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259-Bond Purchase Agreement BOND PURCHASE AGREEMENT July 25, 1986 $16,975,000 City Of Sanford, Florida Water and Sewer Revenue Bonds Series 1986 City of Sanford 300 N. Park Avenue Sanford, Florida 32771 Gentlemen: William R. Hough & Co. (the "Managing Underwriter"), Smith Barney, Harris Upham & Co., Inc. and Southeastern Municipal Bonds, Inc. (the "Underwriters"), offer to enter into the fol- lowing agreement with you (the "City") which, upon your accep- tance of this offer, will be binding upon you and upon the Underwriters. The Managing Underwriter has been duly authorized to execute this Bond Purchase Agreement and has been duly autho- rized to act hereunder by and on behalf of the other Underwriters. The offer made hereby is subject to your acceptance thereof by execution of this Bond Purchase Agreement and its delivery to the Managing Underwriter at or prior to 8:00 P.M., Florida Time, on the date first above written. 1. Upon the terms and conditions and upon the basis of the representations hereinafter Set forth, the Underwriters, jointly and severally, hereby agree to purchase from the City, and the City hereby agrees to sell to the Underwriters, all (but not less than all) of the City's $16,975,000 aggregate principal amount of Water and Sewer Revenue Bonds, Series 1986 (herein called the "Bonds"), dated August 1, 1986 to mature on the dates and in the amounts and to bear interest at the rates and yields per annum shown on Exhibit A attached hereto, at a purchase price of 91.01023564% of the principal amount thereof (being $16,616,237.50 less an original issue discount in the amount of $1,167,250) plus accrued interest thereon (calculated on the basis of a 360-day year) from August 1, 1986 to the date of payment for and delivery of such Bonds (the "Closing"). Terms not otherwise defined here- in shall have the same meanings as set forth in the Official Statement for the Bonds. 2. The Bonds shall be as described in and shall be issued pursuant to a resolution adopted by the City on October 7, 1985, as supplemented and amended by subsequent resolution adopted by the City on the date hereof (collectively, the "Resolution"). The Bonds are being issued to provide funds for various expan- sions and improvements to the City's Water System and Sewer System (collectively the "System"). 3. Pursuant to this Bond Purchase Agreement, it shall be a condition of your obligation to sell simultaneously all of the Bonds to the Underwriters and the obligation of the Underwriters to purchase all of the Bonds; that the entire $16,975,000 aggre- gate principal amount of the Bonds shall be delivered by you and accepted and paid for by the Underwriters at the Closing. 4. You hereby acknowledge receipt of a certified or offi- cial bank cashiers check payable to your order for $169,750 being one percent (1%) of the principal amount of the Bonds. If you accept this offer, you agree to hold said check uncashed until the Closing as security for~the performance by the Under- writers of their obligation to accept and pay for the Bonds at the Closing, and in the event of their compliance with such obli- gation, to return said check to the Underwriters at the Closing. If you do not accept this offer, such check shall be immediately returned to the Managing Underwriter. In the event of your failure to deliver the Bonds at the Closing, or if you shall be unable at or prior to the date of the Closing to satisfy the con- ditions of the obligations of the Underwriters contained herein, or if the obligations of the Underwriters shall be terminated for any reason permitted by this Bond Purchase Agreement, such check shall be immediately returned to the Managing Underwriter. If the Underwriters fail (other than for a reason permitted hereun- der) to accept and pay for the Bonds upon tender thereof by you at the Closing as herein provided, such check may be retained by you as and for full liquidated damages for such failure and for any and all defaults hereunder on the part of the Underwriters, 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 Underwriters understand that in such event your actual damages may be greater or may be less than such sum. Accordingly, the Underwriters hereby waive 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 Underwriters. 5. At the time of your acceptance hereof, or prior to the date of Closing, you shall deliver to the Managing Underwriter four certified copies of the Resolution and two copies of the written commitment of AMBAC Indemnity Corporation committing to issue its bond insurance policy which will be dated the Closing date with respect to the Bonds. You hereby agree that you will make available to the Managing Underwriter four copies of the final Official Statement of the City relating to the Bonds in form approved by the City and the Managing Underwriter, executed on behalf of the City by a duly authorized officer of the City (which, together will the cover page, summary statement and all appendices, maps, reports and statements included therein or attached thereto, are herein called the "Official Statement") and authorize the distribution thereof to prospective purchasers and investors. You hereby authorize any and all of this material (including specifically copies of the Official Statement per- taining to the Bonds, the Resolution, and the information therein contained) to be used in connection with the public offering, sale and distribution of the Bonds. A preliminary draft of the Official Statement is attached hereto as Exhibit B. 6. The City represents and warrants to each of the Underwriters that (i) at the time of delivery to the Managing Underwriter of the Official Statement and as of the date thereof and at the Closing date, the Official Statement will to the best of its knowledge and belief be correct and complete in all material respects and it will not contain any untrue statement of a material fact or omit to state any material fact which should be included therein for the purpose for which the Official State- ment is to be used, or which is necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading; (ii) between the date hereof and the time of Closing, the