373-Municipal Bond Investors $3,385,000
CITY OF SANFORD FINANCE CORPORATION
CERTIFICATES OF PARTICIPATION
(1989 CITY OF SANFORD PROJECT)
EVIDENCING FRACTIONAL UNDIVIDED INTERESTS OF
THE OWNERS THEREOF IN BASIC RENT PAYMENTS TO BE
MADE UNDER A LEASE AGREEMENT WITH OPTION TO
PURCHASE ISSUED BY THE CITY OF SANFORD, FLORIDA
CERTIFICATE PURCHASE CONTRACT
December 6, 1989
Board of Directors Mayor and City Commissioners
City of Sanford City of Sanford, Florida
Finance Corporation Sanford, Florida
Sanford, Florida
Ladies and Gentlemen:
The undersigned William R. Hough & Co. (hereinafter referred
to as the "Underwriter"), offers to enter into the following
certificate purchase contract (the "Purchase Contract") with the
City of Sanford Finance Corporation (herein referred to as the
"Issuer"), and the City of Sanford, Florida (the "City") which upon
your mutual acceptance hereof will be binding upon each of you and
the Underwriter. This offer is made subject to your acceptance by
execution of this Purchase Contract and its delivery to the
Underwriter on or before 11:59 P.M., Eastern Standard time, on the
date hereof, and, if not so accepted, will be subject to withdrawal
by the Underwriter upon notice delivered to you at any time prior
to the acceptance hereof by you.
1. Upon the terms and conditions and the respective
representations, warranties and agreements hereinafter set forth,
the Underwriter hereby agrees to purchase from the Issuer for
offering to the public, and the Issuer hereby agrees to sell to the
Underwriter for such purpose, all (but not less than all) of
$3,385,000 aggregate principal amount of the Issuer's Certificates
of Participation (1989 City of Sanford Project) (the "Certif-
icates"). The Certificates shall be dated as of December 1, 1989
and shall have the maturities, bear interest at the rates, and be
subject to redemption as set forth in Exhibit A hereto. Such
interest shall be payable commencing on April 1, 1990 and on each
October 1 and April 1 thereafter. The Certificates shall be
purchased for an aggregate purchase price of $3,303,892.55 (par
amount of the Certificates, less Underwriter's Discount of $60,930,
and less Original Issue Discount of $20,177.45), plus accrued
interest on the Certificates from December 1, 1989 to the date of
Closing (hereinafter defined). In order to induce the Issuer to
sell the Certificates and to induce the Underwriter to purchase the
Certificates the City has joined and entered into this Purchase
Contract. A copy of the disclosure statement required by Section
218.385, Florida Statutes, is attached hereto as Exhibit B.
2. The Certificates shall be otherwise as described in the
Official Statement of the Issuer, dated the date hereof, relating
to the Certificates (which, together with all reports and appen-
dices contained therein, and with such changes therein and
supplements thereto which are consented to in writing by the
Underwriter and the Issuer, is herein called the "Official
Statement"), and shall be issued pursuant to the provisions of
Chapter 166, Part II, Florida Statutes and other applicable
provisions of law and that certain Trust Indenture dated as of
December 1, 1989 (the "Indenture") by and between the Issuer and
Florida National Bank, as trustee (the "Trustee"). Certain
capitalized terms used herein shall have the meaning set forth in
the Indenture. The Certificates have been authorized and sold
pursuant to certain resolutions of the Issuer (collectively, the
"Resolution"). The proceeds of the Certificates will be used to
acquire and construct the Project, to fund the Reserve Fund in an
amount equal to the Reserve Fund Requirement, and to pay certain
costs of issuing and delivering the Certificates. At or prior to
the delivery of the Certificates, the Issuer will enter into, with
the City, that certain Lease Agreement with Option to Purchase
dated as of December 1, 1989 (the "Lease") pursuant to which the
City has covenanted to make Basic Rent Payments, subject to an
Event of Non-Appropriation, sufficient to pay the debt service on
the Certificates. Pursuant to an Assignment of Leases, Rents and
Profits, dated as of December 1, 1989 (the "Assignment") the
Corporation will assign all of its right, title and interest in and
to amounts payable under the Lease (except the right to receive
payment of certain fees and expenses) to the Trustee for the
benefit of the owners of the Certificates. The fire station
portion of the Project to be financed with the Proceeds of the
Certificates will be located on land presently owned by the City.
The land on which the fire station portion of the Project will be
constructed will be leased to the Corporation by the City pursuant
to a Ground Lease dated as of December 1, 1989 (the "Ground Lease")
between the City and the Corporation, and subleased back to the
City pursuant to the Lease.
Pursuant to a Leasehold Mortgage and Security Agreement dated
as of December 1, 1989 (the "Mortgage") the Corporation has
mortgaged to the Trustee all of its right, title and interest in
the Ground Lease and the improvements to be located on the land
subject to the Ground Lease.
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3. The Underwriter represents that (a) it is duly autho-
rized to execute this Purchase Contract and that it has full
authority to take such action as it may deem advisable with respect
to all matters pertaining to this Purchase Contract; and (b) it is
registered under the Securities Exchange Act of 1934 as a municipal
securities dealer.
4. The Underwriter agrees to make a bona fide public offering
of all the Certificates initially at the public offering prices (or
yields) set forth on the cover page of the Official Statement.
Subsequent to the initial public offering, the Underwriter reserves
the right to change the public offering prices (or yields) as they
deem necessary in connection with the marketing of the Certifi-
cates. The Certificates may be offered and sold to certain dealers
(including the Underwriter and other dealers depositing such
Certificates into investment trusts) at prices lower than such
initial public offering prices.
5. As soon as may be practicable following the execution of
this Purchase Contract by the parties hereto the Issuer shall
deliver to the Underwriter such reasonable number of copies of the
Official Statement, duly executed, as the Underwriter shall
request. The Issuer authorizes the use of copies of the Official
Statement and the Preliminary Official Statement dated November 30,
I989 (the "Preliminary Official Statement") in connection with the
public offering and sale of the Certificates.
The Issuer agrees to make no amendments to the Official
Statement without the prior written consent of the Underwriter.
6. (A) The Issuer hereby represents and warrants to the
Underwriter that:
(1) As Of the date hereof, and at the date of the
Closing, the Issuer is, and will be at the date of the
Closing, validly existing and in good standing as a not-
for-profit corporation, under the laws of the State of
Florida, and any supplements or amendments to either, and
is authorized to do business in the State of Florida, and
is authorized to borrow money through the issuance of the
Certificates and is authorized to enter into the Lease
the Ground Lease, the Assignment, the Mortgage and the
Indenture.
(2) As of the date hereof and at the date of the
Closing, the Issuer has not been notified of any listing
or proposed listing by the Internal Revenue Service to
the effect that it is a bond issuer whose arbitrage
certificates may not be relied upon.
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(3) As of the date hereof and at the date of the
Closing, the Issuer is not in default, and has not been
in default at any time after December 31, 1975, as to
principal or interest with respect to an obligation
issued or guaranteed by the Issuer.
(4) As of the date hereof and at the date of the
Closing, (i) the Issuer will have taken all action
required to be taken by it to authorize the issuance and
delivery of the Certificates; (ii) the Issuer has, and
at the date of the Closing will have, full legal right,
power and authority to enter into this Purchase Contract,
the Indenture, the Lease, the Assignment, the Mortgage
and the Ground Lease and to adopt the Resolution; (iii)
the Issuer at the date of the Closing will have full
legal right, power and authority to issue and deliver the
Certificates to the Underwriter and to perform its
obligations as provided in the Indenture, this Purchase
Contract and the Certificates, and to carry out and
effectuate its obligations as contemplated by this
Purchase Contract, the Indenture, the Lease, the Assign-
ment, the Mortgage and the Ground Lease; (iv) the
execution and/or the delivery of this Purchase Contract,
the Certificates, the Indenture, the Lease, the Assign-
ment, the Mortgage and the Ground Lease and the consumma-
tion of its obligations contemplated hereby and thereby
have been duly authorized; (v) this Purchase Contract
has been, and, at or prior to the Closing, the Indenture,
the Lease, the Ground Lease, the Assignment, the Mortgage
and the Certificates will have been, duly executed by the
Issuer, and delivered by the Issuer and constitute, or
when executed and delivered by all other parties thereto
will constitute, valid and legally binding obligations
of the Issuer enforceable against it in accordance with
their respective terms, subject to any applicable
bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights generally,
or general principles of equity; and (vi) the issuer has
duly ratified and approved the distribution of the
Preliminary Official Statement and duly authorized and
approved the execution and distribution of the Official
Statement.
(5) As of the date hereof and at the date of the
Closing, no further consent, approval, authorization or
order of, or filing, registration or declaration with,
any court or governmental agency or body is required for
the issuance, delivery or sale of the Certificates or the
consummation of the other transactions affected by or
contemplated for the issuance of the Certificates, except
for such actions as may be necessary to be taken to
qualify the Certificates for offer and sale under the
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Blue Sky or other securities laws and regulations of such
states and jurisdictions of the United States as the
Underwriter may designate.
