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02-43 RESOLUTION NO. 02-43 A RESOLUTION AUTHORIZING THE NEGOTIATED SALE OF NOT TO EXCEED $15,500,000 REVENUE BONDS (SPRING TRAINING FACILITY), SERIES 2002; AWARDING THE SALE THEREOF TO UBS PAINEWEBBER INC ON BEHALF OF ITSELF AND THE CO- MANAGERS SELECTED BY THE CITY, SUBJECT TO THE TERMS AND CONDITIONS OF A PURCHASE CONTRACT; PROVIDING FOR THE ISSUANCE OF THE SERIES 2002 BONDS IN FULL BOOK ENTRY FORM; APPROVING THE FORM OF A PRELIMINARY OFFICIAL STATEMENT; AUTHORIZING THE DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND AN OFFICIAL STATEMENT IN CONNEC- TION WITH THE DELIVERY OF THE BONDS; PROVIDING FOR COMPLIANCE WITH A CONTINUING DISCLOSURE CERTIFICATE; APPOINTING A REGISTRAR AND PAYING AGENT; AUTHORIZING THE PURCHASE OF MUNICIPAL BOND INSURANCE; AUTHORIZING THE PURCHASE OF A DEBT SERVICE RESERVE FUND SURETY BOND; PROVIDING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on January 18, 2001, the City Commission of the City of Clearwater, Florida (the "City" or the "Issuer") enacted Ordinance No. 6675-01 (the "Original Bond Ordinance") to provide for the issuance of City's Revenue Bonds (Spring Training Facility), Series 2001, to be issued in one or more series from time to time payable from the Interlocal Agreement payments and Revenues to be received by the City from the State of Florida (as defined therein); and WHEREAS, on September 6, 2001, the City Commission of the City enacted Ordinance No. 6854-01, amending the Original Bond Ordinance to provide for the issuance of not to exceed $15,500,000 in principal amount of the City's Revenue Bonds (Spring Training Facility), Series 2001, and on August 22, 2002, the City Commission of the City enacted Ordinance No. 7016-02, further amending the Original Bond Ordinance to authorize the limited use of City funds, in addition to the County Payments and the State Payments (as defined in the Original Bond Ordinance) in connection with obtaining municipal bond insurance for the Bonds herein authorized ( the Original Bond Ordinance, as amended by Ordinance No. 6854-01 and Ordinance No. 7016-02, collectively, the "Bond Ordinance"); and WHEREAS, the City in the Bond Ordinance designated the project to be financed with the proceeds of the Series 2002 Bonds as the baseball spring training facility consisting of a new 7000 seat baseball stadium and related spring training facilities to replace the existing Jack Russell Stadium (the "Project"), which will be used in conjunction with Carpenter Field at which is located four major league training fields, a practice infield, covered batting tunnels, an outdoor bullpen, clubhouse building and a workout/exercise building; and Resolution 02-43 WHEREAS, it is in the best interest of the City to provide for the negotiated sale of not to exceed $15,500,000 of the Series 2002 Bonds herein authorized; and WHEREAS, the City intends on negotiating a sale of the Series 2002 Bonds with UBS PaineWebber Inc. on behalf of itself and as representative of the co-manager Salomon Smith Barney, Inc., each as selected by the City's Finance Director after consultation with the City's Financial Advisor (collectively, the "Underwriters") subject to the terms and conditions contained herein and set forth in a Purchase Contract, the form of which is attached hereto as Exhibit "A" (the "Purchase Contract") and authorizing its Mayor-Commissioner, or in his absence the Vice Mayor, and City Manager to execute such Purchase Contract upon the approval of the terms thereof by the City Manager and the City's Finance Director; and WHEREAS, the City now desires to approve the issuance of its Series 2002 Bonds, to sell its Series 2002 Bonds pursuant to the Purchase Contract, to authorize the distribution of a Preliminary Official Statement and an Official Statement in connection with the issuance of the Series 2002 Bonds and to take certain other actions in connection with the issuance and sale of the Series 2002 Bonds; and WHEREAS, the Issuer will be provided all applicable disclosure information by the Underwriters as required by Section 218.385, Florida Statutes, prior to the execution of the Purchase Contract, a copy of which disclosure is to be attached to the Purchase Contract; and WHEREAS, this resolution shall constitute a supplemental resolution under the terms of the Bond Ordinance, and all capitalized undefined terms used herein shall have the meanings set forth in the Bond Ordinance; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF CLEARWATER, FLORIDA, as follows: SECTION 1. AUTHORIZATION OF BONDS AND SERIES DESIGNATION. The Revenue Bonds (Spring Training Facility), Series 2001 authorized by the Bond Ordinance being offered pursuant to this resolution is hereby designated as the not to exceed $15,500,000 City of Clearwater, Florida, Revenue Bonds (Spring Training Facility), Series 2002 (the "Series 2002 Bonds"), which Series 2002 Bonds are hereby authorized to be issued. The proceeds of the Series 2002 Bonds shall be used to pay (i) a portion of the costs of the Project (as hereinafter identified), (ii) the costs of issuing the Series 2002 Bonds, (iii) the premium on the Bond Insurance Policy, and (iv) the premium for the debt service reserve fund surety bond for deposit to the Reserve Fund. The proceeds of the Series 2002 Bonds not required to pay the amounts described in clauses (ii) through (iv) in the immediately preceding sentence shall be deposited into the Project Account in the Construction Fund (created by the Bond Ordinance) for the Project. 2 Resolution 02~43 SECTION 2. NEGOTIATED SALE. (a) Due to the willingness of the Underwriters to purchase not to exceed $15,500,000 in aggregate principal amount of the Series 2002 Bonds at favorable interest costs and the importance of timing in the marketing of such obligations, it is hereby determined that it is in the best interest of the public and the City to sell the Series 2002 Bonds at a negotiated sale and such sale to the Underwriters pursuant to the terms and conditions contained in the Purchase Contract and herein is hereby authorized and approved, subject to the satisfaction of the conditions set forth in Section 2(b) below. (b) The Finance Director is hereby authorized to receive the offer to purchase the Series 2002 Bonds from the Underwriters in the form of an executed Purchase Contract in the form approved herein. The City Manager and the Finance Director are hereby authorized to award the sale of the Series 2002 Bonds on their determination that the offer submitted by the Underwriters for the purchase of all of the Series 2002 Bonds are within the following parameters: (1) in the case of the Series 2002 Bonds, the true interest cost rate shall not exceed 5.50%, (2) the actual principal amount of Series 2002 Bonds shall not exceed $15,500,000, (3) the final maturity date shall not be later than thirty (30) years after the date of issuance of the Series 2002 Bonds, and (4) the Underwriters' discount shall not exceed $8.00 per $1,000 of Series 2002 Bonds issued. The City Manager and the City's Finance Director are hereby authorized to award the sale of the Series 2002 Bonds as set forth above or to reject the offer from the Underwriters for the Series 2002 Bonds. Such award shall be final. (c) The Series 2002 Bonds shall be sold to the Underwriters, upon the terms and conditions set forth in the Purchase Contract, the form of which is attached hereto as Exhibit "A" and incorporated herein by reference, upon the satisfaction of the conditions set forth in Section 2(b) hereof. The Mayor-Commissioner, or in his absence the Vice Mayor, the City Manager and the City Clerk are hereby authorized to execute such Pur- chase Contract in substantially the form attached as Exhibit "A" upon the approval of the City Attorney as to form and legal sufficiency, with such additional changes, insertions and omissions therein as do not change the substance thereof and as may be approved by the said officers of the Issuer executing the same, such execution to be conclusive evidence of such approval. SECTION 3. REDEMPTION AND MATURITY PROVISIONS. The Series 2002 Bonds shall be dated, shall bear interest payable at the times, shall mature and shall be subject to redemption as provided in the Purchase Contract. SECTION 4. CREATION OF ACCOUNT IN THE CONSTRUCTION FUND AND USE OF FUNDS. The Bond Ordinance created within the Construction Fund two separate accounts, namely, the Cost of Issuance Account and the Project Account. Moneys held in the Cost of Issuance Account shall be used to pay the costs of issuing and delivering the Series 2002 Bonds. Moneys held in the Project Account shall be used by the City to pay the costs of the Project. Once all costs of the Projects have 3 Resolution 02-43 been paid or otherwise provided for, any funds then on deposit in the Construction Fund may be used by the City to pay a portion of the then outstanding principal amount of the Series 2002 Bonds. SECTION 5. DISPOSITION OF PROCEEDS OF SERIES 2002 BONDS. The proceeds from the sale of the Series 2002 Bonds shall be deposited as follows: (a) An amount equal to the accrued interest on the Series 2002 Bonds shall be deposited into the Interest Account in the Debt Service Fund; (b) An amount determined by the Finance Director to be necessary to pay the costs of issuing the Series 2002 Bonds, including the premium due to the Bond Insurer and the premium for the reserve account surety bond shall be deposited into the Cost of Issuance Account in the Construction Fund to pay such costs; and (c) The remaining proceeds of the Series 2002 Bonds shall be deposited into the Project Account in the Construction Fund. SECTION 6. APPROVAL OF BONDS. The Series 2002 Bonds shall be issued under and secured by the Bond Ordinance and shall be executed and delivered by the Mayor-Commissioner, the City Manager and the City Clerk upon the approval of the City Attorney as to form and legal sufficiency, in substantially the form set forth in the Bond Ordinance, with such additional changes and insertions therein as conform to the provisions of the Purchase Contract and such execution and delivery shall be conclusive evidence of the approval thereof by such officers. SECTION 7. BOOK ENTRY ONLY BONDS. It is in the best interest of the City and the residents and inhabitants thereof that the Series 2002 Bonds be issued utilizing a pure book-entry system of registration. In furtherance thereof, the City has previously executed and delivered a Blanket Letter of Representations with the Depository Trust Company. For so long as the Series 2002 Bonds remain in such book entry only system of registration, in the event of a conflict between the provisions of the Bond Ordinance and of the Blanket Letter of Representations, the terms and provisions of the Blanket Letter of Representations shall prevail. SECTION 8. PRELIMINARY OFFICIAL STATEMENT AND OFFICIAL STATEMENT. The City Manager and Finance Director are authorized and directed to cause a Preliminary Official Statement to be prepared in substantially the form attached hereto as Exhibit "B", with such changes, insertions and omissions as shall be approved by the City Manager and Finance Director and to furnish copies of such Preliminary Official Statement to the Underwriters, who are hereby authorized to distribute copies thereof to potential purchasers. The City Manager and Finance Director are authorized to deem final the Preliminary Official Statement prepared pursuant to this Section for purposes of Rule 15c2-12 (the "Rule") of the Securities and Exchange Commission. Upon the award of the sale of the Series 2002 Bonds to the Underwriters the City shall 4 Resolution 02-43 also make available a reasonable number of copies of the Official Statement to the Underwriter. Following the award of the Series 2002 Bonds, the City Manager and the Finance Director shall cause to be prepared a final Official Statement dated as of the sale date, reflecting such changes in the Preliminary Official Statement as may be necessary to reflect the Purchase Contract. The Mayor-Commissioner and City Manager are hereby authorized to execute and delivery such final Official Statement, with such changes, insertions and omissions as may be approved by such officers. SECTION 9. CONTINUING DISCLOSURE. The City hereby covenants and agrees that, in order to provide for compliance by the City with the secondary market disclosure requirements of the Rule, that it will comply with and carry out all of the provisions of that certain Continuing Disclosure Certificate in substantially the form attached hereto as Exhibit "C", to be executed by the City and dated the date of issuance and delivery of the Series 2002 Bonds, as it may be amended from time to time in accordance with the terms thereof (the "Continuing Disclosure Certificate"). Notwithstanding any other provision of this Resolution, failure of the City to comply with such Continuing Disclosure Certificate shall not be considered an event of default; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Section. SECTION 10. REGISTRAR AND PAYING AGENT. Wells Fargo Bank Minnesota, NA, Jacksonville, Florida, is hereby appointed as Registrar and Paying Agent for the Series 2002 Bonds. SECTION 11. MUNICIPAL BOND INSURANCE POLICIES AND RESERVE ACCOUNT SURETY BONDS, Pursuant to the Bond Ordinance, MBIA Insurance Corporation (UMBIA") has been selected to provide its municipal bond insurance policy (the "Policy") as the Bond Insurance Policy (as defined in the Bond Ordinance) as additional security for payment of principal of and interest on the Series 2002 Bonds, and to provide its debt service reserve fund surety bond or insurance policy (the "Reserve Policy") in the amount of the applicable Reserve Requirement to fund the Reserve Fund for the benefit of the Series 2002 Bonds. Selection of MBIA as the Bond Insurer (as defined in the Bond Ordinance) and MBIA as the provider of the Reserve Policy is hereby ratified and confirmed and payment for such Bond Insurance Policy and Reserve Policy from proceeds of the Series 2002 Bonds is hereby authorized. The City hereby accepts the terms, conditions and agreements relating to the Bond Insurance Policy and the Reserve Policy in accordance with the Municipal Bond Insurance Commitment and Municipal Bond Debt Service Reserve Insurance Commitment, substantially in the form attached hereto as Exhibit liD" and incorporated herein with such changes as may be approved by the City's Finance Director, whose execution thereof shall be deemed approval of such changes. A statement of insurance is hereby authorized to be printed on or attached to the Series 2002 Bonds for the benefit and information of the Holders of the Series 2002 Bonds. The Mayor- Commissioner, or in his absence the Vice Mayor, and City Manager are authorized to 5 Resolution 02-43 execute and the City Clerk is authorized to attest upon the approval thereof as to form and legal sufficiency by the City Attorney, the Financial Guaranty Agreement in substantially the form attached to the Commitment as part of Exhibit liD" hereto, and a Debt Service Agreement substantially in the form attached hereto as Exhibit "E", each with such changes, insertions and omissions as may be approved by such officers, whose execution thereof shall be deemed approval of such changes. In addition to the covenants and agreements of the City previously contained in the Bond Ordinance regarding the rights of the Bond Insurer and the provider of the Reserve Policy, which are hereby incorporated herein, the City hereby makes the following additional covenants and agreements for the benefit of the Bond Insurer and the holders of the Series 2002 Bonds while the Bond Insurance Policy insuring the Series 2002 Bonds and the Reserve Policy are in full force and effect: (a) "Bond Insurance Policy" shall mean the insurance policy issued by the Bond Insurer guaranteeing the scheduled payment of principal of and interest on the Series 2002 Bonds when due. (b) "Bond Insurer" shall mean MBIA Insurance Company, or any successor thereto or assignee thereof. (c) The maturity of the Series 2002 Bonds insured by the Bond Insurer shall not be accelerated without the consent of the Bond Insurer. (d) No waiver, modification, amendment or supplement to the Bond Ordinance which requires Bondholder consent may become effective except upon obtaining the prior written consent of the Bond Insurer. (e) Copies of any modification or amendment to the Bond Ordinance shall be sent to Standard & Poor's Credit Markets Services at least 10 days prior to the effective date thereof. (f) Amounts paid by the Bond Insurer under the Bond Insurance Policy shall not be deemed paid for purposes of the Bond Ordinance and shall remain Outstanding and continue to be due and owing until paid by the City in accordance with the Bond Ordinance. The Bond Insurer shall, to the extent it makes any payment of principal of or interest on the Series 2002 Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Bond Insurance Policy. The Bond Ordinance shall not be discharged unless all amounts due or to become due to the Bond Insurer have been paid in full or duly provided for. (g) All notices required to be given under the Bond Ordinance or this Resolution (including, without limitation, the resignation or removal of the 6 Resolution 02-43 Paying Agent) shall also be given to the Bond Insurer. The notice address of the Bond Insurer is MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504, Attention: Insured Portfolio Management. (h) Payments under the Reserve Policy. A. In the event that, on the second Business Day, and again on the Business Day, prior to the Payment Date on the Series 2002 Bonds, the Paying Agent has not received sufficient moneys to pay all principal of and interest on the Series 2002 Bonds due on the second following or following, as the case may be, Business Day, the Paying Agent shall immediately notify the Bond Insurer or its designee on the same Business Day by telephone or telegraph confirmed in writing by registered or certified mail, of the amount of the deficiency. B. If the deficiency is made up in whole or in part on the Payment Date, the Paying Agent shall so notify the Bond Insurer or its designee. C. In addition, if the Paying Agent has notice that any Bondholder has been required to disgorge payments of principal or interest on the Series 2002 Bonds to a trustee in Bankruptcy or creditors or others pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such Bondholder within the meaning of any applicable bankruptcy laws, then the Paying Agent shall notify the Bond Insurer or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail. D. The Paying Agent is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for Holders of the Series 2002 Bonds as follows: 1. If and to the extent there is a deficiency in amounts required to pay interest on the Series 2002 Bonds, the Paying Agent shall (a) execute and deliver to State Street Bank and Trust Company, N.A., or its successors under the Policy (the "Insurance Paying Agent"), in form satisfactory to the Insurance Paying Agent, an instrument appointing the Bond Insurer as agent for such Holders in any legal proceeding related to the payment of such interest and an assignment to the Bond Insurer of the claims for interest to which such deficiency relates and which are paid by the Bond Insurer, (b) receive as designee of the respective Holders (and not as Paying Agent) in accordance with the tenor of the Municipal Bond Insurance Policy (the "Policy") payment from the Insurance Paying Agent with respect to the claims for interest so assigned, and (c) disburse the same to such respective Holder; and 7 Resolution 02-43 2. If and to the extent of a deficiency in amounts required to pay principal of the Series 2002 Bonds, the Paying Agent shall (a) execute and deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent an instrument appointing the Bond Insurer as agent for such Holder in any legal proceeding relating to the payment of such principal and an assignment to the Bond Insurer of any of the Bond surrendered to the Insurance Paying Agent of so much of the principal amount thereof as has not previously been paid or for which moneys are not held by the Paying Agent and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying Agent is received), (b) receive as designee of the respective Holders (and not as Paying Agent) in accordance with the tenor of the Bond Insurance Policy payment therefor from the Insurance Paying Agent, and (c) disburse the same to such Holders. E. Payments with respect to claims for interest on and principal of Series 2002 Bonds disbursed by the Paying Agent from proceeds of the Bond Insurance Policy shall not be considered to discharge the obligation of the Issuer with respect to such Series 2002 Bonds, and the Bond Insurer shall become the owner of such unpaid Bond and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of this subsection or otherwise. F. Irrespective of whether any such assignment is executed and delivered, the Issuer and the Paying Agent hereby agree for the benefit of the Bond Insurer that: 1. They recognize that to the extent the Bond Insurer makes payments, directly or indirectly (as by paying through the Paying Agent), on account of principal of or interest on the Series 2002 Bonds, the Bond Insurer will be subrogated to the rights of such Holders to receive the amount of such principal and interest from the Issuer, with interest thereon as provided and solely from the sources stated in this Resolution and the Series 2002 Bonds; and 2. They will accordingly pay to the Bond Insurer the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) of the first paragraph of the Bond Insurance Policy, which principal and interest shall be deemed past due and not to have been paid), with interest thereon as provided in this Resolution and the Series 2002 Bonds, but only from the sources and in the manner provided herein for the payment of principal of and interest on the Series 2002 Bonds to Holders, and will otherwise treat the Bond Insurer as the owner of such rights to the amount of such principal and interest. 