City will not have issued any bonds or other obligations for borrowed money pledging Pledged Revenues of the System and shall not have suffered any adverse change of a material nature in its financial position or in the result of its operations; (iii) the City is and will be, at the date of Closing, a municipal corporation of the State of Florida, with the power and authority to issue the Bonds pursuant to the Constitution and laws of the State of Florida, to engage in a variety of activities including acquiring, constructing, financing and operating water and sewage treatment facilities within its boundaries; (iv) when delivered to and paid for by the Underwriters at the Closing in accordance with the provisions of this Purchase Agreement, the Bonds will have been duly authorized, executed, issued and delivered and will constitute valid and binding obligations of the City in conformity with the Resolution payable solely from and secured by an irrevocable prior lien upon and pledge of Net Revenues derived from the operation of the System, the Sewer System Development Charges '(Bond Service Component), the Water System Development Charges (Bond Service Component) and, until released as provided for in the Resolution, the Public Service Taxes levied and collected by the City pursuant to Section 166,231 of Florida Statutes; (v) the adoption of the Resolution does not, and the execution and deliv- ery of this Purchase Agreement, and the Bonds and compliance with the provisions thereof will not conflict with or constitute a breach of or default under any law, administrative regulation, 3 consent decree or any agreement or other instrument to which the City was or is subject, as the case may be; (vi) both at the time of your acceptance hereof and at the time of Closing, the City has and will have the legal right and power to adopt the Resolu- tion and execute and deliver the Purchase Agreement, and has and will have the full power and authority to perform all of its obligations under the Bonds, the Resolution, and this Purchase Agreement; (vii) at the time of your acceptance hereof, the City has legally adopted the Resolution and has executed and delivered this Purchase Agreement; (viii) except as disclosed in the Offi- cial Statement, all approvals, consents and orders, if any, of any governmental authority or agency having jurisdiction in the matter which would constitute a condition precedent to the per- formance by the City of its obligations hereunder have been obtained; provided the City makes no representation regarding compliance with applicable registration requirements of state and federal securities laws; (ix) except as disclosed in the Official Statement, any and all permits, licenses and approvals with material respect to the operation of its Water System and Sewer System (the "System") have been obtained and are in full force and effect; (x) except as may be set forth in the Official State- ment, there is no action, suit, proceeding, inquiry or investiga- tion at law or in equity or before or by any court, public board or body pending or, to the knowledge of the City threatened against or affecting the City or the System wherein an unfa- vorable decision, ruling or finding would (a) adversely affect the transactions contemplated hereby or by the Official Statement or the validity of the Bonds, the Resolution, this Purchase Agreement, or any agreement or instrument to which the City is a party and which is used or contemplated for use in the consum- mation of the transactions contemplated hereby or by the Official Statement and the Resolution, (b) have a material adverse effect on the financial condition of or the operation of the System or (c) adversely affect the Federal or state tax-exempt status of the interest on the Bonds; (xi) the City agrees to reasonably cooperate with the Underwriters and their counsel at the Underwriters' expense in any endeavor to qualify the Bonds for offering and sale under the securities or "Blue Sky" laws of such jurisdictions of the United States as the Underwriters may request, provided that the City shall not be required to consent to service of process in or the jurisdiction of any state other than Florida; (xii) any certificates signed by an authorized officer of the City and delivered to the Managing Underwriter · pursuant to this Purchase Agreement shall be deemed a certificate by the City to the Underwriters; (xiii) to the best of its knowledge, the audited financial report of the System, for the Fiscal Year ended September 30, 1985 contained in the Official Statement as Appendix B thereto, presents fairly the financial position of the System as to the date indicated and the results of such operations for the period specified; (xiv) to the best of 4 its knowledge, the historical financial information for the Fiscal Years ended September 30, 1980 through September 30, 1985 and the financial projections for the Fiscal Years ending Sep- tember 30, 1986 through September 30, 1991 prepared by Conklin, Porter and Holmes - Engineers, Inc. and included in the Official Statement present fairly such historical and projected financial information with respect to the City's operation of the System; (xv) to the best of its knowledge, the report by Conklin, Porter and Holmes - Engineers, Inc. included as Appendix C to the Offi- cial Statement, of the conditions, operations of and proposed improvements to the System represents fairly the present opera- tions and conditions of and proposed improvements to the System; (xvi) at the Closing, all liens, encumbrances, covenants, con- ditions and restrictions, if any, to the real personal property of the System will not interfere with or impair the operation of the System by the City or the ability of the City to pay the Bonds; and (xvii) the City will not take or omit to take any action which will in any way cause or result in the proceeds from the sale of the Bonds being applied in a manner other than as provided in the Resolution or as described in the Official State- ment. The City will advise the Managing Underwriter promptly of any proposal to amend or supplement the official Statement, or any part thereof, and will not effect any such amendment or supple- ment without the consent of the Managing Underwriter in writing, which consent shall be given if deemed necessary in the opinion of Bond Counsel to disclose any material fact as specified in this paragraph 6 above. 