to such documents contains any untrue statement of a material fact or omits to state any material fact necessary to make the statement therein not misleading. The City has consented to the use of the Preliminary Official Statement and the Official Statement by the Underwriters in connection with the public offering of the Series 1996 Bonds. MIA:26663:3 5 (0) The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriters as the Underwriters may reasonably request in order to qualify the Series 1996 Bonds for offer and sale under the Blue Sky or other securities laws or regulations of such states and other jurisdictions of the United States as the Underwriters may designate and to determine the eligibility of the Series 1996 Bonds for investment under the laws of such states and jurisdictions, and will undertake its best efforts to continue such qualifications in effect as long as required for the distribution of any Series 1996 Bonds, provided that the City will not be required to qualify to do business, or be subject to service of process in or subject itself to the jurisdiction of, any state other than the State of Florida. (P) The City has not, since December 31, 1975, been in default in the payment of principal of, premium, if any, or interest on, or otherwise been in default with respect to, any bonds, notes, lease purchase arrangements or other obligations which it has issued, assumed or guaranteed as to payment of principal, premium, if any, or interest, nor has any other person been in default with respect to payment of principal of, premium, if any, or interest on any bonds, notes or other obligations which the City has issued, except, in both cases, as described in the Preliminary Official Statement and the Official Statement and certain conduit issues which in the opinion of the City would not be considered material by a reasonable investor and therefore do not have to be disclosed in the Official Statement under Rule 3E-400.003, Rules of Government Securities, promulgated under Section 517.051(1), Florida Statutes. (q) If between the date hereof and the date of the Closing, or between the date of the Closing and the "end of the underwriting period" as defined in (s) below, any event shall occur which would or might cause the information contained in the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the City shall notify the Underwriters thereof, and if in the reasonable opinion of the Underwriters such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City will cooperate with the Underwriters in supplementing or amending the Official Statement (the printing of which will be the expense of the City) in such form and manner and at such time or times as may be reasonably called for by the Underwriters. (r) The City agrees that after the Closing and during the period ended on the earlier of (A) ninety (90) days after the "end of the underwriting period", hereinafter described or (B) the time when the Official Statement is available from a Nationally Recognized Municipal Securities Information Repository ("NRMSIR"), which the Managing Underwriter shall cause to be filed immediately after the Official Statement is available, (but in no event less than 25 days following the end of the underwriting period)(i) the City will not adopt any amendment of or supplement to the Official Statement to which, after having been furnished a copy prior to any proposed adoption, the Managing Underwriter shall object in writing or which shall be disapproved by counsel for the Underwriters and (ii) if any event relating to or affecting the City or the Series 1996 Bonds shall occur as a result of which it is necessary, in the opinion of the City, the Managing Underwriter or Underwriters' Counsel, to amend or supplement the Official Statement in order to make the Official Statement not misleading in light of the circumstances existing at the time it is delivered to a purchaser, the MIA:26663:3 6 City shall, at its expense, forthwith prepare and furnish to the Managing Underwriter a reasonable number of copies of an amendment of or supplement to the Official Statement (in form and substance satisfactory to the City and the Underwriters) which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading. The City will promptly notify the Managing Underwriter of the occurrence of any event which, in the City's opinion, is an event described in clause (ii) of the preceding sentence. For purposes of the foregoing, the term "end of the underwriting period" means the date of Closing or the date on which the Underwriters do not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Series 1996 Bonds for sale to the public, which date shall in no event be later than ninety (90) days after the date of Closing. The Underwriters will promptly notify the City in writing of the end of the underwriting period. (s) The City will undertake, pursuant to the Bond Resolution and the Continuing Disclosure Commitment, to provide annual reports and notices of certain events. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the final Official Statement. ARTICLE III AGREEMENT TO PURCHASE SERIES 1996 BONDS SECTION 3.1. Delivery of Documents to Underwriters. Prior to or simultaneously with the execution and delivery of this Bond Purchase Agreement, the Underwriters shall have delivered the Underwriters' Truth-in-Bonding and Disclosure Statement required by law, as set forth in Exhibit E. As soon as practicable after the date hereof, and in any event, within seven days of the date hereof, as required by paragraph (b)(3) of Rule 15(c)2-12 of the Securities and Exchange Commission ("SEC") or the rules of the Municipal Securities Rulemaking Board ("MSRB"), the City shall deliver or cause to be delivered to the Managing Underwriter copies of the Official Statement, dated the date hereof, relating to the Series 1996 Bonds, in sufficient quantities to allow the Underwriters to comply with paragraph (b)(4) of Rule 15(c)2-12 of the SEC and the rules of the MSRB, in substantially the form of the Preliminary Official Statement with only such changes therein as shall have been approved by the City and the Managing Underwriter. References to the Official Statement shall include the cover page and all exhibits, appendices, reports and statements included with or attached to it and any amendments and supplements that may be authorized by the City and to which the Managing Underwriter does not reasonably object, and any amendments and supplements which may be reasonably required by the Managing Underwriter for use with respect to the Series 1996 Bonds. The Official Statement shall be executed on behalf of the City by duly authorized officers thereof. The City approves the Preliminary Official Statement, and consents to the use of the Preliminary Official Statement and the Official Statement and the information contained therein by the Underwriters. The City deems final the Preliminary Official Statement, as of its date, for purposes of Rule 15( c )(2)-12, with certain omissions therein in connection with the pricing of the Series 1996 Bonds. MIA:26663:3 7 SECTION 3.2. Agreement to Sell and Purchase Series 1996 Bonds. The Series 1996 Bonds shall have the terms specified in the Official Statement, including maturities, amounts, interest rates, prices or yields and redemption provisions, and such terms as are required to be set forth herein by the Bond Resolution, all as described on Exhibit A annexed hereto. Upon the basis of the representations and upon the terms and conditions set forth in this Bond Purchase Agreement, the Underwriters agree to purchase, and the City agrees to issue, sell and deliver to the Underwriters, all (but not less than all) of Series 1996 Bonds for the aggregate purchase price of $ (representing the $ original principal amount of the Series 1996 Bonds, less $ of original issue discount and less $ of Underwriter's discount) plus accrued interest through the day immediately preceding the Closing Date on the Series 1996 Bonds (the "Purchase Price"). Payment of the Purchase Price shall be made by the Underwriters to the order of the City at the Closing Time in Federal or other immediately available funds. One fully registered Series 1996 Bond for each maturity, duly executed and authenticated, shall be delivered to or upon the order of the Underwriters, together with the other documents hereinafter mentioned, and subject to the terms and conditions hereof, the Underwriters will accept such delivery and pay the Purchase Price. The Series 1996 Bonds shall be registered in the name of Cede & Co., or in such other names and in such authorized denominations as the Underwriters shall reasonably specify in writing at least three (3) business days prior to the Closing Date. The Series 1996 Bonds shall be available for examination and packaging at the office of The Depository Trust Company, New York, New York by the Underwriters at least one (1) business day prior to the Closing Date. SECTION 3.3. Public Offering of Series 1996 Bonds. The Underwriters agree to make a bona fide public offering of the Series 1996 Bonds, solely pursuant to the Official Statement, at the initial offering prices set forth in the Official Statement, reserving, however, the rights to (i) change such initial offering prices as the Managing Underwriter shall deem necessary in connection with the marketing of the Series 1996 Bonds and (ii) offer and sell the Series 1996 Bonds to certain dealers (including dealers depositing the Series 1996 Bonds into investment trusts) at concessions to be determined by