(6) The information relating to the Issuer con-
tained in the Official Statement is, and as of the
Closing date will be, true and correct in all material
respects, and the Official Statement does not and will
not contain any untrue or misleading statement of a
material fact relating to the Issuer or omit to state any
material fact relating to the Issuer necessary to make
the statements therein, in the light of the circumstan-
ces under which they were made, not misleading. Any
amendments or supplements to the Official Statement will
not contain any untrue or misleading statement of a
material fact relating to the Issuer or omit to state any
material fact relating to the Issuer necessary to make
the statements therein, in the light of the circumstances
under which they were made, not misleading.
(7) As of the date hereof and at the date of the
Closing, the issuance of the Certificates, the execution or
endorsement, delivery and performance of the Certificates,
this Purchase Contract, the Indenture, the Lease, the Assign-
ment, the Mortgage and the Ground Lease and compliance with
the provisions hereof and thereof, where applicable, by the
Issuer will not conflict with or constitute on the part of the
Issuer a breach of, or a default under, any existing law,
charter, ordinance, regulation, decree, order or resolution,
or any agreement, indenture, mortgage, lease or other instru-
ment, to which the Issuer is subject or by which it is bound.
(8) As of the date hereof and at the date of the
Closing, except as disclosed in the Official Statement,
there is no action, suit, proceeding or investigation at
law or in equity before or by any court, public board or
body, pending or (to the knowledge of the Issuer)
threatened against the Issuer: (i) affecting the
existence of the Issuer or challenging the respective
powers of the several offices of the officials of the
Issuer or the titles of the officials holding those
respective offices; or (ii) seeking to restrain or enjoin
the issuance or delivery of any of the Certificates, or
contesting or affecting the validity or enforceability
of the Certificates, this Purchase Contract, the Inden-
ture, the Lease, the Assignment, the Mortgage or the
Ground Lease; or (iii) in which a final adverse decision
would declare this Purchase Contract to be invalid or
unenforceable in whole or in material part.
(9) As of the date hereof, the Issuer has not taken
and at the date of the Closing the Issuer will not have
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taken any action which would cause the Certificates not
to conform in all material respects to the description
thereof contained in the Official Statement.
(10) The Issuer will furnish such information,
execute such instruments and take such other action,
including the execution of related instruments, if
necessary in cooperation with the Underwriter as the
Underwriter may reasonably request in order (i) to
qualify the Certificates for offer and sale under the
Blue Sky or other securities laws and regulations of such
states and other jurisdictions of the United States as
the Underwriter may designate, (ii) to determine the
eligibility of the Certificates for investment under the
laws of such states, and (iii) to continue such qualifi-
cations in effect so long as required for distribution
of the Certificates, except that this provision shall not
be construed to require the Issuer to consent to or
subject itself to the jurisdiction of the courts of any
state other than Florida.
(B) As of the date hereof and at the date of the Closing the
City hereby represents and warrants to the Underwriter that (i) the
City is a municipal corporation of the State of Florida; (ii) the
City has all the legal and necessary power and authority to enter
into the Lease, and the Ground Lease, and to execute the certifi-
cates and agreements necessary to effectuate the Closing and to
execute this Purchase Contract; (iii) as of the date of the
Closing, the City will hold full legal unencumbered title in fee
simple to the land subject to the Ground Lease; (iv) the City has
no reason to believe that the Official Statement contains an untrue
statement of material fact required to be stated therein or
necessary to make the statements therein, in light of the cir-
cumstances under which they were made, not misleading; (v) the City
has not been or is not in default as to principal and interest on
any obligation to which the City has been or is a party including
any obligation which the City has guaranteed; (vi) neither the
execution and delivery of the Lease, or the Ground Lease, nor the
consummation of the transactions contemplated therein or the
compliance with the provisions thereof, will conflict with, or
constitute on the part of the City a violation of, or a breach of
or default under, any statute, indenture, mortgage, commitment,
note or other agreement or instrument to which the City is a party
or by which the City is bound, or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over
the City or any of its activities or properties; (vii) all con-
sents, approvals, authorizations and orders of governmental or
regulatory authorities which are required for the City's execution
and delivery of, consummation of the transactions contemplated by
and compliance with the provisions of this Purchase Contract, the
Lease and the Ground Lease, have been obtained; (viii) except as
may be disclosed in the Official Statement, there is no action,
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suit, proceeding, inquiry or investigation, at law or in equity,
before or by any court, public board or body, pending or, to the
best knowledge of the City, threatened against or affecting the
City, its legal existence, or the actions taken or contemplated to
be taken by it, nor, to the best knowledge of the City, is there
any basis therefor, wherein an unfavorable decision, ruling or
finding would materially adversely affect the transactions con-
templated by, or which, in any way, would adversely affect the
validity or enforceability of, this Purchase Contract, the Lease
or the Ground Lease, or the City's receipt of any of its Non Ad-
Valorem Revenues in the amounts which such Non Ad-Valorem Revenues
are currently being received; (ix) subsequent to the date of the
audited financial statements for the City's fiscal year ended
September 30, 1988 there have been no material adverse changes in
the financial condition of the City, and neither the business, the
properties, nor the affairs of the City have been adversely
affected in any substantial way as the result of any fire, ex-
plosion, accident, strike, riot, flood, windstorm, earthquake,
embargo, war or act of God or of the public enemy; and (x) the City
will furnish such information as the Underwriter may reasonable
request in order (a) to qualify the Certificates for offer and sale
under the Blue Sky or other securities laws and regulations of such
states and other jurisdictions of the United States as the Under-
writer may designate and (b) to determine the eligibility of the
Certificates for investment under the laws of such states, except
that the City will not be required to consent to or subject itself
to the jurisdiction of the Courts, if any state other than Florida.
6. At 11:00 a.m., EST, on December 20, 1989, or at such
other time or on such earlier or later business day as shall have
been mutually agreed upon by the parties to this Purchase Contract
(the "Closing"), the Issuer will deliver to the Underwriter at the
offices of Parker, Johnson, Owen, McGuire, Michaud, Lang & Kruppen-
bacher, P.A., Orlando, Florida or such other place as may be
designated by the Underwriter, the Certificates in definitive form,
duly executed and authenticated, together with the other documents
hereinafter mentioned; and the Underwriter will accept such
delivery and pay the purchase price thereof by federal funds to the
order of the Trustee for the account of the Issuer.
7. The Underwriter has entered into this Purchase Contract
in reliance upon the representations and warranties of the Issuer
and the City contained herein, and the performance by the Issuer
and the City of their respective obligations hereunder, both as of
the date hereof and at the date of the Closing. The Underwriter's
obligations under this Purchase Contract are and shall be subject
to the following further conditions as of the date of the Closing:
(A) The representations and warranties of the Issuer and the
City contained herein shall be true, complete and correct in all
material respects at the date hereof and at the date of the
Closing, and the statements made in all certificates and other
7
documents delivered at the Closing pursuant hereto shall be true,
complete and correct in all material respects on the date of the
Closing; and the Issuer and the City shall be in compliance with
each of their respective agreements contained in this Purchase
Contract.
(B) At the date of the Closing (i) the Official Statement,
this Purchase Contract, the Indenture, the Lease, the Ground Lease,
the Assignment, the Mortgage, and the Resolution shall be in full
force and effect and shall not have been amended, modified or
supplemented except as may have been agreed to in writing by the
Underwriter; (ii) the proceeds of the sale of the Certificates
shall be applied as set forth in the Official Statement and the
Indenture; and (iii) all actions which, in the opinion of Bryant,
Miller and Olive, P.A. Tallahassee, Florida ("Special Counsel"),
shall be necessary, in connection with the transactions con-
templated hereby, shall have been duly taken and shall be in full
force and effect; and the Issuer, the City and the Trustee, shall
perform or have performed all of their respective obligations
required under or specified in the Indenture, the Resolution, the
Lease, the Ground Lease, the Assignment, the Mortgage, this
Purchase Contract, or the Official Statement to be performed at or
prior to the date of the Closing.
(C) No decision, ruling or finding shall have been entered
by any court or governmental authority since the date of this
Purchase Contract (and not reversed on appeal or otherwise set
aside) which has any of the effects described in Section 7(D)
hereof.
