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HomeMy WebLinkAboutR-2001-122 RESOLUTION NO. 2001-122 • A RESOLUTION OF THE CITY OF DANIA BEACH, FLORIDA, AUTHORIZING THE ISSUANCE OF ITS PROMISSORY NOTE, SERIES 2001 IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $7009000, TO PAY AN ARBITRATION AWARD AND COSTS RELATED THERETO;PROVIDING FOR THE PAYMENT OF THE NOTE FROM THE UTILITY TAX IMPOSED ON THE PURCHASE OF ELECTRICITY WITHIN THE CITY; PRESCRIBING THE FORM,TERMS AND DETAILS OF THE NOTE; AWARDING THE NOTE TO REPUBLIC SECURITY BAND BY NEGOTIATED SALE; DESIGNATING THE NOTE AS A "QUALIFIED TAX-EXEMPT OBLIGATION"WITHIN THE MEANING OF SECTION 265(b)(3) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED; MAKING CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF DANIA BEACH, FLORIDA; SECTION 1. DEFINITIONS. As used herein, unless the context otherwise requires: "Act"means,as applicable,Article VIII, Section 2 of the Constitution of the State of Florida, Chapter 166, Florida Statutes, the,Charter of the City of Dania Beach, and other applicable provisions of law. "Annual Budget" means the annual budget prepared by the City for each Fiscal Year in accordance with Section 11 below and in accordance with the laws of the State of Florida. "Business Day"means any day which is not a Saturday, Sunday or legal holiday in Broward County, Florida. "Chief Financial Officer" means the chief financial officer of the City as defined in Section 218.403, Florida Statutes. "City" means the City of Dania Beach, a Florida municipal corporation, or its successor. "City Manager" means the City Manager of the City and such other person as may be duly authorized to act on his or her behalf. "Clerk" means the City Clerk or any Deputy Clerk of the City. RESOLUTION NO. 2001-122 MGM/NWPB/1 02-2/201 1 63.0002 1 "Code" means the Internal Revenue Code of 1986, as amended, including the applicable regulations of the Department of the Treasury (including applicable final regulations, temporary regulations and proposed regulations), the applicable rulings of the Internal Revenue Service (including published Revenue Rulings and private letter rulings) and applicable court decisions. "Costs of the Project" means with respect to the Project, all items of cost authorized by the Act, including the costs of issuance of the Note. "Dated Date" means the date of issuance of the Note. "Fiscal Year" means the period commencing on October 1 of each year and ending on the succeeding September 30,or such other consecutive 12-month period as may be hereafter designated as the fiscal year of the City pursuant to general law. "Governing Body" means the City Commission of the City, or its successor in function. "Mayor" means the Mayor of the City and such other person as may be duly authorized to act on the Mayor's behalf. "Noteholder" or"Holder" means the registered owner(or its authorized representative)of the Note. "Note" means the Promissory Note, Series 2001 authorized to be issued by the City in the aggregate principal amount not to exceed $700,000, the form of which is attached as Exhibit "A" hereto. "Project" means the satisfaction of the obligations of the City under the arbitration award relating to the dredging of Tigertail Lake and costs related thereto. "Republic" means Republic Security Bank, the initial purchaser of the Note, and its successors and assigns. "Resolution" means this Resolution, authorizing the issuance of the Note, as the same may from time to time be amended, modified or supplemented. "State" means the State of Florida. "Utility Tax"means the taxes levied and collected by the City imposed by Section 23-11 et seq. of the City Code of Ordinances or otherwise on the purchase of electricity within the City pursuant to Section 166.231, Florida Statutes. SECTION 2. AUTHORITY FOR RESOLUTION. This Resolution is enacted pursuant to the provisions of the Act. The City has ascertained and hereby determined that enactment of this RESOLUTION NO. 2001-122 MGM/NWPB/102-2/201163.0002 2 Resolution is necessary to carry out the powers,purposes and duties expressly provided in the Act, athat each and every matter and thing as to which provision is made herein is necessary in order to carry out and effectuate the purposes of the City in accordance with the Act and to carry out and effectuate the plan and purpose of the Act, and that the powers of the City herein exercised are in each case exercised in accordance with the provisions of the Act and in furtherance of the purposes of the City. SECTION 3. RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the purchase and acceptance of the Note by those who shall hold the same from time to time, the provisions of this Resolution shall be a part of the contract of the City with the Holder,and shall be deemed to be and shall constitute a contract between the Issuer and the Holder from time to time of the Note. The pledge made in this Resolution and the provisions,covenants and agreements herein set forth to be performed by or on behalf of the City shall be for the benefit,protection and security of the Holder of the Note in accordance with the terms hereof. SECTION 4. AUTHORITY FOR ISSUANCE OF NOTE. Subject and pursuant to the provisions hereof, a Note to be known as "City of Dania Beach, Florida, Promissory Note, Series 2001" is hereby authorized to be issued in an aggregate principal amount not to exceed Seven Hundred Thousand Dollars($700,000.00)for the purpose of financing the Project.The City shall not use the proceeds of the Note for any purpose other than the Project without the written approval of Republic, which approval may be conditioned upon the receipt of an opinion of nationally recognized bond counsel to the effect that such use will not adversely affect the exclusion from the gross income of the Holder of the interest on the Note. SECTION 5. DESCRIPTION OF NOTE. The Note shall be issued in one(1)typewritten certificate and shall be dated the Dated Date. The Note shall bear interest from the Dated Date at the rate of 4.20%. Principal of the Note will be payable in sixteen equal quarterly installments,with the first installment payable November 1,2002. Accrued interest on the Note will be payable in twenty quarterly installments,beginning November 1, 2001.Interest on the Note shall be calculated on the basis of a 360 day year for the actual number of days elapsed. The interest rate on the Note shall be adjusted upon the occurrence of