88-847 WHITE - C�TV CLERK
!��NK� -� FINANCE G I TY OF SA NT PA U L Council G�
C4n-nR�- DEPARiMENT FliQ NO. �4 ��r
BLlYE MAVOR
Council R solution
Presented By
Referred To Committee: Date
Out of Committee By Date
RESOLUTION R LATING TO
SEWER REVENUE BOND , SERIES 1988A;
AUTHORIZING THE DIRECTOR OF FI ANCE AND MANAGEMENT SERVICES
TO AGREE TO THE PURCHAS PRICE FOR THE BONDS,
INTEREST RATES FOR THE ONDS, BOND INSURANCE
AND OTHER MATTERS
4rI3EREAS:
A. The City of Saint Paul proposes to issue its
$78 ,450 ,000 Sewer Revenue Bond , Series 1988A (the "Bonds" )
pursuant to a "General Resolu ion Relating to Sewer Revenue
Bonds" (the "General Resolution" ) to be considered and adopted
by this City Council on May 24, 1 88 ;
B. The General Resolut' on as proposed to be adopted
by this City Council does not specify: the principal amount
of Bonds to mature or be rede med in each year; the interest
rate to be borne by each matu ity of the Bonds; the purchase
price for the Bonds to be pai by the Purchaser thereof ; the
redemption� premiums to be paid upon optional redemption of the
Bonds; the specific amounts t be deposited in the Reserve
Account, Bond Account and Con truction Account, respectively;
and certain other matters;
C. The City ha.s received from AMBAC Indemnity Corporation
a Commitment for Municipal Bon Insurance dated May 18 , 1988 ,
together with a sample munici al bond insurance policy, and
a "standard package" of provis ons which AMBAC requires to be
included in resolutions for b nds insured by AMBAC; and said
materials are attached to this r solution;
COUNC[LMEIV Requested by Department of:
Yeas Drew Nays
Nicosia ln Favor
Rettma� �
Scheibel
Sonnen __ AgeiOSt BY
Tedesco
Wilson
Form Approved by City Attorney
Adopted by Council: Date
\
Certified Yassed by Council Secretary BY
By
Approved by :Navor: Date _ Approve y May f mission to Council
ti
BY - – — �J
, � � C����7
NOW THEREFORE, BE IT RE QLVED.: by the City Council of
the City of Saint Paul, Minnesota, as follows:
1 . There is hereby autho iz�d to be issued $78 , 450, 000
Sewer Revenue Bonds, Series 198 A of the City of Saint Paul,
Minnesota in a principal amount not exceeding $78 , 450, 000 in
substantially the form, and on the terms and conditions, to
be set forth in the General Resolution and as authorized by
this Resolution.
2. The City' s Director of Finance and Management Services
(or, in his absence, the City T easurer) are hereby authorized
and directed to negotiate with Dougherty, Dawkins, Strand &
Yost, Incorporated and Piper, affray & Hopwood Incorporated
( jointly, the "Purchaser" ) the ollowing terms and conditions
of the Bonds: ,
a. the principal amo nt of Bonds to mature in each
year;
b. the principal am unt of Bonds to be redeemed
by scheduled mandatory r demption pursuant to Section
3 . 05(B) of the General Reso ution;
c. the interest rate to be borne by each maturity
of the Bonds pursuant to Section 3 . 04 of the General
Resolution;
d. the premiums to b paid upon optional redemption
of Bonds pursuant to ction 3. 05 of the General
Resolution;
e. the specific am unts to be deposited in the
Reserve Account, Bond Acc unt and Construction Account
created and established wit in the Sewer Service Enterprise
Fund pursuant to the Genera Resolution;
f . the purchase pric to be paid by the Purchaser
upon issuance and delivery f the Bonds pursuant to Section
3 . 01 of the General Resolut' on;
g. whether all or so e of the Bonds will be insured
as `o the n3�PTlt of gr ncip�l ar.d inter�st purs�ian�
to a municipal bond insuran e policy.
The authorization granted by th' s paragraph shall be subject
to the limitations expressed in pa agraph 3, and the authorization
to agree to municipal bond insu ance shall be subject to the
limitations expressed in paragraph 4 .
3 . The authorization exp essed in paragraph 2 of this
resolution shall be subject to the following limitations:
a. the total of th principal maturities of the
Bonds shall not exceed $78 , 450, 000 ;
-2-
.
� - � � . � �-�.���
,
b. the specific in erest rates for each maturity
of the Bonds shall be s ch that the net interest cost
for the entire issue shall not exceed 8 . 00� .
c. the price paid y the Purchaser for the Bonds
shall be not less than 98 of the initial principal amount
thereof .
4 . The Director of Fina ce and Management Services (or,
in his absence, the City Treas rer) is hereby authorized and
directed to agree that all or a portion of the Bonds shall be
insured pursuant to a municipa bond insurance policy. Such
agreement shall only be made if the net interest cost for the
Bonds (treating the municipal bond insurance policy premium
as though it were interest) w' th bond insurance is equal to
or less than the net interest cost obtainable �for the Bonds
without municipal bond insurance For this purpose, a schedule
of interest rates for each year rovided by the Purchaser showing
the difference between the ' nterest rates obtainable for
non-insured bonds and the inter st rates obtainable for insured
bonds may be relied upon in go d faith if based upon current
market conditions. In the even that municipal bond insurance
is agreed to, the Director of inance and Management Services
(or City Treasurer) are further uthorized and directed to cause
the General Resolution to be evised to include therein all
provisions necessary or desirabl for the purposes of municipal
bond insurance, such provisions to be substantially in accord
with the Municipal Bond Insu nce Commitment and "standard
package" of resolution provisio s attached to this resolution.
Such provisions shall be incl ed in the General Resolution
upon approval thereof by the Di ector of Finance and Management
Services (or City Treasurer) and ity Attorney.
5. The Director of Fina ce and Management Services (or
City Treasurer) shall prepare a d provide to bond counsel, the
Purchaser and others as necessa y a certificate specifying the
maturity amounts, mandatory sched led redemption amounts, interest
rates, optional redemption prem ums, account deposits and the
initial purchase price of the Bo ds. Upon execution and delivery
of such certificate, all of su h information shall be deemed
part of the General Resolution as though included therein on
the date of its adoption by t is City Council. Further, if
municipal bond insurance is agr ed to, ali provisions necessary
and desirable in connection th rewith shall also be included
in the General Resolution and s all be deemed part thereof as
though included therein on the ate of its adoption. The City
Clerk is hereby authorized and di ected to cause a form of General
Resolution to be prepared which includes all of the facts set
forth in the certificate requi ed by this paragraph, and, if
necessary, the provisions relatin to municipal bond insurance.
-3
WHITE - CITV CLERK
PINK �� +FINANGE G I TY O F S I NT PA U L Council p�/ fi�1'�
•. BLUERV - MAVORdMENT v0 v �j
File N 0.
� Council esolution
Presented By
Referred To Committee: Date
Out of Committee By Date
6 . The Mayor, Clerk and D rector of Finance and Management
Services are authorized and d' rected to enter into, execute
and deliver a bond purchase a reement between the Purchaser
and the City upon: (a) final a reement on all matters provided
for in this resolution; and (b approval of the form thereof
by the City Attorney. The City officers named above shall
negotiate the exact terms of t e bond purchase agreement. In
the event of the absence or disa ility of any of the named City
officers, the bond purchase ag eement may be executed by any
other City officer designated r authorized to act in their
absence.
7. This resolution sha 1 be effective upon the date
of its adoption.
COUNCILMEN Requested by Department of:
Yeas � ��� Nays
�+� G-oscvtrX. _� �n Favor
s�n� n
Sonnen v __ Against BY �
,�..■�AaaaMo
.�+»�-
Adopted by Council: Date ��^� �� �� Form Approv City Att�e
`
Certified Pas ed by Co�ncil Secretary BY �
By�
` y� r 1
Approv y Mavor: Da _ 6M1� � � 1�� Approve y May or ' sion to Council
pU6l{SHEq ���� � 1 1988
. � . -���li:�t. �I:I�C;".IiilA" l_t:i�'�t)f:tii' :�� ��������
t il`.0 `(:iIC �[1"CCI i��.i/::
��t"�ti� ���.�,�;�i. .�.�_: . .� ;� :i;:(ii{�}
-�'�.il'1�'til?(lt�. I_'�_i 1`I',;�.i!�-.��)
May 18, 1988
Richard Martin, Esq.