8 Resolution 02-43 (i) The Ordinance shall not be discharged until all Policy costs owing to MBIA shall have been paid in full. The City's obligation to pay such amounts shall expressly survive payment in full of the Series 2002 Bonds. In addition, there shall be no optional redemption of Series 2002 Bonds unless all amounts owed to the Bond Insurer under the terms of the Financial Guaranty Agreement have been paid in full. U) The Paying Agent shall maintain adequate records, verified with the Bond Insurer, as to the amount available to be drawn at any given time under the Reserve Policy and as to the amounts paid and owing to the Bond Insurer under the terms of the Financial Guaranty Agreement. The Paying Agent shall give notice to MBIA of any failure of the City to make timely payment in full of any required deposits to the Debt Service Fund within two business days of the date due. SECTION 12, RESERVE ACCOUNT REQUIREMENT. The Reserve Account Requirement is hereby designated to be an amount equal to the lesser of (i) ten percent (10%) of the stated principal amount of the Series 2002 Bonds, (ii) maximum annual debt service on the Series 2002 Bonds and (iii) one hundred twenty-five percent (125%) of the average annual debt service on the Series 2002 Bonds. SECTION 13. AUTHORIZED INVESTMENTS. The City hereby waives its right to add additional Authorized Investments as permitted by clause E of the definition of Authorized Investments set forth in, the Ordinance, and hereby agrees to restrict investments of funds held under the Ordinance to those set forth in the definition of Authorized Investments. SECTION 14. AUTHORIZED SIGNORS. The Mayor-Commissioner, or in his absence the Vice Mayor, the City Manager or any Assistant City Manager , the City's Finance Director, the City Attorney and the City Clerk or any Assistant or Deputy City Clerk, or any other appropriate officers of the City are hereby authorized and directed to execute any and all certifications or other instruments or documents required by the Resolution, the Purchase Contract, the Bond Ordinance or any other document referred to above as a prerequisite or precondition to the issuance of the Series 2002 Bonds and any such representation made therein shall be deemed to be made on behalf of the City. In the event both the Mayor-Commissioner and the Vice Mayor are unable to execute the documents related to the Series 2002 Bonds, then any other member of the City Commission shall be authorized to execute such documents with the full force and effect as if the Mayor-Commissioner or the Vice Mayor had executed same. All action taken to date by the officers of the City in furtherance of the issuance of the Series 2002 Bonds is hereby approved, confirmed and ratified. SECTION 15. PRIOR RESOLUTIONS. To the extent the provisions of this Resolution are inconsistent with the provisions of previous resolutions adopted by the 9 Resolution 02-43 City Commission of the City with respect to the Project, provisions of this Resolution shall control and supercede the inconsistent provisions of such prior resolutions. SECTION 16. EFFECTIVE DATE. This resolution shall take effect immediately upon adoption. Passed and adopted by the City Commission of the City of Clearwater, Florida, this 22nddayof August , 2002. CITY OF CLEARWATER, FLORIDA Approved as to form: Attest: _~ J r ,~ Pamela K. Akin, City Attorney . ~~, /l~dx~:dl~0-euL 1JV Cyn i . GOUdea.u, ~jty Clerk {I 10 Resolution 02-43 EXHIBIT A FORM OF PURCHASE CONTRACT Resolution 02-43 BOND PURCHASE AGREEMENT September _, 2002 City of Clearwater, Florida $ City of Clearwater, Florida, Revenue Bonds, (Spring Training Facility) Series 2002 Ladies and Gentlemen: The undersigned on behalf of itself and Salomon Smith Barney Inc. (collectively, the "Underwriters") offer to enter into this Bond Purchase Agreement (this "Purchase Agreement") with you (the "Issuer"), which upon your acceptance of this offer, will be binding upon you and upon the Underwriters. Terms not otherwise defined herein shall have the same meanings as set forth in Ordinance No. 6675.01, enacted by the City Commission of the Issuer on January 18, 2001, as amended by Ordinance No. 6854-01, enacted by the City Commission of the Issuer on September 6, 2001 and as further amended by Ordinance No. 7016-02, enacted by the City Commission of the Issuer on August 22, 2002 (collectively, the "Bond Ordinance") and Resolution No. 02-43 adopted by the City Commission of the Issuer on August 22, 2002, as amended and supplemented from time to time (the "Resolution") and the Final Official Statement described below. This offer is made subject to your acceptance of this Purchase Agreement on or before , 2002 at 12:00 p.m. 1. Purchase and Sale of Series 2002 Bonds. (a) Upon the terms and conditions and in reliance upon the respective representations, warranties and covenants herein, the Underwriters hereby agree to purchase from the Issuer, and the Issuer hereby agrees to sell to the Underwriters all (but not less than all) of the $_ City of Clearwater, Florida, Revenue Bonds (Spring Training Facility) Series 2002 (the "Series 2002 Bonds"), at a purchase price (the "Purchase Price") of $ equal to the par amount of the Series 2002 Bonds $ less original issue discount ($ ) and Underwriters's discount ($ ), plus accrued interest from , 2002 to the date of Closing as described in Section 7. The Series 2002 Bonds shall be in such principal amounts, mature on such dates, bear interest at such rates and shall be subject to redemption as indicated on Exhibit E hereto. The proceeds to be received by the Issuer from the sale of the Series 2002 Bonds will be used to (1) finance the acquisition, construction and installation of a new baseball spring training facility and related spring training facilities to replace Jack Russell Stadium consisting of a 7000 seat baseball stadium (the "Project") (ii) fund the reserve account insurance policy and (iii) pay costs associated with the issuance of the Series 2002 Bonds, including the municipal bond insurance premium. (b) The Underwriters have delivered to the Issuer herewith a corporate check equal to $ ( ) as a security deposit, payable to the Issuer. In the event Issuer does not accept this offer, such check shall be immediately returned to the Underwriters uncashed. If this offer is accepted, the check will be held uncashed as security for the performance by the Underwriters of its obligations to purchase, to accept delivery of and to pay for the Series 2002 Bonds at the Closing. In the event of Issuer's failure to deliver the Series 2002 Bonds at the Closing, or if Issuer shall be unable to satisfy the conditions of the obligations of the Underwriters contained herein, or if the obligations of the Underwriters shall be terminated for any reason permitted by this Agreement, the check shall be immediately returned to the Underwriters uncashed, and such return shall constitute a full release and discharge of all claims by the Underwriters arising out of the transactions contemplated hereby. In the event that the Underwriters fail (other than for reasons permitted hereunder) to accept delivery of and to pay for the Series 2002 Bonds at the Closing, the check shall be cashed and the proceeds thereof retained by Issuer as and for full liquidated damages for such failure and for any defaults hereunder on the part of the Underwriters, and such retention shall constitute a full release and discharge of all claims by the Issuer against the Underwriters arising out of the transactions contemplated hereby. 2. Public Offering. The Underwriters agree to make a bona fide public offering of all of the Series 2002 Bonds at the offering prices or yields set forth on Exhibit E hereto. 3. Preliminary and Final Official Statements. (a) The Issuer agrees to deliver Final Official Statements to the Underwriters. The Issuer agrees to deliver to the Underwriters, at such addresses as the Underwriters shall specify, as many copies of the Official Statement relating to the Series 2002 Bonds (the "Final Official Statement") as the Underwriters shall reasonably request as necessary to comply with paragraph (b)(4) of Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule") and with Rule G-32 and all other applicable rules of the Municipal Securities Rulemaking Board. The Issuer agrees to deliver such Final Official Statements within seven business days after the execution hereof. It is understood that, in undertaking to deliver Final Official Statements pursuant to this subparagraph (a), the Issuer is not undertaking any responsibility for the accuracy or completeness of the information in the Final Official Statement concerning DTC. (b) The Issuer hereby authorizes and approves the Preliminary Official Statement dated 2002, and the Final Official Statement (the Final Official Statement, the Preliminary Official Statement and any amendments or supplements that may be authorized for use with respect to the Series 2002 Bonds are 2 herein referred to collectively as the "Official Statement"), consents to their distribution and use by the Underwriters and authorizes the execution of the Final Official Statement by a duly authorized officer of the Issuer. (c) The Underwriters shall give notice to the Issuer on the date after which no participating Underwriters, as such term is defined in the Rule, remains obligated to deliver Final Official Statements pursuant to paragraph (b)(4) of the Rule. 4. Representations and Warranties of the Issuer. The Issuer represents and warrants to the Underwriters that: (a) The Issuer is a duly organized and validly eXlstmg body under the Constitution and laws of the State of Florida, including, particularly, Chapter 166, Part II, Florida Statutes, as amended and other applicable provisions of law (the "Act") with all requisite power and authority to (i) enact Ordinance No. 6675-01, enacted by the City Commission on January 18,2001, as amended by Ordinance No. 6854-01, enacted by the City Commission of the City on September 6, 2001, as further amended by Ordinance No. 7016-02, enacted by the City Commission of the City on August 22, 2002 (collectively, the "Bond Ordinance"), and Resolution No. 02-43, adopted by the City Commission of the City on August 22, 2002 (the "Resolution") (ii) issue, sell, execute and deliver the Series 2002 Bonds to the Underwriters; (iii) execute, deliver, perform its obligations, give effect to and consummate all transactions involving the Issuer under this Purchase Agreement, the Bond Ordinance, the Resolution and the Continuing Disclosure Agreement (the "Financing Documents"), and all other agreements and documents relating to the issuance of the Series 2002 Bonds, (iv) execute and deliver the Official Statement, (v) secure the Series 2002 Bonds in the manner contemplated by the Bond Ordinance and (vi) carry out and consummate all other transactions contemplated by each of the aforesaid documents, and the Issuer has complied with all provisions of applicable law, including the Act, in all matters relating to such transactions. (b) The Issuer has duly authorized (i) the execution and delivery of the Series 2002 Bonds and the execution, delivery and due performance of the Financing Documents, (ii) the distribution and use of the Preliminary Official Statement and execution, delivery and distribution of the Final Official Statement and (iii) the taking of any and all such action as may be required on the part of the Issuer to carry out, give effect to and consummate the transactions contemplated by such instruments. All consents or approvals necessary to be obtained by the Issuer in connection with the foregoing have been received, and the consents or approvals so received are still in full force and effect. (c) The Resolution has been duly adopted by the Issuer, is in full force and effect and constitutes the legal, valid and binding act of the Issuer. The Series 2002 Bonds and the Financing Documents, when executed and delivered, will constitute legal, valid and binding obligations of the Issuer, and the Resolution, the Series 2002 Bonds, the Ordinances and the Financing Documents are enforceable against the Issuer in 3 accordance with their respective terms, except as enforceability thereof may be limited by bankruptcy, insolvency or other laws affecting creditors' rights generally. (d) The Ordinances have been duly enacted following the requlSlte first reading, notice and public hearing requirements and are in full force and effect and constitute the legal, valid and binding acts of the Issuer. (e) When delivered to the Underwriters, the Series 2002 Bonds will have been duly authorized, executed, authenticated, issued and delivered and will constitute legal, valid and binding obligations of the Issuer in conformity with the laws of the State of Florida, including the Act, and will be entitled to the benefit and security of the Pledged Funds. (f) The information relating to the Issuer contained in the Preliminary Official Statement is, and as of the date of closing such information in the Final Official Statement will be, true and correct in all material respects, and the Preliminary Official Statement does not and the Final 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. (g) If, at any time prior to the earlier of (i) receipt of notice from the Underwriters pursuant to Section 3(c) hereof that Final Official Statement is no longer required to be delivered under the Rule or (ii) 90 days after the Closing, any event occurs with respect to the Issuer as a result of which the Preliminary Official Statement or the Final Official Statement as then amended or supplemented might include an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the Issuer shall promptly notify the Underwriters in writing of such event. Any information supplied by the Issuer for inclusion in any amendments or supplements to the Preliminary or Final 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. (h) Neither the adoption of the Resolution, the enactment of the Bond Ordinance, the execution and delivery of the Series 2002 Bonds and the Financing Documents, nor the consummation of the transactions contemplated herein or therein or the compliance with the provisions hereof or thereof will conflict with, or constitute on the part of the Issuer a violation of, or a breach of or default under, (i) any statute, indenture, mortgage, commitment, note or other agreement or instrument to which the Issuer is a party or by which it is bound, (ii) any provision of the State Constitution or the Act or (iii) any existing law, rule, regulation, ordinance, judgment, order or decree to which the Issuer (or the members of the, or any of its officers in their respective capacities as such) is subject. 4 (i) Since December 31, 1975, the Issuer has not been in default at any time as to principal or interest with respect to any obligation issued by the Issuer or with respect to any obligation guaranteed by the Issuer; and other than the Financing Documents the Issuer has not entered into any contract or arrangement of any kind which might give rise to any lien or encumbrance on the Pledged Funds. (j) Except as is specifically disclosed in the Official Statement, there is no action, 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 Issuer, threatened, which in any way questions the powers of the Issuer referred to in subsection (a) above, or the validity of any proceeding taken by the Issuer in connection with the issuance of the Series 2002 Bonds, or wherein an unfavorable decision, ruling or finding could materially adversely affect the transactions contemplated by this Purchase Agreement, or of any other document or instrument required or contemplated by this financing, or which, in any way, could adversely affect the validity or enforceability of the Ordinances, the Series 2002 Bonds or the Financing Documents, or, to the knowledge of the Issuer, which in any way questions the exclusion from gross income of the recipients thereof of the interest on the Series 2002 Bonds for federal income tax purposes or in any other way questions the status of the Series 2002 Bonds under federal or State tax laws or regulations. (k) Any certificate signed by any official of the Issuer and delivered to the Underwriters shall be deemed a representation and warranty by the Issuer to the Underwriters as to the truth of the statements therein contained. (1) 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 certifications may not be relied upon. (m) The Issuer will not knowingly take or omit to take any action, which action or omission will in any way cause the proceeds from the sale of the Series 2002 Bonds to be applied in a manner other than as provided in the Resolution or which would cause the interest on the Series 2002 Bonds to be includable in gross income for federal income tax purposes. (n) The audited financial report of the Issuer for the fiscal year ended September 30, 2001, included in the Official Statement, presents fairly the financial position of the Issuer as of the date indicated and the results of operations for the period specified, and such financial report and statement has been prepared in conformity with generally accepted accounting principles consistently applied in all material respects to the period involved, except as otherwise stated in the notes thereto. There has been no material change in the general affairs, management, properties, financial position, or results of operation of the Issuer since the date of such financial statement except as set forth in the Final Official Statement. 5 (0) The Issuer has all necessary permits, licenses, authorizations to (i) conduct its business as presently being conducted, (ii) operate its facilities and (iii) consummate all transactions contemplated by the Financing Documents and the Series 2002 Bonds, and the Issuer will take all actions necessary to obtain, when required, all additional permits, licenses, approvals and authorizations necessary to operate its facilities and perform its obligations under the Ordinances, Financing Documents and the Series 2002 Bonds. 5. Covenants of the Issuer. The Issuer covenants with the Underwriters as follows: (a) The Issuer will cooperate with the Underwriters in qualifying the Series 2002 Bonds for offer and sale under the securities or Blue Sky laws of such jurisdictions of the United States as the Underwriters may request; provided, however, that the Issuer shall not be required to consent to suit or to service of process in any jurisdiction. The Issuer consents to the use by the Underwriters in the course of its compliance with the securities or Blue Sky laws of the documents relating to the Series 2002 Bonds, subject to the right of the Issuer to withdraw such consent for cause by written notice to the Underwriters. (b) Prior to the earlier of (i) receipt of notice from the Underwriters pursuant to Section 3(c) hereof that the Final Official Statement is no longer required to be delivered under the Rule or (ii) 90 days after the Closing, the Issuer shall provide the Underwriters with such information regarding its current financial condition and ongoing operations as the Issuer shall deem material and such other information concerning the Issuer as the Underwriters may reasonably request. 6. Representations of the Underwriters. As an inducement to the Issuer to enter into this Purchase Agreement, the Underwriters represent and warrant that the Series 2002 Bonds purchased by the Underwriters will be offered and sold by the Underwriters in accordance with all state and federal laws applicable to the Underwriters, unless there is any violation of law arising out of any misrepresentation or breach of covenant by the Issuer, a termination under Section 0 or the failure of a condition under Section 9. The Underwriters have this day filed with the Issuer a Disclosure Statement pursuant to Section 218.385(4), Florida Statutes, as amended, a copy of which is attached hereto as Exhibit D. The Underwriter are authorized to execute and deliver this Purchase Agreement on behalf of the Underwriters and to act for the Underwriters as contemplated hereby. 7. Closing and Delivery. On ,2002 or at such other time and/or date as shall have been mutually agreed upon by the Issuer and the Underwriters, the Issuer will deliver, or cause to be delivered to DTC, for the account of the Underwriters, the Series 2002 Bonds, in definitive form duly executed by the Issuer and authenticated by the Registrar utilizing the FAST delivery system, together with the other documents hereinafter mentioned; and the Underwriters will accept such delivery and pay the Purchase Price of the Series 2002 Bonds by delivering to Issuer a wire transfer in federal funds payable to the order of the Issuer. 6 The activities relating to the final execution and delivery of the Series 2002 Bonds and the Financing Documents and the payment therefor and the delivery of the certificates, opinions and other instruments as described in Section 9 of this Purchase Agreement shall occur at the offices of in, Florida, or such other place as shall have been mutually agreed upon by the Issuer, Paying Agent and Registrar and the Underwriters. The payment for the Series 2002 Bonds and simultaneous delivery of the Series 2002 Bonds to the Underwriters is herein referred to as the "Closing". The Series 2002 Bonds will be delivered as definitive registered Series 2002 Bonds in the denomination of $5,000 each or any integral multiple thereof, and registered in such names and in such amounts as the Underwriters may request. The Series 2002 Bonds shall be made available to the Underwriters for inspection at least 48 hours prior to the Closing. 8. Termination of this Purchase Agreement. The Underwriters shall have the right to cancel its obligation to purchase the Series 2002 Bonds if between the date hereof and the date of Closing: (a) a tentative decision with respect to legislation shall be reached by a committee of the House of Representatives or the Senate of the Congress of the United States, or legislation shall be favorably reported or rereported by such a committee or be introduced, by amendment or otherwise, in or be passed by the House of Representatives or the Senate, or recommended to the Congress of the United States for passage by the President of the United States, or be enacted or a decision by a federal court of the United States or the United States Tax Court shall have been rendered, or a ruling, release, order, regulation or official statement by or on behalf of the United States Treasury Department, the Internal Revenue Service or other governmental agency shall have been made or proposed to be made having the purpose or effect, or any other action or event shall have occurred which has the purpose or effect, directly or indirectly, of adversely affecting the federal income tax consequences of owning the Series 2002 Bonds or of any of the transactions contemplated in connection herewith, including causing interest on the Series 2002 Bonds to be included in gross income for purposes of federal income taxation, or imposing federal income taxation upon revenues or other income of the general character to be derived by the Issuer under the Financing Documents or similar documents or upon interest received on obligations of the general character of the Series 2002 Bonds, which, in the opinion of the Underwriters, materially adversely affects the market price of or market for the Series 2002 Bonds; or (b) legislation shall have been enacted, or actively considered for enactment with an effective date prior to the Closing, or a decision by a court of the United States shall have been rendered, the effect of which is that the Series 2002 Bonds are not exempt from the registration, qualification or other requirements of the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Resolution, as amended and as then in effect; or (c) a stop order, ruling, regulation or official statement by the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall have been issued or made or any other event occurs, the effect of 7 which is that the issuance, offering or sale of the Series 2002 Bonds, is or would be in violation of any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect as amended and as then in effect; or (d) any event shall have occurred or any information shall have become known to the Underwriters which causes the Underwriters to reasonably believe that the Official Statement as then amended or supplemented includes an untrue statement of a material fact, or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; or (e) there shall have occurred any outbreak of hostilities or any national or international calamity or crisis, including a financial crisis, the effect of which on the financial markets of the United States is such as, in the reasonable judgment of the Underwriters, would materially adversely affect the market for or market price of the Series 2002 Bonds; or (f) there shall be in force a general suspension of trading on the New York Stock Exchange, the effect of which on the financial markets of the United States is such as, in the reasonable judgment of the Underwriters, would materially adversely affect the market for or market price of the Series 2002 Bonds; or (g) a general banking moratorium shall have been declared by federal, New York or State authorities; or (h) any proceeding shall be pending or threatened by the Securities and Exchange Commission against the Issuer; or (i) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange; or (j) the New York Stock Exchange or other national securities exchange, or any governmental authority, shall impose, as to the Series 2002 Bonds or obligations of the general character of the Series 2002 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 or, Underwriters. 