an"Event of Taxability" as set forth on the form of Note attached as Exhibit "A" hereto. Details of the Note shall be as provided in the form of Note attached as Exhibit"A"hereto. The Note shall be in registered form,contain substantially the same terms and conditions as set forth in Exhibit "A" hereto, shall be payable in lawful money of the United States of America, and the principal thereof, interest thereon and any other payments thereunder shall be payable by check, wire, draft or bank transfer to the Holder at such address as may be provided in writing by such Holder to the Clerk. So long as the Note shall remain outstanding,the City shall maintain and keep books for the registration and transfer of the Note.The Note may be assigned as provided in the form of Note attached as Exhibit "A" hereto. RESOLUTION NO. 2001-122 MGM/N W PB/1 02-2/20 1 1 63.0002 3 SECTION 6. EXECUTION OF NOTE. The Note shall be executed in the name of the • City by the manual signature of the Clerk and the City Manager, the seal of the City shall be imprinted, reproduced or lithographed on the Note, and the Note shall be attested to by the manual signature of the Mayor. If any officer whose signature appears on the Note ceases to hold office before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes. In addition,the Note may bear the signature of,or may be signed by,such persons as at the actual time of execution of the Note shall be the proper officers to sign the Note although at the date of the Note or the date of delivery thereof such persons may not have been such officers. SECTION 7. NOTE MUTILATED,DESTROYED, STOLEN OR LOST. If the Note is mutilated, destroyed, stolen or lost, the City may, in its discretion (i) deliver a duplicate replacement Note, or(ii)pay a Note that has matured or is about to mature. A mutilated Note shall be surrendered to and canceled by the Clerk or its duly authorized agent. The Holder must furnish the City or its agent proof of ownership of any destroyed, stolen or lost Note; post satisfactory indemnity; comply with any reasonable conditions the City or its agent may prescribe; and pay the City's or its agent's reasonable expenses. Any such duplicate Note shall constitute an original contractual obligation on the part of the City whether or not the destroyed, stolen, or lost Note be at any time found by anyone, and such duplicate Note shall be entitled to equal and proportionate benefits and rights as to lien on, and source of and security for payment from,the funds pledged to the payment of the Note so mutilated, destroyed, stolen or lost. SECTION 8. PROVISIONS FOR REDEMPTION. The Note may be prepaid in whole or in part at any time prior to maturity in the manner and with the prepayment premium provided in the form of Note attached as Exhibit "A" hereto. SECTION 9. NOTE NOT TO BE GENERAL INDEBTEDNESS OF THE CITY. The Note shall not be or constitute a general obligation or indebtedness of the City within the meaning of the Constitution of Florida, but shall be payable from and secured solely in the manner described in Section 10 hereof, in the manner and to the extent herein provided. No Holder shall ever have the right to compel the exercise of the ad valorem taxing power of the City or taxation in any form on any real or personal property to pay the Note or the interest thereon,nor shall any Holder be entitled to payment of such principal and interest from any funds of the City other than the Utility Tax. The Holder shall have no lien upon any real or tangible personal property of the City. SECTION 10. PLEDGE OF REVENUES. The payment of the principal of, premium, if any, and interest on the Note shall be secured forthwith equally and ratably by an irrevocable lien on and pledge of the Utility Tax,prior and superior to all other liens or encumbrances on the Utility Service Tax (excepting only the City's outstanding promissory note to Republic maturing in May of 2002, the pledge and lien of which on the Utility Tax is superior to the pledge and lien hereby granted), and the City hereby irrevocably pledges the Utility Tax to the payment of the principal of, • RESOLUTION NO. 2001-122 MGM/NWPB/102-2/201163.0002 4 premium, if any, and interest on the Note as the same shall become due. Such pledge of the Utility Tax shall be cumulative to the extent not paid,and shall continue until the Note has been paid in full. The City covenants that for so long as the Note shall remain unpaid, it will continue to impose the Utility Tax, and will not amend or repeal the provisions of the resolutions, ordinances and/or agreements of the City that impose the Utility Tax as of the date hereof so as to reduce the rate at which the Utility Tax is imposed or the services or commodities subject to the Utility Tax,or otherwise modify the proceedings of the City relevant to the Utility Tax in any manner so as to impair or adversely affect the ability of the City to impose and collect the Utility Tax. The City represents that except as otherwise stated in this Section 10 the Utility Tax is not pledged or encumbered in any manner. The City further represents that the revenues generated by the Utility Tax are estimated to be sufficient to pay the principal of,premium,if any,and interest on the Note as the same shall become due. SECTION 11. OPERATING BUDGET;FINANCIAL STATEMENTS. Before the first day of each Fiscal Year the Governing Body shall prepare, approve and adopt in the manner prescribed by law, a detailed Annual Budget. Such Annual Budget shall provide for revenues sufficient to comply with the City's obligations hereunder,including any unsatisfied obligations from prior Fiscal Years. The City shall annually provide to Republic a copy of the Annual Budget and the City's audited financial statements prepared in accordance with law, each within thirty(30)days of its completion. SECTION 12. ISSUANCE OF ADDITIONAL OBLIGATIONS PROHIBITED. The City will not issue any obligations or incur any liability payable from or secured by the Utility Tax and having a right to payment therefrom that is prior to or on a parity with the right to payment therefrom of the Note. The City may only issue obligations or incur liability payable from or secured by the Utility Tax and having a right to payment therefrom that is subordinate to the right to payment therefrom of the Note with the written approval of Republic. SECTION 13. AWARD OF NOTES BY NEGOTIATED SALE. Because of the nature of the Note,the