Briggs & Morgan
° 2200 First National Bank Bldg.
St. Paul, MN 55101
RE: $78,450,000 City of Saint Paul, Minnesota, Sewer Revenue Bonds,
Series 1988A, dated May 1, 988.
Dear Mr. Martin:
Enclosed herewith please £ind for distribution an original and one
certified photocopy of the C itment for Municipal Bond Insurance,
Commitment Number 3476 (the " �mnitment"), relating to the above-
captioned obligations (the " nds"). The Co�nitment has been
requested in connection with the sale of the Bonds, and if not
exercised, should be disregard .
It is suggested that the origin 1 copy of the Co�nitment be delivered
to or held on behalf of the iss er of the Bonds. If further certified
photocopies of the Co�nitment a e required, please notify us and they
will be provided.
Please be advised of the followi g:
1. In accordance with e terms of this Conmitment, any
applicable accn.�ed a d/or capitalized interest will be
deducted from the total principal and interest when com�puting
the premium, if desire by the ourchaser of the Insurance.
' However, such deductio will be made only upon receipt at
least five (5) busine s days prior to closing of evidence
satisfactory to C Indemnity Corporation ("A(�AC
Indemnity") that the nies representing such interest will
be invested in �C's Permitted Investments (See Exhibit D
of the Standard Package enclosed) and applied exclusively to
the payment of interest on the Bonds.
2. A sample Municipal Bon Insurance Policy (which is page 2 of
the enclosed Co�nitmen ) and ANBAC's STAND,ARD PACKAGE which
contains sample langu ge for inclusion in the Official
Statement relating to the Bonds (see Exhibit G of the
Standard Package) are e losed.
r
. . �a - ��!
3a. If the Bonds sell w th our insurance please notify Janine
Feudi, Jeanne Maynar or pouglas Korey of AMBAC at (212)
668-0340 and confir.n hat those responsible for printing the
Bonds are aware that the enclosed Bond Legend (Exhibit G of
the Standard Package) including policy number, should appear
on the Bonds.
3b. The policy number to be printed as part ot the Bond Legend
can also be obtained fror,i Janine Feudi, Jeanne Maynard or
Dr�uglas Korey.
4. If an opinion of ANIBA 's counsel regarding the f.airness and
accuracy of the lan uage to be included in the Official
Statement describing C Indemnity and the Municipal Bond
Insurance Policy is required for closing, please notify
Janine Feudi, Jeanne � ynard or pouglas Korey. The delivery
of such opinion is d pendent upon the prior review by our
legal department of su h language.
5. If rating letters fr Standard & Poor's Corporation and
Moody's Investors Se vice with respect to the Bonds are
required, our closing department should be notified as soon
as possible. Please r sc�ond promotly to requests from either
rating agency for doc�: ntation with respect to this issue or
any related or narity ebt issue. Failure to do so may delay
or prevent the timely 'ssuance of the AAA/Aaa rating letters.
Please '.�e advised tha if the issue has related or parity
debt issues, rating ency review of such issues must be
completed prior to t eir issuance of the AAA/Aaa rating
letters.
6. Dr�fts of all financi g documents and any legal opinions
relating to the issua ce of the Bonds, to the extent not
already provided, shou d be provided for our review as soon
as available. Please rovide a copy of the closing index as
soon as practicable. P ease note the conditions set forth in
the enclosed Conunitme t (beginning on page 3) must be
satisfied prior to C releasing the Municipal Bond
Insurance Policy. Plea e send all doc►.�ments to my attention.
7. A closing transcript co taining, among other things, all such
financing doc�.;ments and legal opinions should be provided as
soon after closing as o acticable, along with six (6) copies
of the Final Official S atement.
If you need any assistance in this regard, please do not hesitate to
call me directly. Any qt.�es ions relating to the sarnple language
provided for inclusion in the Official Statement should be addressed
to our legal department.
Sincerely,
ANB1�C INDQ�TITY CORP'ORATION
. ��vr�'""
J nine Feudi
� E closures
', c
� �
cc: t�ir. R�;ssell King
Dougherty, Dawkins, Strand
& Yost Incorporated
100 South Fifth Street
Suite 2300
Minneapolis, t�I 55402
Ms. Amelia Zalcam
Tnbod Dawson Smith & Hellman
17 Battery Place
New York, NY 10004
�Ir. Thomas Sackett
ANIBAC
„,.��,_�,. ��� _ �,
. . . �1fI].1tIIleIIt fOf MU11�(�$QIId re ����'^. p t`�j
_ M�boc�Wtsmrntn 537a3 �a `�T l
. . _ _ - �d�u-�ctv�e Off�oc
' _ Oc�6r�e Sueet P'�w
Ncarltxl�Ntw Sbcit 10004 -
Issuer.City of Saint Paul, Minnesota commirmenc vurr,ber: 3476
Due oE Commiane�c: M8y 18, 1988
Expiracion Dace: �gt 16, 1988
���� 578,450,000 Sewer Revenue Bond.s, Series �ran��►m: .295� of the total
1988A, dated May 1, 1988, $46,93 ,000 principal and interest due on
in aggregate principal �rount ma uring the Borids (less any applicable
on Decer�er 1 in the years 1990 accnxd or capitalized interest
2003, both inclusive; and $31,52 ,000 im�e.sted in a manner approved b�
in aggregate principal amount ma uring AF� Inder�ity).
on Deaember l, 2008.
' A.�AC tademnity Corporantoa(AMSr�,C)A W in Suodc Insvranc�e Company ,
. herebv commi�s ro issue a uunicipal Bond tnsurancc Pol' (che"Policy”)relaring co the above�escribe�d debt obliquions
(che "Bonds"),subscanciallv in the form imprinced in fi� mmitmen[,'subjsa co�he ccrms u�►d condirions eontained herein '
• or added here�o(see condiuons sec forzh on page 3 and fo owing� ' •
. •. To keep�his Commi;men� in effea afrer rhe e�inuon d�e sec foRh aba�e,a cequat for rencar�l musc be submiaed co '
�.'�iSAC prior co such expiracion due.AhSBAC reservrs che ght to rduse wholty or in pzrt co gruu a renewal
�:��,.�.�z,��;�-, A- 23 6 ��d s
Ab�AC(�iY C�
� ' Munidpai Bond Ln.surance Pbli i 2 W�°`p°�S°"�
�.�v�on�ve. M�r'.}ison,Wt 53703
- ' �O�
� , - One Sts�e Stxe�es Pha,NeavliFxl4:dY 10004
Issuer: _ - F�Qicy Number:
Bonds: Premium:
AMHAC Indemnity Corporadoa(Afv�AG)A W nsin Scodc Iruurux,-e Com�any
in considerauon of rhe pay7nenc of ihe premium and s bject to�hc�erms of chis Policy,hereby agrees to pzy�qrhe Uniced
Sca�es Trusc Company of tiew York,as�ee,or i�s suc r(�e"lnsurance Zluuee"�for rhe bcnefic of Bondholders,chat
pornon of che principal of and ineeresc on che above-d 'bed debe obligarions(ehe"Bonds")wlvch shall beeome Due for
Pa}mern bu�sha11 be unpaid by reason of Nonpayment y che Lssua
.4ti�tBr�0.�11 make such paymen�s co che Insurance'Itus wichin 5 cfzys foUowing no�carion to At�AC of Nonpaymenc
C'pon a Bondholder's presencation and surrender to ch lnsurance 12us�ee of such unpaid Bo ds or appunenanc couporLS,
uncanceled and in bearer form and free of any adverse claim,thr.Inseuance'Ru,szee will ' to che Bondhotder che face
amour,c of principa! and incerest R�hich is�hen Due for nc but is unpaid.Upon menc,AMB�C shall become
che oR-ner oE che surrendered Bonds and couporu and hall be(ulty subroga�ed of n older's righcs�o�ymenc
►n cases 0.•here the Bonds are issua�le onLy in a form ereby p;indpal is dholders or their assigns,
;he t2surance Trustee shall disburse pnncipal �o a Bon lder a�afor p and surrender co[he
lnsurance Truseee of�he unpaid Bond,uncanceled and ree of u�y an insuvment of assignment,
�n form sa�sfaaory co che Insurance Tnucee,duly ez bv o ndholder's duty authorized
represer,�adve,so as co permie oa�nership of such Sond to r e of A.��4C or iu nominee.In cases
Rfiere�he Bonds are issuable only in a form whereby ' ed Bondholders or their�ssigns,che
tnsurance Trustee shall disburse in�erest to a Bo pon presencation�o che Insucance'iYustee of
proof�hac che cl�iman�is che person entided[ c u the Bond 3nd dellvery to ehe Insurance Thistee
c.�f an �nswmenc of as.signmen�, in form to 'TYuscee,duly execu[ed by the claimznc Esondholder or
such Bondholder's duly authorized r ve, o AMSe4C all righcs under such Bond to receive che incerest
' in respecz of afiich �he insurance b .AIvB�tiC shall be subrogaced co all of che Bondholders'righes to
. payinen�on regiscered Bon ce disbursemencs so made.
