HomeMy WebLinkAbout2011 08 08 Consent 202 Resolution 2011-37 BB&T BondSYNOPSIS:
CONSIDERATIONS:
Refinance the existing debt at
the same remaining life (term)
but at the loly end of the yield
curve
ITEM 202
August 8, 2011
— ■ ■
3m 6111 1y 2y 3y 4
COMMISSION AGENDA
Regular Meeting
■
5y 6y 7y ay
Consent
Informational
Public Hearing
Regular
X
MGR. /DEPT.
2001 Bonds are in their last 10
years of the life cycle
9y 10y 15y 2 0y 30y
U.S. Treasury Yield Curve (7/28/2011)
Authorization
REQUEST: The City Manager and Finance and Administrative Services Department are requesting
the Commission adopt Bond Resolution 2011 -37 to accept the proposal by BB &T Bank to purchase the
City's, not to exceed $3,731,000, Water and Sewer System Revenue Refunding Revenue Notes, Series
2011C to refund all of the City's outstanding Water and Sewer Revenue Bonds, Series 2001; and
authorize the City Manager and City Attorney to execute all necessary documents to complete a loan
agreement with BB &T Bank.
The Purpose of this agenda item is approve the advanced refunding of the Water and Sewer
Revenue Bonds, Series 2001; take advantage of the low interest rate environment and issue a
traditional bank note to replace part of the outstanding bonds, to minimize the issuances costs
and allow for maximum flexibility for repayment of the bank notes.
In 2001 the City of Winter Springs Issued $6,065,000 Water and Sewer Refunding Revenue
Bonds, Series 2001 with a final maturity of 20 years for the purpose of refinancing the original
construction cost of the City's Utilities.
Due to the continued softness in the economy, the interest rate environment is still very favorable
to refinancing debt that is in its later stages of repayment. Typically, bonds are issued for a term
between 10 and 30 years at an increasing rate of interest as you move further from the date of
issuance. This is best illustrated by the current yield curve seen below.
4.5
4
3.5
3
2.5
1 .5
1
0.5
0
D.02
-0.02
-0.04
4.55%
4 F ?5%
4.70%
.
5.0C 5
3.12! X
L.bbti /o
2.bb" /o
? AAo/
2.bb o
1.66% 2.66%
5%
2.73%
.625
0016
. 75%
By refinancing the bonds at the short end (terms less than 30 years) of the yield curve the City
will realize substantial interest rate savings thus lowering the cost of repaying the debt. The
graph below demonstrates the benefit that could be realized if the City
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
12 -Month 2 -Year 3 -Year 5 -Year 7 -Year 10 -Year
a�
Refinancing Opportunit
US
Treasury
BB &T
—2000
Bonds
refinances the Water and Sewer Revenue Bonds, Series 2001 with a BB &T Bank Note.
There are several considerations that were analyzed to develop the recommendation to refinance
the 2001 bonds; financial gain, affordability of debt and flexibility in repayment of the debt.
Current interest rates are at historically low levels, due primarily to the U.S. enduring one of the
steepest economic contractions in many years. The Federal Reserve has maintained short and
long -term rates at very low levels in order to attempt to stimulate economic growth. These low
rates present an opportunity for the City to review its bond contracts to determine if refinancing
debt would have a positive economic impact on the City's financials.
The Series 2001 Bonds were issued on July 1, 2001 with the total principal amount of
$6,065,000 and a weight average interest rate (coupon) of 4.7862% over the 20 year term. After
10 years, the remaining principal outstanding (Series 2001) is now $3,700,000 (gross) with a
weighted average interest rate of 4.9 %. The reason the weighted average interest rate has
increased is because we have moved further away from the origination date and interest rates
tend to increase over time (see Treasury Yield Curve above). This present an opportunity!
Originally, the debt (Series 2001) was issued as an 20 year bond now the City has the
opportunity to reissue part of this debt as a 10 year note and take advantage of exceptionally low
interest rate market and the lower cost of interest for short term borrowing. These savings are
demonstrated in the chart below. We have set the new proposed 2.66% (fixed rate) bank note
next to the remaining bond payments. The net (NPV) effect of this refinancing is a savings of
$410,553 over the next ten years. This savings is accomplished without extending the length of
the debt beyond the original financing.