the Managing Underwriter. The Underwriters also reserve the right to over-allot or effect transactions that stabilize or maintain the market prices of the Series 1996 Bonds at levels above that which might otherwise prevail in the open market and to discontinue such stabilizing, if commenced, at any time. SECTION 3.4. Good Faith Check. The City hereby acknowledges receipt of a corporate check payable to the City in an amount equal to $40,000 (the "Good Faith Check") as security for the performance by the Underwriters of their obligation to accept and pay for the Series 1996 Bonds at the Closing in accordance with the provisions of this Bond Purchase Agreement. The City shall retain the check, uncashed, except under the circumstances hereinafter set forth. In the event the City fails to deliver the Series 1996 Bonds at the Closing, or if City shall be unable to satisfy the conditions to the obligations of the Underwriters contained in this Bond Purchase Agreement or if such obligations shall be terminated for any reason permitted by this Bond Purchase Agreement, the City shall be obligated to immediately return the uncashed Good Faith Check to the Underwriters. In the event the Underwriters accept and pay for the Series 1996 Bonds at Closing, the uncashed Good Faith Check shall be returned to the Underwriters at Closing. In the event the Underwriters fail (other than for a reason permitted under this Bond Purchase Agreement) to accept and pay for the Series 1996 Bonds at Closing, the Good Faith Check may be cashed and the proceeds thereof shall be retained by the City as and for full liquidated damages for such failure, and not as a penalty, and for any and all defaults hereunder on the part of the Underwriters, and thereupon, all claims and rights hereunder against the Underwriters shall be fully released and discharged, it being understood MIA:26663:3 8 by the City and the Underwriters that actual damages in such circumstances may be difficult or impossible to compute. ARTICLE IV CLOSING CONDITIONS SECTION 4.1. Performance of Obligations. The obligations and agreements of the Underwriters under this Bond Purchase Agreement are expressly made subject to the due performance by the City at or prior to the Closing Time of its respective obligations and undertakings pursuant to this Bond Purchase Agreement. SECTION 4.2. Delivery of Closing Papers. The obligations and agreements of the Underwriters under this Bond Purchase Agreement are expressly made subject to the condition that, at or prior to the Closing Time, there shall have been delivered to the Underwriters each of the following which the City agrees to do: (a) Basic Documents: Miscellaneous Documents: (i) One executed copy of each of the Basic Documents, in the respective forms thereof delivered to the Underwriters pursuant to Section 3.1 of this Bond Purchase Agreement, which documents shall be in full force and effect, with only such revisions therein or additions thereto as shall have been required to incorporate terms specified in this Bond Purchase Agreement or as shall be satisfactory to the Managing Underwriter. (ii) Ten executed copies of the Official Statement and Appendices included therein. (b) Closing Papers to be Furnished by the City: (i) One copy of the Bond Resolution certified by the appropriate City official to be true and correct copies thereof as adopted and approved. (ii) One fully executed Mayor's Certificate. (iii) One executed copy of a certificate of an Authorized Party on behalf of the City, dated the Closing Date, (A) confirming that each of the representations of the City contained in Section 2.1 of this Bond Purchase Agreement was true and accurate in all material respects on the date when made, has been true and accurate in all material respects at all times since, and continues to be true and accurate in all material respects on the Closing Date as if such representations were made on the Closing Date, (B) stating that there has been no material adverse change in the business or financial condition of the City from that shown in the Official Statement, (C) stating that to its best knowledge no event affecting the City has occurred since the date of the Preliminary Official Statement which should be disclosed in the Official Statement for the purpose for which it is used or which it is necessary to disclose therein in order to make the statements and information therein not MIA:26663:3 9 MIA:26663:3 misleading in any material respect as of the Closing Date; and (D) certifying that the Bond Resolution has not been supplemented, modified, amended or repealed. (iv) One executed original of a customary incumbency and no-litigation certificate, in form prepared by and reasonably acceptable to Bond Counsel, the City Attorney and