.�s used herein,�he cerm l m pe ocher�han che L�.suer who,u che dme of Nonpzymenc,is che oa-ner '
• . � of a Sond or of a nd"Due or P:ycne�c;when referring to che pcindpal of Bonds,is when che ,
' ' � stated maturiry ry redempcion d�te for the applic�on of a requiFed sinking fund installmrnt has been• '
. reached and d eartier daze on which t is due by c�son of calt for redeinpcion(aher ct�an by
' • appl;cacion of r ins�llmcncs�xcel 'on t�r aher�dvjacesnenc of macurrry;and,when refcrring to
inceresc on�he Bo en the s�ed datt for of incc.-rest hu been rexhed"Nonpzymenc"mezns the failure
of che Issuer to hav ided suffidenc funds w che ageru for gryrnent in full of all prindpal of and interest on the
Bonds which are Du�for Pryrnenc
Zhis ?olicy is nonczncelable.The premium on rhis Pbll is noc refundable for any reason,induding pzyment of che Bonds
prior�o macuriry.This Poticy dces na insure agairuc loss of ury nedanpdon,prepzymenc or acceleracionpranium avhich az
any dme may b�come due in respect of any Bond,nor risk ocher ihan Nongzyr.�enc
. ,. !n wicness whereo�AMBAC has caused chis Pelicy co be ed wich a hcsimile of irs mcporue seal uxi co be signed by iu �.
duly auchocized oHiccrs in facsimile to become effective irs originat seal and signacura and binding upon AIv�,K by virtue
of ehe councer•signacure of ics duty auchorized rrpersen ' .
•�•�
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Praidrnt ' � • ��rY
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Eff!'CUVt D�iG• \\�����
Auchoriud Fepresentuire
�'hTT'ED STATF'S TRI;ST COMPAtv'Y OF N�W IORK aclm edga thzt it • ��,/��
has agreed to perform ehe duua of Insurance'Il�ustee un r chis Pblicy.
�.�.,,•y,���+�i i e-�
Aut�ioriz.ed O�x�er
�z� �
, .�.�t&�C Indcrruu���Curpc,rau�m d'6 Q 7 7
�u CT C:ur�>rauon���tem�
Endorsement "'�est�tashingt��n A�rnur
\laciiscm.\1'���on.�in��-f)�
.�iw�iscn�i�•r Office:
One S�ate Screet Plaza
`ew Ybrk.tien�Ybrk 1000a
/�� Pc�li�1�is,ued tu: Attached tu anel furmink part��F
C11".� .
Effecci�•e Date of Enciursement:
'Ihe Fblicy to which this Etxbrsarent is attached and of which it fonns a part is hereby
arerxied by the irLSertion of the follr�wi language:
"Notwithstandir�g anythirg o�ntained rein to the o�ntrazy, when the T�nds are is.sued
only in book entry form, the I noe 'IYustee shall disburse that portion of the
principal and interest on the B�nds e for Payment but unpaid by reason of t�bnpayment
to a t3ondholder only upon evidence satisfactory to the Insurance Trustee of the
Bondholder's right to reoeive gayment of the principal or interest then Due for Payment
arxi that such right has been effecti ly transferred � ANID�C on the books maintair�ed
for such purpose. Upon such dis nt, ANff�C shall beocR�e the owner of the A�nd,
appurtenant oaipon or right of paymen of principal or interest on such eond and shall
be fully subrogated to all the ndYnlder's rights thereunder, includirx� the
Borx�tnlder's right to payment thereof.'
Wthing herein contained shall be h�ld to�•an;alter.n•ai�• s� •of terms,condi�ions,pro�•isions,agreen-��n�ti ur
` limitations��f the abuve mentioned Policti•other[han a5 a v .f'
�
[n Witness Whereo�the Compam� a d i['s o te Seal ro be hereto affixed and these presentti�o be;igned b�•i[s
duh•au�horized ot�icen in facsimile� effective a i�s original seal and signa[ures and binding un the Compam�h}•
�•irtue uf councersignature by its duly a zed agent.
AMBA Indemnity Corporadon
••���
��µNIiY.�.�
�:��'QR►ORq'lf��1
i;• •,''/, �/�%�
;F� SEAI, �:Z; ,�,c c0
,� �
President\ �,�''• "�scoNS`" •'� Secrecan�
. �
��`_���
Auchorized Representati�•e
ft)Iflla!(j.Ul)U�����K ) -
r _
��MllII1C}�BOOQ�.Rl[�Ct PO�Sb11�bt�16i1 �L�C fOvO'�PIIIg CQII�t�OnS itt S�td:
1. The documen�s co be exetiv�ed and delivered in con etivon wich che issuwce and sale of the Bonds shall noc con�ain
any uncrue or mislading stacement of a matenal Fa and sh�ll not fai!to stace a materia!faa necessary in order to make
�he informadon con�.ined cherein no�misleading.
2. No evenc shall occvr which would permic any purc of che Bonds,ocherwse required,noc co be required to
purchase che Bo�cis on che due scheduled for�he ' uance and delivery chereoE
3. There shall be no macerial change in or affeaing che Bonds(including,wirhouc limication,che securiry for che Bonds)or
che financing documents or�t►e official scuemern(o any similar disclosure docvmenc)to be execv�ed and delivered in
connecvon wi�h che issuance and sale of�he Bonds om the descripcioru chereof herec�Fore provided co M�tB�,C.
4. The Bonds shall con�ain no reference to AMBAC,che Aolicy or che municipal bond insurance evidenced thereby excepc
as may be approved by M4BAC.
S. ,�IvtB.�C shall be provided wich:
(a) F�cecviced copies of all financing docvmencs,che oH'icia!stacement(or any simiLar disdosure docum�nc)and che
various legal opinions delivered in ronnecvon '�h the isswance and saJe of che Bonds,including,wichouc
lim;raaon,che unqualified approving opinion of bond couruel rendered by a law firm xcepiable co AMBAC. Such
opinion of bond counsel shall be addressed�o or,in lieu rhereo�a lea,er shall be provided co AMBAC�o�he
effea�hac At�BtiC may relp on such opinion as ' it avere addressed co AMBAC.
(b) A leaer from bond counse!or couruei co che pu cha5er or o�hcrwise from anocher person accepcabte to AMB,tiC co
�he et7ea chac�he financing docvmencs,che offi � scaccmenc(or any similar disclosure docvmenE)and ct:e various
. lega!opinions execuced and delivered in conn 'on wich.the usuance and sale of che Bonds are subsranaally in the
fornu cherecofore submiaed co�.��BA�C for revi ,wich only such arnendmencs,modificadons or deletioRS u
approved by AMHAC.
(c) A cerufied or cashier's check for or evidence of 're transfer of an amount equal co che insurance prefiium at the
ame of che issuance and delivery of che Sonds.
Addldoaal coadldons to che ls.sw�ace d t�e M Boad tasurmce PolLcy:
6. 'IY:e form of bond counsel's approvi apinion mist be sent to
AMSAC Indennity to the attention f Janfne Feu�di not less
than 5 days prior to closing. form of Bor�d Counsel's
approving opinion shall indicate t the issuer must canply
with certain covenants under and t to the new tax law
and that the issuer has the legal r to �ly with such
' covenants. Failure to provide an acceptable apinion in a .
timely fashion caild result in a del y or non-deliveiy of the
r�011 G�'• • - -
. 7: •. The final approving opinion stxx�l be addres.sed to AMBAC �
Indemnity or a letter indicatirg t A[+�C Indes�ity may
. , rely ors such op�nion should be de ivered with an execvted .
oQinion.