maturity of the Note and the prevailing market conditions,the negotiated sale of the Note to Republic in substantial accordance with Republic's Commitment Letter to the Citydated July 19, 2001, which letter is attached hereto as Exhibit"B" (the "Commitment"), is hereby found to be in the best interests of the City; provided, however, that the provisions of this Resolution shall control to the extent of any conflict with the Commitment. SECTION 14. MODIFICATION, AMENDMENT OR SUPPLEMENT. This Resolution may be modified, amended or supplemented by the City from time to time prior to the issuance of the Note hereunder. Thereafter, no modification, amendment or supplement of this Resolution, or of any resolution amendatory hereof or supplemental hereto, may be made without the consent in writing of the Holder. • RESOLUTION NO. 2001-122 MGM/NWPB/1 02-2/201 1 63.0002 5 SECTION 15. TAX COVENANTS. It is the intention of the City and all parties under its . control that the interest on the Note be and remain excluded from gross income for federal income tax purposes and to this end the City hereby represents to and covenants with each Holder of the Note issued hereunder that it will comply with the requirements applicable to it contained in Section 103 and Part IV of Subchapter B of Chapter 1 of the Code to the extent necessary to preserve the exclusion of interest on the Note issued hereunder from gross income for federal income tax purposes. Specifically,without intending to limit in any way the generality of the foregoing,the City covenants and agrees: a) to refrain from using proceeds from the Note in a manner that might cause the Note to be classified as a private activity bond under Section 141(a) of the Code; and b) to refrain from taking any action that would cause the Note to become an arbitrage bond under Section 148 of the Code. The City understands that the foregoing covenants impose continuing obligations of the City that will exist as long as the requirements of Section 103 and Part IV of Subchapter B of Chapter 1 of the Code are applicable to the Note. SECTION 16. EVENTS OF DEFAULT; REMEDIES. A. Events of Default. Any one or more of the following events shall be an "Event of Default": (i) The City shall fail to pay the principal of or interest on the Note when due; (ii) The City shall default under any obligation for the repayment of money; (iii) The City shall (a) admit in writing its inability to pay its debts generally as they become due, (b) file (or have filed against it and not dismissed within 90 days) a petition in bankruptcy or take advantage of any insolvency act, (c)make an assignment for the general benefit of creditors,(d)consent to the appointment of a receiver for itself or for the whole or any substantial part of its property, or (e) be adjudicated a bankrupt; or (iv) The City shall default in the due and punctual performance of any of its covenants, conditions, agreements and provisions contained herein or in the Note, and such default shall continue for thirty (30) days after written notice specifying such default and requiring the same to be remedied shall have been given to the City by the Holder of the Note;provided that such default shall not be an Event of Default if the City within such 30 day period commences and carries out with due diligence to completion(although not necessarily within such thirty(30)day period) such action as is necessary to cure the same. B. Remedies on Default. If an Event of Default shall have occurred and be continuing, the Holder may proceed to protect and enforce its rights hereunder by a suit,action or special proceeding Is RESOLUTION NO. 2001-122 MGM/NWPB/1 02-2/20 1 1 63.0002 in equity or at law, by mandamus or otherwise, either for the specific performance of any covenant or agreement contained herein or for enforcement of any proper legal or equitable remedy as such Holder shall deem most effectual to protect and enforce the rights aforesaid. No remedy herein conferred upon or reserved to the Holder is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission of a Holder to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default, or an acquiescence therein; and every power and remedy given by this article may be exercised from time to time, and as often as may be deemed expeditious by a Holder. SECTION 17. GENERAL AUTHORITY. The Mayor and the members of the Governing Body and the officers, attorneys and other agents or employees of the City are hereby authorized to do all acts and things required of them by this Resolution, or desirable or consistent with the requirements hereof,for the full punctual and complete performance of all the terms,covenants and agreements contained herein or in the Note,including the execution of any documents or instruments relating to payment of the Note, and each member, employee, attorney and officer of the City is hereby authorized and directed to execute and deliver any and all papers and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated hereunder. SECTION 18. BANK QUALIFIED ISSUE. The City hereby designates the Note to be a "qualified tax-exempt obligation" within the meaning of Section 265(b) of the Code. SECTION 19. WAIVER OF JURY TRIAL. REPUBLIC AND THE CITY HEREBY KNOWINGLY,VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF,UNDER OR IN CONNECTION WITH THIS RESOLUTION,THE NOTE OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF EITHER PARTY. SECTION 20. SEVERABILITY. If any one or more of the covenants, agreements or provisions of this Resolution should be held contrary to any express provision of law or contrary to the policy of express law,though not expressly prohibited,or against public policy, or shall for any reason whatsoever be held invalid,then such covenants,agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions of this Resolution or of the Note issued hereunder,which remaining covenants,agreements and provisions shall remain in full force and effect. RESOLUTION NO. 2001-122 MGM/NWPB/102-2/20 1 1 63.0002 7 SECTION 21. NO THIRD-PARTY BENEFICIARIES. Except as herein otherwise . expressly provided,nothing in this Resolution expressed or implied is intended or shall be construed to confer upon any person,firm or corporation other than the parties hereto and a subsequent holder of the Note issued hereunder, any right, remedy or claim, legal or equitable, under or by reason of this Resolution or any provision hereof,this Resolution and all its