Underwriters' Counsel, dated the Closing Date and signed by an authorized member of the City's Governing Body. (v) One executed copy of the Arbitrage Certificate, in form satisfactory to Bond Counsel, dated the Closing Date, signed by an Authorized Party on behalf of the City. (vi) One executed copy of the final approving opinion of Bond Counsel, in substantially the form contained in an Appendix to the Official Statement, and one executed copy of the supplemental legal opinion of Bond Counsel, dated the Closing Date, in the form as set forth in Exhibit B hereto. (vii) One executed copy of the opinion of the City Attorney in the form as set forth in Exhibit C hereto. (viii) One executed copy of the opinion of Underwriters' Counsel in the form as set forth in the attached Exhibit D. (ix) One executed copy of a customary authorization and incumbency certificate, and a standard closing certificate, both dated the Closing Date, signed by authorized officers of the Bond Registrar and Paying Agent and the Escrow Agent, together with a standard opinion of counsel to the effect that the obligations undertaken by the Bond Registrar and Paying Agent and the Escrow Agent in connection with the Series 1996 Bonds are legal, valid and binding obligations of such parties, all in form and substance satisfactory to the Underwriters. (x) A certified copy of the Insurance Policy accompanied by a certificate of, or opinion of counsel to, the Insurer to the effect that the information relating to the Insurer appearing under the caption "MUNICIPAL BOND INSURANCE" in the Official Statement does not contain any untrue statement of a material fact or omit to state a material fact required in order to make the statements therein, in light of the circumstances under which they were made, not misleading. (xi) One executed copy of a certificate from the Insurer to the effect that it is not currently in default, nor has it been in default at any time with respect to the payment of the principal of, or interest on, any obligation guaranteed by the Insurer and the opinion of counsel to the Insurer to the effect that (A) the Insurer is duly incorporated and validly existing under the laws of the State of Wisconsin and is licensed and authorized to issue the Insurance Policy under the laws of the State of Wisconsin and the State of Florida; and (B) the Insurance Policy have been duly executed and are valid and binding obligations of the Insurer enforceable in accordance with their terms. 10 (xii) Letters of confirmation with respect to the ratings of the Series 1996 Bonds from Moody's Investors Service, Inc. and Standard & Poor's Ratings Group of "Aaa" and "AAA", respectively. (xiii) One executed copy of a Verification Report as to the sufficiency of the escrow for the Prior Bonds from KPMG Peat Marwick LLP. (xiv) One executed copy of the Letter of Representation to The Depository Trust Company relating to the Series 1996 Bonds. (d) Other Assurances: Such additional opinions, certificates, proceedings, instruments and other documents as the Underwriters, Underwriters' Counselor Bond Counsel may reasonably request to verify or evidence (i) compliance by the Parties with applicable legal requirements, (ii) the truth and accuracy of the representations or opinions of the Parties contained in this Bond Purchase Agreement or in any Closing Paper, or (iii) the due performance of all agreements and the satisfaction of all conditions required to be performed or satisfied at or prior to the Closing Time. SECTION 4.3. Form ofClosin~ Papers: Waiver of Conditions. The Closing Papers to be delivered to the Underwriters pursuant to this Bond Purchase Agreement shall be deemed to be in compliance with the conditions of this Bond Purchase Agreement if, but only if, in the reasonable judgment of the Underwriters, they are satisfactory in form and substance. The legal opinions and certificates described in Section 4.2 shall be addressed to the Underwriters or a reliance letter with respect thereto shall be addressed to the Underwriters. No condition hereof shall be deemed to have been waived by the Underwriters unless expressed specifically in a writing signed by the Underwriters. ARTICLE V TERMINATION: PAYMENT OF EXPENSES SECTION 5.1. Termination. This Bond Purchase Agreement may be terminated by the Underwriters without liability on the part of the Underwriters, if, at or prior to the Closing Time: (a) The Bond Resolution, the Mayor's Certificate or this Bond Purchase Agreement shall not be in full force and effect or shall have been supplemented, modified, amended or repealed, without the prior written consent of the Underwriters. (b) Any representation of the City contained in this Bond Purchase Agreement or in any Closing Paper shall prove to be or to have been false in any