8: Unless expr�ssly waived in whole o in part by A�1C, the
f inancing dccuroents shall contain e term�s and provisiorzs
provided in the � IndesQnity PACKAC� transmitted
herewith. . ,
' 9. At�C Inde�ity shall receive a cap�y of any inswrance p�licy,
. surety band, guaranty or inde��ifica ion or any other policy,
contract or agi�nt which provi s for payment of all or
any portion of the debt, the cos of rec,bnstruction, the
loss of business incane or in any way securss, ensur+es or
enhances the iname stream anticipat to pay the bo�xi.s.
� �s� 5
_ _ ,
_ - .
Addldoaal candidons to cf�c ls.suaace dt�e Muai Bond Lasuriace Pbiicy(coat):
10. Any pmvisions of the Pur Contract or Bond Purchase
Agreement referencing the bond insurer mist be sent to the
attention of Janine Feudi not less than five (5) business
days prior to closing. If suc provisions are not received
within that time, relevant pravisions of the Furchase
Contract or Bond Purchase nt may not be cxcrQlied with.
In addition, if provisions a e inserted in the Purchase
Contract or Bond Purchase nt without At�C Inde�ity's
knowledge, cxr�liance with ch provisions may not be
possible.
11. This ccrtmitment is additionall conditioned upon receipt of
the most recent 3 years audited financial statements, interim
f inancials if available, and t which should reflect no
material adverse changes fran th information provided in the
• draf t Preliminary Official Stat nt of May 6, 1988.
12. This ccxtrnitment is additionally conditior�ed upon reoeipt of
Minnesota Statutes Secticx� 475. 4 Subdivision 16, Minnesota
Law regarding the City's Inve tments, and a copy of the
Depository Letter Agr�esr�ent wi Mid�rest Secvrities TYust
�nY•
13. Th i s cczrmi t�nent i s add i t i onally i t ion�d upon rece ipt and
approval �y At�.0 Zndes�r�ity of a 1 final da,timents including
the General Resolution. The fo lvwing ite��s in the General
Resolution must be addre to Al�C Irida�ity's
satisfaction: .
a) 'IY�e inclusion of At�C's S Package lar�guage as it
' a��pl ies to the Serie:� 1988A .
b) A definition of AME�AC as e Credit Provider on the
' � . . ,� Se ries 1988A Borid.s and all ights •and remedies ascribed . '
to such C�redit Pravider. � • '
c) bcclusion of (b) and (c) in definitian ' of CYedit
� Facility as it applies to •
.
d) Interest Rate Swaps.
. .• e) . Section 2.10 Slipple�nental lution override shall be � �
sub ject to the apinfon of th Baxi Coun.�el and AbID�C as �
well as the Issuer.
� J .
/ tho ' r �
/i
Fcm�76.rn;-11�9") Pag+c�ol
�
f) Definition of a Liquidit Provider.
g) Section 2.198 and 2.21 st also include the ability to
amend the Resol�tion i accordance wit� Rating Agency
and/or Credit Facility r irements if the City needs to
obtain such Credit Faci ity. In light of this ability
to amend Ah�AC m►�st be given the right to consent to
amen�nents.
. h) Section 2.22--If syst m revenues are to be used to
provide for a manda ory purchase of bonds, the
application of such r venues must be subordinate to
payment of debt service on the Bonds.
i) Explanation of purpose f inclusion of Section 3.08.
j) Section 4.05—Reserve count, sh y 1 be � S l�li°as an
it can acco�rtr�date a res rve suret policy
L.O.C.
k) Section 4.09—Inclusion of At�C's permitted invest�nents
(see Standard Package) .
1) Section 6.01 (B) (4� (b) ► reduce period of t:ime to 10
years
m) Section 7.01—Suit by ndholders. Giving th:.s right to
F�C in addition to olders.
� ;�) Inclusion of Default ction�.
.. . . � � � .
. . �a � �
Page 5 of 5
. AMB4C Indaruury Corponnon D� �!�/'f
' c/o CT Corporirion Sysoans Q ✓
' Munici.pal Bond vnsLU�ance Policy � z22 W WishingrDn Ave.,Madison,WI 53703
Administruivc O�cc:
Onc Scatc Suecc PL�.1,NewYork,NY 10004
Issuer. Aolicy Number:
�n�: Premium:
A,�AC Lndemnity Corporation(.�vBAC)A Vtrsco in Scock Insurance Company
�`���� in consideration of che payment of che premium and subj to che cerms of chis Policy,hereby agrees co pay co che United
S�a!es Trust Compam•of�ew�ork,as trustee,or ics succe r([he"lnsurance T;uscee"),for d�e benefic of Bondholders,Lhac
porcion of che principal of and incerest on the above-descri ed debc obiigations(;he"B ")which shall become Due for
Pa}•ment but shall be unpaid by reason of Nonpayment by e Issuer.
�.�1BAC a�ill make such pa��mencs�o�he Insurance Tnu�ee ithin 5 days follo •� g afic n AIvtBAC oE Nonpaymenc.
l'pon a Bondholder's presencavon and surrender co che Ins rance Truste s u aid d_ r appurcenanc coupons,
uncanceled and in bearer form and free of any adverse clai ,che Ins T ce R d' urse �he Boridholder che face
amounc of principal and interest R•hich is�hen Due for Pa}• ent b s a .t u d rse nc,�.'�1B.AC shall become
ehe ot��ner of the surrendered Bonds and coupons and shal •sub a c of e er's righ[s to pa�•ment.
In cases Rhere the Bunds ar° issuable oniv in a form w r pri al is �a e<< P is Bondholders or cheir assigns,
:he lnwrance Truuee snall disburse principal�o a B dh as afo s o v on pr encauon and surrender to�he
Insurance Trus�ee of che �npaid Bond, uncance n r f y �ers lai � er wi�h an instrumen�of assignmenc,
in form sausfactory io che Insurance Trusce uly e, c d ho r such Bondholder's duly au�horized
re{?resentati��e,so as to permit ov.'ners 'p su B [ e i re ame of:��lBAC or iu nominee. In cases
n�he;e�he Bonds are issuabie onh� � r wh y inre t is a} le egiscered Bondholders or cheir assigns,the
Insurance Tru�t�e shall disb�rse i ere. �o a on or i I}�upon presen�ation to�he Insurance Truscee of '
. proof�hat�he claimant is t o en � e •me ' resc on che Bond and delivery�o�he Insurance Truscee
of an instrumen[of�ss me t,i o sa a t e I urance Truscee,duly esecured bv�he daimant Bondhol�er or
�uch Bondholder�� � 1� u�t� ed se u��e, ansf ng ro A.'�4BAC all righ�s under such Bond ro receive�he�ntcrest
in respea of n• . �h i ra di u m �as de. ti4BAC shall be subrogaced to all of�he Bondholders' righu ro
• , pa��menc on gis co�h �cce of urance disbursemencs so made.
� ' ':�s used herei ��he . o o er" m any person ther chan'�he Issuer who,a�che ume of Nonpaymen[,is the owner ,
• of a Bond or of � n a 'n to a Bond."Due for ymeni;a•hen referring co�he principal of Bonds,is a•hen che� '
� ' s�aced marurin�daie an t • dempcion date for ch applicacion of a required sinking fund installmen[hu been
reached and does t r to y earlier dace on which pa ent is due by reason of call f6r redempdon(ocher than by
applica�ion of requir si g fund inscallmen�s),accelera on or ocher advancemen[of maturicy;and,when referring to
interest on�he Bonds, � �hen rhe scaced dace for payment f interest has been reached."Nonpaymeni'means the failure
of�he Issuer�o have pro��ded sufficienc funds to che payin agent for paymen�in full of all principal of and incerest on che
gonds a�hich are Due for Paymen[.