(D) The Underwriter shall have the right to cancel its
obligations to purchase the Certificates, by written notice from
the Underwriter to the Issuer and the City if between the date
hereof and the date of the Closing: (i) any event shall occur
which, in the reasonable professional judgment of the Underwriter,
makes untrue any statement of a material fact set forth in the
Official Statement or results in an omission to state a material
fact necessary to make the statements therein, in light of the cir-
cumstances under which they are made, not misleading; or (ii) the
market for the Certificates or the market price of the Certificates
or the ability of the Underwriter to enforce contracts for the sale
of the Certificates shall have been materially and adversely
affected, in the reasonable professional judgment of the Under-
writer, by (a) legislation introduced in or enacted by the Congress
of the United States, or recommended to the Congress for passage
by the President of the United States, or favorably reported for
passage to either House of Congress by any Committee of such House,
or passed by either House of Congress, or a decision rendered by
a court of the United States or the United States Tax Court, or a
ruling issued or a regulation proposed or promulgated or other
statement made by the Treasury Department of the United States or
the Internal Revenue Service or an official of either of them, with
8
respect to the status, for federal income tax purposes, of interest
received on obligations of the general character of the Certifi-
cates, which, in the opinion of Special Counsel or of Counsel to
the Underwriter has, will or may have, an adverse effect upon the
federal income tax status of interest on the Certificates or on the
marketability or market price of the Certificates; or (b) legisla-
tion enacted by the Congress of the United States of America, or
a decision by a court of the United States of America rendered or
a determination by Counsel to the Underwriter or Special Counsel,
to the effect that obligations of the general character of the
Certificates, or the Certificates, including all the underlying
obligations and guarantees, are not exempt from registration under
the Securities Act of 1933, as amended and as then in effect, or
the Securities Exchange Act of 1934, as amended and as then in
effect, or that the Indenture is not exempt from qualification
under or other requirements of the Trust Indenture Act of 1939, as
amended and as then in effect; or (c) a stop order, ruling,
regulation or official statement, by, or on behalf of, the
Securities and Exchange Commission or any other governmental agency
having jurisdiction of the subject matter to the effect that the
issuance, offering or sale of obligations of the general character
of the Certificates, or the issuance, offering or sale of the
Certificates, including all underlying obligations, as contemplated
hereby or by the Official Statement, is in violation or would be
in violation of any provision of Federal securities laws, including
the Securities Act Of 1933, as amended and as then in effect, or
the registration provisions of the Securities Exchange Act Of 1934,
as amended and as then in effect, or the qualification provisions
of the Trust Indenture Act of 1939, as amended and as then in
effect; or (d) any legislation, ordinance, rule or regulation
introduced in or enacted by any governmental body, department or
agency in the State of Florida or any other state of the United
States, or a decision by any court of competent jurisdiction within
the State of Florida or any other state of the United States or an
opinion of the Attorney General of the State of Florida which, in
the opinion of Counsel to the Underwriter, would cause the sale,
marketing or issuance of the Certificates, without registration
under the securities laws of any state of the United States, to
violate any law of any state of the United States which registra-
tion has not been noted to the Underwriter as of the date hereof
for the states of the United States identified as material by the
Underwriter or would materially adversely affect the marketability
of market price of the Certificates; or (e) a general suspension
of trading on the New York Stock Exchange, or fixing Of minimum or
maximum prices for trading or maximum ranges for prices for
securities on the New York Stock Exchange, whether by virtue of a
determination by that exchange or by order of the Securities and
Exchange Commission or any other governmental authority having
jurisdiction; or (f) a general banking moratorium declared by
either federal or New York or Florida authorities having jurisdic-
tion; or (g) any fact shall exist or any event shall have occurred
which, in the reasonable opinion of the Underwriter, makes the
9
Official Statement, in the form as originally approved, contain an
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not mislead-
ing; or (h) there shall have occurred any outbreak of hostilities
or any national or international calamity or crisis, financial or
otherwise, including a general suspension of trading on any
national securities exchange, which, in the reasonable opinion of
the Underwriter, materially adversely affects the market for the
Certificates or the sale, at the contemplated offering prices, by
the Underwriter of the Certificates to be purchased by them; or (i)
any anticipated rating of the Certificates shall have been down-
graded or withdrawn by a national rating service which, in the
Underwriter's reasonable opinion, materially adversely affects the
market for the Certificates or the sale of the Certificates, at the
contemplated offering prices, or trading in any securities of the
Issuer or the City shall have been suspended on any national
securities exchange; or any proceeding shall be pending or threat-
ened by the Securities and Exchange Commission against the Issuer
or the City; or (j) any litigation shall be instituted, pending or
threatened to restrain or enjoin the issuance, sale or delivery of
the Certificates or in any way contesting or affecting any
authority for or the validity of the Certificates, the security and
sources of payment therefor, or any of the proceedings of the
Issuer or the City taken with respect to the issuance or sale
thereof.
(E) At or prior to the date of the Closing, the Underwriter
shall receive the following documents each dated on and as of the
date of the Closing:
(1) (A) An approving opinion of Special Counsel,
substantially in the form attached as Appendix E to the
Official Statement and, if such approving opinion is not
addressed to the Underwriter, a letter of such counsel
addressed to the Underwriter to the effect that the
approving opinion of Special Counsel addressed to the
Issuer may be relied upon by the Underwriter as if such
opinion were addressed to them.
(B) Asupplemental opinion of Special Counsel
addressed to the Underwriter, in form and substance
satisfactory to the Underwriter, that (1) while they have
not been retained to and are not passing on or assuming
any responsibility for the accuracy, completeness or
fairness of the statements contained in the Official
Statement except as expressly provided in their opinion,
the statements contained in the Official Statement under
the headings "Description of the Certificates", "The
Lease-Purchase Program", "Security and Sources of
Payment", "Tax Exemption" and Appendix A - The Principal
Documents, insofar as they constitute conclusions of law,
10
legal opinions, or descriptions of legal documents, or
the Certificates fairly present the information purported
to be described therein, and do not omit to state a
material fact necessary in order to make the statements
therein, in light of the circumstances under which they
were made, not misleading, and except as expressly
provided in such opinion they have necessarily assumed
the fairness, correctness and completeness of the
materials set forth in the Official Statement (including
but not limited to financial or statistical data relating
to the Issuer and the City), (2) the Certificates are
exempt from the registration provisions of the Securities
Act of 1933, as amended, and the Indenture is not
required to be qualified under the Trust Indenture Act
of 1939, as amended, (3) the Trust Estate has been duly
and validly assigned to the Trustee under the Indenture
and the Indenture creates as security for the Certifi-
cates a valid security interest in the Trust Estate, (4)
the Certificates are "qualified tax-exempt obligations"
within the meaning of section 265 (b)(3) of the Internal
Revenue Code of 1986, and (5) that any original issue
discount of the Certificates is excluded from gross
income for federal income tax purposes.
(2) The opinion of Stenstrom, McIntosh, Julian,
Colbert, Whigham & Simmons, P.A. counsel to the Issuer,
dated the date of Closing and addressed to the Issuer,
Special Counsel and the Underwriter, to the effect that:
(i) The Issuer is a not-for-profit corporation
duly organized, validly existing and in good standing
under the laws of the State of Florida;
(ii) The Issuer has full legal right, power and
authority to conduct its business and (a) to issue, sell
and deliver the Certificates for the purposes described
in the Official Statement, (b) to execute and deliver the
Official Statement, (c) to enter into the Indenture, the
Lease, the Ground Lease, the Mortgage, the Assignment and
this Purchase Contract, (d) to pledge its interest in the
Lease to the Trustee as provided in the Indenture, and
(e) to carry out the transactions contemplated by the
Indenture, the Lease, the Ground Lease, the Mortgage, the
Assignment, the Official Statement and this Purchase
Contract;
(iii) The Certificates have been duly authorized,
executed and delivered by the Issuer and constitute valid
and legally binding limited obligations of the Issuer
secured by the Indenture;
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(iv) The Indenture, the Lease, the Ground Lease,
the Mortgage, the Assignment and this Purchase Contract
have been duly authorized, executed and delivered by and
on behalf of the Issuer and, assuming the due execution
by the other parties thereto, constitute the valid,
binding and enforceable obligations of the Issuer, except
as such enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights
generally, and by the application of equitable prin-
ciples;
(v) The Issuer has duly authorized, executed and
delivered and approved the distribution of the Official
Statement by the Underwriter in connection with the sale
of the Certificates;,
(vi) The information contained in the Official
Statement under the captions "The Corporation" and
"Litigation" as it relates to the Issuer does not contain
any untrue statement of a material fact and does not omit
to state any material fact required to be stated therein
or necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading;
(vii) While Counsel to the Issuer has made no
independent investigation with respect thereto, nothing
has come to their attention which would lead them to
believe that any other portions of the Official Statement
contain an untrue statement of a material fact or fail
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;
(viii) There is no action, suit or proceeding or
investigation at law or in equity before or by any court,
public board or public body, pending or threatened
against or affecting the Issuer (or to their knowledge
any basis therefor) wherein an unfavorable decision,
ruling or finding would adversely affect the Issuer, the
transactions contemplated by the Official Statement or
the validity or enforceability of the Certificates, the
Indenture, the Lease, the Ground Lease, the Assignment,
the Mortgage or this Purchase Contract;
(ix) The execution and delivery of the Certifi-
cates, the Indenture, the Lease, the Official Statement,
the Ground Lease, the Assignment, the Mortgage and this
Purchase Contract and the compliance with the provisions
thereof, under the circumstance contemplated thereby, do
12
not and will not conflict with or constitute on the part
of the Issuer a violation of, breach of or default under
any agreement or other instrument to which the Issuer is
a party or by which the Issuer or its property is bound,
any resolution including the Resolution adopted by the
Issuer, the Issuer's articles of incorporation or bylaws,
or any constitutional provisions, statute or law, or any
rule, regulation, order or decree to which the Issuer is
subject; and
(x) All consents, approvals and authorizations
of governmental or public authorities required to be
obtained by the Issuer in connection with the execution
and delivery and for the consummation by the Issuer of
the transactions contemplated by this Purchase Contract,
the Indenture, the Lease, the Ground Lease, the Assign-
ment, the Mortgage, the Official Statement and the
Certificates have been obtained.