Date
10/1/2011
10/1/2012
10/1/2013
10/1/2014
10/1/2015
10/1/2016
10/1/2017
10/1/2018
10/1/2019
10/1/2020
10/1/2021
FISCAL IMPACT:
SAVINGS
City of Winter Springs
Refunding of the Series 2001 Bonds (BB &T)
Current
Bond Prior Receipts
$ 90,147.50 $60,098.33
480,295.00
476,645.00
472,307.50
482,267.50
475,707.50
478,312.50
474,750.00
480,250.00
479,500.00
477,750.00
Prior Debt
Service
$ 30,049.17
480,295.00
476,645.00
472,307.50
482,267.50
475,707.50
478,312.50
474,750.00
480,250.00
479,500.00
477,750.00
Refunding
Debt Service
$ 14,056.07
432,259.34
428,609.46
424,272.04
434,231.66
427,671.72
430,276.16
426,714.02
432,213.60
431,464.30
429,714.22
Annual NPV
Savings @2.6603179%
$ 15,993.10 15,708.75
48,035.66 47,131.17
48,035.54 45,871.68
48,035.46 44,642.51
48,035.84 43,443.21
48,035.78 42,269.84
48,036.34 41,124.39
48,035.98 40,004.55
48,036.40 38,911.67
48,035.70 37,843.37
48,035.78 36,801.16
$4,867,932.50 $60,098.33 $4,807,834.17 $4,311,482.59 $496,351.58 $433,752.29
Second, we have analyzed the ability of the Water and Sewer Utility pledged revenues to support
this refinancing and have determined that current utilities revenue are healthy /sufficient enough
to support this debt and to achieve a debt coverage ratio of 1.4% (1.1% is required) for the
length of this new bank note. Additionally, by issuing a traditional bank note as an alternative to
a traditional bond the City will realize a "Cost of Issuance" savings of approximately $150,000.
The final variable reviewed was the flexibility of repayment terms between bank notes and
bonds. The BB &T Bank Note has a "no prepayment penalty" clause which will permit the City
repay the loan at anytime. Bonds typically are much more rigid in their terms for repayment.
This financing request was bid via a formal Request for Proposal to all banks that had both the
financial means to bid and are of the highest investment grade quality as deemed by Standard
and Poor's and Fitch Rating. Three banks choose to bid on this financing (BB &T, Bank of
America, SunTrust Bank) and BB &T Bank put forth the best proposal for this particular request.
The RFP and the responses were managed by PFM, the City of Winter Springs' Financial
Advisor.
Upon acceptance of the refinancing of the Water and Sewer Revenue Bonds, Series 2001 by
BB &T Bank the City will realize a Net Present Value savings of $410,752.29 (10.32 %) over the
remaining 10 years until final maturity of the BB &T note on 10/1/2021. This equates to a
savings for the Water and Sewer Fund of $48,000 (nominal) annually.
COMMUNICATION EFFORTS:
This Agenda Item Has Been Electronically Forwarded To The Mayor And City Commission,
City Manager, City Attorney /Staff, And Is Available On The City's Website, LaserFiche, And
The City's Server. Additionally, Portions Of This Agenda Item Are Typed Verbatim On The
Respective Meeting Agenda Which Has Also Been Electronically Forwarded To The Individuals
Noted Above, And Which Is Also Available On The City's Website, LaserFiche, And The City's
Server; Has Been Sent To Applicable City Staff, eAlert/eCitizen Recipients, Media/Press
Representatives Who Have Requested Agendas /Agenda Item Information, Homeowner's
Associations/Representatives On File With The City, And All Individuals Who Have Requested
Such Information.
This Information Has Also Been Posted Outside City Hall, Posted Inside City Hall With
Additional Copies Available For The General Public, And Posted At Five (5) Different
Locations Around The City. Furthermore, This Information Is Also Available To Any
Individual Requestors. City Staff Is Always Willing To Discuss This Agenda Item Or Any
Agenda Item With Any Interested Individuals.