This Peticy is noncancetable.The premium on�his Policy is not refundable for any reason,inciuding payment of che Bonds
' " prior to ma�uriry.This Poliey does not insure against loss o any redemption,prepayment or accelerarion premium which a[
any dme may become due in respea of any Bond,nor agai st risk other than Nonpa}�nenG
In a�mess v.-hereo�AMBAC has caused chu Po�in'�o b�� �with a facsimile of its corporate seal and to be signed by ics
duty auchorized officers in facsimile to become effeevve as u originai seal and signatures and binding upon A.'�18AC by vir�ue
of che coun�er-signacure of i�s duly au[horized representau .
i�M`��\�
♦ •..,�� �(//� C�%2�-'�-f
' i?`o�ioa;�'T f�o�1
/��• I� �:=/
��-`i/
/ ��lii/ i
� � �' � f Secretary
President ' ':: ; �
;''• "�sco�s``�''�i
�\�_��i
E,gecv.•e Dace: Au�horized Represen�acive
l;;:ITED S'L�TES TRUST COMP.�.ti'Y OF N'E�'✓��acknowl ges[hat ic • ����
has agreed co perform che duues of Insurance Trustee und r ehis Policv
A_ Auchori�ed Officer
, � �.VS�C in��m:u;•, i��r�,�r•rv��n
. . _ ����T(:ur�x,r.�t�un��,�rm�
. Endorsement _„ur.����<n��;���:�,�.,��
>ta�lix�n.���i�i��n��n5���t
.�1:�unL;�r.�u��r U;T�rr -
One�ta�e S�rrrc Plaza
�cR•lork.�en 1'ork tU���
P��li��•i„urc!tu .�.�tacl�ed tc>an�f furmii;K 4�art uF
Effer[i�•e Da�e<>f En�iursemrn�:
The Fblicy to which this Erx�rsarent is attached ar�d of which it fo�rns a part is hereby
_ arended by the ir�sertion of the follvwing larx3uage:
"Notwithstandirig anythirg mntained in to the o�ntrary, when the Bonds are issued
only in book entry fonn, the Insura 'IYvstee shall disburse that portion of the
principal and interest on the 5�nds Du for Payment but ur�aid by reason of t�br�xy�rent
to a 3ondholder only upon evidence atisfactory to the Insurance Trustee of the
� �on�holder's right t� reoeive payment f the prirx�ipal or interest then Due for Payment
�rr� ttiat such right has been effecti ly transferned � A�'�C on the boaks m�intair�ed
for such purp�se. Upon such dis nt, At�C shall t�cxcr�e the owner of the �nd,
appurtenant axipon or right of payment of principal or interest on such B�nd and shall
be fully subrogated to all the rx3holder's rights thereur�c3er, includirx� the
�rr7nlder's right to pay�rent thereof."
• �urh�;,u n�rcin��_mtainr�f�hail he held to��an•,al�ec R•ai�•e x� •of � remis,con�iicions.pru�•isiuns,agreen-�rnc,�_�r
I�r.:�carn��r,��,f ehr�bu�c menciuned Polic�•oeher chan��a. � •.� .
� � ,
. • [n a itness Rt�ereoC�he Compam• a d i�s or e Seal�o be he�e�o affixed and�hese presencti�o br;igned h�•ic,
�iuh•autnurizr�i ufficer>in facsimile i effecci�•e as �s original�eal and signatures and binding un[he Cumpam h��
���rtue ui cuuntersignature b�•i�s duh�a zed agent. � •
A.'►�iBAC demnity Corporadon
�����
♦EMh�iY r��
. ��CO'►O�,'r��O,
� '•• E 'Z� � I// /'� �.
I �� �%���/��%f~
,� SEAL �
. � `� :� -
Presidenc �'\\``=-;.�� Secre�arrc
•"
Au�hunzrd Represenca[i�•e
� A!�lBAC IND l�NITY STANDAAD PACIV�GE
FOR T SACTIONS OTHER THAN
GENE OBLIG�TION BONDS
T0: Issuer , Managinq Undec riter, Bond Counsel and
Underwriter' s Counsel
RE: Preparation of Financi q Documents for AMBAC
indemnit Insured issu s
The attached ma'terials ha e been prepared to assist you in the
preparation of documents for your AMBAC Indemnity Corporation
( "AMBAC indemnity" ) insur d issu�. Pleas• modity th• attached
exhibfts where appropriat and notity us as to any proposed �
modifications. if desire , these pcovisfons can be incorporated
into on� section within an indenture, R�solution, Ordinsnc�, etc.
entitled "Municipal Bond nsurance" . Pleaa• b� advised that the
proviaions contained fn th s packaqe are in addition to any other
comments or chanqes that ay be suqq�sted by the AMBAC Indemnity
personnel workinq on this financing. It you have a�y questions,
pleaae call one of the f llowinq persons: Joaeph V. Salzano,
Eileen L. Kirchoff or Mary McKeon. �
o Definitions Exhibit A) .
o AMBAC indem ity consent required for changes to
underlyinq d cumentation and exercise of cemedies
upon detault ( Exhibit B) .
o Notices to b qiven to ArlBAC Indemnity ( Exhibit C ) .
o Peraftted In estments (Exhibit D) .
o Subrogation rovision to be fncluded in Defeasance
a�ctioa and types of obligations allowable for
defeasance p rposes ( Exhibit E) .
o Deacription of AMBAC Indemnity payment procedur.e
(Exhibit F) .
o Sugqested 1 nguaqe for ( i ) Notice of Sale, ( ii )
Bond Leqen , ( iii ) Cover page of Official
Statement, ( iv) Ratinqs section of Official
Statement nd (v) AMBAC Indemnity Official
Statement Di closure ( Exhibit G) .
Continued on next page
o Trustee-relat d p�ovisions ( Exhibit H) .
o AMBAC Indemn ty as a third-party beneficiary
( Exhibit I ) .
� � - �Py �
1/21/88
• E HIBIT A
SECTION _ Definitions .
"AMBAC Indemnity" shall mean AMBAC Indemnity
Corporation, a wisconsin-dom' ciled stock insurance company.
"Municipal Bond nsurance Policy" shall mean the
municipal bcnd insurance policy issued by AMHAC Indemnity
insuring the payment when du of the principal of and interest on
the Bonds as provided therei .
1/21/88
E HIBIT B
SECTION _ A. Consent of A BAC Indemnity
Any provision of thi [ Indenture, Resolution, ordinance ,
etc . 1 expressly recoqnizinq or qranting riqhts in or to AMBAC
indemnity may not be amende in any manner which attects the
riqhts of AMSAC �ndemnity ereunder without the prioc written
consent of AMBAC Indemnity.
8. Consent of BAC Indemnity in Addition to
Bondholder Consent.
Unless otherwise provided fn thia Section, AMBAC
inde�nity' s cons-ent shall b required in addition to Bondholder
consent, when cequired, or the �ollowinq purpos�s . ( i �
execution and delivery of any aupplementsl ( indenture ,
resolution, ordinance, etc � or any am�ndment, supplement oc
chanqe to or modificatio of the (Loan Agreement, Lease
Agreement, etc. J ( ii ) ccess r trusteeiTrande( iiia initiationaor
appointment of any su
approval of any action not escribed in ( i) or ( ii ) above whic
requires Bondholder consent.
C. Consent of BAC indemnity Upon Default.
Anythinq in this fIndenture, Reaolution, Ordinance , ,
etc. ) to the contrary not ithstandinq, upon the occurrence and
continuance ot an evenled todcontrol and directdtheCenforcement ,
indemnity shall be entit tanted to the Bondholdecs or the
of all riqhts and remedie q
Trustee for the benefit oet h� �8oincludinq,unwithouts limitation,
Resolution. Ordinance,
accelerntion of the princ= inancethetc� ldandatheesriqhtdtonannul
[ Indenture, Re�olution, �
any declaration of acceiir aiversaoi events ofddefaultshall a so
be entitled to approve a
1/21/88
SUGGESTEO LANGUAG FOR ACCELERATION SECTION
UNDER EFAULT REMEDIES
Upon the occurcence of an event of default, the Trustee
may, with the consent of MBAC Indemnity, and shall , at the
direction of AMBAC indemnit byrw=ltten notice��to�therIssuer and
consent of AMBAC Indemnity, tinci al of the Bonda to be
AMBAC indemnity, declare he whereupon that portion of the
immediately due and payab e,
principal of the Bonds th reby cominq due and the interest
thereon accrued to the dat of payment shall, without further
action, become and be immed ately due and payable, anythinq in
this ( Indenture , Resolutain. Ordinance, etc. ) or in the Bonds to
the contrary notwithstan q
1/21/88
ExHIBIT C
SECTION Notices to be Given to AMBAC Indemnity.
while the Municip 1 Bond insurance Policy is in effect,
the Issuer* oc the Truste , as appropriate, shall furnish to
AMBAC Indemnity:
( a) as soon as practicable after the filinq theceof, a copy of
any financial statement of the Issuer* and a copy of any audit
and annual report of the is uer* ;
(b) a copy ot any notice t be qiven to the registered owners �of
the Honds and any cert ficate rendered pursuant to this
( Indenture, Resolution, Ord nance, etc. J relatinq to the security
for the Bonds; and
( c) such additional informa ion it may reasonably request.