7. At 11:00 A.M. New York Time, on August 26, 1986 or at such other time as shall have been mutually agreed upon by you and the Managing Underwriter, you will deliver, or cause to be delivered, to the Managing Underwriter, the Bonds, in definitive form or, with the consent of the Managing Underwriter, in tem- porary form, duly executed on your behalf, together with other documents hereinafter mentioned; and the Managing Underwriter, on behalf of the Underwriters, will accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof by delivering to the City a check or checks in immediately available funds payable to the order of the City. The Bonds will be deliv- ered as fully registered Bonds in denominations of $5,000 each, or integral multiples thereof. The Bonds shall be of the terms and tenor as described herein and in the Official Statement and will be made available to the Underwriters for checking and packaging not less than 24 hours prior to the Closing at a place designated by the Managing Underwriter. 8. The Underwriters may terminate this Bond Purchase Agreement, without liability therefor, by notification to you, if at any time subsequent to the date of this Bond Purchase Agreement and at or prior to the Closing: 5 (a) Legislation shall be enacted by the Congress of the United States or a bill introduced (by amendment or otherwise) or favorably reported by a committee of the House of Representatives or the Senate of the Congress of the United States or a con- ference committee of such House and Senate makes a report (or takes any other action) or a decision by a court of the United States or the Tax Court of the United States shall be rendered, or a ruling, regulation or fiscal action shall be issued or pro- posed by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or other governmental agency with respect to or having the purpose or effect in each case of changing directly or indirectly the federal income tax consequen- ces of interest on the Series 1986 Bonds in the hands of the holders thereof (including imposition of a minimum federal tax which includes tax-exempt interest in the calculation of such tax), which adversely affects the market price or the marketabi- lity of the Series 1986 Bonds. (b) Any legislation, rule or regulation shall be intro- duced in, or be enacted by any department or agency in the State of Florida, or a decision by any court or administrative agency of competent jurisdiction within the State of Florida shall be rendered which, in the reasonable opinion of the Managing Underwriter, materially affects the market for the Series 1986 Bonds or the sale, at the contemplated offering prices, by the Underwriters of the Series 1986 Bonds to be purchased by them. (c) Any amendment to the Official Statement is proposed by the City or deemed necessary by Bond Counsel or Counsel to the Underwriters which, in the reasonable opinion of the Managing Underwriter, materially affects the market for the Series 1986 Bonds or the sale, at the contemplated offering prices, by the Underwriters of the Series 1986 Bonds to be purchased by them. (d) Any fact shall exist or any event shall have occurred which, in the reasonable opinion of the Managing Underwriter, makes the Official Statement, in the form as origi- nally approved by the City Commission, contain an untrue state- ment 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 misleading. (e) There shall have occurred any outbreak of hostili- ties or any national or international calamity or crisis, finan- cial or otherwise, including a general suspension of trading on any national securities exchange, which, in the reasonable opin- ion of the Managing Underwriter, materially adversely affects the market for the Series 1986 Bonds or the sale, at the con- templated offering prices, by the Underwriters of the Series 1986 Bonds to be purchased by them. 6 (f) Legislation shall be enacted or any action shall be taken by, or on behalf of, the Securities and Exchange Commission which, in the reasonable opinion of Counsel to the Underwriters, has the effect of requiring the contemplated distribution of the Series 1986 Bonds to be registered under the Securities Act of 1933, or any laws analogous thereto relating to governmental bodies, and compliance therewith cannot be accomplished prior to the Closing. (g) A general banking moratorium shall have been declared by the United States, New York or Florida authorities, which, in the reasonable opinion of the Managing Underwriter, materially adversely affects the market for the Series 1986 bonds or the sale, at the contemplated offering prices, by the Underwriters of the Series 1986 Bonds to be purchased by them. (h) Any national securities exchange, or any governmen- tal authority, shall impose, as tO the Series 1986 Bonds or obli- gations of the general character of the Series 1986 Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriters. (i) Any rating of the Series 1986 Bonds shall have been downgraded or withdrawn by a national rating service, which, in the Managing Underwriter's reasonable opinion, materially adver- sely affects the market for the Series 1986 Bonds or the sale, at the contemplated offering prices, by the Purchasers of the Series 1986 Bonds to be purchased by them; or trading in any securities of the City shall have been suspended on any national securities exchange; or any proceeding shall be pending or threatened by the Securities and Exchange Commission against the City. (j) Any litigation shall be instituted, pending or threatened to restrain or enjoin the issuance, sale or delivery of the Bonds or in any way contesting or affecting any authority for or the validity of the Bonds, the security and sources of payment therefor, or any of the proceedings of the City taken with respect to the issuance or sale thereof. 