9. Conditions to the Underwriters's Obligation to Purchase the Series 2002 Bonds. The obligations of the Underwriters to purchase the Series 2002 Bonds shall be subject (a) to the performance by the Issuer of its obligations to be performed hereunder at and prior to the Closing, (b) to the accuracy of the representations and warranties of the Issuer herein as of the date hereof and as of the time of the Closing, and (c) to the following conditions, including the delivery by the Issuer of such documents as are enumerated herein in form and substance satisfactory to Marchena and Graham, P.A., counsel to the Underwriters, and to Bryant, Miller and Olive, P.A. as bond counsel ("Bond Counsel"): 8 (a) At the time of Closing, (i) the Official Statement and the Financing Documents shall be in full force and effect and shall not have been amended, modified or supplemented from the date hereof except as may have been agreed to in writing by the Underwriters, (ii) the proceeds of the sale of the Series 2002 Bonds shall be deposited and applied as described in Section 2.3 of the Resolution and (iii) the Issuer shall have duly adopted and there shall be in full force and effect such resolutions as, in the opinion of Bond Counsel, shall be necessary in connection with the transactions contemplated hereby. (b) Receipt of executed Series 2002 Bonds and Financing Documents at or prior to the Closing. The terms of the Series 2002 Bonds, as delivered, shall in all instances be as described in the Final Official Statement. (c) At or prior to the Closing, the Underwriters shall receive the following documents in such number of counterparts as shall be mutually agreeable to the Underwriters and the Issuer: (i) A final approving opmlOn of Bond Counsel dated the date of Closing, in substantially the form set forth in the Official Statement. (ii) A Letter of Bond Counsel addressed to the Underwriters and dated the date of Closing, to the effect that Bond Counsel's final approving opinion referred to in Section 9(c)(i) hereof may be relied upon by the Underwriters to the same extent as if such opinion were addressed to the Underwriters. (iii) A supplemental opinion of Bond Counsel addressed to the Underwriters and dated the date of Closing, in substantially the form set forth in Exhibit (A). (iv) An opinion, dated the date of the Closing and addressed to the Issuer, of Nabors, Giblin & Nickerson, P.A., Disclosure Counsel, in form and substance satisfactory to the Issuer, and a reliance letter pertaining thereto addressed to the Underwriters. (v) An opinion of Counsel for the Issuer dated the date of Closing, addressed to the Underwriters, in substantially the form set forth in Exhibit B. (vi) Memoranda from Counsel to the Underwriters addressed to the Underwriters indicating the jurisdictions in which the Series 2002 Bonds have been qualified or exempted under the securities or "Blue Sky" laws. (vii) An opinion of Counsel to the Underwriters in substantially the form set forth in Exhibit C hereto. (viii) a Rule 15c2-12 Certificate with respect to the Preliminary Official Statement. 9 (ix) The Final Official Statement executed on behalf of the Issuer by a duly authorized officer. (x) Certified copies of all resolutions of the Issuer relating to the Series 2002 Bonds and approving the execution and delivery of the Financing Documents and related documents. (xi) Specimen Series 2002 Bonds. (xii) A letter from Standard and Poor's and Fitch to the effect that the Series 2002 Bonds have been assigned a rating of no less than "AAA" , which rating shall be in effect as of the date of Closing. (xiii) A letter from the Auditors in which consent is given to the use of its reports on the financial statements of the Issuer in the Official Statement and to the references made to the firm in the Official Statement. (xiv) A certificate, in form and substance satisfactory to the Underwriters and its Counsel, of the Issuer or any duly authorized officer or official of the Issuer satisfactory to the Underwriters and its Counsel, dated as of the Closing Date, to the effect that: (1) each of the Issuer's representations, warranties and covenants contained herein are true and correct as of the Closing Date as described in Section 7; (2) the Issuer has authorized, by all action necessary under the Act and the laws and Constitution of the State, the adoption of the Resolution, the enactment of the Ordinances and the execution, delivery and due performance of the Series 2002 Bonds and the Financing Documents; (3) no litigation is pending, or to the knowledge of the officer or official of the Issuer signing the certificate after due investigation and inquiry threatened, to restrain or enjoin the issuance or sale of the Series 2002 Bonds or in any way affecting any authority for or the validity of the Resolution, the Ordinances, the Series 2002 Bonds or the Financing Documents; (4) the Series 2002 Bonds and the Financing Documents, as executed by the Issuer, are in the form or in substantially the form approved for such execution by appropriate proceedings of the Issuer; (5) since September 30, 2001, there has not been any material adverse change in the properties, financial position or results of operations of the Issuer, whether or not arising from transactions in the ordinary course of business, other than as set forth in the Official Statement; and since such date the Issuer has not entered into any transaction or incurred any debt or other liability material as to the Issuer, except as set forth in the Official Statement; and (6) the information contained in the Official Statement relating to the Issuer, its activities, properties and financial condition is true and correct in all material respects and does not contain any untrue or incorrect statement of a material fact and does not 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. 10 (xv) Evidence that Federal Form 8038-G has been executed by the Issuer and filed with the Internal Revenue Service. (xvi) A copy of a customary "non-arbitrage certificate," in form prepared by and acceptable to Bond Counsel, dated the Closing Date and executed by the Issuer. (xvii) Evidence that Form BF2003/2004 has been executed by the Issuer and filed with the Florida Division of Bond Finance. (xviii) A copy of a request and authorization to the Registrar to authenticate and deliver the Series 2002 Bonds. (xix) A customary authorization and incumbency closing certificate signed by authorized officers of the Issuer. (xx) Evidence of both the Municipal Bond Insurance Policy for the Series 2002 Bonds and the Reserve Account Insurance Policy. (xxi) Such additional legal opmlOns, certificates, proceedings, instruments and other documents as Counsel to the Underwriters, Bond Counsel or Counsel to the Issuer may reasonably request to evidence compliance by the Issuer with legal requirements, the truth and accuracy, as of the time of Closing, of the respective representations of the Issuer herein contained and the due performance or satisfaction by the Issuer at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Issuer. If the Issuer shall be unable to satisfy the conditions to the obligations of the Underwriters contained in this Purchase Agreement, or if the obligations of the Underwriters to purchase and accept delivery of the Series 2002 Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Underwriters nor the Issuer shall be under further obligation hereunder; except that the respective obligations to pay expenses, as provided in Section 14 hereof, shall continue in full force and effect. 10. Conditions to Obligations of the Issuer. The obligations of the Issuer hereunder are subject to the performance by the Underwriters of its obligations hereunder. 11. Survival of Representations and Warranties. All representations, warranties and agreements of the Issuer shall remain operative and in full force and effect, regardless of any investigations made by or on behalf of the Underwriters and shall survive the Closing. The obligations of the Issuer under Section 12 hereof shall survive any termination of this Purchase Agreement by the Underwriters pursuant to the terms hereof. 12. Costs and Expenses. The Issuer will payor cause to be paid all reasonable expenses incident to the performance of its obligations under this Purchase Agreement, including, but not limited to, mailing or delivery of the Series 2002 Bonds; costs of printing the Series 2002 Bonds, the Preliminary and Final Official Statements and any amendment or 11 supplement to the Preliminary or Final Official Statement; fees and disbursements of Bond Counsel and Issuer's counsel; fees and expenses of the Auditors; any fees charged by rating agencies for the rating of the Series 2002 Bonds; fees of the Registrar and Paying Agent or dissemination agent fees; and fees incurred in connection with the qualification of the Series 2002 Bonds for sale under the securities or "Blue Sky" laws of the various jurisdictions and the preparation of "Blue Sky" memoranda. In the event this Purchase Agreement shall terminate because of the default of the Underwriters, the Issuer will, nevertheless, pay, or cause to be paid, all of the expenses specified above; however, the Issuer may bring whatever legal actions it may have against the Underwriters to recover such costs and for damages, if any. The Underwriters shall pay all advertising expenses in connection with the public offering of the Series 2002 Bonds, and all other expenses incurred by it in connection with the public offering and distribution of the Series 2002 Bonds, including the fees and disbursements of Counsel to the Underwriters. If the Issuer defaults under this Purchase Agreement, the Underwriters may bring whatever legal action it may have against the Issuer to recover damages, if any, incurred by it. 13. Notice. Any notice or other communication to be given to the Issuer under this Purchase Agreement may be given by delivering the same in writing at the 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 UBS PaineWebber Inc., 200 South Orange Avenue, Suite 2200, Orlando, Florida, 32801, Attention: Norman Pellegrini, Managing Director. 14. Applicability. This Purchase Agreement is made solely for the benefit of the Issuer and the Underwriters (including the successors or assigns of the Underwriters) and no other person, including any purchaser of the Series 2002 Bonds, shall acquire or have any right hereunder or by virtue hereof. 15. Choice of Law. This Purchase Agreement shall be governed by and construed in accordance with the laws of the State of Florida. 16. Effective Date. This Purchase Agreement shall become effective upon your mutual acceptance hereof. Very truly yours, UBS PaineWebber Inc. Salomon Smith Barney Inc. By: UBS PaineWebber Inc. By: Norman Pellegrini, Managing Director 12 IIII Accepted and agreed to as of the date first above written: Attest: By: City Clerk Approved as to form and substance By: City Attorney City of Clearwater, Florida By: City Manager By: Mayor-Commissioner 13 EXHIBIT A Supplemental Bond Counsel Opinion [Letterhead of Bond Counsel] A-I EXHIBIT B Issuer's Counsel Opinion [Letterhead of Counsel to the Issuer] B-1 EXHIBIT C Underwriters's Counsel Opinion ,2002 City of Clearwater, Florida Clearwater, Florida UBS Paine Webber Inc. Orlando, Florida Re: $_ City of Clearwater, Florida, Revenue Bonds (Spring Training Facility) Series 2002 Dear Ladies and Gentlemen: We have acted as Counsel to UBS PaineWebber Inc. (the "Underwriters") in connection with its purchase of the above-captioned bonds (the "Series 2002 Bonds"), pursuant to a Bond Purchase Agreement dated , 2002 (the "Purchase Agreement"), by and between the City of Clearwater, Florida (the "Issuer") and the Underwriters. The terms defined in the Purchase Agreement are used in this letter with the meanings assigned them in the Purchase Agreement. We have participated in the preparation and review of the Purchase Agreement, the Resolution, and the Continuing Disclosure Agreement. We also participated in the preparation and review of the Preliminary Official Statement dated , 2002 (the "Preliminary Official Statement") and the Official Statement dated , 2002 (the "Final Official Statement" and, together with the Preliminary Official Statement, the "Official Statement") relating to the Series 2002 Bonds. We have conferred with and reviewed the opinions rendered by Bond Counsel, counsel for the Issuer and counsel for the Bank; we have conferred with accountants for the Issuer and certain of the Issuer's officers; and we have also examined such other documents, proceedings, corporate records and other instruments as we have deemed necessary or advisable for the purpose of this opinion. Based upon the foregoing, we are of the opinion that: 1. Neither the purchase of the Series 2002 Bonds by the Underwriters nor the resale of the Series 2002 Bonds by the Underwriters to the public requires that the Series 2002 Bonds be registered under the Securities Act of 1933, as amended. 2. We are not passing upon, and assume no responsibility for, the accuracy, completeness or fairness of the statements contained in the Official Statement. During the C-l preparation of the Official Statement, however, we examined various documents and other papers, and participated in conferences with your representatives and counsel, with bond counsel, with representatives of the Bank and its counsel, and with representatives of the independent public accountants for the Issuer, at which conferences the contents of the Official Statement and related matters were discussed. We have also examined the certificates and other documents delivered at Closing. On the basis of the foregoing, but without independent verification of factual matters, nothing has come to our attention that would lead us to believe that the Official Statement contains any untrue statement of material fact or omits 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. We express no opinion, however, as to the ability of the Issuer to comply with the terms and provisions of Resolution, nor do we express any opinion as to any financial or statistical information included in the Official Statement. Very truly yours, MARCHENA AND GRAHAM, P A C-2 EXHIBIT D Disclosure and Truth-in-Bonding Statement June 14, 2002 City of Clearwater, Florida Clearwater, Florida Re: $ City of Clearwater, Florida Revenue Bonds, (Spring Training Facility) Series 2002 Ladies and Gentlemen: In connection with the proposed issuance by the City of Clearwater, Florida (the "Issuer") of the above-referenced bonds (the "Bonds"), UBS PaineWebber Inc. (the "Underwriters") has agreed to purchase the Bonds upon the terms and conditions set forth in the Bond Purchase Agreement dated , 2002, between the Issuer and the Underwriters. The purpose of this letter is to furnish to the Issuer certain information in connection with the offer and sale of the Bonds, pursuant to the provisions of Section 218.385, Florida Statutes, as amended. Pursuant to Section 218.385, Florida Statutes, as amended, the Underwriters provide the following information: 1. The nature and estimated amount of expenses to be incurred by the Underwriters in connection with the purchase and offering of the Bonds are set forth in Schedule 1 attached hereto. 2. No person has entered into an understanding with the Underwriters, or to the knowledge of the Underwriters, with the Issuer, for any paid or promised compensation or valuable consideration, directly or indirectly, expressly or implicitly, to act solely as an intermediary between the Issuer and the Underwriters or to exercise or to attempt to exercise any influence to effect any transaction in connection with the purchase of the Bonds. 3. The underwriting spread (the difference between the price at which the Bonds will be initially offered to the public by the Underwriters and the purchase price to be paid to the Issuer for the Bonds, exclusive of accrued interest) will be $ 4. As part of the estimated underwriting spread set forth m paragraph 3 above, the Underwriters will charge a management fee of $0. D-l 5. No fee, bonus or other compensation will be paid by the Underwriters in connection with the issuance of the Bonds to any person not regularly employed or retained by the Underwriters (included any "finder," as defined in Section 218.386(1)(a), Florida Statutes, as amended), except as disclosed as expenses to be incurred by the Underwriters, as set forth in paragraph 1 above. 6. The name and address of the Underwriters is: UBS PaineWebber Inc. 200 South Orange A venue Suite 2200 Orlando, Florida 32801 Attention: Norman Pellegrini 7. The Issuer is proposing to issue the Bonds for the purpose of providing funds, sufficient together with the other available moneys, to (i) , (ii) _ (iii) 8. The Bonds are expected to be repaid over a period of approximately _ years. Total interest paid over the life of the Bonds is expected to be $ 9. The source of repayment or security for the Bonds consists of the Issuer's Pledged Revenues and certain other revenues and proceeds under the terms of the Resolution dated as of ,2002. Authorization of the Bonds will not result in any adverse change in the amount of moneys available to the Issuer to finance other services of the Issuer. The foregoing statements are provided for information purposes only and shall not affect or control the actual terms and conditions of the Bonds. We understand that you do not require any further disclosure from the Underwriters pursuant to Section 218.385, Florida Statutes, as amended. Very truly yours, UBS PaineWebber Inc. By: Norman Pellegrini, Managing Director D-2 SCHEDULE 1 Underwriters's Expenses $ City of Clearwater, Florida Revenue Bonds (Spring Training Facility) Series 2002 Underwriters's Discount $/1000 Amount Underwriters's Counsel Fee BMA Fee DALCOMP Fee Interest on Day Loan DTC Fee CUSIP Fee Travel and Out-of-Pocket Expenses D-3 EXHIBIT E Description of the Series 2002 Bonds $ CITY OF CLEARWATER, FLORIDA REVENUE BONDS (Spring Training Facility) SERIES 2002 Maturity Schedule E-l EXHIBIT B FORM OF PRELIMINARY OFFICIAL STATEMENT Resolution 02-43 ;;: ~ ~ c ~ "'~ ""~ ~ ~ 'L:] ';;: ~ (..j ~ ~6<~ ~ :>. ~ ..... ':l g~ ~JUl E;: 13 :s: ~ ct ;:: ~ .~ ~ ~;S~ .~ 6' ~ Ii: ~ ::: .g ~ 8; .2 '~ ~ ;:, '" - ~ ,~ ~ .~ ~~ 2i ~ .~ ~ ~~ t:: C ~ --:os _:...~ "" ~ - ~ ..~ '"'" .5 .....) ..... j ~ ~ ~ ~.~ '1 '!,~ ~ 13 .~ .::-.<:0_- ~ ~ ~ ~ ~ ~ .:.:::: ~ ~ .g '" :~,; ~ 2;Z~ 'i ~ "" "'=l-~ ~~~ ~] .~ ~~~ ~ a~ ~ ~ C~:S .~ ~ & ~:~ ~ C). it ~..., i"..o: 2 ~ ~~ ~ ]~~ " .~ >; ct " ~ .~ "S ~ ~.9~ Preliminary Official Statement Dated A ugust ,2002 NEW ISSUE - BOOK-ENTRY ONLY Ratings: Standard & Poor's: _ Fitch: (MBIA Insured) See "RATINGS" herein In the opinion of Bond COllnsel, assuming continuing compliance by the City with certain covenants to comply with provisions of the Internal Revenue Codeol] 986,IJS amended,intereston the Series 2002 Bonds;s excluded /romgross income/or purposes o/federal income taxation and;s not an item o/tax preference/or purposes ofthefederal alternative minimum tax imposed 011 individuals and corpurations under existing statutes, regulations and judicial decisions; "Ithough it should b. noted that ;n th~ eas~ of corporations (as defined for federal income tax purposes). such interest;s laken into account;" tleter",;ningadjusted currentearniltgsforpurposes ofsuch alternati.,~minimum lax. Furthermore, in Ihe opinion of Bond Counsel. the Se,ies 2002 Bonds and the income therefro", are exe..ptfrolll taxation under the laws of the State of Florida, except as to Florida estate taxes imposed by Chapt~r J98, Floridll Statutu, liS amellded aNd net inco",e IIndfratlchise taxes imposed by Chapter 2Z0, Florida Statutes, as amended. See "TAX EXEMPTION" Irereillfor furtherinfoTIIIQlioll. $15,500,000* CITY OF CLEARWATER, FLORIDA Revenue Bonds (Spring Training Facility) Series 2002 Dated: September 1. ZOOZ Due: August I, as sbown below The City of Clearwater, Florida (the "City") is issuing ilsRevenue Bonds (Spring Training Facility), Series 2002 (the "Series 2002 Bonds"), in fully registered form in denominations of $5,000 principal amount or any integral multiples thereoC. Interest on the SerieslOO2Bondsispayable on October I, 2001 and semiannually thereafter on each April J and October J, by check or draft of Wells Fargo Bank, Minneapolis, NA.. Minneapolis,Minnesota,theBondRegistrarandPaying Agent, made out and mail ed to each registeredownerthereofattheaddress asit appears on the registration books k.ept by the Bond Registrar on the 15th day oCthe month preceding the applicable interest payment date. Principal of the Series 2002 Bonds and any redemption premium will be payable upon presentation and surrender of the Series 2002 Bonds, when due, atthe principal corporate trust office of the Paying Agent. The Series 2002 Bonds arc subje(:t to optional and mandatory redemption prior to maturity, as provided herein. The Series 2002 Bonds are being issued by the City to provide funds, together with other available funds, to (i) finance a portion of the (:ost of the acquisition. construction, rehabilitation and equipping of a spring training facility to be used by the PhHadeJphiaPbiJjjes major league baseball team; (ii) pay a premium Cor a municipal bond insurance policy and a debt service reserve account surety bond. and (iii) pay certain costs and expenses incurred in connection with the issuance of the Series2002 Bonds, aU as more particularly described herein. The Series ZOOZ BODds are special, Umlted obUgatloDS oftbe CIty. payable solely fro... aDd .eeDred by a neD DpoD ud pledge oftbe PiDelJ.. CODDty PaymeDts <as deBoed berelo) and the State Paymeols (u deDoed hereto) eonstituting the Pledged Reveouu, In the manoer provided In the ResolutloD. The Series 2002 Bonds do oot tonstitute a geDenl indebtedDelSofthe CltywithiD tbe Dleaoiog of BDY cODstitutional, statutory or charter provinoD or IiDlltation, and DO Bondholder shall ever have the right to require or compeJ the exercise of the ad valorem taxing power oftbe City or talation of any real or penonal property therein Cor the payment of the principal or aDd Interest on the Series 2002 Bonds or the making of aoy Debt Service Fuod, reserve or otber paymeots provided for ID tbe Resolution. A rommitment bas been issued by policy guaranteeing the timely payment of discussion of the tenns and provisions INSURANCE" herein. MBIA Insurance Corporation ("MBIA") to issue a mlDlicipal bond insurance the principal of, and interest on, the Series 2002 Bonds, when due. For a of such policy, including the limitations thereof, see "MUNICIPAL BOND NlBIA MATURITY SCHEDULE (See inside cover page) Tile Serie. 2002 BOllds lI1'e offered wlleN..S .,,4 ifiuued a,.d accepted by the Underwritersflbject to the appro",,1 of legality by Bryant, Miller.nd OIiFe, P.A., T,IIII1Ir.slee, Flbrillll, 801111 COllllsel. Cel'lsill olhe, J'l"IMlJlters ...illbepllssed uponforthe CitybYPlJmela K. Akin, Esquire, City A ttorll ey, 4ntl byNtJllon. Giblill &: Niclcerson,P.A., TaIllPd,Florid., Diselosure COllnsel to the City. Balle afAmerica Securities LLC,Clearwater, Florida is ser.illg.s Filla"d"l Ad.;sor to tire City. It;s expected that tile Series ZOO] Bonds, ill definitive book-entry forM, will he available for deli.ery through DTC ill New York, New York on Dr about SepteMber .2002. UBS Paine Webber Inc. SALOMON SMITH BARNEY INC. September ,2002 . Preliminary, subject to change. IIIIII Maturity Schedule CITY OF CLEARWATER, FLORIDA ELECTED OFFICIALS MAYOR - COMMISSIONER Brian 1. Aungst, Sr. COMMISSIONERS Frank Hibbard Hoyt Hamilton Whitney Gray Bill Jonson APPOINTED OFFICIALS William B. Home, IT, City Manager Pamela K.. Akin, Esq., City Attorney Margaret L. Simmons, CPA, Finance Director BOND COUNSEL Bryant, Miller and Olive, P.A. Tallahassee, Florida FINANCIAL ADVISOR Bane of America Securities LLC Clearwater, Florida REGISTRAR AND PAYING AGENT Wells Fargo Bank, Minneapolis, NA Minneapolis, Minnesota No dealer, broker, salesman or other person has been authorized by the City or the Underwriters to give any information or to make any representations with respect to the Series 2002 Bonds other than that contained in this Official Statement, and, if given or made, such information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the Series 2002 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the City, MBIA, DTC and other sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by, the f4 Underwriters. The information pertaining to municipal bond insurance and the Reserve Fund Policy (as defined herein) and the book-entry only system has been supplied by MBIA and DTC, respectively, and is likewise not to be construed as a representation of the City or the f4 Underwriters. The information and expressions of opinion contained herein are subject to change without notice and neither the deliveIy of this Official Statement nor any sale made hereunder shall under any circumstances create any implication that there has been no change in the infonnation or opinions set forth herein after the date of this Official Statement. THE SERIES 2002 BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THE INDENTURE BEEN QUALIFIED UNDER THE INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE SERIES 2002 BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF THE SECURITIES LAWS OF THE STATES, IF ANY, IN WHICH THE SERIES 2002 BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN CERTAIN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE STATES NOR ANY OF THEm AGENCIES HAVE PASSED UPON THE MERITS OF THE SERIES 2002 BONDS OR THE ACCURACY OR COMPLETENESS OF TIllS OFFICIAL STATEMENT. ANY REPRESENTATIONS TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. IN CONNECTION WITH THE OFFERING OF THE SERIES 2002 BONDS, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2002 BONDS AT A LEVEL ABOVE mAT WlllCH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. TABLE OF CONTENTS Page INTRODUCTION ............................................................. 