The Trustee shall notify AMBAC Indemnity ot aay failure
of the issuer* to provide r levant notices, cectificates, etc.
The Issuer* will ermit APlBAC Indemnity to discuss the
affairs, finances and acco nts of the issu�r* or any in�ormation
AMBAC indemnity may reasona ly request reqardinq th� security for
the Bonds with appropriate officers of the Issuer*. The Trustee
or Issuer*, as appropriate will permft ArlBAC Indemaity to ( have
access to the Project and� have access to and to make copies of
all books and records rel tinq to the Bonds at any reasonable
time.
AMBAC 2ndemnity hall have the riqht to direct an
accounting at the Isauer' s* expenae, and the Isauer' s* failure to
comply with such direction within thirty ( 30) days atter receipt
of written notice of the d rection from AMHAC indemnity shall be
deemed a default hereundet; provided, however, that if compliance
cannot occur within such period, then such period will be
extended so long as compli nce is bequn within such period and
diliqently pursued, but only if such extension would not
materially advetaely affect the interests of any registered owner
of the Bonds. •
Notwithstandinq an other provision of this ( Indenture ,
Resolution, Ordinance, et . 1 , the Trustee shall immediately
notify AMBAC Indemnity if at any time there are insufficient
moneys to make any payme ts of principal and/or interest as
required and immediately pon the occurrence of any event of
default hereunder .
*or appropriate obliqor on he Bonds.
1/21/88
ExHIBIT D
AMBAC Iademnity will A1 ow the Following Obliqations to be Used
as Permitted Investments
a) Direct obliqati ns of ( including obliqations issued or
held in book en ry form on the books ot) the Department
of the Treasury of the United States of Amecica;
b) Obliqatfons of any of the followinq federal aqencies
which obliqatio s represent full faith and credit of the
United States o America:
- Farmers Home dministration
- Gen�ral Servi es Administration
- U.S. Maritime Admfnistration
- Small Buaines Administration
- Government Na ional Mortgaq� Assocfation (GNI�u�)
- U.S. Departme t ot Houainq � Urban Development ( PHA�s)
- Federal Housi g Adminiatration;
c) U.S. Dollar den minated depoait accounts fully insured
to the holder ( p to the S100, 000 maximum coveraqe) by
the Federal Depe ft Inaurance Corpocation irt commercfal
banks;
d) U.S. Dollac deno inated deposit accounts, federal funds
and banker' s acc ptances with commercial banks ( foreign
or domestic) which have a ratinq on thefr short term
certificates of eposit on the date of purchase ot "A-1 "
or "A-1+" by Stan ard � Poor's and "P-1" by Moody� s and
maturing no more than 360 days after the date of
purchase;
e) Money market fund rated in the hiqhest ratinq category
of any nationall recoqnized ratinq aqency, which are
monitored quarter y;
f) Pre-retunded muni ipal obliqations defined as follows :
� Any bonds or ot er obliqations of any state of the
united States of America or of any aqency,
instrumentality o local qovernmental unit of any such
state ( i ) which re not callable at the option of the
obliqor prior to maturity or aa to which irrevocable
notice has been q' ven by the obliqor to call on the da�e
specified in th notice, and ( ii ) which are fully
secured as to p incipal and interest and redemption
premium, if any, by a fund consistinq only of cash or
obliqations described in paraqraph ( a? abeve, which fund
1/21/88
may be applied nly to the payment of such principal of
and interest a d redemption premium, if an
bonds or other bligations on the maturity date ocndates
thereof or th specified redemption date or dates
pursuant to such irrevocable instructions, as
aPPropriate, a d ( iii ) which fund is sufficient, as
verified by an independent certified public accountant,
to pay principa of and interest and redemption premium,
if any, on the bonds or other obliqations described in
this paraqraph n the maturity date or dates theceof or
on the rede�p ion date or dates specified in the
irrevocable ins ructiona referred to in subclause ( i > of
this paraqraph, as appropriate, and ( iv) which are
rated, based n the escrow, in the hiqhest ratinq
cateqory of St ndard & Poor' s Corporation and Moody' s
I'nvestocs Servi e, Inc. or any successors thereto;
q) investment aqree�ents approved by ArlBAC Zndemnity
Corporation.
The value of the abov investments shall be determined as
provided in "Value" belo .
"value" as of any partic lac time of determination, means that
the value of any investme ts shall b� calculated aa follows :
a) as to investments t e bid and asked prices of which are
published on a requla basis in The Wall Street Journal ( oc,
if not there, then in The New Yor T mes : e averaqe of the
bid and asked prices or suc investments so published on oc
most recently prior t such time of determination;
b) as to investments th bid and aaked prices of which are not
published on a regul r basis in The Wall Street Journal or
The New York Timea: the average pr ce at suc time of
eterm na on or s ch inveatmenta by any two nationally
recoqnized qovernmen securities dealers ( selected by the
Trustee in its abao ute discretion) at the time making a
market in such inves ments or the bid price published by a
nationally recoqnized pricing service;
c ) as to certificates o deposit and bankers acceptances: the
face amount thereot, lus accrued interest; and
d) as to any investment not specified above: the value thereof
established by prio aqreement betweea the Issuer , the
Trustee and AMBAC Ind mnity Corporation.
If more than one provisi n of this definition of "value" shall
apply at any time to any articular investment, the value thereof
at such time shall be det rmined in accordance with the provision
establishing the low st value for such investment .
' d � — ° ` �
1/21/88
E]CHIBIT E
Please add the fo lowinq to the ( indenture, Resolution,
Ordinance, etc. ] Defeasanc section:
in the event that the principal and/or interest due on
the Bonds shall be paid by AMBAC Indemnity pursuant to the
Municipal Bond insurance Policy, the Bonds shall remain
Outstanding for all purp ses, not be defeased or otherwise
satisfied and not be con idered paid by the Issuer , and the
assiqnment and pledqe of he Trust Estate and all covenants ,
aqreements and other oblig tions of the Issuer to the registered
owners shall continue to e ist and shall run to the benefit of
AMBAC indemnity, and AMBAC Indemnity shall be subroqated to the
riqhts of such re'qistered o ners. .
ArIBAC Indemnity wi 1 Allow the Followinq Obliqations to
He Used for Defeasance Purp ses:
( a) Cash fully insur d by the �'ederal Deposit Inaurance
Corporation or
( b) Direct obligations of ( including obliqations issued or
held in book entry form on the books of) the Department
of the Treasury of the United States of America .
- 1/21/88
XHIBIT F
Section Payme t Procedure Pursuant to Municipal
eond Insurance Policy.
A. As lonq as the ond insurance shall be in full
force and effect, the is uer, the Trustee and any Payinq
Aqent aqree to comply with the followinq provisiona:
( a > if five ( 5 ) days prior to an Interest Payment Date
the Trustee or Payinq Age t, if any, determines that there
will be insufficient funds in the Funds and Accounts to pay
the principal of or inter st on the Bonds on such tnterest
Payment Date, the Trustee or Paying Aqent, it any, shall so
notify AMBAC indemnity. Such notice shall specify the
amount of the anticipate deficiency, the Honds to which
such deffciency is applica le and whether such Bonds will be
deficient aa to principa or intereat, or both. If the
Trustee or Payinq Aqent, ' f any, has not so notitied AMBAC
indemnity five ( 5) days p ior to an Interest Payment Date ,
AMBAC Indemnity will make payments o� princfpal or interest
due on the Bonds on or be ore the fifth ( Sth) business day
next following the date o which AMBAC Indemnity shall have
received notice of nonpa ment from the Trustee or Payfng
Aqent, if � any.