9. The obligations of the Underwriters hereunder shall be subject to the performance by the City of its obligations to be performed hereunder at and prior to the Closing, to the accuracy of the representations and warranties of the City herein as of the date hereof and as of the time of the Closing, and are also subject, in the discretion of the Managing Underwriter, to the following conditions: (a) The representations, warranties and covenants of the City contained herein shall be true and correct and complied with at the time of Closing. 7 (b) At the time of Closing, the Resolution shall be in full force and effect and shall not have been amended, modified or supplemented except as shall have been mutually agreed to by the Managing Underwriter; and the City shall have duly adopted and there shall be in full force and effect such additional reso- lutions of the City as shall, in the opinion of the Bryant, Miller and Olive, P.A., Bond Counsel to the City, and Gray, Harris & Robinson, P.A., Counsel to the Underwriters, be necessary and appropriate in connection with the transactions contemplated hereby. (c) At the time of Closing, the Bonds shall have been duly authorized, executed, issued and delivered to the Underwrit- ers in accordance with the Resolution and this Purchase Agree- ment. (d) At the time of Closing, there shall be no appeals or other proceedings pending withlrespect to the judgment of the Circuit Court of the Eighteenth Judicial Court of Florida rendered on November 8, 1985 validating the Bonds. (e) At the time of Closing, the Managing Underwriter shall receive the unqualified approving opinion of Bryant, Miller and Olive, P.A., Bond Counsel to the City, as to the Bonds, dated the date of closing and substantially in the form included as Appendix E to the Official Statement. (f) At the time of Closing, the Managing Underwriter shall receive the opinion of Bryant, Miller and Olive, P.A., Bond Counsel to the City, to the effect that (i) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, (ii) although not responsible for the truth and accuracy of the Official Statement and not having undertaken any efforts to verify the information contained therein, the state- ments contained in the Official Statement under the captions "Purpose of the Series 1986 Bonds", "Security and Sources of Payment for the Bonds" (except for the subheading "Municipal Bond Insurance"), "The Series 1986 Bonds", "Legal Matters" and "Appendix D: Summary of Certain Provisions Of the Resolution" (apart from the engineering, financial and statistical data con- tained therein, as to which we do not express any opinion or belief), are correct in all material respects and do not omit any statement which, in their opinion, should be included or referred to_therein. (g) At the time of Closing, the Managing Underwriter shall receive the opinion of Stenstrom, McIntosh, Julian, Colbert & Whigham, P.A., City Attorneys, as to the Bonds, dated the date of closing, addressed to the Underwriters in substantially the form attached hereto as Exhibit C. 8 (h) At the time of Closing, the Managing Underwriter shall receive the opinion or opinions of Gray, Harris & Robinson, P.A., counsel to the Underwriters, dated the date of closing, to the effect that (i) the Bonds are not subject to the registration requirement of the Securities Act of 1933, as amended, and (ii) such counsel has no reason to believe, based on their participa- tion in preparation of the Official Statement, that the Official Statement as of its date contained or as of the closing date con- tains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. In rendering such opinion, Gray, Harris & Robinson, P.A., may rely as to all matters governed by Florida Law upon the opinions of Bond Counsel and Counsel to the City. (i) At the time of Closing, the Managing Underwriter shall receive evidence of a rating by Standard & Poor's Cor- poration of "AAA" for the Bonds based upon a commitment of insurance from AMBAC Indemnity Corporation. (j) At the time of Closing, the Managing Underwriter shall receive evidence that AMBAC Indemnity Corporation shall have issued an insurance policy insuring the payment of principal and interest on the Bonds, the premium for such insurance to be paid by the City. (k) At the time of Closing, the Managing Underwriter shall receive a letter from Hartsock & Hartsock, dated as of the date of closing, to the Underwriter, substantially in the form of the letter attached hereto as Exhibit D. (1) At the time of Closing, the Managing Underwriter shall receive a letter from Conklin, Porter & Holmes - Engineers, Inc., dated as of the date of closing, to the Underwriters sub- stantially in the form of the letter attached hereto as Exhibit E. (m) At the time of Closing, the Managing Underwriter shall receive a certificate, dated the date of the Closing, signed by the Mayor, to the effect that, except as disclosed in the Official Statement, no litigation or other proceedings are pending or, to her knowledge, threatened against the City in any court or other tribunal or competent jurisdiction, State or 'Federal, in any way (i) restraining or enjoining the issuance, sale or delivery of any of the Bonds, or (ii) questioning or affecting the validity of this Purchase Agreement, the Bonds, the Resolution or the pledge by the City to the Bondholders of any moneys or other security provided under the Resolution, or (iii) questioning or affecting the validity of any of the proceedings for the authorization, sale, execution, issuance or delivery of. 9 the Bonds or (iv) questioning or affecting (A) the organization or existence of the City or the title to office of the officers thereof or (B) the power or authority of the City to own and operate the System (as defined in the Official Statement), including the power and authority of the City to establish, revise, levy and collect rates, fees or other charges for the use and services of the System. (n) At the time of Closing, the Managing Underwriter shall receive a certificate, dated the date of the Closing, signed by the aforesaid Mayor of the City to the effect that (a) to her best knowledge and belief, the Official Statement does not contain any untrue statement of a material fact or omit to state any material fact which should be included therein for the pur- pose for which the Official Statement is to be used, or which is necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading, (b) the information c6ncerning the City set forth in Appendix A of the Official Statement is accurate and complete, (c) all payments required to be made into the funds and accounts established in the Resolution have been made in full, and (d) except as disclosed in the Official Statement, any and all per- mits, licenses and approvals with material respect to the opera- tion of the City's System as of the date of Closing have been obtained and are in full force and effect. (o) At the time of Closing, the Managing Underwriter shall receive a certificate (herein sometimes referred to as the "Arbitrage Certificate") of the City executed by the Mayor, the City Manager or Director of Finance, in form and substance accep- table to Bond Counsel, dated as of the date of Closing, setting forth facts, estimates and circumstances concerning the use or application of the Bond Proceeds, and stating in effect that on the basis of such facts, estimates and circumstances in existence on the date of the Closing, it is not expected that the proceeds of the Bonds will be used in a manner that would cause such Bonds to be "arbitrage bonds" within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended, and the regula- tions prescribed thereunder. (p) At the time of Closing, the Managing Underwriter shall receive from Bond Counsel four copies of the record of pro- .ceedings with respect to the Bonds. (q) At the time of Closing, the Managing Underwriter shall have received at no cost to the City an opinion of counsel to AMBAC Indemnity Corporation, dated the Closing and addressed to the City and the Underwriters to the effect that subject to proper countersignatures, the policy is a valid and legally binding obligation of AMBAC Indemnity Corporation enforceable in 10 accordance with its terms except that the enforcement of the policy may be limited by laws relating to bankruptcy, reorganiza- tions, moratorium, receivershop, or other similar laws affecting creditors rights, generally. (r) At the time of Closing, the Managing Underwriter shall receive such additional certificates and other evidence as the Managing Underwriter may deem necessary to evidence the truth and accuracy as of the time of the Closing of the representations and warranties of the City herein contained and the due perfor- mance and satisfaction by the City at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by it. (s) Subsequent to the respective dates as of which information is given in the Official Statement, there shall not have been any change in the long-term debt of the City's System, or any decrease in the operating revenues or net earnings of the City's System as compared to the ~omparable period of the prior year, or any other change in the financial position or results of operations of such System, or any event or prospective event relating to or affecting such System, which, in the opinion of the Managing Underwriter, materially affects the market for the Bonds or the sale, at the contemplated offering price of the Bonds to be purchased by the Underwriters. The Opinions and certificates and other evidence referred to above shall be in form and substance satisfactory to the Managing Underwriter. If the City shall be unable to satisfy the conditions to the obligations of the Underwriters contained in this Purchase Agree- ment, or if the obligations of the Underwriters shall be ter- minated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Underwriters nor the City shall be under further obligation hereunder, except as provided in Section 10 hereof and except that the check referred to in Section 4 hereof shall be returned to the Managing Underwriter by the City. 10. The Underwriters shall be under no obligations of the City hereunder. The City shall pay or cause to be paid the muni- cipal bond insurance premium with respect to the Bonds and all fees and disbursements of Bryant, Miller and Olive, P.A., Talla- hassee, Florida, Bond Counsel, and Stenstrom, Macintosh, Julian, Colbert & Whigham, P.A., Sanford, Florida, Counsel to the City, the fees and expenses of its engineering consultants and indepen- dent certified public accountants, the fees relating to the rating of the Bonds and all travel expenses incurred by the City related to the Closing. The City shall be under no obligation to 11 pay any expenses incident to the performance of the obligations of the Purchasers hereunder. The City shall pay, in addition to those costs delineated above, all other expenses directly related to the issuance and delivery of the Bonds, including the fees and disbursements of its Counsel, the cost of printing and distri- buting the Official Statement, and printing of the Bonds. 11. Any notice or other communication to be given to the City under this Purchase Agreement may be given by delivering the same in writing to the City at its address set forth above, and any notice or other communication to be given to the Underwriters under this Purchase Agreement may be given by delivering the same in writing to William R. Bough & Co. 250 N. Orange Ave., Suite 1420, Orlando, Florida 32801, until July 31, 1986, and after that date, to William R. Bough & Co., Landmark Center II, 225 E. Robinson Street, Suite 465, Orlando, Florida 32801. 12. This Purchase Agreement is made solely for the benefit of the City and the Underwriters (including the successors or assigns of any Underwriters) and no other person shall acquire or have any right hereunder or by virtue hereof. All the representations, warranties and agreements of the City and of the Underwriters in this Purchase Agreement shall remain operative and in full force and effect and shall survive delivery of and payment for the Bonds hereunder and regardless of any investigation made by or on behalf of the Underwriters. The agreements in Sections 4 and 10 hereof shall survive any termination of this Purchase Agreement. 