provisions being intended to be and being for the sole and exclusive benefit of the parties hereto and the holder from time to time of the Note issued hereunder. SECTION 22. CONTROLLING LAW; MEMBERS OF CITY NOT LIABLE. All covenants, stipulations,obligations and agreements of the City contained in this Resolution and the Note shall be covenants, stipulations, obligations and agreements of the City to the full extent authorized by the Act and provided by the Constitution and laws of the State of Florida. No covenant, stipulation, obligation or agreement contained in this Resolution or the Note shall be a covenant, stipulation, obligation or agreement of any present or future member, agent, officer or employee of the City or the Governing Body of the City in his or her individual capacity,and neither the members or officers of the Governing Body of the City nor any official executing the Note shall be liable personally on the Note or shall be subject to any personal liability or accountability by reason of the issuance or the execution of the Note by the City or such members thereof. SECTION 23. REPEAL OF INCONSISTENT RESOLUTIONS.All resolutions or parts thereof in conflict with this Resolution are repealed to the extent of such conflict. SECTION 24. EFFECTIVE DATE. This Resolution shall be in force and take effect immediately upon its passage and adoption. Remainder of page intentionally left blank RESOLUTION NO. 2001-122 • MGM/NWPB/1 02-2/20 1 1 63.0002 PASSED AND ADOPTED THIS 24TH DAY OF JULY 2001. Azt� PATRICIA A. FLURY MAYOR-COMMISSIONER ATTEST: ROLL CALL: COMMISSIONER BERTINO-YES rh,L x4u-- COMMISSIONER MCELYEA-NO CHARLENE JOMIRK ON COMMISSIONER MIKES-ABSENT ACTING CITY VICE-MAYOY CHUNK-YES MAYOR FLURY-YES APPROVED AS TO FORM AND CORRECTNESS BY: r, /\ ; / TlIOMXS J. ANSBRO CITY ATTORNEY RESOLUTION NO. 2001-122 MGM/NWPB/102-2/201163.0002 EXIIIBIT "A" FORM OF NOTE • MGM/NWPB/1 02-2/201 1 63.0002 REGISTERED REGISTERED No. R- 1 $ 700,000.00 UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF DANIA BEACH PROMISSORY NOTE, SERIES 2001 Interest Rate: Maturity Date: Dated Date: 4.20% August 1, 2006 July 30, 2001 REGISTERED OWNER: REPUBLIC SECURITY BANK - PRINCIPAL AMOUNT: SEVEN HUNDRED THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS, that the City of Dania Beach, Florida, a municipal corporation of the State of Florida (hereinafter called the "City") for value received, hereby promises to pay to the Registered Owner identified above, or to registered assigns or legal representatives, but solely from the revenues hereinafter mentioned, on the dates hereinafter provided, the Principal Amount identified above, and to pay, solely from such revenues, interest on the Principal Amount remaining unpaid from time to time, at the interest rate per annum identified above (the 'Bond Rate"),until the entire Principal Amount has been repaid.Principal of and interest on this Note will be paid by bank wire, check, draft or bank transfer delivered to the Registered Owner hereof at his address as it appears on the registration books of the City at the close of business on the fifth Business Day (as defined in the hereinafter described Resolution),next preceding each interest payment date (the "Record Date"). Interest on this Note shall be calculated on the basis of a 360 day year and will be paid in arrears for the actual number of days elapsed. Payments of accrued interest will be due on this Note on the t st day of each November, February, May and August, beginning November 1, 2001. Payments of principal in the amount of $43,750.00 will be due on this Note on the 1st day of each November, February, May and August, beginning November 1, 2002. Each date when principal and/or interest on this Note is due is a "Payment Date." If any Payment Date is not a Business Day, the payment otherwise due on such Payment Date shall be due on the preceding Business Day. Any payment of principal hereof or interest hereon not paid when due shall bear interest from the due date until paid at the Bond Rate. • 1 This Note is the entire authorized issue of notes in the aggregate principal amount of $700,000, issued to finance the Project (as defined in the Resolution), pursuant to the authority of and in full compliance with the Constitution and laws of the State of Florida,including particularly Article VIII, Section 2 of the Constitution of the State of Florida, Chapter 166,Florida Statutes,the Charter of the City (collectively, the "Act"), and Resolution No. 2001-122, adopted by the City Commission of the City on July 24, 2001 (the "Resolution"). This Note and the interest hereon are secured by and are payable from a prior lien upon and pledge of the Utility Tax(as defined in the Resolution), in the manner and to the extent provided in the Resolution. Such lien and pledge are subordinate to the lien and pledge of the Utility Tax in favor of the holder of the City's promissory note to Republic Security Bank("Republic")maturing May of 2002.Reference is hereby made to the Resolution for the provisions,among others,relating to the terms and security for the Note,the custody and application of the proceeds of the Note, the rights and remedies of the Registered Owner of the Note, and the extent of and limitations on the City's rights,duties and obligations,to all.of which provisions the Registered Owner hereof for himself and his successors in interest assents by acceptance of this Note. All terms used herein in capitalized form, unless otherwise defined herein, shall have the meanings ascribed thereto in the Resolution. For purposes of this Note, the following definitions shall apply: (1) "Code" means the Internal Revenue Code of 1986, as amended; (2) "Cost of Funds" means 100 multiplied by a fraction,the numerator of which is equal to the total interest expense of Republic for its immediately preceding tax year and the denominator of which is equal to the average total assets of Republic for such tax year, but not to exceed the cost of Fed Funds. (3) "Fully Taxable Equivalent" means the Bond Rate multiplied by 1.65, expressed as a number and not as a percentage. (4) "Maximum Corporate Tax Rate"means the maximum Federal income tax rate applicable to corporations, presently 35%. (5) "Preference Reduction Rate"means the percentage reduction to be applied to the amount allowable as a deduction under Chapter I of the Code with respect to any financial institution preference item(as such term is defined in