RECOMMENDATION:
The City Manager and Finance Department recommend that the City Commission accept the
BB &T offer to issue a bank note for the purposes of refunding the Water and Sewer Revenue
Bonds, Series 2001 not to exceed $3,731,000, adopt Resolution 2011 -37, and to authorize the
City Manager and City Attorney to complete all applicable paperwork necessary to complete this
refinancing.
ATTACHMENTS:
Resolution 2011 -37
BB &T Bank Contract
RESOLUTION NO. 2011-37
A RESOLUTION OF THE CITY OF WINTER SPRINGS,
FLORIDA ACCEPTING THE PROPOSAL OF BRANCH
BANKING AND TRUST COMPANY TO PURCHASE THE CITY'S
NOT TO EXCEED 53,731,000 WATER AND SEWER SYSTEM
REVENUE REFUNDING NOTE, SERIES 2011C TO REFUND ALL
OF THE CITY'S OUTSTANDING WATER AND SEWER
REFUNDING REVENUE BONDS, SERIES 2001; AUTHORIZING
THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT
WITH SAID BANK TO SECURE THE REPAYMENT OF SAID
NOTE; PROVIDING FOR THE PAYMENT OF SUCH NOTE
FROM THE NET REVENUES OF THE CITY'S WATER AND
SEWER SYSTEM ON PARITY WITH CERTAIN OUTSTANDING
WATER AND SEWER DEBT OF THE CITY, ALL AS PROVIDED
IN THE LOAN AGREEMENT; AUTHORIZING THE PROPER
OFFICIALS OF THE CITY TO DO ANY OTHER ADDITIONAL
THINGS DEEMED NECESSARY OR ADVISABLE IN
CONNECTION WITH THE EXECUTION OF THE LOAN
AGREEMENT, THE NOTE, AND THE SECURITY THEREFOR;
AUTHORIZING THE EXECUTION AND DELIVERY OF AN
ESCROW DEPOSIT AGREEMENT AND OTHER DOCUMENTS
IN CONNECTION WITH SAID LOAN; PROVIDING FOR
SEVERABILITY; DESIGNATING THE NOTE AS "BANK
QUALIFIED;" AND PROVIDING AN EFFECTIVE DATE.
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER
SPRINGS, FLORIDA, AS FOLLOWS:
SECTION 1. AUTHORITY FOR THIS RESOLUTION. This Resolution is
adopted pursuant to the provisions of Chapter 166, Florida Statutes, the Florida Constitution, and
other applicable provisions of law.
SECTION 2. FINDINGS. It is hereby ascertained, determined and declared:
(A) The City of Winter Springs, Florida (the "City ") deems it necessary,
desirable and in the best interests of the City that the City refund all of the City's Water and
Sewer Refunding Revenue Bonds, Series 2001 (the "Refunded Bonds "), all as more particularly
described in the Loan Agreement (as defined herein).
(B) Pursuant to Section 2(b), Article VIII of the State Constitution, and
Section 166.021, Florida Statutes, municipalities have the governmental, corporate and
proprietary powers to enable them to conduct municipal government, perform municipal
functions, and render municipal services, and may exercise any power for municipal purposes,
except when expressly prohibited by law. The issuance by the City of its Water and Sewer
System Revenue Refunding Note, Series 2011C (the "2011C Note ") and the execution and
101695872;1 }
delivery of the Loan Agreement for the purposes of refunding the Refunded Bonds is not
prohibited by law.
(C) The 2011C Note will be issued as "Additional Parity Obligations" in
accordance with the provisions of City Resolution No. 665 (the "Original Instrument ") and will
be secured by the Net Revenues as provided in Section 6 hereof and the Loan Agreement
pursuant to which the City will issue the 2011C Note to secure the repayment of the Loan (as
defined in the Loan Agreement).
(D) In accordance with the provisions of the Original Instrument, it is hereby
found that all of the covenants contained in said resolution shall be fully applicable to the 2011C
Note except as otherwise provided in the Loan Agreement.