13. Notwithstanding any provision herein to the contrary, the performance of any and all obligations of the City hereunder and the performance of any and all conditions contained herein for the benefit of the Managing Underwriter may be waived by the Managing Underwriter in its sole discretion, and the approval of the Managing Underwriter when required hereunder or the deter- mination of its satisfaction as to any document referred to herein shall be in writing, signed by a Vice President of William R. Bough & Co. and delivered to you. 14. The Underwriters are delivering herewith a disclosure statement as required by Section 218.385 of Florida Statutes and attached hereto as Exhibit F. William R. Bough & Co. 250 N. Orange Avenue Suite 1420 Orlando, Florida 32801 A h ized Agent on behalf of the Underwriters, including themselves. 12 Accepted by resolution adopted at Sanford, Florida on July~,~ 1986. City of Sanford, Florida Acting by and through the City Commission A t t e s~r/~'~~~ 13 Sources and Uses of Funds Sources: Par Amount Of Bonds $16,975,000.00 Less Original Issue Discount (1,167,250.00) Accrued Interest 81,860.50 Total Sources $15,889,610.50 Uses: Deposit to Construction Fund 13,628,002.20 Capitalized Reserve Fund 1,367,506.25 Deposit to Bond Service Fund 81,860.50 Underwriter's Discount 358,762.50 Cost of Issuance 152,320.00 Insurance 296,185.30 Contingency 4,973.75 Total Uses 15,889,610.50 A-3 EXHIBIT "C" FORM OF OPINION OF CITY ATTORNEY , 1986 City Commission City of Sanford, Florida William R. Hough & Co. Smith Barney, Harris Upham & Co. Incorporated Southeastern Municipal Bonds, Inc. Bryant, Miller & Olive, P.A. Sirs: We are City Attorneys to the City of Sanford, Florida (the "City") and as such, have acted as Counsel for the City in con- nection with the issuance and sale of $ aggregate principal amount of the City's Water and Sewer Revenue Bonds, Series 1986 (the "Series 1986 Bonds"). All terms not otherwise defined herein shall have the meanings ascribed thereto in the Bond Purchase Agreement, dated as of July , 1986, by and be- tween you and the City. For the purpose of rendering this opinion, we have examined the Constitution andlaws of the State of Florida, a transcript of proceedings of the City relating to the authorization and issuance of the Series 1986 Bonds, and such other records, cer- tificates and documents as we have considered necessary to render this opinion. Based upon such review, we are of the opinion that: 1. The City is a municipal corporation of the State of Florida, duly created and existing under and by virtue of the Constitution and laws of the State of Florida. 2. The City had and has good right and lawful authority under the Constitution and laws of the State to adopt the Resolu- tion and to authorize and issue the Bonds; the Resolution has been duly adopted by the City, is presently in full force and effect and constitutes a valid and binding agreement of the City enforceable in accordance with its terms as part of its contract with the several holders of the Bonds; and the holders of the Bonds may either at law or in equity, by suit, mandamus or other proceeding in any court of competent jurisdiction, protect, enforce or compel the performance of all the duties required under the applicable Resolution, except to the extent that the enforceability thereof may be limited by any applicable Page Two bankruptcy, insolvency or other similar laws affecting the enfor- cement of creditors' rights generally. 3. The City has authorized, executed and delivered the Offi- cial Statement. 4. We have participated in the preparation of the Official Statement and in that connection, have participated in conferen- ces with and have generally reviewed and discussed with the offi- cers and staff of the City, with Counsel to the City, with the Consulting Engineers for the City, with Bond Counsel and with the Underwriters and their counsel, the information and statements contained in the Official Statement. While we have not verified the accuracy, completeness or fairness of the statements con- tained in the Official Statement, based upon our examination of the documents mentioned above and our participation in the con- ferences mentioned above, no facts have come to our attention which lead us to believe that the Official Statement as of the date thereof and at all subsequent times up to and including the date hereof (except with respect to the Engineer's Report and summaries thereof and references thereto, and the financial and statistical information contained in the Official Statement as to which no view is expressed), contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statement therein, in light of the circumstances under which they were made, not misleading. 5. The Bond Purchase Agreement has been duly authorized, executed and delivered by the City and constitutes a legal, valid and binding obligation of the City, enforceable in accordance with its terms; provided, however, that no representation is made concerning compliance with the registration requirements of Federal Securities Laws or the securities or Blue Sky Laws of the various states. 6. To the best of our knowledge, neither the City's execu- tion and delivery of the Bond Purchase Agreement and the Series 1986 Bonds, the City's adoption of the Resolution, nor the con- summation of the transactions contemplated thereby and by the Official Statement conflicts with or constitutes a breach of or default under, or will conflict with the laws of the State of Florida, federal law, or the City's ordinances and resolutions or any administrative rule or regulation, judgment, decree, order, license, permit, agreement or instrument to which the City is a party or by which the City or any of its properties are bound. Page Three 7. The pending litigation against the City by Seminole County challenging two annexation proceedings of the City could have an adverse effect on future annexations by the City. We are unable to determine at this time what effect, if any, the outcome of these suits will have on the number of additional customers the City will be able to add to the Water and Sewer System through annexation. 