1 PURPOSE OF THE SERIES 2002 BONDS. . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . fi Z. DESCRIPTION OF THE SERIES 2002 BONDS ..................................... 2 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 2 Book-Entry Only System. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Optional Redemption . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Mandatory Redemption . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 3 Notice of Redemption .................................................. . . .4 Registration, Transfer, and Exchange .......................................... 5 SECURITY FOR THE SERIES 2002 BONDS. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 5 Pledged Revenues ........................................................... 5 Limited Obligations ........................................................ 6 State Payments .......................................................... 6 Pinellas County fi Payments ............................................... 11 Reserve Account ........................................................ 13 Flow of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . fi 14 ~unic~mBond~urnnce ..... ........ ......... ......... .... ...... ........ 16 Parity Bonds ........................................................... 16 MUNICIP AL BOND INSURANCE ................................................ 16 Rights Granted Insurer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 ESTIMATED SOURCES AND USES OF FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . fi II DEBT SERVICE SCHEDULE ...................................................... fi 22 SPRING TRAINING FACILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . fi II t4 TAX EXE'MPTION ..................................... . . . . . . . . . . . . . . . . . . . 24 Federm Income Tax Matters ............................................ fi 24 Tax Treatment of Original Issue Discount ...................................... t4 25 Florida Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . fi 26 FINANCIAL STATEMENTS ..................................................26 INVESTMENT POLICY ...................................................... 26 LmGATION ............................................................... 27 RA TIN"GS .................................................................. 27 UNDERWRITING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 FINANCIAL ADVISOR ...................................................... 28 LEGAL OPINIONS .......................................................... 28 ENFORCEABILITY OF REMEDIES ........................................... t4 28 fi DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS ........... fi 29 ADVISORS AND CONSULTANTS. . . . .. . . . . . . . . ... . .. . . . ... .. . . . . . .. . . .. . ... fi 29 CONTINUING DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . fi 30 CERTIFICATE CONCERNING OFFICIAL STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . fi 30 fi MISCELLANEOUS ..................................................... fi 30 APPENDICES: APPENDIX A- APPENDIX B- APPENDIX C - APPENDIX D - APPENDIX E- APPENDIX F - GENERAL INFORMATION REGARDING THE CITY FORM OF BOND COUNSEL OPINION THE ORDINANCE THE INTERLOCAL AGREEMENT SPECIMEN BOND INSURANCE POLICY FORM OF CONTINUING DISCLOSURE CERTIFICATE ii $15,500,000. CITY OF CLEARWATER, FLORIDA REVENUE BONDS (SPRING TRAINING FAClllTY) SERIES 2002 INTRODUCTION This Official Statement, which includes the cover page and appendices hereto, provides certain information relating to the sale by City of Clearwater, Florida (the "City"), of its $15,500,000* Revenue Bonds (Spring Training Facility), Series 2002 (the "Series 2002 Bonds"). The Series 2002 Bonds are being issued pursuant to Chapter 166, Part II, Florida Statutes, City Home Rule Ordinance 6675-01, enacted January 18, 2001, as amended by Ordinance 6854-01 enacted on September 6, 2001 and Ordinance 7016-02 enacted on August 22, 2002 (the "Ordinance"), as may be further amended and supplemented, and other applicable provisions of law (collectively the "Act"), and City of Clearwater Resolution No. 02-43, adopted August 22, 2002, as amended and supplemented (the "Resolution"). The Series 2002 Bonds are limited obligations of City of Clearwater, Florida, payable by the City from and secured by a lien upon and pledge of the Pledged Revenues (as described herein) including amounts on deposit in the funds and accounts established under the Ordinance (other than the Rebate Fund), all as described herein. Neither the City, PinelIas County, Florida, the State of Florida nor any political subdivision thereof has pledged its faith or credit or taxing pOl\er to the payment of the Series 2002 Bonds. No holder of the Series 2002 Bonds shall ever have the right to compel the exercise of any ad valorem taxing power of the City or taxation in any form of any real property therein to pay the Series 2002 Bonds or the interest due thereon nor be entitled to payment of the Series 2002 Bonds from any funds of the City except as described herein. The references, excerpts and summaries of all documents referred to herein do not purport to be complete statements of the provisions of such documents, and are made subject to all of the detailed provisions of such documents, to which reference is directed for full and complete statements of all matters relating to the Ordinance, the Series 2002 Bonds, the security for the payment of the Series 2002 Bonds and rights and obligations of the holders of the Series 2002 Bonds. Capitalized terms used but not defined herein have the same meaning as in the Ordinance unless the context would indicate otherwise. A copy of the Ordinance is attached hereto as Appendix C. · Preliminary, subject to change. PURPOSE OF THE SERIES 2002 BONDS The Series 2002 Bonds are being issued by the City to provide funds, together with other available funds, to (i) finance a portion of the cost of acquisition and expansion of a spring training facility to be used by the Philadelphia Phillies major league baseball team; (ii) pay a premium for a municipal bond insurance policy and a debt service reserve account surety bond, and (ill) pay certain costs and expenses incurred in connection with the issuance of the Series 2002 Bonds, all as more particularly described herein. DESCRIPTION OF THE SERIES 2002 BONDS General The Series 2002 Bonds will be dated September 1, 2002, and will bear interest from such date at the rates per annum as set forth on the cover page hereof, payable on April 1, 2003, and semiannually thereafter on each April 1 and October 1 and will mature on April 1 in the years and principal amounts as set forth on the cover page hereof. The Series 2002 Bonds will be initially issued in the formofa single fully registered Bond for each maturity of the Series 2002 Bonds. Upon initial issuance, the ownership of each such Series 2002 Bonds will be registered in the registration books kept by the Bond Registrar, in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). While held in book-entry form, all payments of principal, interest and premium, if any, on the Series 2002 Bonds will be made to DTC or the DTC Nominee as the sole registered owner of the Series 2002 Bonds and payments to Beneficial Owners will be the responsibility of DTC and the DTC Participants as described below. See "Book-Entry Only System." Book-Entry Only System With respect to Series 2002 Bonds registered in the name of Cede & Co., as nominee ofDTC, neither the City, nor the Paying Agent will have any responsibility or obligation to any DTC Participant or to any indirect DTC Participant. See "Book-Entry Only System" for the definition of "DTC Participant." Without limiting the innnediately preceding sentence, neither the Citynorthe Bond Registrar and the Paying Agent will have any responsibility or obligation with respect to: (i) the accuracy of the records of DTC or any DTC Participant with respect to any ownership interest in the Series 2002 Bonds; (ii) the delivery to any DTC Participant or any other person other than a registered owner, as shown in the registration books kept by the Bond Registrar, of any notice with respect to the Series 2002 Bonds, including any notice of redemption; or (iii) the payment to any DTC Participant or any other person, other thana registered owner, as shown in the registration books kept by the Bond Registrar, of any amount with respect to principal of, premium, ifany, or interest on the Series 2002 Bonds. The City, the Bond Registrar and the Paying Agent may treat and consider the person in whose name each Series 2002 Bonds is registered in the registration 2 books kept by the Bond Registrar as the holder and absolute owner of such Bond for the pmpose of payment of principal of, premium, if any, and interest with respect to such Bond, for the pmpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other pwposes whatsoever. The Paying Agent will pay all principal of, premium, if any, and interest on the Series 2002 Bonds only to or upon the order of the respective registered owners, as shown in the registration books kept by the Bond Registrar, or their respective attorneys duly authorized in writing, as provided in the Ordinance, and all such payments will be valid and effectual to satisfY and discharge the City's obligations with respect to payment of principal of, premium, if any, and interest on the Series 2002 Bonds to the extent of the sums so paid. No person other than a registered owner, as shown in the registration books kept by the Bond Registrar, will receive a certificated Bond evidencing the obligation of the City to make payments of principal of, premium, if any, and interest on the Series 2002 Bonds pursuant to the provisions of the Ordinance. Optional Redemption The Series 2002 Bonds stated to mature on or prior to April l, , shall not be subject to redemption prior to their respective dates ofmatwity. The Series 2002 Bonds stated to mature on or after Aprill, , are subject to redemption at the option of the City in whole or, from time to time, in part, on Aprill, , or on any date thereafter at the respective redemption prices set forth below expressed as percentages of the principal amount to be redeemed, plus interest accrued to the date of redemption. Redemption Period Redemption Price Aprill, April l, Aprill, April l, through March 30, through March 30, through March 30, and thereafter If fewer than all of the Series 2002 Bonds are to be so redeemed, the City may select the maturity or maturities to be redeemed. If fewer than all of the Series 2002 Bonds of any particular maturity are to be redeemed, the Bond Registrar will select by lot the particular Series 2002 Bonds or portions of Series 2002 Bonds of such maturity to be redeemed. The portion of any Series 2002 Bond of a denomination of more than $5,000 to be redeemed will be in the principal amount of$5,000 or an integral multiple of that stUll. Mandatory Redemption The Series 2002 Term Bonds stated to mature on April l, [ ], are subject to mandatory redemption by lot prior to maturity in such manner as shall be detennined by the Bond Registrar, by operation of the Bond Amortization Account, in the years and amounts set forth below at a price equal to lOO% of principal amount plus interest accrued to the redemption date. 3 Aprill of the Year Principal Amount * Maturity date The Series 2002 Term Bonds stated to mature on April I, [ ] are subject to mandatory redemption by lot prior to maturity in such manner as shall be determined by the Bond Registrar, by operation of the Bond Amortization Account, in the years and amounts set forth below at a price equal to 100% of principal amount plus interest accrued to the redemption date. Aprill of the Year Principal Amount * Maturity date The City may apply moneys in the Bond Amortization Account to the purchase of Series 2002 Bonds subject to mandatoryredemption(the "Series 2002 TermBonds") at prices not greater thanpar plus accrued interest and apply the principal amount of any Series 2002 Term Bonds so purchased as a credit against and in fulfillment of amortization installments required on the Series 2002 TermBonds of the same maturity. If the City shall purchase or call for redemption in any year Series 2002 Term Bonds in excess of the amortization installment requirement for such year, such excess of Series 2002 Term Bonds so purchased or redeemed shall be credited against subsequent mandatory redemption of the Series 2002 Term Bonds of such maturity at such times and amounts as the City may direct. To the extent the City's obligation to make installments in a particular year is fulfilled through such purchases, the likelihood of redemption through such installments of any Registered Holder's Series 2002 Term Bonds of the maturity so purchased will be reduced for such year. Notice of Redemption Notice of the intention to redeem the Series 2002 Bonds in whole or in part will be mailed by the Paying Agent, by first class mail, to the Registered Holders of the Series 2002 Bonds to be redeemed in whole or in part not more than forty-five (45) days and not less than thirty (30) days prior to the date fixed 4 for redemption, at their respective addresses as shown on the registration books, in accordance with the terms of the Ordinance. Such notice is to specify the series, maturities and numbers of Series 2002 Bonds to be redeemed (including the CUSIP number); the date fixed for redemption; the redemption price or prices applicable to the Series 2002 Bonds to be redeemed; and that on the date fixed for redemption such Series 2002 Bonds will be payable at the principal corporate trust office of the Paying Agent and that after such date interest shall cease to accrue on such Series 2002 Bonds. If Registered Holders of all such Series 2002 Bonds to be redeemed file written waivers of notice with the Paying Agent, such Series 2002 Bonds may be redeemed on the redemption date without necessity of notice by mailing. Failure to mail any notice of redemption or any defect therein or in the mailing thereof will not affect the validity of any proceeding for redemption of other Series 2002 Bonds called for redemption. Registration, Transfer, and Exchange The following applies only during any period the Series 2002 Bonds are not held in book -entry only form All Series 2002 Bonds presented for transfer, exchange, redemption, or payment (if so required by the Bond Registrnr) shall be accompanied by a written instnment or instruments of transfer or authorization for exchange, in form and with guaranty of signature satisfactory to the Bond Registrar, duly executed by the Registered Holder or by his duly authorized attorney. The Bond Registrar may charge the Registered Holder a sum sufficient to reimburse it for any expenses incurred in making any exchange or transfer. The Bond Registrnr also may require payment from the Registered Holder or his transferee, as the case may be, of a sum sufficient to cover any tax, fee, or other governmental charge that may be imposed in relation thereto. Such charges and expenses shall be paid before any such new Series 2002 Bond shall be delivered. The City and Bond Registrar may treat the Registered Holder of any Series 2002 Bond as the absolute owner thereof for all purposes, and shall not be bound by any notice to the contrary. SECURITY FOR THE SERIES 2002 BONDS Pledged Revenues The principal of, redemption premimn, if any, and interest on the Series 2002 Bonds will be payable from and secured by a first lien upon and pledge of the following, together with any investment income realized on any fimds held under the Ordinance, except the Cost ofIssuance Account and the Rebate Fund: (i) Payments received by the City from the State of Florida pursuant to Section 212.20, Florida Statutes (hereinafter referred to as "State Payments"); and 5 (ii) Payments received by the City from Pinellas County, Florida pursuant to the Interlocal Agreement (hereinafter referred to as the "Pinellas County Payments"). The foregoing are collectively referred to herein as the "Pledged Revenues." Limited Obligations The Series 2002 Bonds are special, limited obligations of the City, payable solely from and secured by a lien upon and pledge of the Pledged Revenues, in the manner provided in the Ordinance. The Series 2002 Bonds do not constitute a general indebtedness of the City within the meaning of any constitutional, statutory or charter provision or limitation, and no Bondholder shall ever have the right to require or compel the exercise of the ad valorem taxing power of the City or taxation of any real or personal property therein for the payment of the principal of and interest on the Series 2002 Bonds or the making of any Debt Service Fund, reserve or othe r payments provided for in the Ordinance. State Payments The Office oITourism, Trade, and Economic Development ("OTIED") in the Executive office of the Governor has certified the City as a "facility for a retained spring training franchise" pursuant to Section 288.1162, Florida Statutes, as amended, for purposes of Section 212.20, Florida Statutes, as amended. Pursuant to Section 212.20, a monthly distribution of$41 ,667.00 is to be made from the State General Revenue Fund to the City. Monthly distributions began on March I, 2001 and will continue for thirty (30) years. An applicant certified as a facility for a retained professional sports franchise or as a facility for a retained spring training franchise may use the funds provided pursuant to s. 212.20 only for the public pmpose of paying for the acquisition, construction, reconstruction, or renovation of a facility for a retained spring training franchise or to payor pledge for the payment of debt service on, or to fund debt service reserve funds, arbitrage rebate obligations, or other amounts payable with respect to, bonds issued for the acquisition, construction, reconstruction, or renovation of such facility or for the reimbursement of such costs or the refinancing ofbonds issued for such purposes. An applicant certified may not receive more in distributions than actually expended by the applicant for the foregoing pmposes. However, a certified applicant is entitled to receive distributions up to the maxinrum amount allowable and undistributed for additional renovations and improvements to the facility for the franchise without additional certification. Chapter 212, Part I, Florida Statutes, entitled 'Taxon Sales or Use oITangible Personal Property, Admissions, Rentals and Services," imposes a 6% sales tax on the sales price of tangible personal property sold at retail in the State, subject to certain exemptions therefrom. A similar tax is imposed on the price 6 of tangible personal property when the property is not sold but is used, or stocked for use, in the State. The largest single source of tax receipts in the State is the sales and use tax. Unless a transaction is specifically exempt, the State sales and use tax is applicable to sales of tangible personal property at retail in the State including the business of making mail order sales, the rental or furnishing of things or services taxable under Chapter 212, Florida Statutes, the storage for use or consumption in the State of any item or article of tangible personal property, and the lease or rental of such property within the State. Pursuant to Section 212.20(1), Florida Statutes, the State Department of Revenue ("DOR") shall pay over to the State Treasurer all funds received and collected by it under Chapter 212, Part I, Florida Statutes, to be credited to the account of the State General Revenue Fund, except the proceeds of the fee imposed pursuant to Section 212.18(5), Florida Statutes. Set forth below is the distribution by the State of such proceeds pursuant to Section 212.20(6), Florida Statutes: (1) State General Revenue Fund: In any fiscal year, the greater of $500 million, minus an amount equal to 4.6% of the proceeds of the taxes collected pursuant to Chapter 201, Florida Statutes ( docwnentary taxes), or 5% of all other taxes and fees imposed pursuant to Chapter 212, Part I, Florida Statutes, shall be deposited in monthly installments into the State General Revenue Fund. (2) State Solid Waste Management Trust Fund: Two-tenths of one percent (0.2%) of all other taxes and fees imposed pursuant to Chapter 212, Part I, Florida Statutes, shall be deposited into the State Solid Waste Management Trust Fund. (3) State Local Government Half-Cent Sales Tax Clearing Trust Fund: After the distributions in (1) and (2) above, 9.653% of the amount remitted by a sales tax dealer located within a participating county pursuant to Section 218.61, Florida Statutes, shall be transferred into the State Local Government Half-Cent Sales Tax Clearing Trust Fund. (4) State Local Government Half-Cent Sales Tax Clearing Trust Fund: After the distributions in (1), (2) and (3) above, 0.065% shall be transferred to the State Local Government Half-Cent Sales Tax Clearing Trust Fund and distributed pursuant to Section 218.65, Florida Statutes. (5) State Revenue Sharing Trust Fund for Counties: Beginning July 1, 2000, after the distributions in (1), (2), (3) and (4) above, 2.25% shall be transferred monthly to the State Revenue Sharing Trust Fund for Counties pursuant to Section 218.215, Florida Statutes. (6) State Revenue Sharing Trust Fund for Municipalities: Beginning July 1,2000, after the distributions in (1), (2), (3) and (4) above, 1.0715% shall be transferred monthly to the 7 State Revenue Sharing Trust Fund for Municipalities pursuant to Section 218.215, Florida Statutes. If the total revenue to be distributed pursuant to this subparagraph is at least as great as the amount due from the State Revenue Sharing Trust Fund for Municipalities and the Municipal Financial Assistance Trust Fund in state fiscal year 1999-2000, no municipality shall receive less than the amount due from the State Revenue Sharing Trust Fund for Municipalities and the Municipal Financial Assistance Trust Fund in state fiscal year 1999-2000. If the total proceeds to be distributed are less than the amount received in combination from the State Revenue Sharing Trust Fund for Municipalities and the Municipal Financial Assistance Trust Fund in state fiscal year 1999-2000, each municipality shall receive an amount proportionate to the amount it was due in state fiscal year 1999-2000. (7) Pari-Mutuel Revenues Replacement Program: BeginningJuly 1,2000, and in each fiscal year thereafter, of the remaining proceeds, the sum of$29,915,500 shall be divided into as many equal parts as there are counties in the state, and one part shall be distributed to each county. The distribution among the several counties shall begin each fiscal year on or before January sth and shall continue monthly for a total of 4 months. If a local or special law required that any moneys accming to a county in fiscal year 1999-2000 under the then-existing provisions of Section 550.135, Florida Statutes be paid directly to the district school board, special district, or a municipal government, such payment shall continue tmtil such time that the local or special law is amended or repealed. The state covenants with holders of bonds or other instnnnents of indebtedness issued by local governments, special districts, or district school boards prior to July 1, 2000, that it is not the intent of this subparagraph to adversely affect the rights of those holders or relieve local governments, special districts, or district school boards of the duty to meet their obligations as a result of previous pledges or assigmnents or trusts entered into which obligated funds received from the distribution to county governments under then-existing Section 550.135, Florida Statutes. This distribution specially is in lieu of funds distributed under Section 550.135, Florida Statutes prior to July 1,2000. (8) Professional Sports Facilities: Of the remaining proceeds, $166,667 distributed monthly for 30 years to each applicant that has been certified as a "facility for a new professional sports franchise" or a "facility for a retained professional sports franchise" pursuant to Section 288.1162, Florida Statues, and up to $41,667 monthly for 30 years to each applicant certified as a "facility for a retained spring training franchise" pursuant to Section 288.1162, Florida Statutes. Because not more than $208,335 may be distributed monthly in the aggregate to all certified:fucilities for a retained spring training franchise, no more than five facilities will be certified. Distributions shall begin 60 days following such certification and shall continue for not more than 30 years. Nothing contained in this paragraph shall be construed to allow anapplicant certified pursuant to Section 288.1162, Florida Statutes to receive more in distributions than actually expended by the applicant for the public 8 purposes provided for in Section 288 .1162(6), Florida Statutes. However, a certified applicant is entitled to receive distributions up to the maximum amount allowable and undistributed under this section for additional renovations and improvements to the facility for the franchise without additional certification. (9) Professional Golf Hall of Fame: Of the rernaining proceeds, 30 days after notice by OrrED to OOR that an applicant has been certified as the professional golfhall of fame pursuant to Section288.1168, Florida Statutes and is open to the public, $166,667 shall be distributed monthly, for up to 300 months, to the applicant. (10) International Game Fish Association: Of the remaining proceeds, $83,333 distributed monthly for up to 180 months to an applicant which is both certified as the International Game Fish Association World Center facility pursuant to Section 288.1169, Florida Statutes, and is open to the public. A lump sum payment of$999,996 shall be made, after certification and before July 1, 2000. (11) State General Revenue Fund: All other proceeds shall remain with the State General Revenue Fund. 9 Collection and Distributions of the General Sales and Use Tax Fiscal Years Ended June 30, 1991 through June 30, 2002 (OOO's) Local Local Fiscal Total Sales Local Government Government General Year Tax Solid Waste Govennent Emergency Sports Replacement Revenue Endin!! ~ Tl1IstFund ~ Distribution Facilities Distribution Fund 1991 $8,152,024 $16,251 $706,017 0 0 0 $6,950,168 1992 8,375,378 16,684 723,130 0 0 0 7,635,564 1993 9,424,309 18,778 796,771 0 0 0 8,379,960 1994 10,073,611 20,113 854,441 0 2,167 0 9,006,890 1995 10,677,222 21,323 909,531 4,898 4,166 0 9,578,304 1996 11,491,252 22,891 977,980 5,335 7,667 0 10,477,378 1997 12,121,776 24,121 1,015,707 5,626 10,833 0 11,065,489 1998 12,975,125 25,995 1,089,443 6,066 11 ,500 0 11,842,121 1999 13,917,703 27,649 1,160,093 6,451 1,700 0 12,706,510 2000 15,076,874 30,016 1,257,119 7,004 1,600 0 13,766,734 2001 15,802,622 31,508 1,309,841 8,856 18,028 479,173 13,952,217 2002 16,044,153 32,126 1,349,6% 8,953 19,467 487,195 14,146,717 SOURCE: Executive Office of the Governor, Office of Planning and Budgeting, Revenue and Economic Analysis. 