Section 291(e)of the Code), presently 20%. If this Note is not or ceases to be a "qualified tax-exempt obligation" as defined in Section 265(b) of the Code, the Preference Reduction Rate shall be deemed to increase from twenty percent (20%) to one hundred percent(100%). (7) "TEFRA Adjustment" means an adjustment equal to the product of the Cost of Funds multiplied by the applicable Maximum Corporate Tax Rate multiplied by the applicable Preference Reduction Rate. 2 If for any reason the interest on this Note becomes includable in the gross income of the i holder of this Note for Federal income tax purposes (an "Event of Taxability"), this Note shall bear interest from the earliest effective date of such Event of Taxability at a rate per annum equal to the interest rate otherwise borne by this Note multiplied by 1.65. In addition to the foregoing, the City shall pay any additions to tax, penalties and interest, and any arrears in interest imposed upon the holder of this Note on account of an Event of Taxability. All such additional interest, additions to tax and penalties shall be paid on the next succeeding Payment Date following the date the holder was advised of such Event of Taxability. No Event of Taxability shall be deemed to occur unless the City has been given timely written notice of such occurrence by the holder of this Note and, to the extent permitted by law, an opportunity to participate in and seek, at the City's own expense,a final administrative determination by the Internal Revenue Service or determination by a court of competent jurisdiction (from which no further right of appeal exists)as to the occurrence of such Event of Taxability; provided that the City, at its own expense, delivers to the holder of this Note an opinion of bond counsel acceptable to such holder to the effect that such appeal or action for judicial or administrative review is not without merit and there is a reasonable possibility that the judgment, order, ruling or decision from which such appeal or action for judicial or administrative review is taken will be reversed, vacated or otherwise set aside. The interest rate borne by this Note shall also be adjusted automatically as of the effective date of any change in the Maximum Corporate Tax Rate or in the Preference Reduction Rate,to the product obtained by multiplying the Bond Rate by a fraction,the numerator of which is equal to the sum of(i) the product of the Fully Taxable Equivalent times 1 minus the Maximum Corporate Tax Rate in effect as of the date of adjustment,plus (ii) the TEFRA Adjustment in effect as of the date of adjustment, and the denominator of which is equal to the sum of(i) the product of the Fully Taxable Equivalent times 0.65,plus (ii) the TEFRA Adjustment in effect on the date of closing of the Note. A certificate of the Holder as to any such additional amount or amounts, in the absence of manifest error, shall be final and conclusive. In determining such amount, the Holder may use any reasonable averaging and attribution methods. Upon the occurrence of an Event of Default (as defined in the Resolution), the Holder may declare the entire outstanding balance due hereon to be immediately due and payable(but only from the Utility Tax), and in any such acceleration the City shall also be obligated to pay all costs of collection and enforcement thereof, including such fees as may be incurred on appeal or incurred in any bankruptcy or insolvency proceeding. THIS NOTE SHALL NOT BE DEEMED TO CONSTITUTE A GENERAL DEBT OR A PLEDGE OF THE FAITH AND CREDIT OF THE CITY, OR A DEBT OR PLEDGE OF THE FAITH AND CREDIT OF THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL, LEGISLATIVE OR 3 CHARTER PROVISION OR LIMITATION, AND IT IS EXPRESSLY AGREED BY THE REGISTERED OWNER OF THIS NOTE THAT SUCH REGISTERED OWNER SHALL NEVER HAVE THE RIGHT, DIRECTLY OR INDIRECTLY, TO REQUIRE OR COMPEL THE EXERCISE OF THE AD VALOREM TAXING POWER OF THE CITY OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE OF FLORIDA OR TAXATION IN ANY FORM ON ANY REAL OR PERSONAL PROPERTY FOR THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON THIS NOTE OR FOR THE PAYMENT OF ANY OTHER AMOUNTS PROVIDED FOR IN THE RESOLUTION. This Note shall be and have all the qualities and incidents of negotiable instruments under the law merchant and the Uniform Commercial Code of the State of Florida, subject to the provisions for registration of transfer contained herein and in the Resolution. It is further agreed between the City and the Registered Owner of this Note that this Note and the indebtedness evidenced hereby shall not constitute a lien upon any real or tangible personal property of or in the City. Neither the members of the governing body of the City nor any person executing the Note shall be liable personally on the Note by reason of its issuance. This Note may be prepaid in whole or in part on any scheduled payment date subject to the payment of a non-refundable Prepayment Premium calculated by Republic. The amount due on any date of prepayment or on any date on which payment of this Note is accelerated pursuant to the terms of the Note(each a"Prepayment Date") shall be the sum of(a)any unpaid fees, or a prorata portion • thereof, if a partial prepayment, (b) accrued but unpaid interest, (c) the principal amount to be prepaid or required to be prepaid,and(d)the Prepayment Premium if greater than zero. For purposes of this Note, the following definitions shall apply: (1) "Prepayment Premium" is the sum of the present values of Remaining Payments of Principal and the present values of interest on the Remaining Scheduled Payments and the present value of any balloon payment, as determined by application of the Discount Rate, minus the principal amount to be prepaid or required to be paid. The Prepayment Premium cannot exceed what is legally allowable or permitted by law. If this Note is to be prepaid in part, then the Prepayment Premium will be equal to the amount calculated as set forth above,prorated based on the ratio of the amount of principal prepaid or required to be paid, to the outstanding principal balance immediately prior to the prepayment or required payment. (2) . "Remaining Scheduled Payments of Principal" means each of the projected payments from the prepayment date up to and including the maturity of the loan. (3) "Discount Rate"means, at approximately 11:00 a.m.New York time two (2) Business Days prior to the Prepayment Date, the then