material respect; (c) There shall be a material failure of anyone or more of the conditions set forth in Sections 4.1,4.2 or 4.3 of this Bond Purchase Agreement; (d) Litigation or an administrative proceeding or investigation shall be pending or threatened affecting, contesting, questioning or seeking to restrain or enjoin (i) the powers or the valid existence of the City or the titles of its officers to their respective offices or (ii) contesting the validity or effecting the enforceability of the Series 1996 Bonds, the Bond MIA:26663:3 11 Resolution, the Mayor's Certificate, or the Basic Documents or contesting the power or the City to execute and deliver such documents or to consummate the transactions contemplated therein or in the Official Statement or apply the proceeds of the Series 1996 Bonds as contemplated therein, or (iii) contesting in any way the completeness or accuracy of the Official Statement, or (iv) wherein an unfavorable decision, ruling or finding would, in the judgment of the Underwriters, materially and adversely affect the validity or enforceability of the Series 1996 Bonds, the Bond Resolution, the Mayor's Certificate or the Basic Documents; (e) Any legislative, executive or regulatory action or any court decision shall occur which, in the reasonable judgment of the Underwriters, casts sufficient doubt on the legality of, or the excludability from gross income for Federal income tax purposes of interest on, obligations of the general kind and character as the Series 1996 Bonds so as to impair materially the marketability, or to reduce materially the market price of, such obligations or otherwise materially impairs the marketability, or materially reduces the market price of, such obligations; (f) Any action by or on behalf of the Securities and Exchange Commission or a court shall occur which would require registration of any Series 1996 Bonds under the Securities Act of 1933, as amended, or the qualification of the Bond Resolution under the Trust Indenture Act of 1939, as amended; (g) Any material restriction not presently in force on trading in securities generally, or any banking moratorium shall occur, which, in the judgment of the Managing Underwriter, substantially impairs the marketability of the Series 1996 Bonds; (h) The outbreak or escalation of war or hostilities involving the United States or any national or international calamity or crisis, financial or otherwise, including a general suspension of trading on any national securities exchange, which shall occur, if the effect of any such event, in the judgment of the Managing Underwriter, materially and adversely affects the public offering or the delivery of the Series 1996 Bonds; (i) There shall occur any adverse change in the operations, properties or financial condition of the City from that described in the Official Statement, which, in the reasonable judgment of the Underwriters, is material and makes it inadvisable to proceed with the sale of the Series 1996 Bonds; G) Any event or condition shall exist or occur which, in the judgment of the Underwriters, renders untrue or incorrect, in any material respect as of the time to which the same purports to relate, the information contained in the Official Statement or which requires that information not reflected therein be included therein in order to make the statements and information contained therein not misleading in any material respect as of such time; or (k) Any national securities exchange, or any governmental authority shall impose, as to the Series 1996 Bonds, any material restrictions not now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriters. MIA:26663:3 12 SECTION 5.2. Payment of Expenses. The following costs and expenses relating to the transactions contemplated or described in this Bond Purchase Agreement shall be borne and paid by the City: printing of Series 1996 Bonds; printing or photostating of Closing Papers (including the Preliminary Official Statement and the Official Statement) in such reasonable quantities as the Underwriters may request; fees and disbursements of Bond Counsel; fees and disbursements of the City's Financial Advisor, the Certified Public Accountant, the Bond Registrar and Paying Agent, the Escrow Agent, and the premium for the Insurance Policy; fees and disbursements ofthe Insurer; and fees of the rating agencies. The City shall reimburse the Underwriters for the fees and disbursements of Underwriters' counsel. The Underwriters shall pay (i) all advertising expenses in connection with the public offering of the Series 1996 Bonds; and (ii) all other expenses incurred by them in connection with their public offering and distribution of the Series 1996 Bonds. Except as otherwise provided above, the City and the Underwriters shall each bear