(3) The opinion of Stenstrom, McIntosh, Julian, Colbert,
Whigham & Simmons, P.A., counsel to the City, addressed to the
City, Special Counsel and the Underwriter to the effect that:
(i) The City is a municipal corporation duly
existing under the Constitution and laws of the State of
Florida;
(ii) The City has full legal right, power and
authority to enter into the Lease, the Ground Lease, and
this Purchase Contract and to carry out and consummate
all transactions contemplated thereby;
(iii) The City has duly approved and authorized
distribution of the Official Statement;
(iv) The Lease, the Ground Lease, and this
Purchase Contract have each been duly authorized,
executed and delivered by the City and, when duly
authorized, executed and delivered by the other parties
thereto, will constitute the valid, binding and enforce-
able agreements of the City in accordance with their
respective terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights generally
and by general principles of equity;
(v) Except as described in the Official State-
ment, 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
or threatened against or affecting the City wherein any
unfavorable decision, ruling or finding would materially
13
adversely affect the validity or enforceability of, or
the transactions contemplated under, the Lease, the
Ground Lease, the Purchase Contract, the Indenture, the
Assignment, the Mortgage or the Certificates or would
materially adversely affect the operations or financial
condition of the City;
(vi) The execution and delivery of this Purchase
Contract, the Lease and the Ground Lease and compliance
with the provisions of each do not and will not conflict
with or constitute a breach of or default under any
applicable law or administrative regulation of the State
or the United States or any applicable, judgment or
decree or any trust agreement, loan agreement, bond,
note, resolution, ordinance, agreement or other instru-
ment to which the CIty is a party or is otherwise
subject;
(vii) Nothing has come to the attention of such
counsel that would lead him to believe that the Official
Statement as of its date or as of the date of Closing
contains anyuntrue statement of a material fact or omits
to state a material fact necessary to make the statements
therein, in the light of the circumstances under which
they were made, not misleading;
(viii) No consent, waiver Or any other action by
any person, board or body, public or private, other than
the approval of the City which has been duly and validly
obtained, is required as of the date of the Closing for
the City to execute and deliver the Purchase Contract,
the Lease, the Ground Lease or to perform its obligations
under any of the foregoing;
(ix) The information contained in the Official
Statement under the captions, "The City", "The Project",
"Certain Non Ad-Valorem Revenues of the City" and
"Litigation" as it relates to the City does not contain
any untrue statement of a material fact and does not omit
to state any material fact required to be stated therein
or necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading;
(4) An opinion of Counsel to the Trustee in form and
substance satisfactory to Special Counsel and Counsel to the
Underwriter.
(5) An opinion of Parker, Johnson, Owen, McGuire,
Michaud, Lang & Kruppenbacher, P.A., Counsel to the Under-
writer in form and substance satisfactory to the Underwriter.
14
(6) A certificate signed by the President or an officer
or member of the Issuer and in form and substance satisfactory
to the Underwriter and to Special Counsel, to the effect that
(i) the representations of the Issuer contained herein are
true, complete and correct in all material respects; (ii) the
Indenture, the Lease, the Assignment, the Mortgage and the
Ground Lease have been entered into and are in full force and
effect; (iii) there is no action, suit, proceeding, investiga-
tion at law or in equity before or by any court, public board
or body, pending or, to his or her knowledge, threatened (a)
to restrain or enjoin the issuance, sale or delivery of any
of the Certificates or the payment, collection or application
of the proceeds thereof, (b) contesting or affecting the
authority for or the validity of the Certificates or the
validity of this Purchase Contract, the Indenture, the Lease,
the Assignment, the Mortgage or the Ground Lease or (c)
contesting the existence or powers of the Issuer to carry out
and effectuate the obligations contemplated by this Purchase
Contract, the Indenture, the Lease, the Assignment, the
Mortgage, the Ground Lease or the Official Statement; (iv) the
statements contained in the Official Statement under the
captions "The Corporation" and "Litigation" (as it pertains
to the Issuer), are true and accurate and they have no reason
to believe that said statements contain an untrue statement
of material fact or omit to state a material fact required to
be stated therein, in light of the circumstances under which
they were made, not misleading; (v) the Issuer is not in
default, and has not been in default at any time after
December 31, 1975, as to principal and interest with respect
to an obligation issued or guaranteed by the Issuer or any
predecessor of the Issuer.
(7) A certificate of the Mayor or other representative
of the City to the effect that the representations of the City
contained herein are true, complete and correct in all
material respects; the City has all legal and necessary power
and authority to enter into the Lease, the Ground Lease, this
Purchase Contract, and other certificates and agreements
necessary to effectuate the Closing and to execute this
Purchase Contract and such documents at the date of the
Closing have been properly executed or endorsed, as the case
may be, and, assuming due execution or endorsement by the
other parties thereto such documents constitute valid, legal
and binding obligations of the City; and the information
contained in the Official Statement is true and accurate and
it has no reason to believe that said information contains an
untrue statement of 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, and to the best of her knowledge, no event
affecting the City has occurred since the date of the Official
Statement which should be disclosed in the Official Statement
15
for the purpose for which it is to be used, or which it is
necessary to disclose therein in order to make the statements
and information therein not misleading in any material
respect; the information contained in the Official Statement
under the captions "The Project, .... The City", "Certain Non Ad-
Valorem Revenues of the City", "Litigation" (as it affects
the City), andAppendix B - "General Information Regarding the
City of Sanford and Seminole County" is true and accurate and
that she has no reason to believe that said information
contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or neces-
sary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The
City is not in default, and has not been in default as to
principal and interest on any obligation to which the City has
been or is a party including any obligation which the City has
guaranteed.
(8) A certificate of arbitrage, signed by the President
or other appropriate officer of the Issuer in form and
substance satisfactory to Special Counsel and the Under-
writer.
(9) A certificate signed by an authorized officer of the
Trustee, in form and substance satisfactory to the Under-
writer, counsel to the Underwriter and Special Counsel, to the
effect that (~) the Trustee is a national banking association,
duly organized and validly existing under the laws of the
United States, (ii) the Trustee has the power to take all
action required of it under the Indenture, (iii) the represen-
tatives executing the Indenture and the Certificates on behalf
of the Trustee were at the time of such execution, and as of
the date of the Closing, authorized representatives of the
Trustee, and the signatures appearing after the names are true
and correct specimens of their genuine signatures, (iv) the
Trustee is authorized to act as Trustee and accept the duties
in connection with the Indenture and in so acting is in
violation of no provision of its Articles of Association or
By-Laws, or any law, regulation or court or administrative
order or any agreement or other instrument to which it is a
party or by which it may be bound, (v) attached to the
certificate as an exhibit is a true, complete and correct copy
of the By-Laws of the Trustee and/or resolution of the Board
of Directors of the Trustee and/or any other applicable
document which evidences the Trustee's powers, its right to
enter into the Indenture, and the authority of the officers
referred to above to act on behalf of the Trustee, and (vi)
that said By-Laws and/or resolution and/or other applicable
documents were in effect on the date or dates said officers
acted and remain in full force and effect on the Closing Date.
(10) An executed copy of the Indenture.
16
(11) An executed copy of the Lease.
(12) An executed copy of the Mortgage.
(13) An executed copy of the Assignment.
(14) Certified copies of the Articles of Incorporation
and Bylaws of the Issuer.
(15) An executed copy of the Ground Lease.
(16) Certified copies of the Resolution.
(17) Certified copies of all resolutions of the City
approving the execution of the Lease, the Ground Lease, and
the Purchase Contract and the Official Statement.
(18) Specimen Certificates.
(19) Evidence that the City has fee simple unencumbered
title to the land subject to the Ground Lease.
(20) A comfort and consent letter from Coopers & Lybrand,
dated as of the date of Closing, to the Underwriter, in the
form acceptable to the Underwriter and the City.
(21) The insurance policy issued by Municipal Bond
Investors Assurance Corporation ("MBIA") relating to the
Certificates in form and substance satisfactory to the
Underwriter.