current U.S. Treasury Security Yield at a term closest to the Weighted Average Life interpolating if necessary plus the then current 4 Interest Rate Swap Spread at a term closest to the Weighted Average Life interpolating if necessary. (4) "U.S. Treasury Security Yield" means a rate, as determined by Republic, which is based upon the mid market yield to maturity for securities issued by the U.S. Treasury on a regular basis as shown for selected benchmark maturities on the Market Data News Service, whose term, interpolated if necessary, corresponds to the Weighted Average Life. (5) "Interest Rate Swap Spread"means a spread which is lower of the bid or offer spread, in basis points, as determined by Republic,based upon the Interest Rate Swap Spread provided by the Market Data News Service whose term, interpolated if necessary, corresponds to the Weighted Average Life. (6) "Market Data News Service"means page 19901 of the Bridge Telerate, Inc. Trading Service, or any successor or alternative pages of that service or any other news service that reports mid-market yields for U.S. Treasury bonds and notes and market standard interest rate swap data. (7) "Weighted Average Life" means, on the Prepayment Date, the number of years obtained(calculated to the nearest one-twelfth)by dividing(a)the sum of the products of(i) the amount of each of the Remaining Scheduled Payments of Principal, times (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between the Prepayment Date and the date such Remaining Scheduled Payment of Principal would have been due under the original repayment terms of the Note, up to and including the Maturity Date. In the event of any partial prepayment of this Note,each partial payment shall be applied first to accrued interest hereon, and then to such principal installments as the City shall designate, by notice in writing delivered to the Holder simultaneous with such partial prepayment. This Note may be assigned by the owner of this Note, or any assignee or successor-in-interest thereto. Such assignment shall only be effective, and the City obligated to pay such assignee, upon delivery to the Clerk at 100 West Dania Beach Boulevard, Dania Beach, Florida 33304 (or such future address as may serve as the address of the City) of a written instrument or instruments of assignment in the form provided herein, duly executed by the owner of this Note or by his attorney-in-fact or legal representative,containing written instructions as to the details of assignment of this Note,along with the social security number or federal employer identification number of such assignee. In all cases of an assignment of this Note the City shall at the earliest practical time in accordance with the provisions of the Agreement enter the change of ownership in the registration books; provided, however, the written notice of assignment must be received by the Clerk no later than the close of business on the fifth Business Day prior to a Payment Date in order to carry the right to receive the interest and principal payment due on such Payment Date. The City may charge 5 the registered owner of the Note for the registration of every such assignment of the Note an amount sufficient to reimburse it for any tax, fee or any other governmental charge required to be paid, except for any such governmental charge imposed by the City,with respect to the registration of such assignment, and may require that such amounts be paid before any such assignment of the Note shall be effective. It is hereby certified and recited that all acts, conditions and things required to exist, to happen, and to be performed precedent to and in the issuance of this Note exist, have happened and have been performed in regular and due form and time as required by the laws and Constitution of the State of Florida applicable hereto, and that the issuance of the Note does not violate any constitutional or statutory limitation or provision. THE REGISTERED OWNER, BY ITS ACCEPTANCE OF THIS NOTE, AND THE CITY, BY ITS ACCEPTANCE OF THE PROCEEDS OF THE NOTE, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, THE RESOLUTION OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OR DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY. IN WITNESS WHEREOF, the City of Dania Beach, Florida has issued this Note and has • caused the same to be executed by the manual signature of the Clerk and the City Manager, and attested by the manual signature of the Mayor and its corporate seal or a facsimile thereof to be affixed or reproduced hereon, all as of the day of July, 2001. CITY OF DANIA BEACH, FLORIDA (SEAL) City Clerk City Manager ATTEST: Mayor 6 FORM OF ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Note in the books kept by the City for the registration thereof, with full power of substitution in the premises. Dated: NOTICE: The signature of this SOCIAL SECURITY NUMBER OR assignment must correspond with FEDERAL IDENTIFICATION NUMBER the name as it appears upon the OF ASSIGNEE within Note in every particular, without enlargement or alteration or any change whatever. [Form of Abbreviations] The following abbreviations, when used in the inscription on the face of the within Note, shall be construed as though they were written out in full according to the applicable laws or regulations. TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with the right of survivorship and not as tenants in common UNIFORM TRANS MIN ACT - Custodian for (Cust.) (Minor) under Uniform Transfers to Minors Act of (State) Additional abbreviations may also be used though not in the above list. EXIIIBIT "B" COMMITMENT LETTER MGM/N W PB/1 02-2/201 1 63.0002 110 East Broward Blvd. Suite 102 Fort Lauderdale, Florida 33301 Phone: 954-762-8920 Fax: 954-762-8918 July 19, 2001 Mr. David E. Keller Director of Finance City of Dania Beach 100 W. Dania Beach Blvd. Dania Beach Fl. 33004 Dear Mr. Keller: We are pleased to inform you that Republic Security Bank (hereinafter referred to as "Lender"), has approved your request for a Bank Qualified Term Loan to provide funds to pay an arbitration settlement. Our approval of your request is subject, but not limited, to the following terms and conditions: BORROWER:.City of Dania Beach LOAN AMOUNT: The loan has been approved in an amount up to seven hundred thousand dollars ($700,000.00). INTEREST RATE: Option 1. The loan shall be priced at a base floating rate ( Floating Rate Option) equal to 64.5% of 30 Day Libor