10 Pinellas County Payments General. Pursuant to an Interlocal Agreement (the "Interlocal Agreement"), between the City and Pinellas County, Florida (the "County"), dated as of December 1,2000 (a copyofwhichis attached hereto as Appendix D, the Countyhas agreed to pay from Non-Ad Valorem Revenues (hereinafter defined) an annual amount of$587,650.00, payable in equal monthly payments of $48,970.83 (which amount is one-twelfth of the annual amount), commencing on the first County Payment Date, and continuing for a total of two hundred forty (240) months for a total of two hundred forty (240) monthly payments. A County Payment Date is the fifteenth calendar day of each month, commencingwiththe second month immediately following the month in which the City received certification from the State of Florida that the Project constituted a "facility for a retained spring training franchise" in accordance with Section 288.1162(5), Florida Statutes. The first County Payment Date was March 15,2001. "Non-Ad Valorem Revenues," under the Interlocal Agreement, means all legally available non-ad valorem revenues or taxes of the County (including ad valorem taxes to the extent the use thereof for securing bonds or other debt obligations of the County has been approved by referendum), which are legally available to make the payments required by the Interlocal Agreement, but only after provision has been made by the County for payment of services and programs which are for essential public purposes affecting the health, welfare and safety of the inhabitants of the County or which are legally mandated by applicable law. The Interlocal Agreement provides tat the obligation of the County to pay over to the City the County Payments is an indebtedness of the County and the Interlocal Agreement is issued by the County as evidence of such indebtedness. The City has covenanted in the Interlocal Agreement that it will deposit all County Payments into the County's Payment Account held by the City under the Ordinance, it will transfer and deposit all amounts received from the County representing County Payments into the Debt Service Fund and that it will pay the Series 2002 Bonds from and exhaust all monies in the Debt Service Fund so deposited from the proceeds of the County Payments paid by and received from the County for the Debt Service Payments prior to using any other revenues of the City which are pledged for the repayment of the Series 2002 Bonds. Covenant to Budget and Appropriate. The County covenants that it will include in its annual budget and appropriate, sufficient legally available Non-Ad Valorem Revenues of the County, for the timely payment of all County Payments due to be made in each fiscal year at such times as shall be required. In no event will the County be required to make any payments required hereunder except from fimds duly budgeted and appropriated in accordance with the Interloca1 Agreement. Such covenant and agreement on the part of the County will be cumulative and will continue tm1i1 all County Payments shall have been budgeted, appropriated and actually paid. The County has agreed that this covenant and agreement will be deemed to be entered into for the benefit of the Holders of the Series 2002 Bonds and that this obligation may be enforced in a court of competent jurisdiction. Notwithstanding the foregoing or any provision of the Interlocal Agreement to the contrary, the County does not covenant to maintain any services or programs now maintained or provided by the County, including those programs and services 11 which generate Non-Ad Valorem Revenues. The covenant and agreement may not be construed as a limitation on the ability of the County to pledge all or a portion of such Non-Ad Valorem Revenues for other legally pennissible purposes. Nothing herein shall be deemed to pledge ad valorem taxation revenues or to permit or constitute a mortgage upon any assets owned by the County and no person may compel the levy of ad valorem taxes on real or personal property within the boundaries of the County for the payment of the County's obligations under the Interlocal Agreement. Limited County Obligation. The Series 2002 Bonds and the obligations of the County under the Interlocal Agreement shall not be or constitute general obligations or indebtedness of the County as "bonds" within the meaning of the Constitution of the State of Florida, and no holder or holders of any City Bonds shall ever have the right to compel the exercise of the ad valorem taxing power of the County or taxation in any form of any real or personal property therein. However, the covenant to budget and appropriate in its general annual budget for the purposes and in the manner stated herein, has the effect of making available for the payment of the obligations of the County the Non-Ad Valorem Revenues of the County in the manner provided in the Interlocal Agreement and placing on the Countya positive duty to appropriate and budget, by amendment, ifnecessary, amounts sufficient to meet its obligations hereunder; subject, however, in all respects to the restrictions of Chapter 125, Florida Statutes, which makes it tmlawful for any county to expend moneys not appropriated and in excess of such county's current budgeted revenues. The obligation of the County to make such payments fromits Non-Ad Valorem Revenues is subjectto the availability of money in the treasury of the County and fi.m.ding requirements for essential services of the Cmmty; however, such obligation is cwnulative and would cany over from Fiscal Year to Fiscal Year. The County has further covenanted that the Interlocal Agreement shall be entered into for the benefit of the holders of the Series 2002 Bonds and that the obligations of the County to pay the County Payments to the City may be enforced in a court of competent jurisdiction in accordance with the remedies set forth therein. Annual Budgets. The County is required by the Interlocal Agreement to prepare, approve and adopt each year, in the manner provided by law, a detailed annual budget pursuant to which it will allocate, appropriate and provide for the deposits and payments of sufficient legally available Non-Ad Valorem Revenues of the County for the ensuing Fiscal Year required by the Interlocal Agreement. The covenant and agreement by the County to budget and appropriate such amount is cwnulative and will continue each Fiscal Year until all required County Payments have been budgeted, appropriated and actually paid by the County to the City for deposit as provided in the Interlocal Agreement. Reports and Annual Audits. The Interlocal Agreement provides that County will, as soon as practicable after the end of each Fiscal Year, cause the books, records, accounts and the data relating to the County Payments for such Fiscal Year to be properly audited by an independent certified public accountant of recognized standing. 12 Enforcement of Collections . The County is currently authorized to receive sufficient legally available non ad-valorem revenues to enable it to budget and appropriate the County Payments. The County will diligently enforce its right to receive such revenues and will not take any action which will impair or adversely affect its right to receive such funds or impair or adversely affect in any manner its obligations under the Interlocal Agreement. The County shall be unconditionally and irrevocably obligated to take all lawful action necessary or required to enable the County to receive sufficient revenues to so budget and appropriate the County Payments as now permitted or provided by law or as may later be authorized, and to make the transfers required by the Interloca1 Agreement. Reduction of Non-Ad Valorem Revenues. During such time as the obligations of the County to make County Payments under the InterlocalAgreement are Outstanding, the County covenants that it will not reduce the rate or rates at which any Discretionary Non-Ad Valorem Revenues are charged or collected if such reduction, in and of itself, would cause, Non-Ad Valorem Revenues in such Fiscal Year to be less than 120% of the Debt Service in such year on debt payable from Non-Ad Valorem Revenues, including for this purpose, the County Payments. "Discretionary Non-Ad ValoremRevenues"means any component of the Non-Ad Valorem Revenues as to which the County has the authority to determine the rate or rates charged or collected. Notwithstanding the foregoing or any provision of the Interloca1 Agreement to the contrary, the County will not be prohibited from reducing Non-Ad Valorem Revenues if such reduction is required by the laws of the State of Florida or the United States of America. Reserve Account Under the Ordinance, the City is required to establish a Reserve Account. The Reserve Account is required to be funded in an amount equal to the Reserve Account Requirement. The Reserve Account Requirement is defined in the Ordinance as an amount equal to the lesser of (i) ten percent (10%) of the original sale proceeds of the Series 2002 Bonds, (ii) maximum annual debt service on the Series 2002Bonds or (iii) one hundred twenty-five percent (125%) of the average annual debt service on the Series 2002 Bonds. The City may provide for this deposit to the Reserve Account either from the proceeds of the sale of the Series 2002 Bonds, from other available moneys of the City and/or by providing an insurance policy or a letter of credit meeting the quality of credit criteria required by the Ordinance. In order to satisfy the Reserve Account Requirement, a Municipal Bond Reserve Fund Policy (the "Reserve Fund Policy") issued by MBIA will be provided. The Reserve Account shall be used only for the purpose of payment of maturing principal of or interest on the Series 2002 Bonds as the same shall become due and payable, when the other money in the Sinking Fund is insufficient therefor, and for no other purpose. The City will enter into a Debt Service Agreement (the "Agreement") with MBIA pursuant to which the City will covenant that, in the event the City does not have on deposit in the Revenue Fund sufficient funds derived from the County Payments and the State Payments on any Payment Date to pay the principal 13 and interest on the Series 2002 Bonds then due, the City will supplement the County Payments and State Payments moneys it has on deposit in the Revenue Fund with other legally available Non-Ad Valorem Revenues of the City, and will provide to the Paying Agent sufficient fimds to pay debt service then due on the respective Payment Date, all in accordance with the Ordinance. For purposes of the Agreement the term "Non-Ad Valorem Revenues" shall mean all revenues of the City derived from any source whatsoever other than ad valorem taxation on real or personal property, which are legally available to make the payments required herein, but only after provision has been made by the City for the payment of all essential or legally mandated services. Flow of Funds The Ordinance creates the following fimds and accounts: (i) a Revenue Fund, and within the Revenue Fund, a State Payments Account, a County Payments Account and an Investment Account; (ii) a Construction Fund, and within the Construction Fund, a Project Account and a Cost oflssuance Account; (iii) a Debt Service Fund, and within the Debt Service Fund, an Interest Account, a Principal Account, a Bond Amortization Account and a Reserve Account; and (iv) a Rebate Fund. All fimds at any time remaining on deposit in the Revenue Fund will be disposed of on the day immediately preceding each Payment Date, commencing with the first Payment Date immediately following the delivery of the Bonds, for so long as any Bonds remain Outstanding, only in the following manner and in the following order of priority: (1) From the moneys in the Revenue Fund, the City will deposit into the respective accounts in the Debt Service Fund, such sums as will be sufficient to pay (a) interest becoming due on the Bonds on the next Payment Date; (b) principal due and payable on the next AmortizationInstallment required to be made on the next Payment Date, and ( c) the amount of any Amortization Installment required to be made on the next Payment Date. Such payments will be credited to the Interest Account, Principal Account or Bond Amortization Account. Upon the sale of any series oITermBonds, the City will by resolution, establish the amounts and maturities of such AmortizationInstallments for each series, and if there will be more than one maturity of Term Bonds within a series, the AmortizationInstallments for the Term Bonds of each maturity. In the event the moneys deposited for retirement ofa maturityofTermBonds are required to be invested, in the manner provided below, the Amortization Installments may be stated in terms of either the principal amount of the investments to be purchased on, or the cumulative amounts of the principal amount of investments required to have been purchased by, the payment date of such Amortization Installment. Moneys on deposit in each of the separate special accounts in the Bond Amortization Account will be used for the open market purchase or the redemption of Term Bonds of the series or maturity of Term Bonds within a series for which such separate special account is established or may remain 14 in said separate special account and be invested until the stated date of maturity of the Term Bonds. The resolution establishing the AmortizationInstallments for any series or maturity of Term Bonds may limit the use of moneys to anyone or more of the uses set forth in the preceding sentence and may specify the type or types of investments pennitted hereunder to be purchased. (2) Moneys remaining in the Revenue Fund will next be applied by the City to maintain the Reserve Account, witha balance equal to the Reserve Account Requirement, all or a portion of which sum may be initially provided from the proceeds of the sale of the Bonds and/or other moneys of the City. The City will thereafter deposit into said Reserve Account an amount equal to the difference between the amount, ifany, on deposit inthe Reserve Account and the Reserve Account Requirement. No further payments will be required to be made into such Reserve Account when there has been deposited therein and as long as there will remain on deposit therein a sum equal to the Reserve Account Requirement. Any withdrawals from the Reserve Account will be subsequently restored from the first moneys available in the Revenue Fund after all required current payments into the Debt Service Fund and including all deficiencies for prior payments, have been made in full. Moneys in the Reserve Account will be used only for the purpose of the payment of maturing principal (including Amortization Installments) of or interest on the Bonds when the moneys in the Interest Account, Principal Account or Bond Amortization Account in the Debt Service Fund are insufficient therefor, and for no other purpose. Whenever the amount on deposit in the Reserve Account exceeds the Reserve Account Requirement, the excess may be withdrawn and deposited into the Investment Account in the Revenue Fund. The City will not be required to make any further payments into the Debt Service Fund or into the Reserve Account when the aggregate amount of moneys in the Debt Service Fund and the Reserve Account are at least equal to the aggregate principal amount of Bonds then outstanding, plus the amount of interest then due or thereafter to become due on the Bonds then outstanding. Notwithstanding the foregoing provisions, in lieu of the required deposits of Revenues into the Reserve Account, the City may cause to be deposited into the Reserve Account a surety bond or an insurance policy issued by a reputable and recognized insurer for the benefit of the Bondholders in an amount equal to the Reserve Account Requirement, which surety bond or insurance policy will be payable (upon the giving of notice as required thereunder) on any Payment Date on which a deficiency exists which cannot be cured by fimds in any other account held pursuant to this Ordinance and avail- able for such purpose. The insurer providing such surety bond or insurance policy will be an insurer whose municipal bond insurance policies insuring the payment, when due, of the principal of and interest on municipal bond issues results in such issues being rated in the highest rating category by 15 Standard & Poor's Corporation or Moody's Investors Service, Inc., or their successors. If a disbursement is made from a surety bond or an insurance policy provided, the City will be obligated to either reinstate the maximum limits of such surety bond or insurance policy immediately following such disbursement or to deposit into the Reserve Account, as described above, for restoration of withdrawals from the Reserve Account, fimds in the amount of the disbursement made under such policy, or a combination of such alternatives. (3) The balance of any moneys remaining in the Revenue Fund after the above required payments have been made may either be deposited into either the Investment Account, the Revenue Fund, or may be used for the purchase or redemption of Bonds, or may be used by the City to reimburse the City for any costs of the Project paid for with City fimds other than the proceeds of the Bonds. Municipal Bond Insurance Payments of principal of and interest on the Series 2002 Bonds are to be insured through a policy to be issued by MBIA (the "MBIA") which policy will take effect upon the delivery of the Series 2002 Bonds. See "MUNICIPAL BOND INSURANCE" herein and "SPECIMEN MUNICIPAL BOND INSURANCE POLICY" attached hereto as Appendix E. Parity Bonds The Ordinance provides that the City will issue no bonds or obligations of any kind or nature payable from or enjoying a lien on the Pledged Revenues if such obligations have priority over the Series 2002 Bonds with respect to payment or lien, nor will the City create or cause or permit to be created any debt, lien, pledge, assignment, encumbrance or other charge on a parity with the lien of the Series 2002 Bonds upon the Pledged Revenues. Any obligations of the City, other than the Series 2002 Bonds, which are payable from the Pledged Revenues shall contain an express statement that such obligations are junior and subordinate in all respects to the Series 2002 Bonds as to lien on and source and security for payment from such Pledged Revenues. MUNICIPAL BOND INSURANCE The followinginfonnationhas been furnished by MBIA Insurance Corporation ("MBIA") for use in this Official Statement. Reference is made to Appendix "E" for a specimen ofMBIA's policy. MBIA's policy unconditionally and irrevocably guarantees the full and complete payment required to be made by or on behalf of the City to the Paying Agent or its successor of an amount equal to (i) the principal of( either at the stated maturity or by an advancement of maturitypursuant to a mandatory sinking fimd payment) and interest on, the Series 2002 Bonds as such payments shall become due but shall not be so paid (except that in the event of any acceleration of the due date of such principal by reason of 16 mandatory or optional redemption or acceleration resulting. from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed by MBIA's policy shall be made in such amounts and at such times as such payments of principal would have been due had there not been any such acceleration); and (ii) the reimbursement of any such payment which is subsequently recovered fromany owner of the Series 2002 Bonds pursuant to a finaljudgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner within the meaning of any applicable bankruptcy law (a "Preference"). MBIA's policy does not insure against loss of any prepayment premiwn which may at any time be payable with respect to any Series 2002 Bond. MBIA's policy does not, under any circumstance, insure against loss relating to: (i) optional or mandatory redemptions (other than mandatory sinking fund redemptions); (ii) any payments to be made on an accelerated basis; (ill) payments of the purchase price of Series 2002 Bonds upon tender by an owner thereof; or (iv) any Preference relating to (i) through (ill) above. MBIA's policy also does not insure against nonpayment of principal of or interest on the Series 2002 Bonds resulting from the insolvency, negligence or any other act or omission of the Paying Agent or any other paying agent for the Series 2002 Bonds. Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by MBIA from the Paying Agent or any Owner of a Bond the payment of an insured amount for which is then due, that such required payment has not been made, MBIA on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with State Street Bank and Trust Company, N.A., in New York, New York, or its successor, sufficient for the payment of any such insured amounts which are then due. Upon presentment and surrender of suchSeries 2002 Bonds or presentment of such other proof of ownership of the Series 2002 Bonds, together with any appropriate instruments of assignment to evidence the assignment of the insured amounts due on the Series 2002 Bonds as are paid by MBIA, and appropriate instrwnents to effect the appointment ofMBIA as agent for such owners of the Series 2002 Bonds in any legal proceeding related to payment of insured amounts on the Series 2002 Bonds, such instnnnents being in a form satisfactory to State Street Bank and Trust Company, N.A., State Street Bank and Trust Company, N.A. shall disburse to such owners or the Paying Agent payment of the insured amounts due on suchSeries 2002 Bonds, less any amount held by the Paying Agent for the payment of such insured amounts and legally available therefor. 