(22) A certificate of MBIA or opinion of Counsel to MBIA,
dated the date of Closing, addressed to the Underwriter, in
form and substance satisfactory to the Underwriter, to the
effect that (A) MBIA is duly qualified to do business in the
State of Florida, (B) MBIA has full corporate power and
authority to execute and deliver the insurance policy for the
Bonds (the "Policy") and the Policy has been duly authorized,
executed and delivered by MBIA and constitutes a legal, valid
and binding obligation of MBIA enforceable in accordance with
its terms, (C) the statements contained in the Official
Statement under the heading "Municipal Bond Insurance,"
insofar as such statements constitute summaries of the matters
referred to therein, accurately reflect and fairly present the
information purported to be shown and, insofar as such
statements purport to describe MBIA fairly and accurately
describe MBIA, and (D) MBIA has not been in default after
December 31, 1975, as to principal or interest with respect
to any obligations insured by MBIA in the State of Florida.
17
(23) Such additional legal opinions, certificates,
proceedings, instruments and other documents as the
Underwriter or Special Counsel may reasonably request.
8. If the Issuer or the City shall be unable to satisfy the
conditions contained in this Purchase Contract, or if the obliga-
tions of the Underwriter shall be terminated for any reason
permitted by this Purchase Contract, this Purchase Contract shall
terminate and neither the Underwriter nor the Issuer shall be under
further obligation hereunder, except as set forth in Paragraph 9
hereof and except that the check referred to in Section 10 hereof
shall be returned to the Underwriter by the Issuer.
9. (a) The Issuer or the City shall pay or cause to be paid
any expenses incident to the performance of the Issuer's or the
City's obligations hereunder, .including but not limited to: (i)
the cost of preparation and reproduction of the Indenture; (ii) the
fees and disbursements of Special Counsel, Counsel to the Issuer,
Counsel to the City and Fishkind & Associates, Inc., as financial
advisor; (iii) the fees and disbursements of the Issuer and the
City; (iv) all expenses relating to the printing of CUSIP numbers
on the Certificates; (v) the cost of the preparation and printing
of the Certificates; (vi) the cost of preparation and printing of
the Preliminary Official Statement and Official Statement (vii) the
fees and expenses of the Trustee and its Counsel and (viii) all
other expenses in connection with the public offering of the
Certificates other than those set forth in the next paragraph.
(b) The Underwriter shall pay or cause to be paid: (i)
the fees and disbursements of Counsel to the Underwriter; (ii) the
expenses of advertising in connection with the public offering of
the Certificates; (iii) all other expenses incurred by them in
connection with their public offering and distribution of the
Certificates, and (iv) CUSIP fees.
10. The Issuer hereby acknowledges receipt of a corporate
check of William R. Hough & Co., payable to the order of the Issuer
for $33,750. If you accept this offer, the Issuer agrees to hold
said check uncashed until the Closing as security for the perfor-
mance by the Underwriter of its obligation to accept and pay for
the Certificates at the Closing, and in the event of its compliance
with such obligation, the Issuer agrees to return said check to the
Underwriter at the Closing. If you do not accept this offer, such
check shall be immediately returned to the Underwriter. In the
event of your failure to deliver the Certificates at the Closing,
or if you shall be unable at or prior to the date of the Closing
to satisfy the conditions of the obligations of the Underwriter
contained herein, or if the obligations of the Underwriter shall
be terminated for any reason permitted by this Purchase Contract,
such check shall be immediately returned to the Underwriter. If
the Underwriter fails (other than for reason permitted hereunder)
to accept and pay for the Certificates upon tender thereof by you
18
at the Closing as herein provided, such check may be retained by
the Issuer as and for full liquidated damages for such failure and
for any and all defaults hereunder on the part of the Underwriter,
and the retention of such amount shall constitute a full release
and discharge of all claims and damages for such failure and for
any and all such defaults. The Underwriter understands that in
such event your actual damages may be greater or may be less than
such sum. Accordingly, the Underwriter hereby waives any right to
claim that your actual damages are less than such sum, and your
acceptance of this offer shall constitute a waiver of any right you
may have to additional damages from the Underwriter.
11. Any notice or other communication to be given to the City
under this Purchase Contract may be given by delivering the same
in writing to the City Manager, City of Sanford, Florida, 300 North
Park Avenue, Sanford, Florida 32772-1778, or to such other person
as it may designate in writing, and any notice or other communica-
tion to be given to the Issuer under this Purchase Contract may be
given by delivering the same in writing to President, City of
Sanford Lease Finance Corporation, 200 West First Street, Sanford,
Florida 32771, or to such other person as it may designate in
writing, and any communication to be given to the Underwriter under
this Purchase Contract may be given by delivering the same in
writing to William R. Hough & Co., 100 Second Avenue, South, Suite
800, St. Petersburg, Florida 33701. The approval of the Under-
writer when required hereunder or the determination of its satis-
faction as to any document referred to herein shall be in writing
signed by a vice president thereof.
12. This Purchase Contract may be executed in multiple
counterparts, each of which shall be an original but all of which
together shall constitute but one and the same instrument.
13. This Purchase Contract when executed by the Underwriter
and the Issuer and the City shall constitute the entire agreement
among the Underwriter, the issuer and the City. Except as express-
ly set forth in Paragraph 9 hereof, no other person shall acquire
or have any right hereunder or by virtue hereof. All representa-
tions, warranties and agreements of the issuer, the City, and the
Underwriter in this Purchase Contract shall survive regardless of
(a) any investigation or any statement with respect thereto made
19
by or on behalf of the Underwriter, (b) delivery of and payment by
the Underwriter for the Certificates hereunder, and (c) any
termination of this Purchase Contract, unless such termination is
caused by the Underwriter~
Accepted and agreed to as of
the date first above written:
CITY OF SANFORD FINANCE (SEAL)
CORPORATION
CITY OF SANFORD, FLORIDA (SEAL)
20
~ 0o', Im -mnH I~q~,u ~E-m-H.IJ U-P gh
1~ .H q) lJ ua-HD .H ~ ~ 0 ,,Q(Dq) D~DEH
~OH-~G ,cEo E.~ m~moo ~ '~e
effective immediately, to the Certificate Owners pursuant to the
Indenture and the Outstanding CertifiCates shall each be redeemed
proportionally in part to the extent of such Net Proceeds (without
regard to Certificate Maturity Dates) in the relative proportion
that (a) the amount of the unpaid Certificate Principal Payments
represented thereby bears to (b) the aggregate amount of the unpaid
Certificate Principal Payments represented by all the Outstanding
Certificates.
Events of ExtraordinarV Redemption. If an Event of Default
has occurred under the Indenture and the Trustee has received
direction from MBIA to accelerate and redeem certificatesor if all
of the Project is lost, destroyed or damaged in its entirety due
to casualty or condemnation and the City elects not to repair,
replace or restore same as provided in the Agreement: an "Event of
Extraordinary Redemption in Whole" shall be deemed to have
occurred; and
If a portion of the Project is lost, destroyed or damaged due
to casualty or condemnation and the City elects not to repair,
replace or restore same as provided in the Agreement; or moneys on
deposit in the Project Fund are required to be used for prepayment
of Certificate Principal Payments pursuant to the Indenture and the
Agreement: an "Event of Extraordinary Redemption in Part" shall be
deemed to have occurred.
Upon the occurrence of an Event of Extraordinary Redemption
in Whole, all Outstanding Certificates or an Event of EXtraordinary
Redemption in Part, a portion of the Outstanding Certificates,
shall be subject to mandatory redemption on any date following
notice given immediately by the Trustee. The Redemption Date with
respect to such a redemption shall be within fifteen (15) days
after issuing such notice.
With respect to an Event of Extraordinary Redemption in Part,
Certificates representing aggregate Certificate Principal Payments
equal in amount to the aggregate outstanding Basic Rent being
prepaid under the Agreement shall be paid. The amount of
Certificate Principal Payments represented by Outstanding
Certificates of each Certificate Principal Payment Date to be so
redeemed shall equal the amount of aggregate Basic Rent due under
the Agreement with respect to such Certificate Principal Payment
Date.
Event of Special Mandatory Redemption. In the event that
following an Event of Default hereunder, MBIA directs the Trustee
to liquidate the Project, or any portion thereof pursuant to the
Indenture, the Net Proceeds of such liquidation plus all other
amounts legally available (together with the moneys then held by
the Trustee in the Funds hereunder) shall be applied by the Trustee
to pay the Certificate Principal Payments, together with accrued
interest thereon through the date of such redemption, on the
Outstanding Certificates. Upon such direction, the Trustee shall
give immediate written notice, effective immediately, to
Certificate Owners of an "Event of Special Mandatory Redemption"
pursuant to the Indenture and the Outstanding Certificates shall
be redeemed in whole, without premium or penalty.
EXHIBIT B
December 6, 1989
Board of Directors Mayor and City Commissioners
City of Sanford City of Sanford
Finance Corporation Sanford, Florida
Sanford, Florida
Re: CITY OF SANFORD FINANCE CORPORATION CERTIFICATES OF
PARTICIPATION (1989 CITY OF SANFORD PROJECT)
Ladies and Gentlemen:
In connection with the proposed issuance by the City of
Sanford Finance Corporation (the "Issuer") of its $3,385,000
Certificates of Participation (1989 City of Sanford Project)
hereinafter referred as (the "Certificates"), William R. Hough &
Company (the "Underwriter") has agreed to underwrite a public
offering of the Certificates. Arrangements for underwriting the
Certificates include a Certificate Purchase Contract between the
Issuer, the City of Sanford (the "City") and the Underwriter which
will embody the negotiations in respect thereof.