to which a spread of 1.25% will be added. The rate will adjust every thirty days. (Based upon a 30 Day LIBOR Rate of 3.82% the rate would be 3.748%). Option 2. The loan shall be priced at 4.20 percent fixed for the life of the loan. These Rates assume that the loan will be a"Bank Qualified" under section 265(b) (3) of the internal revenue code of 1986. If this loan is not"Bank Qualified" and tax free, the rates shall be adjusted upward to represent a comparable taxable rate of interest. The fixed rate option is subject to change if not accepted within five business days of this date. TERMS OF REPAYMENT: The loan shall be shall be repaid with quarterly payments of interest only for the first year. In years two through five, equal payments of principal adequate to amortize the loan by maturity plus accrued interest commencing November 1, 2002 will be due and payable quarterly until maturity. EQUAL OPPORTUNITY MEMBER FM EOUAL HOUSING LENDER LENDER PREPAYMENT: The loan may be prepaid in whole or in part, except that should Fixed Rate Option 2 be chosen and in effect, Republic Security Bank's standard make-whole provision would apply, see"Attachment A"herewith. MATURITY: The loan will mature five years from closing. COLLATERAL: To secure the payment of this proposed obligation, the City is authorized and agrees to pledge to the Lender the City's revenues received from Utility Service Taxes and earnings thereon under the Loan Documents. This will be by a second lien behind Republic Security Bank's first lien position on the Utility Service Tax Revenue, until the former loan is paid in full, at which time the subject loan will have a first lien position. LENDER'S COUNSEL Lender's counsel for this loan shall be: Morris G. (Skip) Miller Adorno&Zeder, PA 1551 Forum Place Building 200 West Palm Beach, Fl. 33401 (561) 640-8000 The fee charged by this law firm at closing is for all services directly related to closing the subject loan. Additional legal fees may from time to time be incurred by lender for post closing services rendered relating to this loan file and subject project. All such fees and attendant expenses, shall be borne by the Borrower. In the event any litigation shall arise out of this commitment, the prevailing party shall be entitled to recover all costs incurred, including reasonable attorney's fees at both the trial and appellate levels. GENERAL CONDITIONS This Commitment is granted subject to the General Conditions attached to this commitment as Exhibit "A". FINANCIAL REPORTING: The City agrees to provide Audited Financial Statements and its annual budget on annual basis while the loan is outstanding. ACCEPTANCE: If the terms and conditions contained herein and in Exhibit"A" meet with your approval, please so indicate your acceptance by signing below where indicated and returning the original commitment, and all the acknowledged exhibits, no later than July 26, 2001. This commitment shall be null and void if the commitment is not accepted by July 26, 2001 and/or the closing of this loan has not taken place by August 24, 2001. Sin erely; ohn J. IV eaca, Jr. Sr. Vice President Republic Security Bank Accepted this )1 day of J\ j 32001. BORROWER: City of Dania Beach By: GX vv A . V' Its: ry k, �, EXHIBIT "A" GENERAL CONDITIONS This addendum is issued as an integral part of the terms and conditions of our Loan Commitment to which it is attached, which Commitment shall be subject but not limited to the following standard conditions. The terms and conditions set out in this Commitment shall be construed, where possible to apply to the continuing relationship of the Lender and Borrower. The Commitment is subject to full compliance with all applicable State and Federal laws and regulations which may govern the Lender and to compliance with all formal directives of State and Federal agencies implementing and enforcing such law, regulations and rules. Where there is a conflict between such laws and regulations and the terms of this Commitment, such laws and regulations shall control. Any and all references herein relating to the Lender's acceptance or approval of documents, reports, opinions or facts shall be in the sole and absolute subjective discretion of the Lender. ARTICLE I DOCUMENTS All of the documents required to consummate the loan, required during the term of the loan or affecting the security or relating to the Borrower's capacity and authority to make the loan and to execute the loan documents, and such other documents, instruments, certificates, opinions and assurances as the Lender may reasonably request, and all procedures in connection herewith, must be acceptable and approved by Lender and its counsel as to form and substance, with all expenses of such review and approval process to be paid by Borrower. A. LOAN DOCUMENTS At the closing, the Borrower shall execute the following applicable documents together with other documents which may be required by Lender or its counsel: ARTICLE II LOAN COSTS AND DISBURSEMENTS A. LOAN COSTS At the closing of the loan, it will be the obligation of Borrower to pay all Lender's counsel fees. In the event Lender is made a defendant to any litigation arising out of the loan, Borrower agrees to pay Lender's court costs and attorney's fees suffered by its as a result of any claim by any persons, firm or corporation, for any brokerage or other commission alleged to be due as a result o f the transaction. In the event the loan does not close through no fault of the Lender, Borrower agrees to pay legal and other expenses of the Lender. ARTICLE III OTHER CONDITIONS A. ASSIGNABILITY OF RIGHTS UNDER COMMITMENT This commitment is made in favor of only the persons to whom this Commitment is addressed as "Borrower". This Commitment is not assignable by Borrower, or transferable by operation of law, or otherwise, except with the prior written consent of Lender, which consent may be withheld in the absolute discretion of the Lender. B. SECONDARY AND ADDITIONAL FINANCING Any secondary financing secured in any way by the proposed collateral is prohibited without the prior written approval of Lender. C. CONDEMNATION At the time of closing of the loan, no proceeding shall have been threatened or commenced by any authority having the power of eminent domain to condemn any part of the Property which the Lender, in its sole judgment, deems substantial. D. TERMINATION OF COMMITMENT: Lender reserves the right to cancel this Commitment and to terminate its obligations hereunder at any time before the loan closes, without any further liability or obligation to the Borrower, in any of the following events: 1. Failure of the Borrower to comply within the time specified,or with any of the provisions or conditions applicable to this Commitment. 