8. Except as may be set forth in the Official Statement, to the best of our knowledge, there is no action, suit or pro- ceeding, or any inquiry or investigation by or before any court, governmental agency, public board or body pending or threatened against the City, which (a) affects or questions the existence of the City, (b) affects or seeks to~prohibit, restrain or enjoin the issuance, sale or delivery of the Series 1986 Bonds or the use of the Official Statement, (c) affects or questions the vali- dity of the Bonds, the Resolution or the Bond Purchase Agreement, (d) questions the completeness or accuracy of the Official State- ment, (e) affects or questions the power or authority of the City to own, operate and maintain the System or establish, revise, levy and collect rates, fees or other charges for the use and services of the System, or (f) questions the powers of the City to carry out any other of the transactions contemplated by the Official Statement, the Resolution or the Bond Purchase Agree- ment, nor is there any basis therefor. 9. The Bonds have been duly validated in accordance with Chapter 75, Florida Statutes and the time for appeal has expired without an appeal having been taken. 10. The City's Ordinance No. 1784, effective November 11, 1985, adopting a revised schedule of water and sewer service charges is in full force and effect and has not been repealed, amended or supplemented. 11. The City has good and proper title to the Water System and Sewer System (collectively the "System") as described in the Resolution and the Official Statement, and except as disclosed in the Official Statement, to the best of our knowledge, the City's System is not in violation in any respect of the State Department of Environmental Regulation and Federal Environmental Protection Laws, which could materially adversely affect the operations or financial condition of the System; and no material pertinent spe- cial or general state law has been adopted since the adjournment of the 1986 Regular Session of the Florida Legislature which affects or would affect the issuance, payment or legality of the Bonds or the interest thereon, the power of the City to collect Page Four and apply the revenues pledged to the payment of said Bonds, the power or authority of the City to own and operate the System, including the power to acquire, construct or operate the projects and facilities described in the Official Statement relating to the Bonds or the City's power or authority to fix, revise and collect rates, fees and other charges in connection with the distribution and sale of water from or collection and disposal of wastewater by the System. Very truly yours, Stenstrom, McIntosh, Julian, Colbert & Whigham, PoA. By: William L. Colbert EXHIBIT "D" FORM OF LETTER FROM HARTSOCK & HARTSOCK William R. Hough & Co. 250 N. Orange Avenue Suite 1420 Orlando, Florida 32801 Gray, Harris and Robinson, P.A. Post Office Box 3068 Orlando, Florida 32801 Bryant, Miller and Olive, P.A. 700 Barnett Bank Building Tallahassee, Florida 32301 Re: City of Sanford, Florida Water and Sewer Revenue Bonds, Series 1986 Gentlemen: We have examined the balance sheets of the Water and Sewer Sys- tems Fund for the City of Sanford, Florida (the "City") as of September 30, 1985 and the related statements of revenue and expense, retained earnings and changes in financial position for the years then ended. We have reviewed the balance sheets of the Water and Sewer Fund of the City of Sanford, Florida as of May 31, 1986 and the related statements of revenue and expense, changes in retained earnings, and changes in financial position for the eight months then ended, in accordance with standards established by the 'American Institute of Certified Public Accountants. A review consists principally of inquiries of City personnel and analytical procedures applied to financial data. It is substan- tially less in scope than an examination in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. William R. Hough & Co. Gray, Harris and Robinson, P.A. Bryant, Miller and Olive, P.A. Page Two Such financial statements and our reports with respect thereto are included as Appendix B to the Official Statement of the City in connection with the public sale by the City of the above- captioned bonds. In connection with the Official Statement: 1. We are independent public accountants with respect to the City within the meaning of the Rules of Conduct and related in- terpretations of the Code of Professional Ethics of the American Institute of Certified Public AccQuntants. 2. We have not examined any financial statements of the City's Water and Sewer Fund as of any date or for any period sub- sequent to September 30, 1985. The purpose (and therefore the scope) of our examination for the year ended September 30, 1985, was to enable us to express our opinion on the financial state- ments at September 30, 1985, and for the year then ended, but not on the financial statements as of or for any period subsequent thereto. 3. For purposes of this letter, we have read the minutes of the City Commission of the City of Sanford, Florida from Septem- ber 30, 1985 to , 1986 as set forth in the minute books, officials of the City having advised us that the minutes of all such meetings through , 1986 were set forth therein (our work did not extend to the period August__, 1986 through August __, 1986, inclusive). 4. The procedures carried out by us with respect to changes in financial statement items after September 30, 1985 are as follows: We have read the monthly financial reports of the Water and Sewer Systems Fund of the City of Sanford, Florida through , 1986 and made inquiries of certain officials · of the City who have responsibility for financial and accounting matters as to whether: (i) there was any material change at , 1986 in the reserves and retained earnings or long term debt of the Water and Sewer Systems or any decrease in net current assets or net assets, all as compared with corresponding amounts as of September 30, 1985, (ii) for the period from September 30, 1985 through May 31, 1986 and sub- sequently, from May 31, 1986 to August __, 1986, there was any material decrease as compared with the corresponding period in the preceding year, in gross revenues or net revenues of the William R. Hough & Co. Gray, Harris and Robinson, P.A. Bryant, Miller and Olive, P.A. Page Three City's Water and Sewer System, or (iii) there has occurred any other change in the financial position or results of operation of the System that could materially adversely affect the operations of or financial condition of the System. On the basis of these inquiries and our reading of the minutes as described in para- graph three, nothing came to our attention that caused us to believe that there was any such material changes or decrease except in all instances for material changes or decreases which the Official Statement discloses have occurred or may occur. 