The purpose of this letter is to furnish, pursuant to the
provisions of Section 218.385(4), Florida Statutes, certain
information in respect of the arrangements contemplated for the
underwriting of the Certificates as follows:
(a) The nature and estimated amounts of expenses to be
incurred by Underwriter, in connection with the issuance
of the Certificates, are set forth in Schedule I attached
hereto.
(b) No person has entered into an understanding with the
Underwriter, or to the knowledge of the Underwriter, with
the Issuer or the City for any paid or promised compensa-
tion or valuable consideration, directly or indirectly,
expressly or implied, to act solely as an intermediary
between the Issuer and the Underwriter or the City and
the Underwriter or to exercise or attempt to exercise any
influence to effect any transaction in the purchase of
the Certificates.
(c) The amount of underwriting spread expected to be realized
is as follows and includes the management fee indicated:
(Per $1,000~
Sales Credit $ 6.65*
Underwriting Risk 1.00
Management Fee 3.50
Underwriter's Expenses 6.85'
Total Underwriting Spread $18.00
* Approximate dollar per Certificate
(d) No other fee, bonus or other compensation is estimated
to be paid by the Underwriter in connection with the
issue of the Certificates, to any person not regularly
employed or retained by the Underwriter, (including any,
"finder" as defined in Section 218.386(1)(a), Florida
Statutes, as amended), except as specifically enumerated
as expenses to be incurred and paid by the Underwriter,
as set forth in Schedule I attached hereto.
We understand that you do not require any further disclosure
from the Underwriter, pursuant to Section 218.385(4), Florida
Statutes, as amended.
WILLIAM R. HOUGH & COMPANY
100 Second Avenue, South
Suite 800
St. Petersburg, Florida 33701
By:
Vice President
SCHEDULE I
$3,385,000
CITY OF SANFORD FINANCE CORPORATION
CERTIFICATES OF PARTICIPATION
(1989 CITY OF SANFORD PROJECT)
EVIDENCING FRACTIONAL UNDIVIDED INTERESTS OF
THE OWNERS THEREOF IN BASIC RENT PAYMENTS TO BE
MADE UNDER A LEASE AGREEMENT WITH OPTION TO
PURCHASE ISSUED BY THE CITY OF SANFORD, FLORIDA
Underwriters' Expenses
(Per $1,000
Of Certificate) Total
Clearance $.50 $1,692.50
Federal Funds Wire .28 947.80
Reproduction, Courier Service,
Communication .35 1,184.75
Computer Costs 1.00 3,385.00
PSA/MSRB/CUSIP .05 169.25
Underwriters' Counsel Fee
and Expenses 3.00 10,155.00
Travel, Closing, Day Loan
and Miscellaneous Expenses 1.67' 5,663.20
TOTAL UNDERWRITERS' EXPENSES: $6.85 $23,197.50
*Approximate dollar per Certificate
Municipal Band .rivestots
Assurance Corporation
113 King Street
Armonk, NY 10504
914 273 4545
VIA COURIER
December 15, 1989
Mr. Frank A. Faison, City Manager
City of Sanford, Florida
300 North Park Avenue
Sanford, FL 32772-1778
RE: $3,385,000 Certificates Of Participation (1989 City of Sanford Project)
Evidencing Fractional Undivided Interests Of the Owners, Thereof in Basic
Rent Palanents to be Made under a Lease Agreement with Option to Purchase
Issued by the City of Sanford, Florida
Dear Mr. Faison:
Enclosed please find Municipal Bond Investors Assurance Corporation's two
(revised as of December 15, 1989) executed Commitments issued for the captioned
issue. Please note that the conditions must be met prior to the Policy being
released by Municipal Bond Investors Assurance Corporation. All materials and
questions regarding the conditions should be directed to the attention of Pam
Peters, whose direct dlal telephone number is (914) 765-3503. Please sign both
Commitments and return one to our offices in the enclosed self-addressed
st~.ped envelope. The second Commitment should be retained for your files.
The premium payment in the amount of $29,000 (.55% premium rate) of $5,249,380
(total. debt service)], premium rounded to the nearest $1,000, due at the
closing of the issue, should be wired to our account with Citibank, N.A., New
York, New York on the day of closing. Municipal Bond Investors Assurance
Corporation's account number is 30261594. The Bank's number is ABA~
021000089. The rating fee in the amount Of $7,500 should be made payable to
Municipal Bond Investors Assurance Corporation. A legal fee of $5,000 should
be made payable to Kutak Rock and Campbell.
We would like to request a copy of the final debt service schedule for this
issue. We would also appreciate receiving three copies of the final official
statement and three executed unbound copies of the closing transcripts when
they are available.
Thank you for your cooperation concerning these matters. If you have any
questions, please contact our offices.
Sincerely,
Cathleen M. Murray
Documentation and Closing Department
Direct Dial: 914 765-3937
Enclosures
cc: Distribution List
REVISED AS OF DECEMBER 15, 198b
COMMITMENT TO ISSUE A
FINANCIAL GUARANTY INSURANCE POLICY
Application No.: 89-09-6561
Sale Date: December 6, 1989
Program Type: Negotiated DP
RE: $3,385,000 Certificates of Participation (1989 City of Sanford Project)
Evidencing Fractional Undivided Interests of the Owners, Thereof in
Basic Rent Payments to be Made under a Lease Agreement with Option to
Purchase Issued by the City of Sanford, Florida
(the "Obligations")
This commitment to issue a financial guaranty insurance policy (the
"Commitment") dated December 15, 1989, constitutes an agreement between CITY
OF SANFORD, FLORIDA (the "Applicant"), and MUNICIPAL BOND INVESTORS ASSURANCE
CORPORATION (the "Insurer"), a stock insurance company incorporated under the
laws of the State of New York.
Based On an approved application dated October 31, 1989, the Insurer
agrees, upon satisfaction of the conditions herein, to issue on the earlier of
(i) 120 days of said approval date or (ii) on the date of delivery of and
payment for the Obligations, a financial guaranty insurance policy (the "Bond
Insurance Policy"), for the Obligations, insuring the payment of principal of
and interest on the Obligations when due. The issuance of the Bond Insurance
Policy shall be subject to the following terms and conditions:
1. Payment by the Applicant, or by the Trustee on behalf of the
Applicant, on the date of delivery of and payment for the Obligations, the
following payments:
a. a nonrefundable premium in the amount of $29,000 [.55% (premium
rate) of $5,249,380 (total debt service)], premium rounded to
the nearest $1,000. The premium set out in this paragraph 1.a.
shall be the total premium required to be paid on the Bond
Insurance Policy issued pursuant to this Commitment; and
b. rating agencies' fees in the amount of $7,500, payable to
Municipal Bond Investors Assurance Corporation, in connection
with obtaining the initial ratings on the Obligations. A legal
fee of $5,000, payable to Kutak Rock and Campbell.
2. The Obligations shall have received the unqualified opinion of bond
counsel with respect to the tax-exempt status of interest on the Obligations.
3. There shall have been no material adverse change in the Obligations
or the Resolution, Bond Ordinance, Trust Indenture or other official document
authorizing the issuance of the Obligations or in the final official statement
or other similar document, including the financial statements included therein.
4. There shall have been no material adverse change in any information
submitted to the Insurer as a part of the application or subsequently
submitted to be a part of the application to the Insurer.
5. No event shall have occurred which would allow any underwriter or any
other purchaser of the Obligations not to be required to purchase the
Obligations at closing.
6. All documen~ executed in connection wit~ the issuance of the
Obligations shall contain a provision which requires copies of any amendments
to such documents consented to by the Insurer to be sent to Standard & Poor's.
7. A Statement of Insurance satisfactory to the insurer shall be printed
on the obligations.
8. Prior to the delivery of and payment for the Obligations, none of the
information or documents submitted as a part of the application to the Insurer
shall be determined to contain any untrue or misleading statement of a
material fact or fall to state a material fact required to be stated therein
or necessary in order to make the statements contained therein not misleading.
9. No material adverse change affecting any security for the Obligations
shall have occurred prior to the delivery of and payment for the Obligations.
10. This Commitment may be signed in counterpart by the parties hereto.
11. The Insurer and its counsel's review and approval of all legal
documentation associated with the issuance of the Certificates.
12. The Insurer and its counsel's receipt, review and approval of the
Ground Lease.
13. The Insurer and its counsel's review and approval of Exhibit B to the
Mortgage which should be a list of the Equipment.
14. The Insurer and its counsel's receipt, review and approval of the
title insurance policy. The Insurer's approval of the amount of title
insurance which should equal the construction cost of the fire station.
15. The Insurer and its counsel's receipt, review, and approval of the
Official Statement
16. The amortization period for the communicatlon's equipment should not
exceed 10 years.