2. Non-payment within the prescribed time, of any fees and expenses provided for in this Commitment. • 3. Insufficiency of lien position as determined by the sole opinion of Lender or its counsel, or lack of approval or acceptance by the Lender to any of the documentation delivered or to be delivered or executed hereunder. 4. Filing by or against Borrower or any Guarantor of any petition in bankruptcy or insolvency, or for reorganization, or for the appointment of a receiver or trustee, or the making of an assignment for the benefit or creditors. 5. Any change subsequent to this Commitment deemed by the Lender to be material or substantial in the financial conditions, assets, net worth, or credit standing of the Borrower or of any Guarantor, or the taking of a judgment against the Borrower or any Guarantor which, in the sole discretion of the Lender, could materially adversely affect the credit standing of the Borrower or any Guarantor, or the ability of Borrower or any Guarantor to perform under this Commitment. F. MISCELLANEOUS The Commitment in which the provisions hereof are incorporated, supersedes any and all prior communication, agreements, offers and statements, whether written or oral,made by the Lender or anyone acting per authorization on its behalf. No change, amendment or modification hereof shall be valid unless it be made in writing and signed by a duly authorized officer of the Lender. The Commitment and the loan made pursuant thereto, are solely for the . benefit of the Borrower and are not to provide any benefit to anyone, are not to be displayed or communicated by the Borrower to any third party, without the prior written consent of the Lender. Attachment A Prepayment— "Make Whole Version" Schedule 1 to$700,000 Note by and between The City of Dania Beach("Borrower')and Republic Security Bank("Lender")dated July . 2001 The Note shall accrue interest-aa rate equal to a fixed rate of 4.20%. Interest will be charged and calculated on the basis of a 360 day year and will be paid in arrea s for,the actuahti umbe or f days elapse&' a g �RF The Note may be prepaid,ui whole orin part;ontany scheduled payment ate supJect to the payment of a non-refundable Prepayment Premium calculated byi e Lender The o nt du on any date of prepaygen r n any date on which payment of the Note is accelerated pursuant to the terms of the Note(each a 'Prepaymerit,D`ate")shall be the sum of(a)any unpaid fees,or a prorata portion thereof,if a partial prepayment,(b)accrued but unpaid interest,(c)-tthe principal amount to be prepaid or required to be prepaid, and(d)the Prepayment Premium if greater than zero. The"Prepayment Premium"is the sum of the present values of the Remaining Scheduled Payments of Principal and the present values of interest on the Remaining Scheduled Payments of Principal and the present value of any balloon payment,as determined by application of the Discount Rate,minus the principal amount to be prepaid or required to be paid.The Prepayment Premium cannot exceed what is legally allowable or permitted by law. If the Note is to be prepaid in part,then the Prepayment Premium will be equal to the amount calculated as set forth above,prorated based on the ratio of the amount of principal prepaid or required to be paid,to the outstanding principal balance immediately prior to the prepayment or required payment. "Remaining Scheduled Payments of Principal"means each of the projected principal payments remaining from the prepayment date up to and including the maturity of the loan. "Discount Rate"means,at approximately 1 1:00 a.m.New York time two(2)business days prior to the Prepayment Date,the then current U.S.Treasury Security Yield at a term closest to the Weighted Average Life interpolating if necessary plus the then current Interest Rate Swap Spread at a term closest to the Weighted Average Life interpolating if necessary. "U.S.Treasury Security Yield"means a rate,as determined by the Lender,which is based upon the mid market yield to maturity for securities issued by the U.S.Treasury on a regular basis as shown for selected benchmark maturities on the Market Data News Service,whose term,interpolated if necessary,corresponds to the Weighted Average Life. "Interest Rate Swap Spread"means a spread which is the lower of the bid or offer spread,in basis points,as determined by the Lender,based upon the Interest Rate Swap Spread provided by the Market Data News Service whose term,interpolated if necessary, corresponds to the Weighted Average Life. "Market Data News Service"means page 19901 of the Bridge Telerate,Inc.Trading Service,or any successor or alternative pages of that service or any other news service that reports mid-market yields for U.S.Treasury bonds and notes and market standard interest rate swap data. "Weighted Average Life"means,on the Prepayment Date,the number of years obtained(calculated to the nearest one-twelfth) by dividing(a)the sum of the products of(i)the amount of each of the Remaining Scheduled Payments of Principal,times(ii)the number of years(calculated to the nearest one-twelfth)that will elapse between the Prepayment Date and the date such Remaining Scheduled Payment of Principal would have been due under the original repayment terms of the Note,up to and including the Maturity Date. s TT ��)T Ae DA u FLO August 1, 2001 Morris G. (Skip) Miller Adorno & Zeder, P.A. 1551 Forum Place, Building 200 West Palm Beach, FL 33401 Dear Skip: At the closing the other day on the Promissory Note for $700,000, the Certified Resolution No. 2001-122 provided to you was not correct in the roll call vote on the last page and our attorney also located two other small typos within the body of the resolution. Therefore, we are enclosing a corrected Certified copy of Resolution No. 2001-122 for your records. Please discard the previous resolution and retain the original Commitment letter signed by Dave Keller, Finance Director. We hope this has not caused you any inconvenience. Sincerely, r .. Ar ene Joh s n cting City Cl rk /cj Enclosure (1) "Broward's First City' 100 West Dania Beach Boulevard Dania Beach, Florida 33004 Phone: (954) 921-8700 www.ci.dania-beach.fl.us