17 MBIA MBIA Insurance Corporation ("MBIA") is the principal operating subsidiary of MBIA Inc., a New York Stock Exchange listed company (the "Company"). The Company is not obligated to pay the debts of or claims against MBIA. MBIA is domiciled in the State of New York and licensed to do business in and subject to regulation under the laws of all 50 states, the District of Colwnbia, the Corrunonwealth of Puerto Rico, the Corrunonwealth of the Northern Mariana Islands, the Virgin Islands of the United States and the Territory of Guam. MBIA has three branches, one in the Republic of France, one in the Republic of Singapore and one in the Kingdom of Spain. New York has laws prescribing mininum capital requirements, limiting classes and concentrations of investments and requiring the approval of policy rates and forms. State laws also regulate the amount of both the aggregate and individual risks that may be insured, the payment of dividends by MBIA, changes in control and transactions among affiliates. Additionally, MBIA is required to maintain contingency reserves on its liabilities in certain amounts and for certain periods of time. MBIA does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding the policy and MBIA set forth under this principal caption "MUNICIP AL BOND INSURANCE." Additionally, MBIA makes no representation regarding the Series 2002 Bonds or the advisability of investing in the Series 2002 Bonds. The Financial Guarantee Insurance Policies are not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York fusurance Law. MBIA Information The following docwnents filed by the Company with the Securities and Exchange Coonnission (1he "SEC") are incorporated herein by reference: (1) The Company's Annual Report on Form 10-K for the year ended December 31, 2001; and (2) The Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2002. Any documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act of 1934, as amended, after the date of this Official Statement and prior to the termination of the offering of the Series 2002 Bonds offered hereby shall be deemed to be incorporated by reference in this Official Statement and to be a part hereof. Any statement contained in a document incorporated or deemed to be incorporated by reference herein, or contained in this Official Statement, shall be deemed to be modified or superseded for purposes of this Official Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Official Statement. 18 The Company files annual, quarterly and special reports, infonnation statements and other infonnation with the SEC under File No. 1-9583. Copies of the SEC filings (including (1) the Company's Annual Report on Form 10-K for the year ended December 31, 2001, and (2) the Company's Quarterly Report on Form 10-Q forthe quarter ended March31, 2002), are available (i) over the Intemet at the SEC's web site at http://www.seq:ov; (ii) at the SEC's public reference room in Washington D.C.; (iii) over the Intemet at the Company's web site at http://www.mbia.com; and (iv) at no cost, upon request to MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504. The telephone number of MBIA is (914) 273-4545. As of December 31,2001, MBIA had admitted assets of$8.5 billion(audited), totalliabilitiesof$5.6 billion (audited), and total capital and surplus of $2.9 billion (audited) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. As ofMarch 31, 2002, MBIA had admitted assets of$8.6 billion(unaudited), total liabilities of$5. 7 billion(unaudited), and total capital and SUIp1us of$2.9 billion (unaudited) detennined in accordance with statutory accounting practices prescribed or pennitted by insurance regulatory authorities. Financial Strength Ratings of MBIA Moody's Investors Service, Inc. rates the financial strength ofMBIA "Aaa." Standard & Poor's, a division of The McGraw-Hill Companies, Inc. rates the financial strength of MBIA "AAA." Fitch, Inc. rates the financial strength ofMBIA "AAA." Each rating of MBIA should be evaluated independently. The ratings reflect the respective rating agency's current assessment of the creditworthiness ofMBIA and its ability to pay claims on its policies of insurance. Any further explanation as to the significance of the above ratings may be obtained only from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold the Series 2002 Bonds, and such ratings may be subject to revision or withdrawal at any time by the rating agencies. Any downward revision or withdrawal of any of the above ratings may have an adverse effect on the market price of the Series 2002 Bonds. MBIA does not guaranty the market price of the Series 2002 Bonds nor does it guaranty that the ratings on the Series 2002 Bonds will not be revised or withdrawn. The insurance provided by this policyis not covered by the Florida Insurance Guaranty Association created under chapter 631, Florida Statutes. 19 Rights Granted Insurer Generally, in connection with its insurance of an issue of municipal securities, the Insurer requires, among other things, (i) that it be granted the power to exercise any rights granted to the holders of such securities upon the occurrence of an event of default, without the consent of such holders, and that such holders may not exercise such rights without the Insurer's consent, in each case so long as the Insurer has not failed to comply with its payment obligations under its insurance policy; and (ii) that any amendment or supplement to or other modification of the principal legal documents be subject to the Insurer's consent. The specific rights, if any, granted to the Insurer in connection with its insurance of the Bonds are set forth in "APPENDIX C - SUMMARY OF CERTAIN PROVISIONS OF THE ORDINANCE." 20 ESTIMATED SOURCES AND USES OF FUNDS The following table sets forth the estimated sources and uses of funds: Sources: Par Amount of Series 2002 Bonds Plus: Accrued Interest Less: Original Issue Discount TOTAL SOURCES Uses: Deposit to Interest Account (Accrued Interest) Costs oflssuance (1) Deposit to Construction Fund TOTAL USES Note: (1) Includes Bond Insurance Premium, Surety Premium, Reserve Account Reserve Fund Policy Premium, Underwriter's Discount and fees and expenses of professionals and consultants. [Remainder of page intentionally left blank] 21 DEBT SERVICE SCHEDULE Date Aprill Principal Interest Total Debt Service 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Totals: 22 SPRING TRAINING FACILITY General. The major league baseball Philadelphia Phillies have trained in Clearwater since 1947, the second-longest tenure of any Grapefiuit League team. The Phillies are the oldest, continuous, one-name, one-city franchise in all of professional sports. The Phillies spring training has been conducted at the City-owned Jack Russell Memorial Stadiwn, located just north of downtown Clearwater. The stadium is also the summer home of the Class-A Clearwater Phillies of the Florida State League. The stadium was built 1955 and seats 6,918 and was named in honor of the late Jack Russell, a former major league baseball player who, as a City Corrnnissioner from 1951-55, was the driving force behind the stadimn. The Phillies lease with the City at Jack Russell Stadium expires in 2003. The "Spring Training Facility, "being financed in part with the Series 2002 Bonds, is a new baseball spring training facility comprised of Cmpenter Field, at which is located four major league training fields, a practice infield, covered batting tunnels, an outdoor bullpen, clubhouse building and a workout/exercise building, and a 7,000 seat new baseball stadium to replace the existing Jack Russell Stadium. The new facility will be used not only for Major League spring training and Minor League baseball, it will also serve as a facility for St. Petersburg Junior College baseball, local high school and AAU baseball, soccer teams and other community events. The Use Agreement. Pursuant to a Sports Facility Use Agreement, dated as ofDecember 31, 2000 (the "Use Agreement"), between the City and The Phillies, a Pennsylvania limited partnership (the "Phillies"), the Phillies will lease the Spring Training Facility for an initial term of20 years, with options for up to 20 years renewals therafter. The City has agreed to provide $5 million toward construction toward the anticipated $22 million cost of the Spring Training Facility, while the Phillies have agreed to provide a minimum of $3 million toward the project, including hiring the project architect. Pursuant to the Use Agreement, the Phillies will pay the City, as rent, $204,000. The Use Agreement provides that the City and the Phillies will share the revenue for concerts or other special events the City conducts at the stadium and the City will receive one-third of the money from stadium naming rights which the Phillies will have the right to sell. The City is obligated to pay the utilities, stadium maintenance and all security or traffic control needed by the stadium. The Use Agreement provides that the Phillies and City will share the costs of any Cmmty property taxes levied on the stadiwn, and the City has agreed not to charge city property taxes onthe stadimn. Pursuant to the Use Agreement, the City will have the use of a luxwy suite and 12 tickets for all games. The Phillies will retain all revenue from ticket sales, parking fees, purchases of corporate IUXUIy suites, concessions and sports bar. f4 23 TAX EXEMPTION Federal Income Tax Matters The Internal Revenue Code of 1986, as amended (the "Code") establishes certain requirements which must be met subsequent to the issuance and delivery of the Series 2002 Bonds in order that interest on the Series 2002 Bonds be and remain excluded from gross income for purposes of federal income taxation. Non-compliance may cause interest on the Series 2002 Bonds to be included in federal gross income retroactive to the date of issuance of the Series 2002 Bonds regardless of the date on which such non-compliance occurs or is ascertained. These requirements include, but are not limited to, provisions which prescribe yield and other limits within which the proceeds of the Series 2002 Bonds and the other amounts are to be invested and require that certain investment earnings on the foregoing must be rebated on a periodic basis to the Treaswy Department of the United States. The City has covenanted in the Ordinance to comply with such requirements in order to maintain the exclusionfromfederal gross income of the interest on the Series 2002 Bonds. In the opinion of Bond Counsel, assmning compliance with the aforementioned covenants, under existing laws, regulations, judicial decisions and rulings, interest on the Series 2002 Bonds is excluded from gross income for pwposes of federal income taxation. Interest on the Series 2002 Bonds is not an item of tax preference for pwposes of the federal alternative minimum tax imposed on individuals or corporations; however, interest on the Series 2002 Bonds may be subject to the alternative mininum tax when any Series 2002 Bond is held by a corporation. The alternative minimum taxable income of a corporation must be increased by 75% of the excess of such corporation's adjusted current earnings over its alternative minimum taxable income (before this adjustment and the alternative tax net operating loss deduction). "Adjusted Current Earnings" will include interest on the Series 2002 Bonds. Except as described above, Bond Counsel will express no opinion regarding the federal income tax consequences resulting from the ownership of, receipt or accrual of interest on, or disposition of Series 2002 Bonds. Prospective purchasers of Series 2002 Bonds should be aware that the ownership of Series 2002 Bonds mayresu1t in collateral federal income tax consequences, including (i) the denial of a deduction for interest on indebtedness incurred or continued to purchase or carry Series 2002 Bonds, (ii) the reduction of the loss reserve deduction for property and casualty insurance companies by 15% of certain items, including interest on the Series 2002 Bonds, (iii) the inclusion of interest on the Series 2002 Bonds in earnings of certain foreign corporations doing business in the United States for pwposes of a branch profits tax, (iv) the inclusion of interest on Series 2002 Bonds in passive income subject to federal income taxation of certain S corporations with Subchapter C earnings and profits at the close of the taxable year, and (v) the inclusion of interest on the Series 2002 Bonds in "modified adjusted gross income" by recipients of certain Social Security and Railroad Retirement benefits for pwposes of determining whether such benefits are included in gross income for federal income tax pwposes. 24 PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE SERIES 2002 BONDS AND TIm RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY HAVE ADVERSE FEDERAL TAX CONSEQUENCES FOR CERTAIN INDIVIDUAL AND CORPORATE REGISTERED OWNERS. PROSPECTIVE SERIES 2002 REGISTERED OWNERS SHOULD CONSULT WITH THEIR TAX SPECIALISTS FOR INFORMATION IN THAT REGARD. During recent years legislative proposals have been introduced in Congress, and in some cases enacted that altered certain federal tax consequences resulting from the ownership of obligations that are similar to the Series 2002 Bonds. In some cases these proposals have contained provisions that altered these consequences on a retroactive basis. Such alteration of federal tax consequences may have affected the market value of obligations similarto the Series 2002 Bonds. From time to time, legislative proposals are pending which could have an effect on both the federal tax consequences resulting from ownership of Series 2002 Bonds and their market value. No assurance can be given that legislative proposals will not be introduced or enacted that would or might apply to, or have an adverse effect upon, the Series 2002 Bonds. Tax Treatment of Original Issue Discount Under the Code, the difference between the maturity amount of the Series 2002 Bonds maturing in the years through (the "Discount Bonds") and the initial offering price to the public, excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers, at whichprice a substantial amount of Series 2002 Bonds of the same maturity was sold is "original issue discount." Original issue discount will accrue over the term of such Series 2002 Bonds at a constant interest rate compounded periodically. A purchaser who acquires such Series 2002 Bonds in the initial offering at a price equal to the initial offering price thereof to the public will be treated as receiving an amount of interest excludable fromgross income for federal income tax pwposes equal to the original issue discount accruing during the period he holds such Series 2002 Bonds, and will increase his adjusted basis in such Series 2002 Bonds by the amount of such accruing discount for pmposes of determining taxable gain or loss on the sale or other disposition of such Series 2002 Bonds. The federal income tax consequences of the purchase, ownership and redemption, sale or other disposition of the Series 2002 Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those above. Holders of such Series 2002 Bonds should consult their own tax advisors with respect to the precise determination for federal income tax pwposes of interest accrued upon sale, redemption or other disposition of Series 2002 Bonds and with respect to the state and local tax consequences of owning and disposing of such Series 2002 Bonds. Tax Treatment of Bond Premium It is anticipated that the Series 2002 Bonds maturing in years _ through _ will be offered at prices in excess of the principal amount thereof to achieve a yield based upon the call date rather than the maturity date (the "callable Premiwn Bonds"). Under the Code, the excess of the cost basis of a 25 Callable Premiwn Bond over the amount payable at the call date of the Callable Premiwn Bond that minimizes the yield to a purchaser of a Callable Premiwn Bond (other than for a bondholder who holds a bond as inventory, stock in trade, or for sale to customers in the ordinary course ofbusiness) is generally characterized as "bond premitnn." For federal income tax pwposes, bond premiwn is amortized over the period to the call date of a Callable Premiwn Bond A bondholder will therefore be required to decrease his basis in the Callable Premimn Bond by the amolUlt of the amortizable bond premitnn attributable to each taxable year he holds such Callable Premimn Bond. The amolUlt of the amortizable bond premiwn attributable to each taxable year is determined on an actuarial basis at a constant interest rate compounded on each interest payment date. The amortizable bond premiwn attributable to a taxable year is not deductible for federal income tax pwposes. Holders of the Series 2002 Bonds maturing in years _ through _ should consult their own tax advisors with respect to the precise determination for federal income tax pwposes of the treatment of bond premiwn upon sale, redemption, or other disposition of such Series 2002 Bonds. Florida Tax Matters On the date of delivery of the Series 2002 Bonds, Bond Counsel will issue an opinion to the effect that under existing statutes, regulations and judicial decisions, the Series 2002 Bonds and the income therefrom are exempt from taxation under the laws of the State of Florida, except as to Florida estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended. FINANCIAL STATEMENTS The security and source of payment for the Series 2002 Bonds are the Pinellas County Payments and the State Payments. The financial statements of both the State of Florida and Pinellas County. Florida have been filed with NRMSIR's in accordance with respective continuine disclosure oblieations of each. Reference is hereby made to such financial statements on fIle with the NRMSIR's. INVESTMENT POLICY Pursuant to the requirements of Section 218.45, Florida Statutes, the City adopted a written investment policy which applies to all funds held by or for the benefit of the City Commission (except for proceeds ofbond issues which are deposited in escrow and debt service funds and governed by their bond documents) and funds of Constitutional Officers and other component units of the City. 26 The objectives of the investment policy, listed in order in order of importance, are: I. Safety of principal 2. Provision of sufficient liquidity 3. Optimization of return within the constraints of safety and liquidity The investment policy limits the securities eligible for inclusion in the City's portfolio. The City will attempt to maintain a weighted average maturity of its investments at or below three years; however, the average maturity of investments may not exceed four years. To enhance safety, the investment policy requires the diversification of the portfolio to reduce the risk of loss resulting from over-concentration of assets in a specific class of security. The investment policy also requires the preparation of periodic reports for the City Commission of all outstanding securities by class or type, book value, income earned and market value as of the report date. Notwithstanding the foregoing, moneys held in the fimds and accounts established under the Ordinance may be invested only in Pennitted Investments, as described in the Ordinance. LmGATION In the opinion of the City Attomey, there is no pending or threatened litigation restraining or enjoining the issuance or delivery of the Series 2002 Bonds or the pledge of the Pledged Revenues or questioning or affecting the validity of the Series 2002 Bonds or the pledge of the Pledged Revenues or the proceedings and authority under which the Series 2002 Bonds are issued and the Pledged Revenues are pledged. Neither the creation, organization or existence, nor the title of the present members of the City Commission of the City or other officers of the City to their respective offices is being contested. The City experiences routine litigation and claims incidental to the conduct of its affairs. The City Attorney is of the opinion that no case either pending or threatened against the City will materially adversely affect the ability of the City to meet its obligations to pay the Series 2002 Bonds or will materially adversely affect the operations or financial condition of the City. RATINGS Moody's Investors Service ("Moody's") and Standard & Poor's Ratings Services ("S&P") are expected to assign municipal bond ratings of" "and" ," respectively, to the Series 2002 Bonds with the understanding that, upon delivery of the Series 2002 Bonds, a policy insuring the payment when due of the principal of and interest on the Series 2002 Bonds will be issued by the Bond Insurer. 27 Suchratings reflect the views of the respective rating agencies and an explanation of the significance of such ratings may be obtained only from the rating agencies at the following addresses: Moody's Investors Service, 99 Church Street, New York, New York 10007, and Standard & Poor's Rating Service, 25 Broadway, New York, New York 10004. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agency concerned, if, inthe judgment of such agency, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect upon the market price of the Series 2002 Bonds. UNDERWRITING The Series 2002 Bonds are being purchased by UBS PaineWebber Inc.fi and Salomon Smith Barney Inc.. the Underwriters, from the City at an aggregate purchase price of $ (par less underwriter's discount of $ , plus accrued interest on the Series 2002 Bonds). The fi Underwriters are obligated to purchase all the Series 2002 Bonds if any are purchased. Following the initial public offering, the public offering prices may be changed from time to time by the fi Underwriters. FINANCIAL ADVISOR The Financia1Advisor for the City is Banc of America Securities LLC, with offices located at 1640 Gulf-to-Bay Boulevard, Clearwater, Florida 33755, telephone number (727) 462-5804. LEGAL OPINIONS Legal matters incident to the authorization, issuance and sale of the Series 2002 Bonds are subject to the approval of Bryant, Miller and Olive, P.A., Tallahassee, Florida, Bond Counsel, whose approving opinion will be printed on the Series 2002 Bonds and will be in substantially the form set forth in APPENDIX E. Certain other legal matters will be passed upon for the City by Pamela K. Akin, Esquire, City Attorney and by Nabors, GIblin & Nickerson, P .A., Tampa, Florida, Disclosure Counsel to the City. ENFORCEABILITY OF REMEDIES The remedies available to the Holders of the Series 2002 Bonds upon an Event of Default under the Ordinance are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, the remedies specified by the Ordinance may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2002 Bonds will be qualified, as to the enforceability of the various legalinstnnnents, by limitations imposed by bankruptcy, reorganization, insolvency or other similar 28 ~ laws affecting the rights of creditors enacted before or after such delivety. The remedies granted to the Bondholders under the Ordinance do not include the power to accelerate the principal of the Series 2002 Bonds. DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS Section 517.051, Florida Statutes, as amended, and the regulations promulgated thereunder (the "Disclosure Act") require that the Citymake a full and fu.ir disclosure of any bonds or other debt obligations that it has issued or guaranteed and that are or have been in default as to principal or interest at any time after December 31, 1975 (including bonds or other debt obligations for which it has served only as a conduit issuer such as industrial development or private activity bonds issued on behalf of private businesses). The City is not and has not since December 31, 1975 been in default as to principal and interest on its bonds or other debt obligations (see, however, disclosure which is being made in the next paragraph related to conduit indebtedness). The City hereby makes the following disclosure regarding a default on an issue of industrial development bonds not related to any direct indebtedness of the City, as it is aware of a prior default in 1990 with respect to an issue of industrial revenue bonds for which the City served only as a conduit issuer. The City was not liable to pay the principal of or interest on such bonds except from payments made to it by the private company on whose behalf such bonds were issued and no funds of the City were used to pay such bonds or the interest thereon. Although the City is not aware of any other defaults with respect to bonds or other debt obligations as to which it has served only as a conduit issuer, it has not undertaken an independent review or investigation of such bonds or other debt obligations. ADVISORS AND CONSULTANTS The City has retained advisors and consultants in connection with the issuance of the Series 2002 Bonds. These advisors and consultants are compensated from a portion of the proceeds of the Series 2002 Bonds, identified as "Costs ofIssuance" under the heading "ESTIMATED SOURCES AND USES OF FUNDS" herein; and such compensation, is, in some instances, contingent upon the issuance of the Bonds and the receipt of the proceeds thereof. Financial Advisor. The City has retained Banc of America Securities LLC, Clearwater, Florida, as financial advisor (the "Financial Advisor") in connection with the preparation of the City's plan of financing and with respect to the authorization and issuance of the Series 2002 Bonds. The fees of the Financial Advisor will be paid from proceeds of the Series 2002 Bonds and such payment is contingent upon the issuance of the Series 2002 Bonds. 