17. The Insurer and its counsel's review and approval of all assignments
of title, warranties, and licenses to the Trustee. Title to the equipment
should be in the name of the Lessor.
18. Evidence satisfactory to the Insurer and its counsel that the
Certificate Validation appeal period has expired and that no appeals have been
filed.
19. Permitted Investments should consist only of those investments listed
on the attached LIST OF PERMISSIBLE INVESTMENTS FOR INDENTURED FUNDS OF LEASE
TRANSACTIONS. Securities permissible for defeasance should consist of only
those on the attached CRITERIA FOR DEFEASANCE.
20. A general liability insurance requirement should be added to the
Lease Agreement with Option to Purchase whereby the Lessee covenants to
maintain general liability insurance in an amount equal to at least five
hundred thousand dollars ($500,000).
Dated this 15th day of December, 1989.
MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION
sistant Secre/a~r~y
CITY OF SANFORD, FLORIDA
LIST OF PERMISSIBLE INVESTME~"~
INDENTURED FUNDS OF LEASE TRANsaCTIONS
A. Direct obligations of the United States of America (including obligations
issued or held in book-entry form on the books of the Department Of the
Treasury) or Obligations the principal of and interest on which are
unconditionally guaranteed by the United States of America.
B. Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following federal agencies and provided such
obligations are backed by the full faith and credit of the United States
of America:
1. U.S. Export-Import Bank
Direct Obligations Or fully guaranteed certificates Of beneficial
ownership
2. Farmers Home Administration
Certificates of beneficial ownership
3. Federal Financing Bank
4. Federal Housing Administration Debentures
5. General Services Administration
Participation certificates
6. Government National Mortgage Association ("GNMA")
GNMA - guaranteed mortgage-backed bonds
GNMA - guaranteed pass-through obligations
(not acceptable for certain cash-flow sensitive issues.)
7. U.S. Maritime Administration
Guaranteed Title XI financing
8. New Communities Debentures
U.S. government guaranteed debentures
9. U.S. Public Housing Notes and Bonds
U.S. government guaranteed public housing notes and bonds
10. U.S. Department Of Housing and Urban Development
Progect Notes
Local Authority Bonds
C. Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following U.S. government agencies (non-full
faith and credit agencies):
1.Federal Home Loan Bank System
Senior debt obligations
2. Federal Home Loan Mortgage Corporation
Participation Certificates
Senior debt obligations
3. Federal Natic~. Mortgage Association
Mortgage-back~ securities and senior debt o~igations (excluded are
stripped mortgage securities which are valued greater than par on the
portion of unpaid principal.)
Student Loan Marketing Association
Senior debt obligations
D. Money market funds registered under the Federal Investment Company Act of
1940, whose shares are registered under the Federal Securities Act of
1933, and having a rating by S&P of AAAm-G; AAAm; Or AAm.
E. Certificates of deposit secured at all times by collateral described in
(A) and/or (B) above. Such certificates must be issued by commercial
banks, savings and loan associations or mutual savings banks whose short
term obligations are rated A-1 or better by S&P and P-I by Moody's. The
collateral must be held by a third party and the bondholders must have a
perfected first security interest in the collateral.
F. Certificates of deposit, savings accounts, deposit accounts or money
market deposits which are fully insured by FDIC or FSLIC.
G. Investment Agreements, including GIC's, acceptable to MBIA.
Commercial paper rated, at the time of purchase, "Prime - 1" by Moody's
and "A-i" or better by S&P.
I. Bonds Or notes issued by any state or municipality which are rated by
Moody's and S&P in one of the two highest rating categories assigned by
such agencies.
J. Federal funds or bankers acceptances with a maximum term of one year of
any bank which has an unsecured, uninsured and unguaranteed obligation
rating of "Prime - 1" or "A3" or better by Moody's and "A-I" or "A" or
better by S&P.
K. Repurchase agreements provide for the transfer of securities from a dealer
bank or securities firm (seller/borrower) to a municipal entity
(buyer/lender), and the transfer of cash from a municipal entity to the
dealer bank or securities firm with an agreement that the dealer bank or
securities firm will repay the cash plus a yield to the municipal entity
in exchange for the securities at a specified date.
Repurchase Agreements must satisfy the following criteria or be approved
by MBIA.
1. Repos must be between the municipal entity and a dealer bank or
securities firm
a. Primary dealers on the Federal Reserve reporting dealer list which
fall under the jurisdiction of the SIPC, or
b. ~3~_n_~a rated "A" or above by Standard & Poor's Corporation and
Moody's Investor Services.
2. The written redo contract must include the following:
a. Securities which are acceptable for transfer are:
(1) Direct U.S. governments
b. The term of the repo may be up to 30 days
c. The collateral must be delivered to the municipal entity, trustee
(if trustee is not supplying the collateral) or third party acting
as agent for the trustee (if the trustee is supplying the
collateral) before/simultaneous with payment (perfection by
possession of certificated securities).
d. The trustee has a perfected first priority security interest in
the collateral.
e. Collateral is free and clear of third-party liens and in the case
of SIPC broker was not acquired pursuant to a repo or reverse repo.
f. Failure to maintain the requisite collateral percentage will
require the trustee to liquidate collateral.
g. valuation Of Collateral
(t) The securities must be valued weekly, marked-to-market at
current market price Plus accrued interest
(a) The value of collateral must be equal to 103% of the
amount of cash transferred by the municipal entity to the
dealer bank or security firm under the repo plus accrued
interest. If the value of securities held as collateral
slips below 103% of the value of the cash transferred by
municipality, then additional cash and/or acceptable
securities must be transferred.
3. Legal opinion which must be delivered to the municipal entity:
a. Repo meets guidelines under state law for legal investment of
public funds.
CRITERIA FOR DEFEASANCE
Defeasance should require the deposit of cash or U.S. Treasury
Certificates, Notes and Bonds (including State and Local Government Series --
"SLGSs"), direct obligations of the Treasury which have been stripped by the
Treasury itself, CATS, TIGRS and similar securities and obligations issued by
the following agencies which are backed by the full faith and credit of the
U.S.:
1. U.S. Export-Import Bank
Direct obligations or fully guaranteed certificates of beneficial
owner s h i p
2. Farmers Home Administration
Certificates of beneficial ownership
3. Federal Financlnq Bank
4. Federal Housing Administration Debentures
5. General Services Administration
Participation certificates
6. U.So Maritime Administration
Guaranteed Title XI financing
7. New Communities Debentures
U.S. government guaranteed debentures
8. U,S. Public Housing Notes and Bonds
U.S. government guaranteed public housing notes and bonds
9.U.S. Department of Housing and Urban Development
Progect Notes
Local Authority Bonds
Prerefunded municipals are permitted investments for defeasance with the
following criteria:
Prerefunded municipal bonds must be rated "~Aaa" by Moody's or "AAA"
byS&P.
If the issue is only rated bY S & P (i.e. there is no Moody's rating)
then the prerefunded bonds must have been prerefunded with cash,
direct U.S., or U.S. guaranteed obligations, or AAA-rated prerefunded
munlcipals that satisfy this condition.
CO~4ITMENT TO ISSUE A
FINANCIAL GUARANT/INSURANCE POLICY
Application No.: 89-09-6561
Sale Date: November 1989
Program Type: Negotiated DP
RE: $3,105,000 (Est) Certificates of Participation (1989 City of Sanford
Project) Evidencing Fractional Undivided Interests of the Owners,
Thereof in Basic Rent PaI~ents to be Made under a Lease Agreement with
Option to Purchase Issued aby the City of Sanford, Florida
(the "Obligations")
This commitment to issue a financial guaranty insurance policy (the
"Commitment") dated November 13, 1989, constitutes an agreement between CIT~
OF SANFORD, FLORIDA (the "Applicant"), and MUNICIPAL BOND INVESTORS ASSURANCE
CORPORATION (the "Insurer"), a stock insurance company incorporated under the
laws of the State of New York.
Based on an approved application dated October 31, 1989, the Insurer
agrees, upon satisfaction of the conditions herein, to issue on the earlier of
(i) 120 days of said approval date or (ii) on the date of delivery of and
payment for the Obligations, a financial guaranty insurance policy (the "Bond
Insurance Policy"), for the Obligations, insuring the payment of principal of
and interest on the Obligations when due. The issuance of the Bond Insurance
Policy shall be subject to the following terms and conditions:
1. Payment by the Applicant, or by the Trustee on behalf of the
Applicant, on the date of delivery of and payment for the Obligations, the
following payments:
a. a nonrefundable premium in the amount of .55% premium rate of
total debt service, premium rounded to the nearest $1,000. The
premium set out in this paragraph 1.a. shall be the total
premium required to be paid on the Bond Insurance Policy issued
pursuant to this Commitment; and
b. rating agencies' fees in the amount of $7,500 in connection with
obtaining the initial ratings on the Obligations, plus a legal
fee of $5,000.
2. The Obligations shall have received the unqualified opinion of bond
counsel with respect to the tax-exempt status of interest on the Obligations.