( b) the Trustee oc P ying Agent, if any, shall, after
qiving notice to AMBAC in emnity as provided in (a) above,
make available to AMBAC I demnity and, at AMBAC Indemnity' s
direction, to the United tates Trust Company of New York ,
as insucance truatee for AMBAC indemnity or any successor
insurance trustee ( th "Insurance Trustee" ) , the
reqistration books of the Issuer maintained by the Trustee
or Payinq Aqent, if any, and all recocds relatinq to the
Funds and Accounts mai tained under this ( Indenture,
Resolution, Ordinance, etc. J .
( c) the Trustee or P yinq Aqent, if any, shall provide
AMBAC Indemnity and the nsurance Truatee with a list of
reqistered owners ot Bond entitled to receive principal or
interest payments from AM AC Indemnity uader the terms of
the Municipal eond Ins rance Policy, and shall make
arrangements with the Ins rance Trustee ( i ) to mail checks
or dratts to the reqiste ed owners of Sonds entitled to
receive full or partia interest payments from AMBAC
indemnity and ( ii ) to pay principal upon Bonds surrendered
to the Insurance Trustee y the registered owners of eonds
entitled to receive full r partial principal payments from
AMBAC indemnity.
1/21/88
(d) the Trustee oc ayinq Aqent, if any, shall , at the
time it provides notice o AMBAC indemnity pursuant to ( a )
above, notify reqistered wners of Bonds entitled to receive
the payment of principa or interest thereon from ArlBAC
Indemnity ( i ) as to the act of such entitlement, ( ii ) that
AMBAC Indemnity will re it to the� all or a part of the
interest payments next c ming due upon proof of Sondholder
entitlement to interest payments and delivery to the
insurance Trustee, satis actory to AMBAC indemnity, of an
appropciate assiqnment o the reqistered owner' s right to
payment, ( iii ) that shou d they be entitled to ceceive full
payment of principal rom AMBAC indemnity, they must
surrender their Honds ( alonq with an appropriate instrument
of assiqnment satistact ry to AMBAC indemnity to permit
ownership ef such Bonds to be reqistered in the name of
AMBAC Indemnity) foc paym nt to the Insurance Trustee, and
not the Trustee' or Payi q Agent, if any, and ( iv) that
should they be entitled to receive partial pa ment of
principal from AMeAC 2nde nity, they muat surrender their
Bonds for payment thereo first to the Trustee or Payinq
Aqent, if any, who shall ote on such Bonds the portion of
the principal paid by the Trustee or Paying Agent, if any,
and then, along with an ap ropriate instrument of assiqnment
satisfactory to AMBAC 2nd mnity, to the Znaurance Trustee,
which will then pay the un aid portion ot pcincipal .
( e ) in the event tha the Trustee or Payinq Aqent, if
any, has notice that any p yment of principal of oc interest
on a eond which has become Due foc Payment and which is made
to a Bondholder by or o behalf of the Issuer has been
deemed a preferential tr nsfer and theretofore recovered
from its reqistered owne pursuant to the United States
Bankruptcy Code by a trustee in bankruptcy in accordance
with the final , nonappealable order of a court havinq
competent jurisdiction, the Trustee or Payinq Aqent, if any,
shall , at the tim• ArlBAC I de�nity is� notified pursuant to
( a) above, notity all reqi tered owners that in the event
that any reqistered owner' payment is so recoveced, such
registered owner will be entitled to payment from AMBAC
Indemnity to the extent of uch recovery if sufficient funds
are not otherwiae availab e�, and the Trustee or Paying
Aqent, if any, shall furni h to AMBAC Indemnity its records
evidencinq the pay�ents of principal of and interest on the
Bonds which have been made by the Trustee oc Payinq Aqent,
if any, and subsequently ecovered from reqistered owners
and the dates on which such payments were made.
( f) in addition to tho e rights qranted AIriBAC indemnity
under this ( Indenture, Res lution, Ocdinance, etc. J , AMBAC
Indemnity shall , to the ext nt it makes� payment of principal
of or interest oa Bonds, b come subrogated to the rights of
the recipients of such paym nts in accordance with the terms
of the Municipal Bond Insur nce Policy, and to evidence such
subrogation ( i ) in the case of subroqation as to claims for
1/21/88
past due interest, the T ustee or Payinq Agent, if any,
shall note AMBAC Indemni y� s riqhts as subcoqee on the
reqistration books of the Issuer maintained by the Trustee
of Paroof ofent, if any, pon receipt fcom AMBAC Indemnity
registered ownerseofpathe Bonds, landr( ii > tinrthe casetof
subrogation as to claims f r past due principal , the Trustee
or Payinq Aqent, if any, s all note AMBAC Indemnity� s rights
as subcoqee on the re istration books of the Issuet
maintained by the Truste or Payinq Aqent, if any, upon
surrender of the Bonds y the reqistered ownecs thereof
toqether with proof of the payment of principal thereof.
iizi�ea
Ex8I8IT G
BOND LEGEND Suggested La guaqe for the NOTZCE 0! SALB,
. COVER PAGB F OFFICIAL STATEMENT, RATINGS S6CTION 0�
and AHBAC INDE!lNITYCOFlIC ALESTATEMENT DISCLOSURE
NOTICE 0! SALE
AMHAC Indemnity Corpora ion ( "AMBAC Indemnity" ) has issued a
commitment for municipal bond insurance relatinq to the Bonds .
All bids may be condition d upon the isauance effective as of the
date on which the Bonds re issued, of a policy of insurance by
AMBAC Indemnity, insurin the payment when due of principal of
and interest an the eo ds. Each Bond will bear a leqend
referring to the insuran e . The purchasec, holder or owner is
not authorized to make ny statements concecninq the insurance
beyond those set out he e and in the bond legend without the
approval of AMBAC Indemni y.
BOND LEGEND
Municipal Bond Insurance Policy No. ( the "Policy" ) with
respect to payments due for principal � and interest on this
bond has been issued by AMeAC Indemnity Corporation ( "AMHAC
Indemnity" ) . The Policy as been deliveced to the United States
Trust Co�pany of New York, New York, New York, aa the Insurance
Trustee under said Polic and will be held by such Insurance
Trustee or any successor insurance trustee. The Policy is on
file and available for in pection at the principal office of the
Insurance Trustee and a c py thereof may be secured from AMBAC
indemnity or the Insurance Trustee. Al1 payments required to be
made under the Policy s all be made in accordance with the
provisions thereof. The owner of this bond acknowledges and
consents to the subrogat on riqhts of AMBAC Indemnity as more
fully set forth in the Pol ' cy.
COVER PAGE O! 0!lICIAL STA EXENT
Payment of the principal f and interest on the Bonds when due
will be insured by a municipal bond insurance policy to be issued
by AMBAC Indemnity Corporation simultaneously with the delivery
of the Bonds.
RATINGS SECTION 0! OPlICIAL STATEKENT
Standard & Poor' s Corporati n and Moody's investors Service , inc.
have assiqned their munici al bond ratinqs of "AAA" and "Aaa" ,
respectively, to this issu of Bonds with the understanding that
upon delivery of the Bonds a policy insurinq the payment when
due of the principal of and interest on the Bonds will be issued
by AMBAC Indemnity Corporat on.
li2i�aa
AMBAC INDEMNITY OFFICIAL STATEMENT DISCLOSURE
AMBAC Indemnity Corporati n
AMBAC Indemnity Corpo ation ( "AMBAC Indemnity" ) is a
Wisconsin-domiciled stoc insurance company, requlated by the
insurance Department of he State of Wisconsin, and licensed to
do business in various s ates, with admitted assets ( unaudited)
of approximately $1 , 032 , 000, 000 and statutory capital (unaudited>
of approximately $611 , 000 , 000 as of December 31 , 1987 . Statutory
capital consists of AMB C Indemnity's statutory continqency
reserve and policyholder ' surplus . ArtBAC indemnity is a
wholly-owned subsidiary f AMBAC inc. , a financial holdinq
company which is -owned by Citibank, N.A. , the employees of AMBAC
Indemnity, Xerox Financi 1 Services, Inc. and Stephens Inc.