29 Bond Counsel. Bryant, Miller and Olive, P.A., Tallahassee, Florida represents the City as Bond Counsel. The fees of Bond Counsel will be paid from proceeds of the Bonds, and such payment is contingent upon the issuance of the Bonds. Disclosure Counsel. Nabors, Giblin & Nickerson, P.A., Tampa, Florida represents the City as Disclosure Counsel. 1be fees of Disclosure Counsel will be paid from proceeds of the Bonds, and such payment is contingent upon the issuance of the Bonds. CONTINUING DISCLOSURE The City has covenanted for the benefit of the holders and beneficial owners of the Series 2002 Bonds to provide certain financial information and operating data relating to the City by not later than June 30 in each year commencing June 30, 2002 (the "Annual Report"), and to provide notices of the occurrence of certain enumerated events, if deemed by the City to be material. The Annual Report will be filed by the City with each Nationally Recognized Municipal Securities Information Repository ("NRMSIR"), and withthe StateofFloridaRepository, ifand when created. The notices of material events willbe filed by the City with the NRMSIR and with the State of Florida Repository, ifand when created. The City has covenanted to obtain and cause to be filed with the NRMSIR the general pwpose financial statements of Pinellas County, Florida and the State of Florida, in the event that either cease to otherwise be subject to continuing disclosure requirements requiring such filings. The form of Continuing Disclosure Certificate containing the specific nature of the information to be contained in the Annual Report or the notices of material events appears in "APPENDIX F - FORM OF CONTINUING DISCLOSURE CERTIFICATE." These covenants have been made in order to assist the Underwriter in complying with S.E.C. Rule l5c2-l2(b)(5). The City has never failed to complyinallmaterialrespects with any previous undertakings with regard to said Rule to provide annual reports or notices of material events. CERTIFICATE CONCERNING OFFICIAL STATEMENT Concurrently with the delivery of the Series 2002 Bonds, the City will fiunish its certificate, executed by the Mayor or Vice-Mayor of the City, to the effect that, to the best of his or her knowledge, this Official Statement, as of its date and as of the date of delivery of the Series 2002 Bonds, does not contain any untrue statements of material fact and does not omit to state a material fact which should be included herein for the purpose for which this Official Statement is to be used, or which is necessary to make the statements contained herein, in the light of the circumstances under which they were made, not misleading. 30 MISCELLANEOUS The references, excerpts and swnmaries of all documents, resolutions and/or ordinances referred to herein do not purport to be complete statements of the provisions of such documents, resolutions and/or ordinances and reference is directed to all such documents, resolutions and/or ordinances for full and complete statements of all matters of fact relating to the Series 2002 Bonds, the security for and the repayment of the Series 2002 Bonds and the rights and obligations of the Holders thereof. Copies of such documents, resolutions and ordinances may be obtained from the City Clerk's Office. So far as any statements made in this Official Statement involve matters of opinion or of estimates, whether or not expressly stated, they are set forth as such and not as representations of fact. No representation is made that any of such statements will be realized. Neither this Official Statement nor any statement which may have been orally or in writing is to be construed as a contract with the Holders of the Series 2002 Bonds. The execution and delivery of this Official Statement by the Mayor-Commissioner of the City has been duly authorized by the City Commission. CITY OF CLEARWATER, FLORIDA Brian 1. Aungst, Sr., Mayor-Commissioner William B. Home, n, City Manager 31 APPENDIX A GENERAL INFORMATION REGARDING THE CITY APPENDIX B FORM OF BOND COUNSEL OPINION APPENDIX C THE ORDINANCE APPENDIX D THE INTERLOCAL AGREEMENT APPENDIX E SPECIMEN BOND INSURANCE POLICY APPENDIX F FORM OF CONTINUING DISCLOSURE CERTIFICATE EXHIBIT C CONTINUING DISCLOSURE CERTIFICATE Resolution 02-43 CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City of Clearwater, Florida (the "Issuer") in connection with the issuance of its $24,725,000 Stormwater Revenue Bonds, Series 2002 (the "Series 2002 Bonds"). The Series 2002 Bonds are being issued pursuant to Chapter 166, Part II, Florida Statutes, City Home Rule Ordinance 6675-01, enacted January 18, 2001, as amended by Ordinance 6854-01 enacted on September 6,2001 and Ordinance 7016-02 enacted on August 22, 2002 (the "Ordinance"), as may be further amended and supplemented, and other applicable provisions of law (collectively the "Act"), and City of Clearwater ResolutionNo, 02- 43, adopted August 22, 2002, as amended and supplemented (the "Resolution").. The Issuer covenants and agrees as follows: SECTION 1. PURPOSE OF DISCLOSURE CERTIFICATE. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Series 2002 Bondholders and in order to assist the original underwriters of the Series 2002 Bonds in complying with Rule 15c2- 12(b)(5) promulgated by the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934 (the "Rule"). SECTION 2. PROVISION OF ANNUAL INFORMATION. Except as otherwise provided herein, the Issuer shall insure that there is provided to all of the nationally recognized municipal securities information repositories described in Section 4 hereof (the ''NRMSIRs''), and to any state information depository that is established within the State of Florida (the "SID"), on or before June 30 of each year, commencing June 30, 2003, the information set forth below in this Section 2. (A) the Comprehensive Annual Financial Report for the immediately preceding Fiscal Year (the "CAFR") for Pinellas County, Florida (the "County") and the State of Florida (the "State"), which shall include the audited financial statements of the County and State, respectively, for the immediately preceding Fiscal Year prepared in accordance with Generally Accepted Accounting Principles, as modified by applicable State of Florida requirements and the governmental accounting standards promulgated by the Government Accounting Standards Board; provided, however, if such audited financial statements are not completed prior to April 30 of any year, the Issuer shall attempt to provide unaudited financial statements of either the County or the State, as applicable, on such date and shall cause to be provided the audited financial statements as soon as practicable following their completion; and (B) to the extent not set forth in the CAFR of the County or the State, additional financial information and operating data of the type included with respect to the Issuer in the final official statement prepared in connection with the sale and issuance of the Series 2002 Bonds (as amended, the "Official Statement"), as set forth below: 1. Updates of the financial infonnation set forth in the Official Statement under the subcaptions "Collection and Distributions of the General Sales and Use Tax Fiscal Years Ended June 30,1991 through June 30, 2002"" under the principal caption "StatePayments" (for the then- immediately preceding ten fiscal years). 2. Description of any additional indebtedness payable in whole or in part from the Pledged Revenues (as defined in the Ordinance). 3. Any other financial infonnation or operating data of the type included in the Official Statement which would be material to a holder or prospective holders of the Series 2002 Bonds. For pwposes of this Disclosure Certificate, "Fiscal Year" means the period commencing on October 1 and ending on September 30 of the next succeeding year, or such other period of time provided by applicable law. SECTION 3. REPORTING SIGNIFICANT EVENTS. The Issuer shall provide to the NRMSIRs or the Municipal Securities Rulemaking Board (the "MSRB") and to the SID, on a timely basis, notice of any of the following events, if such event is material with respect to the Series 2002 Bonds or the Issuer's ability to satisfY its payment obligations with respect to the Series 2002 Bonds: (A) Principal and interest payment delinquencies; (B) Non-payment related defaults; (C) Unscheduled draws on the debt service reserve fimd reflecting financial difficulties; (D) Unscheduled draws on credit enhancement reflecting financial difficulties; (E) Substitution of credit or liquidity providers, or their failure to perform; (F) Adverse tax opinions or events affecting the tax-exempt status of the Series 2002 Bonds; (G) Modifications to rights of Series 2002 Bondholders; (H) Redemptions; (I) Defeasances; (1) Release, substitution, or sale of property securing repayment of the Series 2002 Bonds; (K) Rating changes; and (L) Notice of any failure on the part of the Issuer or any other Obligated Person (as defined herein) to meet the requirements of Section 2 hereof. 2 The Issuer may from time to time, in its discretion, choose to provide notice of the occurrence of certain other events, in addition to those listed in this Section 3, it; in the judgment of the Issuer, such other events are material with respect to the Series 2002 Bonds, but the Issuer does not specifically undertake to connnit to provide any such additional notice of the occurrence of any material event except those events listed above. Whenever the Issuer obtains knowledge of the occurrence of a significant event described in this Section 3, the Issuer shall as soon as possible detennine ifsuchevent would be material under applicable federal securities law to holders of Series 2002 Bonds, provided, that any event under clauses (D), (E), (F), (K) or (L) above will always be deemed to be material. SECTION 4. NRMSIRs. The NRMSIRs to which the Issuer shall provide the infonnationdescribed in Sections 2 and 3 above, to the extent required, shall be the following organizations, their successors and assigns: Bloomberg Municipal Repository 100 Business Park Drive Skillman, New Jersey 08558 Phone: (609) 279-3225 Fax: (609) 279-5962 Email: Munis@Bloomberg.com DPC Data Inc, One Executive Drive Fort Lee, NJ 07024 Phone: (201) 346-0701 Fax: (201) 947-0107 Email: nnnsir@dpcdata.com FT Interactive Data Attn:NRMSIR 100 William Street New York, New York 10038 Phone: (212) 771-6999 Fax: (212) 771-7390 (Secondary Market Information) (212) 771-7391 (Primary Market Information) Email: NRMSIR@FI1D.com 3 Standard & Poor's 1. 1. Kenny Repository 55 Water Street 45th Floor New York, NY 10041 Phone: (212) 438-4595 Fax: (212) 438-3975 Emai1: nnnsicrepository@sandp.com (F) Any NRMSIRs that are established subsequently and approved by the SEC. (G) A list of the names and addresses of all designated NRMSIRs as of any date may currently be obtained by calling the SEC's Fax on Demand Service at 202/942-8088 and requesting document number 0206. SECTION 5. NOEVENTOFDEFAULT. Notwithstandinganyotherprovisioninthe Ordinance to the contrary, failure of the Issuer to comply with the provisions of this Disclosure Certificate shall not be considered an event of default WIder the Ordinance; provided, however, any Series 2002 Bondholder may take such actions as may be necessary and appropriate, including pursuing an action for mandamus or specific performance, as applicable, by court order, to cause the Issuer to comply with its obligations hereWIder. For purposes of this Disclosure Certificate, "Series 2002 Bondholder" shall mean any person who (A) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2002 Bonds (including persons holding Series 2002 Bonds through nominees, depositories or other intermediaries), or (B) is treated as the owner of any Series 2002 Bond for federal income tax purposes. SECTION 6. INCORPORATION BY REFERENCE. Any or all of the infonnation required herein to be disclosed may be incOIporated by reference from other docwnents, including official statements or debt issues of the Issuer of related public entities, which have been submitted to each of the NRMSIRs and the SID, if any, or the SEC. If the document inCOIpOrated by reference is a final official statement, it must be available from the MSRB. The Issuer shall clearly identify each document incorporated by reference. SECTION 7. DISSEMINATION AGENTS. The Issuer may, from time to time, appoint or engage a dissemination agent to assist it in carrying out its obligations WIder this Disclosure Certificate, and may discharge any such agent, with or without appointing a successor disseminating agent. SECTION 8. TERMINATION. The Issuer's obligations WIder this Disclosure Certificate shall terminate upon (A) the legal defeasance, prior redemption or payment in full of all of the Series 2002 Bonds, or (B) the termination of the continuing disclosure requirements of the Rule by legislative, judicial or administrative action. 4 SECTION 9. AMENDMENTS. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision may be waived, if such amendment or waiver is supported by an opinion of counsel that is nationally recognized in the area of federal securities laws, to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule. SECTION to. ADDITIONAL INFORMATION. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other infonnation, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other infonnation in its annual information described in Section 2 hereof or notice of occurrence of a significant event described in Section 3 hereof, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any infonnation in its annual information or notice of occurrence of a significant event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Disclosure Certificate to update such information or include it in its fi.rtw'e annual information or notice of occurrence of a significant event. SECTION 11. OBLIGATED PERSONS. If any person, other than the Issuer, becomes an Obligated Person (as defined in the Rule) relating to the Series 2002 Bonds, the Issuer shall use its best efforts to require such Obligated Person to comply with all provisions of the Rule applicable to such Obligated Person. Dated as of September ,2002 ArrEST: CITY OF CLEARWATER, FLORIDA City Clerk By: Mayor 5 EXHIBIT 0 COMMITMENTS FOR MUNICIPAL BOND INSURANCE POLICY AND MUNICIPAL BOND DEBT SERVICE RESERVE INSURANCE POLICY Resolution 02-43 AtBIA COMMITMENT TO ISSUE A FINANCIAL GUARANTY INSURANCE POLICY Re: Application No.: 2002-005793-01 Sale Date: August, 2002 (T) Program Type: Negotiated-DP Florida, Revenue Bonds (Spring Training $14,825,000 (est.) City of Clearwater, Facility), Series 2002 (the "Obligations") This commitment to issue a financial guaranty insurance policy (the "Commitment") dated August 1,2002, constitutes an agreement between CITY OF CLEARWATER, FLORIDA (the "Applicant") and MBIA Insurance Corporation (the "Insurer"), a stock insurance company incorporated under the laws ofthe State of New York. Based on an approved application dated July 23, 2002, 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 "Policy") for the Obligations, insuring the payment of principal of and interest on the Obligations when due. The issuance of the 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, of a nonrefundable premium in the amount of 0.3400% of total debt service, premium rounded to the nearest thousand. The premium set out in this paragraph shall be the total premium required to be paid on the Policy issued pursuant to this Commitment. 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. A Statement of Insurance satisfactory to the Insurer shall be printed on the Obligations. A1BIA 7. 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. 8. No material adverse change affecting any security for the Obligations shall have occurred prior to the delivery of and payment for the Obligations. 9. This Commitment may be signed in counterpart by the parties hereto. 10. Compliance with the Insurer's General Document Provisions (see attached). 11. Compliance with the Insurer's List of Permissible Investments for Indentured Funds (see attached). 12. S&P rating of 'A' or above. 13. A City Covenant to Budget and Appropriate to replenish the debt service reserve fund. Dated this 1 st day of August, 2002. MBIA Insurance Corporation By: ~gJ~~k CITY OF CLEARWATER, FLORIDA By: Title: At1BIA GENERAL DOCUMENT PROVISIONS A. Notice to the Insurer The basic legal documents must provide that any notices required to be given by any party should also be given to the Insurer, AUn: Insured Portfolio Management. B. Amendments. In the basic legal document, there are usually two methods of amendment. The first, which typically does not require the consent ofthe bondholders, is for amendments which will cure ambiguities, correct formal defects or add to the security of the financing. The second, in which bondholder consent is a prerequisite, covers the more substantive types of amendments. For all financings, the Insurer must be given notice of any amendments that are of the first type and the Insurer's consent must be required for all amendments of the second type. All documents must contain a provision which requires copies of any amendments to such documents which are consented to by the Insurer to be sent to Standard & Poor's. C. SUPlllemental Legal Document. If the basic legal document provides for a supplemental legal document to be issued for reasons other than (1) a refunding to obtain savings; or (2) the issuance of additional bonds pursuant to an additional bonds test, there must be a requirement that the Insurer's consent also be obtained prior to the issuance of any additional bonds and/or execution of such supplemental legal document. D. Events of Default and Remedies. All documents normally contain provisions which define the events of default and which prescribe the remedies that may be exercised upon the occurrence of an event of default. At a minimum, events of default will be defined as follows: 1. the issuer/obligor fails to pay principal when due; 2. the issuer/obligor fails to pay interest when due; 3. the issuer/obligor fails to observe any other covenant or condition of the document and such failure continues for 30 days and 4. the issuer/obligor declares bankruptcy. The Insurer, acting alone, shall have the right to direct all remedies in the event of a default. The Insurer shall be recognized as the registered owner of each bond which it insures for the purposes of exercising all rights and privileges available to bondholders. For bonds which it insures, the Insurer shall have the right to institute any suit, action, or proceeding at law or in equity under the same terms as a bondholder in accordance with applicable provisions of the governing documents. Other than the usual redemption provisions, any acceleration of principal payments must be subject to the Insurer's prior written consent. E. Defeasance requires the deposit of: 1. Cash 2. U.S. Treasury Certificates, Notes and Bonds (including State and Local Government Series -- " SLGs") MBIA 3. Direct obligations of the Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities 4. Resolution Funding Corp. (REFCORP) Only the interest component of REF CORP strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form are acceptable. 5. Pre-refunded municipal bonds rated "Aaa" by Moody's and "AAA" by S&P. If however, the issue is only rated by S&P (i.e., there is no Moody's rating), then the pre- refunded bonds must have been pre-refunded with cash, direct U.S. or U.S. guaranteed obligations, or AAA rated pre-refunded municipals to satisfy this condition. 6. Obligations issued by the following agencies which are backed by the full faith and credit of the U.S.: a. U.S. Export-Import Bank (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership b. Farmers Home Administration (FmHA) Certificates of beneficial ownership c. Federal Financing Bank d. General Services Administration Participation certificates e. U.S. Maritime Administration Guaranteed Title XI financing f. U.S. Department of Housing and Urban Development (HUD) Project Notes Local Authority Bonds New Communities Debentures - U.S. government guaranteed debentures U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds F. Agents: 1. In transactions where there is an agent/enhancer (other than the Insurer), the trustee, tender agent (if any), and paying agent (if any) must be commercial banks with trust powers. 2. The remarketing agent must have trust powers if they are responsible for holding moneys or receiving bonds. As an alternative, the documents may provide that if the remarketing agent is removed, resigns or is unable to perform its duties, the trustee must assume the responsibilities of remarketing agent until a substitute acceptable to the Insurer is appointed. NlBIA LIST OF PERMISSIBLE INVESTMENTS FOR INDENTURED FUNDS A. Direct obligations of the United States of America (including obligations issued or held in book-entry form on the books ofthe Department of the Treasury, and CATS and TIGRS) 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 (stripped securities are only permitted if they have been stripped by the agency itself): 1. U.S. Export-Import Bank (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership 2. Farmers Home Administration (FmHA) Certificates of beneficial ownership 3. Federal Financing Bank 4. Federal Housing Administration Debentures (FHA) 5. General Services Administration Participation certificates 6. Government National Mortgage Association (GNMA or "Ginnie Mae") 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. U.S. Department of Housing and Urban Development (HUD) Project Notes Local Authority Bonds New Communities Debentures - U.S. government guaranteed debentures U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds C. Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non-full faith and credit U.S. government agencies (stripped securities are only permitted ifthey have been stripped by the agency itself): 1. Federal Home Loan Bank System Senior debt obligations iMBIA 2. Federal Home Loan Mortgage Corporation (FHLMC or "Freddie Mac") Participation Certificates Senior debt obligations 3. Federal National Mortgage Association (FNMA or "Fannie Mae") Mortgage-backed securities and senior debt obligations 4. Student Loan Marketing Association (SLMA or "Sallie Mae") Senior debt obligations 5. Resolution Funding Corp. (REFCORP) obligations 6. Farm Credit System Consolidated systemwide bonds and notes 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; AAA-m; or AA-m and if rated by Moody's rated Aaa, Aa1 or Aa2. 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. 