3. There shall have been no material adverse change in the Obligations
or the Resolution, Bond Ordinance, Trust Indenture Or Other official document
authorizing the issuance Of the Obligations or in the final official statement
or other similar document, including the financial statements included therein.
4. There shall have been no material adverse change in any information
submitted to the InsUrer as a part of the application or subsequently
submitted to be a part of the application to the Insurer.
5. No event shall have occurred which would allow any underwriter or any
other purchaser of the Obligations not to be required to purchase the
Obligations at closing.
6. All documex~s executed in connection wib~ the issuance of the
Obligations shall contain a provision which requires copies of any amendments
to such documents consented to by the Insurer to be sent to Standard & Poor's.
7. A Statement of Insurance satisfactory to the Insurer shall be printed
on the obligations.
8. Prior to the delivery of and payment for the Obligations, none of the
information or documents submitted as a part of the application to the Insurer
shall be determined to contain any untrue or misleading statement of a
material fact or fail to state a material fact required to be stated therein
or necessary in order to make the statements contained therein not misleading.
9. No material adverse change affecting any security for the Obligations
shall have occurred prior to the delivery of and payment for the Obligations.
10. This Commitment may be signed in counterpart by the parties hereto.
11. The Insurer and its counsel's review and approval of all legal
documentation associated with the issuance of the Certificates.
12. The Insurer and its counsel's receipt, review and approval of the
Ground Lease.
13. The Insurer and its counsel's review and approval of Exhibit B to the
Mortgage which should be a list of the Equipment.
14. The Insurer and its counsel's receipt, review and approval of the
title insurance policy. The Insurer's approval of the amount of title
insurance which should equal the construction cost Of the fire station.
15. The Insurer and its counsel's receipt, review, and approval of the
Official Statement
16. The amortization period for the communication's equipment should not
exceed 10 years.
17. The Insurer and its counsel's review and approval of all assignments
of title, warranties, and licenses to the Trustee. Title to the equipment
should be in the name of the Lessor.
18. Evidence satisfactory to the Insurer and its counsel that the
Certificate Validation appeal period has expired and that no appeals have been
filed.
19. Permitted Investments should consist only of those investments listed
on the attached LIST OF PERMISSIBLE INVESTMENTS FOR INDENTURED FUNDS OF LEASE
TRANSACTIONS. Securities permissible for defeasance should consist of only
those on the attached CRITERIA FOR DEFEASANCE.
20. A general liability insurance requirement should be added to the
Lease Agreement with Option to Purchase whereby the Lessee covenants to
maintain general liability insurance in an amount equal to at least one
million dollars.
Dated this 13th day of November, 1989.
:NI~TORS ASSURANCE CORPORATION
Assistant Secretary~
CITY OF SANFORD, FLORIDA
Title,
C. LIST OF PERMISSIBLE INVES"~NT$
INDENTURED FUNDS OF LEASE TRANSACTIONS
A. Direct obligations of the United States Of America (including obligations
issued or held in book-entry form on the books of the Department of the
Treasury) or obligations the principal of and interest on which are
unconditionally guaranteed by the United States of America.
B. Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following federal agencies and provided such
obligations are backed by the full faith and credit of the United States
of America:
1. U.S. Export-Import Bank
Direct obligations or fully guaranteed certificates of beneficial
ownership
2. Farmers Home Administration
Certificates of beneficial ownership
3. Federal Financing Bank
4. Federal Housing A~ministration Debentures
5. General Services Administration
Participation certificates
6. Government National Mortgage Association ("GNMA")
GNMA - guaranteed mortgage-backed bonds
GNMA - guaranteed pass-through obligations
(not acceptable for certain cash-flow sensitive issues.)
7. U.S. Maritime Administration
Guaranteed Title XI financing
8. New Communities Debentures
U.S. government guaranteed debentures
9. U.S. Public Housing Notes and Bonds
U.S. government guaranteed public housing notes and bonds
10. U.S. Department of Rousing and Urban Development
Project Notes
Local Authority Bonds
C. Bonds, debentures, notes Or Other evidence of indebtedness issued or
guaranteed by any of the following U.S. government agencies (non-full
faith and credit agencies):
I.Federal Home Loan Bank System
Senior debt obligations
2. Federal Home Loan MortQaQe Corporation
Participation Certificates
Senior debt obligations
3. Federal Nat'f~l Mortgage Association ~
Mortgage-bacKed securities and senior debt obligations (excluded are
stripped mortgage securities which are valued greater than par on the
portion of unpaid principal.)
4. Student Loan Marketing Association
Senior debt obligations
D. Money market funds registered under the Federal Investment Company Act of
1940, whose shares are registered under the Federal Securities Act of
1933, and having a rating by S&P of AAAm-G; AAAm; or AAm.
E. Certificates of deposit secured at all times by collateral described in
(A) and/or (B) above. Such certificates must be issued by commercial
banks, savings and loan associations or mutual savings banks whose short
term obligations are rated A-1 or better by S&P and P-1 by Moody's. The
collateral must be held by a third party and the bondholders must have a
perfected first security interest in the collateral.
F. Certificates of deposit, savings accounts, deposit accounts or money
market deposits which are fully insured by FDIC or FSLIC.
G. Investment Agreements, including GIC's, acceptable to MBIA.
H. Commercial paper rated, at the time of purchase, "Prime 1" by Moody's
and "A-i" or better by
I. Bonds or notes issued by any state or municipality which are rated by
Moody's and S&P in one of the two highest rating categories assigned by
such agencies.
J. Federal funds or bankers acceptances with a maximum term of one year of
any bank which has an unsecured, nninsured and unguaranteed obligation
rating of "Prime - 1" or "A3" or better by Moody's and "A-l" or "A" or
better by S&P.
K. Repurchase agreements provide for the transfer of securities from a dealer
bank or securities firm (seller/borrower) to a municipal entity
(buyer/lender), and the transfer of cash from a municipal entity to the
dealer bank or securities firm with an agreement that the dealer bank or
securities firm will repay the cash plus a yield to the municipal entity
in exchange for the securities at a specified date.
Repurchase Agreements must satisfy the following criteria or be approved
by MBIA.
1. Repos must be between the municipal entity and a dealer bank or
securities firm
a. Primary dealers on the Federal Reserve reporting dealer list which
fall under the jurisdiction of the SIPC, or
b. Banks rated "A" Or above by Standard & Poor's Corporation and
Moody's Investor Services.
2. The written repo contract must include the following:
a. Securities which are acceptable for transfer are:
(1) Direct U.S. governments
b. The term of the repo may be up to 30 days
c. The collateral must be delivered to the municipal entity, trustee
(if trustee is not supplying the collateral) or third party acting
as agent for the trustee (if the trustee is supplying the
collateral) before/simultaneous with payment (perfection by
possession of certificated securities).
d. The trustee has a perfected first priority security interest in
the collateral.
e. Collateral is free and clear of third-party liens and in the case
of SIPC broker was not acquired pursuant to a repo or reverse repo.
f. Failure to maintain the requisite collateral percentage will
require the trustee to liquidate collateral.
g. Valuation of Collateral
(1) The securities must be valued weekly, marked-to-market at
current market price plus accrued interest
(a) The value of collateral must be equal to 103% of the
~mount of cash transferred by the municipal entity to the
dealer bank or security firm under the repo plus accrued
interest. If the value of securities held as collateral
slips below 103% of the value of the cash transferred by
municipality, then additional cash and/Or acceptable
securities must be transferred.
3. Legal opinion which must be delivered to the municipal entity:
a. Repo meets guidelines under state law for legal investment of
public funds.
~'~
CRITERIA FOR DEFEASANCE
Defeasance should require the deposit of cash or U.S. Treasury
Certificates, Notes and Bonds (including State and Local Government Series --
"SLGSs"), direct obligations of the Treasury which have been stripped by the
Treasury itself, CATS, TIGRS and similar securities and obligations issued by
the following agencies which are backed by the full faith and credit of the
U.S.:
1. U · S · Export-ImpOrt Bank
Direct Obligations Or fully guaranteed certificates of beneficial
ownership
2. Farmers Home Administration
Certificates of beneficial ownership
3. Federal Financing Bank
4. Federal Housin(~ Administration Debentures
5. General Services Administration
Participation certificates
6. U.S. Maritime Administration
Guaranteed Title XI financing
7. New Communities Debentures
U.S. government guaranteed debentures
8. U.S. Public Housing Notes and Bonds
U.S. government guaranteed public housing notes and bonds
9.U.S. Department of Housing and Urban Development
Project Notes
Local Authority Bonds
Prerefunded municipals are permitted investments for defeasance with the
following criteria:
Prerefunded municipal bonds must be rated "~Aaa" by Moody's Or "AAA"
byS&P.
If the issue is only rated by S & P (i.e. there is no Moody's rating)
then the prerefunded bonds must have been prerefunded with cash,
direct U.S., or U.S. guaranteed obligations, or AAA-rated prerefunded
municipals that satisfy this condition.