Standard � Poor' s Corporat on and Moody's investors Service, Znc.
have assiqned their ratin s of "AAA" and "Aaa" , resp�ctively, to
the claims payinq ability of AMBAC Indemnity. Copies of AMBAC
indemnity� s financial st te�ents prepa�ed in accocdance with
statutocy accounting st ndards are available from AMBAC
Indemnity. The address of AMBAC Indemnity� s administrative
offices and its telephone umber are One State Street Plaza, 17th
Floor, New Yock, New York, 10004 and ( 212) 668-0340 .
AMBAC Indemnity has entered into stop-loss reinsurance agreements
with a number of unaffilia ed reinsurers desiqned to supplement
its resources. The stop- oss reinsurance aqreements cover all
AMBAC Indemnity� s existing insured mutual funds, unit trusts ,
portfolios and new issue insured by AMBAC Indemnity. In
addition, AMBAC 2ndemnit has entered into quota share
reinsurance agreements unde which a percentaqe of the insurance
or ceinsurance underwritte pursuant to certain municipal bond
insurance proqrams of AM AC indemnity haa been and will be
assumed by such reinsurers.
AMBAC Indemnity haa obtained a rulinq from the intecnal Revenue
Service to the effect that t e insuring of an obliqation by AMBAC
Indemnity will not affect t e treatment for federal income tax
purposes of interest on uch obliqation and that insurance
proceeds representinq matur ' nq interest paid by AMBAC Indemnity
under policy provisions substantially identical to those
conta.ined in its municipal b nd insurance policy shall be treated
for federal income tax pur oses in the same manner as if such
payments were made by the is uer of the Bonds.
. - � �-- � � 7
� 1/21/88
AMBAC Indemnity makes n representation reqardinq the eonds or
the advisability of ' nvesting in the Bonds and makes no
representation reqardin , nor has it
preparation of, the Offi ial Statement otherPthancthetinformation
supplied by AMBAC inde nity and presented under the heading
��
Payvent Pursuant to Munic'pal Bond Insurance Policy
AMBAC indemnity has made a commitment to issue a municipal bond
insurance policy ( the "Mu icipal Hond insurance Policy" ) relating
to the 9onds effective a of the date of isauance of the Bonds .
Under the terms of the unicipal Bond Insurance Polfcy, AMBAC
Indemnity will pay to t e United States Trust Company of New
York, in New York, New York or any succesaor thereto ( the
"Insurance Trustee" ) th t portion of the prfncipal of and
interest on the Bonds w ich shall become Due for Payment but
shall be unpaid by reaso of Nonpayment by the issuer ( as such
terms are defined in the unicipal Hond Insurance Polfcy) . AMBAC
Indemnity will make such p yments to the Inaurance Truatee on the
later of the date on �,hi h such principal and intereat becomes
Due for Payment or the f fth ( Sth> business day next fol2owing
the date � on which AMBAC I demnity shall have ceceived notice of
Nonpayment from the Trust e. The insurance will extend for the
term of the Bonds and, on e issued, cannot be cancelled by AMBAC
Indemnity.
The Municipal Bond Znsura ce Policy will insure payment only on
stated maturity dates and sinkinq fund inatallment dates, in the
case of principal, and on stated dates for payment, in the case
of interest. It will no insure payment on acceleration, as a
result of a call for edemption (other than sinking fund
redemption) or as a resul of any other. advancement of maturity,
nor will it insure the pa ment of any redemption, prepayment or
acceleration premium or a y risk othec than Nonpayment. In the
event of any accelecatio of the principal of the Bonds, the
payments insured wfll be ade at such times and in such amounts
as would have been made had there not been an acceleration.
The Municipal 8ond Insura ce Policy will not insure against
nonpayment of princfpal or interest caused by the insolvency oc
negliq�nce of any Truste or Paying Aqent, if any, or the
Insurane• Trustee. if t e Bonds become subject to mandatory
redemption a�d insufficient funds are available for cedemption of
all outstanding eonda, AMe C Indemnity will remain obliqated to
pay principal of and in erest on outstandinq Bonds on the
oriqinally scheduled int rest and principal payment dates
including mandatory sinking fund redemption dates. in the event
the Trustee has notice t at any payment of principal of cc
interest on a Bond which ha become Due for Payment and which � s
made to a Bondholder by r on behalf of the Issuer has bee�
1/21/88
deemed a preferential tra sfer and thecetofore recovered from its
reqistered ownec pursuant to the United States eankruptcy Code in
accordance with a fina , nonappealable ocdec of a court of
competent jurisdiction, s ch reqistered owner will be entitled to
payment from AMBAC Indem ity to the extent of such recovery if
sufficient funds ace not therwise available.
if it becomes necessary t call upon the Municipal Bond Insurance
Policy, payment of pcincipal requires surrender of Bonds to the
Insurance Trustee toqet er with an appropriate instrument of
, assignment so as to permit ownership of such Bonds to be
reqistered in the name of AMBAC indemnity. Payment of interest
pursuant to the Municipal ond Insurance Policy requires proof of
Bondholder entitlement to interest payments and an appropriate
assignment � of the Bond older� s riqht to payment to AMBAC
Indemnity. -
Upon payment of the ins rance benefits, AMBAC indemnfty will
become the owner of the Bond, appurtenant coupon, if any, or
rfqht to payment of princ pal or int�rest on such eond and will
be fully subroqated to t e surrenderinq Bondholder� s riqhts to
payment.
Additional Para ra h for B ok �ntr Bonds
In cases where the Bonds are issuable only in book entry form,
the insurance Trustee sha 1 disburse principal and interest to a
Bondholder only upon ev dence satisfactory to th� Insurance
Trustee and AMBAC Indemni y that the ownership interest of the
Hondholder in the ciqht to payment of such principal and interest
has been effectively tran ferred to ArtBAC indemnity on the books
maintained for such purp se. AMBAC Indemnity shall be fully
subroqated to all of the Bondholders' riqhts to payment to the
extent of the insuranc� di bursements so made.
For Transactions Involvi variable Rate Bonds - Insert the
0 owin an ua e at en secon sentence o ara ra un er
Pa ment Pursuant to Mun ci a Bon nsurance Po c :
The Municipal Bond Insura ce Policy does not insure against loss
relatinq to paym�nts of t e purchase price of Honds upon tender
by a registered owner thereof or any pceferentfal transfer
relatfng to payments of the purchase price of Bonda upon tender
by a reqistered owner there f.
. �� - ���
1/21/88
EJ[AIBIT H
TRUST E-REI.l�►TBD PROVISIONS
1 . The Trustee may be emoved at any time, at the request of
AMBAC Indemnity, fo any breach of the Trust set forth
herein.
2 . AMBAC Indemnity shal receive prior written notice of any
Trustee resiqnation.
3 . Evecy successor Trustee appointed pursuant to this Section
shall b�e a trust compa y or bank in good standinq located in
or incorpocated under the laws of the State, duly authorized
to exercise trust p wers and subject to examination by
federal or state aut orfty, havinq a reported capital and
surplus of not less t an 575, 000,000 and acceptable to AMHAC
Indemnfty.
4 . Notwithstandinq any ther provision ot this ( Indenture,
Resolution, Ordinance etc. ) , in determininq whether the
rights of the eondhol ers will be adversely affected by any
action taken pursuant to the terms and provisions of this
( Indenture, Resolution Ordinance, etc. � , the Truatee shall
consider the effect o the Bondholders as ff there were no
Municipal Bond Insuran e Policy.
. ��� 4 ��
1/21/88
E7CHIBIT I
Section : Parties interested Herein. Nothinq in this
( Indenture, Resolution, rdinance, etc. ) expressed oc implied is
intended or shall be construed to conter upon, or to give to, any
person or entity, other than the Issuer, the Trustee, AMBAC
Indemnity, the Payinq Aqe t, if any, and the reqistered owners of
the Bonds, any riqht, rem dy or claim under or by reason of this
( Indenture, Resolution, Ordinance, etc. ) or any covenant,
condition or stipulation ereof, and all covenants, stipulations ,
promises and aqreement in this ( Indenture, Resolution,
Ordinance,, etc. ) contain d by and on behalf ot the Issuer shall
be foc the sole ,and exclu ive bene�it of the Isauer, the Trustee,
AMBAC indemnity, the Pa inq Aqent, if any, and the reqistered
owners of the Bonds.