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, including BIF and SAIF. G. Investment Agreements, including GIC's, Forward Purchase Agreements and Reserve Fund Put Agreements acceptable to MBIA (Investment Agreement criteria is available upon request). H. Commercial paper rated, at the time of purchase, "Prime - 1" by Moody's and "A-I" or better byS&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 for 30 days or less must follow the following criteria. Repurchase Agreements which exceed 30 days must be acceptable to MBIA (criteria available upon request) Repurchase agreements provide for the transfer of securities from a dealer bank or securities firm (seller/borrower) to a municipal entity (buyerllender), and the transfer of cash from a municipal entity to the dealer bank or securities firm with an agreement that the dealer bank MBIA or securities firm will repay the cash plus a yield to the municipal entity in exchange for the securities at a specified date. 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 are rated A or better by Standard & Poor's Corporation and Moody's Investor Services, 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, or (2) Federal agencies backed by the full faith and credit of the U.S. government (and FNMA & FHLMC) 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. 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 104% 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 104% of the value of the cash transferred by municipality, then additional cash and/or acceptable securities must be transferred. If, however, the securities used as collateral are FNMA or FHLMC, then the value of collateral must equal 1 05%. 3. Legal opinion which must be delivered to the municipal entity: a. Repo meets guidelines under state law for legal investment of public funds. Additional Notes A1BIA (i) There is no list of permitted investments for non-indentured funds. Your own credit judgment and the relevant circumstances (e.g., amount of investment and timing of investment) should dictate what is permissible. (ii) Any state administered pool investment fund in which the issuer is statutorily permitted or required to invest will be deemed a permitted investment. (iii) DSRF investments should be valued at fair market value and marked to market at least once per year. DSRF investments may not have maturities extending beyond 5 years, except for Investment Agreements approved by the Insurer. A+1BIA COMMITMENT TO ISSUE A DEBT SERVICE RESERVE SURETY BOND Application No.: 2002-005793-02 Sale Date: August, 2002 (T) Program Type: Negotiated-DP RE: $1,482,500 (est.) Debt Service Reserve Fund for the $14,825,000 (est.) City of Clearwater, Florida, Revenue Bonds (Spring Training Facility), Series 2002 (the "Obligations") This commitment to issue a debt service reserve surety bond (the "Commitment") constitutes an agreement between CITY OF CLEARWATER, FLORIDA (the "Applicant"), and MBIA Insurance Corporation (the "Insurer"), a stock insurance company incorporated under the laws of the State of New York. Based on an approved application dated July 23, 2002, 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 debt service reserve surety bond (the "Surety Bond"), for the Obligations, guaranteeing the payment to the issuer of up to $1,482,500 (est.) City of Clearwater, Florida, Revenue Bonds (Spring Training Facility) Series 2002 on the Obligations. The issuance of the Surety Bond 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, of a nonrefundable premium in the amount of 2.000% total debt service reserve fund, premium rounded to the nearest thousand. The premium set out in this paragraph shall be the total premium required to be paid on the Policy issued pursuant to this Commitment. 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. 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. 7. No material adverse change affecting any security for the Obligations shall have occurred prior to the delivery of and payment for the Obligations. MBIA 8. This Commitment may be signed in counterpart by the parties hereto. 9. Compliance with the Insurer's Term Sheet for Debt Service Reserve Fund Program (see Attachment A). Dated this 1st day of August, 2002. MBIA Insurance Corporation By ~e~k Assist Secretary i CITY OF CLEARWATER, FLORIDA By: Title: ..NIBIA (Attachment A) TERM SHEET FOR DEBT SERVICE RESERVE FUND PROGRAM Introduction The Insurer can, under certain circumstances, issue a debt service reserve fund surety bond (the "Surety Bond"), to be used as a replacement for a cash funded reserve, in any amount up to the full amount of the debt service reserve fund requirement. The Insurer requires that the issuer and/or the underlying obligor of the bonds enter into a Financial Guaranty Agreement with the Insurer providing for, among other things, the reimbursement to the Insurer of amounts drawn under the Surety Bond. A sample draft of such an agreement is attached. The Insurer will undertake its standard credit analysis of the issuer and/or obligor which may result in requests for modifications of the structure or certain provisions of the bond documents. These changes would be in addition to the specific changes required in all financings where a Surety Bond will be issued (see Required Terms below). The Surety Bond may be structured to provide debt service reserve fund replacement for the current issue of bonds and any other debt issued on a parity therewith. However, in all cases, the Surety Bond will expire on the final maturity date of the current issue. The program criteria are subject to change by the Insurer. General Terms Provision should be made in the bond documents for the creation of a debt service reserve fund and there should be a requirement to maintain that fund at a certain level. It should also be provided that this requirement may be satisfied by cash or a qualified surety bond or a combination of these two (Note: A "Qualified surety bond" means a surety bond issued by an insurance company rated in the highest rating category by Standard & Poor's and Moody's and. if rated by A.M. Best & Company. must also be rated in the highest rating category by A.M. Best & Com?any). In those instances where the issuance of parity debt will cause the debt service reserve fund requirement to increase, the Insurer requires that at the time of issuance of such parity debt, either cash or a qualified surety bond be provided so that the increased requirement will be satisfied. In any event where the debt service reserve fund contains both an the Insurer Surety Bond and cash, the Insurer requires that the cash be drawn down completely before any demand is made on the Surety Bond. In any event where the debt service reserve fund contains a surety bond from another entity and an INSURER Surety Bond, the documents should provide for a pro-rata draw on each of the surety bonds. With regard to replenishment, any available monies, as defined in the Indenture or Resolution, should be used first to reimburse the Insurer, thereby reinstating the Surety Bond, and second to replenish the cash in the debt service reserve fund. The rate covenant should be expanded so that, in addition to all other coverage requirements, there are sufficient monies available to pay all amounts owed to the Insurer under the terms of the Financial Guaranty Agreement. If the documents provide for the issuance of additional bonds that do not share a common reserve fund with the current issue, the Insurer can issue a surety bond that is, by its terms, MBIA available only as a reserve for the current issue. In such cases, the Insurer would require a covenant that any revenues available for debt service must be distributed between the current issue and any additional bonds on a pro rata basis without regard to the existence of a funded debt service reserve or a surety bond. The bond documents should require the Trustee to deliver a Demand For Payment (see attached form) at least three days prior to the date on which funds are required. Required Terms With respect to any security interest in collateral granted to the bondholders, the Insurer should be granted that same interest subject only to that of the bondholders. This would apply to existing security, if any, as well as any to be granted in the future. The Insurer should receive an opinion from counsel to the issuer/obligor that the Financial Guaranty Agreement is a legal, valid and binding obligation of the issuer/obligor and is enforceable against the issuer/obligor in accordance with its terms. In general terms, the "flow of funds" would be structured as follows: All gross revenues should be paid in the following order with the priority indicated: (1) expenses of operation and maintenance; (2) debt service on the bonds; (3) reimbursement of amounts advanced by the Insurer under the Surety Bond; (4) reimbursement of cash amounts, if any, drawn from the reserve fund; (5) replenishment of Renewal and Replacement Fund; (6) payment to the Insurer of interest on amounts advanced under the Surety Bond; (7) all other lawful uses, including the debt service payment on any subordinate bonds. Provision must be made for the Insurer to be paid all amounts owed to it under the terms of the Financial Guaranty Agreement or any other documents before the bond documents may be terminated, It will be the responsibility of the trustee/paying agent to maintain adequate records, verified with the Insurer, asto the amount available to be drawn at any given time under the Surety Bond and as to the amounts paid and owing to the Insurer under the terms of the Financial Guaranty Agreement. There may be no optional redemption of bonds or distribution of funds to the issuer and/or the underlying obligor unless all amounts owed to the Insurer under the terms of the Financial Guaranty Agreement or any other documents have been paid in full. 8/12/93 EXHIBIT E FORM OF DEBT SERVICE AGREEMENT Resolution 02-43 DEBT SERVICE AGREEMENT re: $ City of Clearwater Florida Revenue Bonds (Spring Training Facility) Series 2002 Dated as of September _, 2002 Among City of Clearwater, Florida and MBIA Insurance Corporation and [PAYING AGENT] DEBT SERVICE AGREEMENT THIS DEBT SERVICE AGREEMENT (the "Agreement") made and entered into as of September _, 2002, by and among the City of Clearwater, Florida, a municipal corporation (the "City"), MBIA Insurance Corporation, a New York insurance company ("MBIA"), and [PAYING AGENT], a [stateHnational] banking association, as paying agent for the hereinafter described Bonds (the "Paying Agent"). WHEREAS, the City is issuing, on the date hereof, its $ City of Clearwater, Florida Revenue Bonds (Spring Training Facility), Series 2002 (the "Bonds") and has designated the Paying Agent as the paying agent for the Bonds; and WHEREAS, the Bonds are being issued pursuant to Ordinance No. 6675-01, enacted by the City Commission of the City on January 18, 2001, as amended by Ordinance No. 6854-01, enacted by the City Commission of the City on September 6, 2001, as further amended by Ordinance No. 7016-02, enacted by the City Commission of the City on August 22, 2002 (collectively, the "Bond Ordinance"), and Resolution No. 02-43, adopted by the City Commission of the City on August 22, 2002 (the "Resolution"); and WHEREAS, the Bonds are payable from certain monthly payments to be made by the State of Florida to the City in accordance with Section 288.1162, Florida Statutes (the "State Payments") and by Pinellas County, Florida (the "County") to the City in accordance with an Interlocal Agreement dated as of December 1, 2000 between the County and the City (the "County Payments"), and no revenues of the City (other than the County Payments and the State Payments) are pledged by the Bond Ordinance to the repayment of the Bonds; and WHEREAS, in consideration of MBIA issuing its Municipal Bond Insurance Policy (the "Policy") to insure the timely payment of the Bonds and its Debt Service Reserve Surety Bond (the "Surety Bond") in lieu of a cash deposit by the City to the Debt Service Reserve Fund for the Bonds created by the Bond Ordinance, the City has agreed to enter into this Agreement with MBIA. NOW THEREFORE, in consideration of the above premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and in further consideration of the mutual covenants and undertakings set forth in this Agreement, the parties mutually agree as follows: SECTION 1. RECITALS AND DEFINITIONS. The foregoing recitals are true and correct and are incorporated in this Agreement by reference. Capitalized terms used, and not otherwise defined herein, shall have the meanings ascribed to such terms in the Bond Ordinance. SECTION 2. CITY'S PAYMENT OBLIGATIONS, The City is collecting the County Payments and the State Payments on a monthly basis, in advance of each respective Payment Date on the Bonds, and will, in accordance with the Bond Ordinance, forward such funds in an amount equal to the debt service payment due on the Bonds on each respective Payment Date to the Paying Agent in order to enable the Paying Agent to pay the debt service on the Bonds on each such Payment Date. In the event the City does not have on deposit in the Revenue Fund sufficient funds derived from the County Payments and the State Payments on any Payment Date to pay the principal and interest on the Bonds then due, the City will supplement the County Payments and State Payments moneys it has on deposit in the Revenue Fund with other legally available Non-Ad Valorem Revenues of the City, and will provide to the Paying Agent sufficient funds to pay debt service then due on the respective Payment Date, all in accordance with the Bond Ordinance. For purposes of this Agreement the term "Non-Ad Valorem Revenues" shall mean all revenues of the City derived from any source whatsoever other than ad valorem taxation on real or personal property, which are legally available to make the payments required herein, but only after provision has been made by the City for the payment of all essential or legally mandated services. In the event the Paying Agent, for whatever reason, does not have sufficient funds available on any Payment Date to pay the principal or interest due on the Bonds on such date, such that the Paying Agent is required to seek a payment under the Surety Bond, the City agrees that it will repay such draw under the Surety Bond with legally available Non-Ad Valorem Revenues within 30 days of the date of such draw, together with any interest due on such draw as required by the Surety Bond. SECTION 3. CITY REIMBURSEMENT RIGHTS. The City shall be entitled to reimburse itself from future receipts of County Payments and State Payments (but only after providing for the timely payment of principal and interest on the Bonds on any Payment Date) for any amounts it pays as required by Section 2 hereof. It is expressly agreed by the parties hereto that the City is not pledging any specific funds or revenues of the City to support its payment obligations under Section 2 hereof, and that any such payment is in the nature of an advance, on behalf of the State or the County, as the case may be, resulting form the City's receipt of a late County Payment or late State Payment. SECTION 4. NON-AD VALOREM REVENUES. The agreement of the City to advance legally available revenues to the Paying Agent to cure any deficiency in funds provided by late County Payments and or late State Payments does not create any lien upon or pledge of the Non-Ad Valorem Revenues of the City, nor does it preclude the City from pledging in the future its Non-Ad Valorem Revenues, nor does it require the City to levy and collect any particular Non-Ad Valorem Revenues, nor does it give the Owners of the Bonds or MBIA a prior claim on the Non-Ad Valorem Revenues as opposed to claims of general creditors of such City. Any payment under this Agreement from Non-Ad Valorem Revenues is subject in all respects to the payment of obligations secured by a specific pledge of such Non-Ad Valorem Revenues heretofore or hereinafter entered into (including the payment of debt service on bonds and other debt instruments). The City's payment obligations set forth in Section 2 hereof is subject in all respects to 2 the restrictions of Section 166.241(3), Florida Statutes, which provides, in part, that the governing body of each municipality make appropriations for each fiscal year which, in anyone year, shall not exceed the amount to be received from taxation or other revenue sources and to the payment of services and programs which are for essential public purposes affecting the health, welfare and safety of the inhabitants of the City or which are legally mandated by applicable law. SECTION 5. REPRESENT A TIONS AND WARRANTIES OF THE CITY. The City hereby represents and warrants to MBIA as follows: (a) the City is a municipal corporation under the laws of the State of Florida; (b) the City has taken all action on its part required to be taken in order to enter into, execute, deliver and perform its obligations under this Agreement; (c) the execution, delivery and performance by the City of this Agreement does not contravene any law or any contractual restriction binding on or affecting the City; (d) no authorization or approval not already obtained from or other action by, and no authorization and/or notice to or filing with, any governmental authority or regulatory body, is required for the due execution, delivery and performance by the City of this Agreement; (e) this Agreement is a legal, valid and binding obligation of the City and is enforceable against the City in accordance with its terms, except that the enforceability of this Agreement is subject to limitations imposed by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors'rights generally and general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and (f) the payment obligations of the City under Section 2 hereof are not subject to prior appropriation and budgeting as such payments are to be made in accordance with the City's customary cash management procedures. SECTION 6. TERM OF AGREEMENT. The City's obligations hereunder shall remain in full force and effect until the Bonds have been paid or defeased in accordance with the Bond Ordinance. SECTION 7. EVENTS OF DEFAULT. As used herein, the term "Event of Default" shall mean anyone or more of the following: (a) The City's failure to make any payment required by Section 2 of this Agreement, when due; 3 (b) the filing by the City of a voluntary petition in bankruptcy or if the City shall be adjudicated as bankrupt or insolvent or file any petition or other pleadings seeking any reorganization, composition, readjustment, liquidation or similar relief under any present or future federal, state or local law or regulation, or if the City shall seek or consent to or acquiesce in the appointment of any trustee, receiver or liquidator of the City or of all or any substantial part of the City's assets, or make a general assignment for the benefit of its creditors, or admit in writing its inability to pay its debts, respectively, generally as such debts become due; (c) the filing of a petition or other pleading against the City seeking an adjudication of bankruptcy, organization, composition, readjustment, liquidation or similar relief under any present or future federal, state or local law or regulation, provided such petition or other pleading shall remain undismissed for an aggregate of ninety (90) days (whether or not consecutive); (d) the appointment, by order or decree of any court of competent jurisdiction, without the consent or acquiescence of the City, of a trustee in bankruptcy or reorganization or receiver or liquidator of the City and any such order or decree shall have continued unvacated or unstayed on appeal or otherwise and in effect for a period of ninety (90) days (whether or not consecutive); (e) the making by the City of a material representation under the terms of this Agreement which proves false in any material respect. SECTION 8. REMEDIES. Upon the occurrence of any Event of Default enumerated above, MBIA, or the Paying Agent on MBIA's behalf, may take whatever action at law or in equity, including appropriate injunctive relief, it may have to collect any amounts then due and thereafter to become due, or to enforce the performance or observance of any obligations, agreements or covenants of the City under this Agreement. In the event of an Event of Default by the City, MBIA or the Paying Agent in the name of MBIA, shall within two (2) Business Days after the occurrence of such Event of Default notify the City of such default. The foregoing giving of notice shall be a condition precedent to the institution of any suit or other legal proceeding, including but not limited to mandamus or an action for specific performance by MBIA or the Paying Agent against the City for an Event of Default. In the event that any Event of Default or any proceeding undertaken by MBIA or the Paying Agent thereon shall be waived or determined adversely to MBIA, then such Event of Default shall be annulled and MBIA and the City shall be restored to their former rights hereunder, but no such waiver or determination shall extend to any subsequent or other default or impair any rights consequent thereon. 4 SECTION 9. MISCELLANEOUS. (a) No remedy herein conferred upon or reserved to MBIA or the Paying Agent is intended to be exclusive of any other available remedy or remedies, but each such remedy shall be cumulative and shall be in addition to every other remedy given under the Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default, omission or failure of performance hereunder shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In the event any provision contained in this Agreement should be breached by the City and thereafter duly waived by MBIA and or the Paying Agent, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. No waiver, amendment, release or modification of this Agreement shall be established by conduct, custom or course of dealing. (b) The invalidity or unenforceability of anyone or more provisions of this Agreement shall not affect the validity or enforceability of the remaining portions of this Agreement, or any part thereof. (c) No amendment to or modification of this Agreement shall be valid or binding upon MBIA or the City unless made in writing and signed by the parties hereto after written approval by the Paying Agent. (d) Any notice, demand, direction, request or other instrument authorized or required by this Agreement to be given to or filed with MBIA, the Paying Agent or the City, shall be deemed to have been sufficiently given or filed for all purposes of this Agreement if personally delivered and receipted for, or if sent by registered United States mail, return receipt requested, addressed as follows: (i) As to the City: City of Clearwater, Florida Municipal Services Building 100 S. Myrtle Avenue Clearwater, Florida 33756-5520 Attention: Finance Director With copies to: Pam Akin, Esq. City Attorney City of Clearwater, Florida 112 South Osceola A venue, 3rd Floor Clearwater, Florida 33756 5 (ii) As to the Paying Agent: , Florida Attention: Corporate Trust (iii) As to MBIA: MBIA 113 King Street Armonk, New York 10504 Attention: Larry Levitz Any party hereto may, by notice sent to the other parties hereto, designate a different or additional address to which notices under this Agreement are to be sent. (e) This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original; but such counterparts shall together constitute but one and the same instrument. (f) This Agreement shall be governed by and construed in accordance with the laws of the State of Florida. (g) All capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings ascribed thereto in the Bond Ordinance. (h) This Agreement shall not be assigned by any party without the prior written consent of the other parties hereto, provided however, that in the event the Paying Agent resigns or is replaced, its successor shall automatically become a party to the Agreement upon such successor accepting the duties of paying agent under the Bond Ordinance. (i) If any action at law or in equity, including an action for declaratory judgment, is brought to enforce or interpret the provisions of this Agreement, the prevailing party or parties shall be entitled to recover reasonable attorneys' fees and costs (including those from appellate proceedings) from the other non-prevailing party. [Remainder of page left intentionally blank] 6 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed and delivered in its name and on its behalf by its duly authorized officer and its official seal to be attached hereto and attested by another authorized officer as of the date first above written. CITY OF CLEARWATER, FLORIDA ATTEST: By: City Manager City Clerk Approved as to from and legal sufficiency: City Attorney MBIA INSURANCE CORPORATION By: Name: Title: [PAYING AGENT] By: Name: Title: 7