the costs and expenses incident to the performance of their respective obligations under this Bond Purchase Agreement. ARTICLE VI MISCELLANEOUS SECTION 6.1. Parties In Interest: Survival of Representations. This Bond Purchase Agreement is made solely for the benefit of the City and the Underwriters, and no other person, partnership, association or corporation, including but not limited to owners of the Series 1996 Bonds or beneficial interests therein, shall acquire or have any rights hereunder or by virtue hereof. All representations and agreements in this Bond Purchase Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any Party and shall survive the delivery of and payment for the Series 1996 Bonds. SECTION 6.2. Notices. All notices, demands, certificates or other communications (other than the Closing Papers) under this Bond Purchase Agreement shall be sufficiently given and shall be deemed given when hand delivered or when mailed by certified or registered mail, postage prepaid, or by prepaid telegram, or by electronic communications with the original forwarded by certified or registered mail, postage prepaid, with proper address as indicated below: To the City: City of Miami Beach 1700 Convention Center Drive Miami Beach, Florida 33139 Attention: Finance Director cc: City Attorney To the Underwriters: Raymond James & Associates, Inc. 2255 Glades Road, Suite l20A Boca Raton, Florida 33431 Attention: Arthur Ziev SECTION 6.3. Amendment. No modification, alteration or amendment to this Bond Purchase Agreement shall be binding upon any Party until such modification, alteration or amendment is reduced to writing and executed by all Parties. MIA:26663:3 13 SECTION 6.4. Governing Law. The laws of the State of Florida shall govern this Bond Purchase Agreement. SECTION 6.5. Captions. The captions or headings in this Bond Purchase Agreement are for convenience only and in no way define, limit or describe the scope or intent of any of the provisions of this Bond Purchase Agreement. SECTION 6.6. Counter:parts. This Bond Purchase Agreement may be signed in any number of counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument SECTION 6.7. Severability. If any provisions of this Bond Purchase Agreement shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions, or in all cases because it conflicts with any other provision or provisions hereof or any constitution or statute or rule of public policy, or for any other reason, such circumstance shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatever. The invalidity of anyone or more phrases, sentences, clauses or sections in this Bond Purchase Agreement contained, shall not affect the remaining portions of this Bond Purchase Agreement, or any part thereof. SECTION 6.8. Rights of Managing Underwriter. The Managing Underwriter, on behalf of the Underwriters, being duly authorized so to do, shall have the power to enter into this Bond Purchase Agreement, to consent to any amendments hereto, to agree to the interpretation of the provisions hereof and to waive any preconditions to Closing hereunder. SECTION 6.9. Effective Time of this Bond Purchase Agreement. This Bond Purchase Agreement shall be effective and binding upon its execution and delivery. MIA:26663:3 14 IN WITNESS WHEREOF, the parties hereto have executed this Bond Purchase Agreement as of the day and year set forth beneath each signature. The City: CITY OF MIAMI BEACH, FLORIDA By: Seymour Gelber, Mayor Attest: Robert Parcher City Clerk The Underwriters: RA YMOND JAMES & ASSOCIATES, INC. on behalf of itself and the Underwriters. By: Title: MIA:26663:3 15 EXHIBIT A MATURITIES, AMOUNTS, INTEREST RATES, PRICES AND YIELDS Maturity (Seotember I) Amount Interest Rate Yield Price REDEMPTION PROVISIONS Optional Redemption Series 1996 Bonds maturing on or prior to October 1, 2006 are not subject to redemption prior to their stated dates of maturity. Series 1996 Bonds maturing on October 1,2007 and thereafter are subject to redemption on October 1,2006 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, 2006 - September 30, 2007 October 1, 2007 - September 30, 2008 October 1, 2008 and thereafter 102% 101 100 Mandatory Redemption The Series 1996 Bonds maturing on October 1, _ are subject to mandatory sinking fund redemption, by lot, on October 1, _ and on each October 1 thereafter, from moneys deposited by the City to the credit of the Bond Redemption Account established under the Bond Resolution representing Amortization Requirements in respect of such Series 1996 Bonds for the immediately preceding Fiscal Years, at a redemption price equal to 100% of each Series 1996 Bond (or portion thereof) to be redeemed plus accrued interest to the date fixed for redemption in the amounts and years set forth below: MIA:26663:3 A-I