5. Our examination of the financial statements for the period referred to in the introductory paragraph of this letter was comprised of audit tests and procedures deemed necessary for the purpose of expressing an opinion on such financial statements taken as a whole. For neither the period referred to therein nor any other period did we perform audit tests for the purpose of expressing an opinion on individual balances of accounts or sum- maries of selected transactions such as those enumerated above, and accordingly, we express no opinion thereon. 6. We have received a copy of the Official Statement related to the above-captioned financing. We acknowledge that our report addressedto the City, dated , 1986, is, included as Appendix B. To the extent our name is used in the Official Statement, we hereby consent thereto. 7. We have read the information contained in the Offici~ Statement related to the above-captioned financing under the heading "Purpose of the Series 1986 Bonds", the table captioned Historical Statement of Net Income and have compared the infor- mation for the Fiscal Years ended September 30, 1981 through 1985 with the audited and unaudited financial statements or accounting records of the City from which such information was derived and have found such information to be in agreement with such audited and unaudited statements or such other accounting records. 8. This letter is solely for the information of, and assist- ance to, the City and its Financial Consultant in conducting and documenting an investigation of the affairs of the City in con- nection with the sale of the securities covered by the Official Statement and is not to be used, circulated, quoted or otherwise referred to within or without the underwriting group for any William R. Hough & Co. Gray, Harris and Robinson, P.A. Bryant, Miller and Olive, P.A. Page Four other purpose, including but not limited to the purchase or sale of securities, nor is it to be filed with or referred to in whole or in part in the Official Statement or any other documents, except that reference may be made to it in a purchase contract or in a list of closing documents pertaining to the offering of the securities covered by the Official Statement. Sincerely, Hartsock & Hartsock EXHIBIT "E" FORM OF LETTER OF CONSULTING ENGINEERS August , 1986 William R. Hough & Co. Smith Barney, Harris Upham & Co., Inc. Southeastern Municipal Bonds, Inc. Gentlemen: We are independent consulting engineers to the City of San- ford, Florida (the "City"). In connection with the City's pro- posed water and wastewater facilities program and the issuance by the City of $ aggregate principal amount of Water and Sewer Revenue Bonds, Series 1986 (the "Series 1986 bonds"), we have participated in various proceedings relating thereto. All terms not otherwise defined in this letter have the same meaning ascribed to those terms in the Bond Purchase Contract, dated July __, 1986, between you and the City. For the purpose of rendering this opinion, we have read the latest available financial statements and interim financial statements of the City, consulted with officers of the City responsible for financial, operational and other matters, and have followed other procedures which we have deemed necessary under the circumstances. Based upon the above procedures, we are of the opinion that: 1. Nothing has come to our attention as of August 20, 1986 which would cause our firm to believe that the statements, pro- jections and tables in the Official Statement relating to the System (including the information under the headings "The System", "Rates, Fees and Charges", "Water and Sewer Capital Improvements Program", "Historical Statement of Net Income" and "Projected Revenue, Expenses, Debt Service and Coverage" and our Feasibility Report attached thereto as Appendix C) contained any untrue statement of a material fact required to be stated therein necessary to make the statements therein, in light of the cir- cumstances under which they were made not misleading in any material respect. 2. The accuracy of the revenue projections contained in the Official Statement in the table captioned "Projected Revenues, Expenses, Debt Service, and Coverage" and in our Feasibility Report attached as Appendix C will not be substantially affected by the outcome of the pending litigation against the City by William R. Hough & Co. Page Two Seminole County challenging the annexation by the City of two parcels of land in Seminole County. We consent to the inclusion of our Feasibility Report as an appendix to the Official Statement for the Series 1986 Bonds and the description of and reliance on us as experts in our field. Very truly yours, Conklin, Porter & Holmes Engineers, Inc. By: Paul E. Porter EXHIBIT "F" CITY OF SANFORD WATER AND SEWER BONDS, SE DISCLOSURE STATEMENT REQUIRED BY SECTION 218.385 OF FLORIDA STATUTES 1. Itemized List of Expenses (a) Out-of-pocket ............................... $13,070.75 (b) Clearance and handling ...................... $ 8,487.50 (c) Cusip, MSRB, PSA, Munifacts ................. $ 5,092.50 (d) Federal Funds .......... ~ .................... $ 3,395.00 (e) Closing ..................................... $ 7,638.75 (f) Underwriter's Counsel ....................... $38,703.00 2. No compensation is to be paid to anyone to act as an inter- mediary between the City and the Underwriter. 3. The expected Underwriter's spread is $358,762.50. 4. The expected management fee to be realized is $59,412.50 (which is included in the Underwriter's spread). 5. No fees or bonuses are to be paid by the Underwriter. 6. The Managing Underwriter is: William R. Hough & Co. Post Office Drawer 1051 St. Petersburg, Florida 33731 (813) 823-8100 for the Underwriters 7. The total gross discount is $1,526,012.50 of which $1,167,250.00 represents the Original Issue Discount.