(E) The City has engaged Public Financial Management, Inc. ( "PFM ") as the
City's financial advisor. PFM advises the City that due to the present volatility of the market for
municipal debt, it is in the best interest of the City to issue the 2011C Note pursuant to the Loan
Agreement by negotiated sale, allowing the City to issue the 2011C Note at the most
advantageous time, rather than a specified advertised future date, thereby allowing the City to
obtain the best possible price, interest rate and other terms for the 2011C Note and, accordingly,
the City Commission of the City hereby finds and determines that it is in the best financial
interest of the City that a negotiated sale of the 2011C Note to Branch Banking and Trust
Company (the "Bank ") be authorized.
SECTION 3. AUTHORIZATION OF REFUNDING OF REFUNDED BONDS.
The City hereby authorizes the refunding of the Refunded Bond as more particularly described in
the Loan Agreement.
SECTION 4. ACCEPTANCE OF COMMITMENT LETTER WITH BANK.
Based on a recommendation from the City's financial advisor, the City hereby accepts the
commitment letter of the Bank dated July 7, 2011 attached hereto to provide the City with the
Loan.
SECTION 5, APPROVAL OF FORM OF AND AUTHORIZATION OF LOAN
AGREEMENT AND EXECUTION OF LOAN AGREEMENT AND 2011C NOTE. The
repayment of the loan as evidenced by the 2011 C Note shall be pursuant to the terms and
provisions of the Loan Agreement and the 2011C Note. The City hereby approves the Loan
Agreement by and between the City and the Bank in substantially the form attached hereto as
Exhibit A (the "Loan Agreement ") and authorizes the Mayor or the Deputy
Mayor /Commissioner of the City (collectively, the "Mayor ") and the City Clerk or any deputy or
assistant City Clerk of the City (collectively, the "City Clerk ") to execute and deliver on behalf
of the City the Loan Agreement and the 2011C Note in substantially the form attached to the
Loan Agreement, with such changes, insertions and additions as they may approve, their
execution thereof being evidence of such approval.
SECTION 6. PAYMENT OF DEBT SERVICE ON 2011C NOTE, Pursuant to
the Loan Agreement, the 2011C Note will be secured by the Net Revenues of the City's Water
{01695872;1) 2
and Sewer System on parity with other City debt, all as more particularly described in the Loan
Agreement.
SECTION 7. AUTHORIZATION OF OTHER DOCUMENTS TO EFFECT
TRANSACTION. To the extent that other documents including but not limited to an escrow
deposit agreement, redemption notices, certificates, opinions, or other items are needed to effect
any of the transactions referenced in this Resolution, the Loan Agreement, the 201 IC Note, and
the security therefore, the Mayor, the City Clerk, the City Manager, the Finance Director and the
City Attorney are hereby authorized to execute and deliver such documents, certificates,
opinions, or other items and to take such other actions as are necessary for the full, punctual, and
complete performance of the covenants, agreements, provisions, and other terms as are contained
herein and in the documents included herein by reference.
SECTION 8. PAYING AGENT AND REGISTRAR. The City hereby accepts
the duties to serve as registrar and paying agent for the 2011C Note.
SECTION 9. LIMITED OBLIGATION. The obligation of the City to repay
amounts under the Loan Agreement and the 2011C Note are limited and special obligations,
payable solely from the sources and in the manner set forth in the Original Instrument and the
Loan Agreement and shall not be deemed a pledge of the faith and credit or taxing power of the
City.
SECTION 10. EFFECT OF PARTIAL INVALIDITY. If any one or more
provisions of this Resolution, the Loan Agreement, or the 2011C Note shall for any reason be
held to be illegal or invalid, such illegality or invalidity shall not effect any other provision of
this Resolution, the 2011C Note or the Loan Agreement, but this Resolution, the Loan
Agreement, and the 2011C Note shall be construed and enforced as if such illegal or invalid
provision had not been contained therein. The 2011C Note and Loan Agreement shall be issued
and this Resolution is adopted with the intent that the laws of the State of Florida shall govern
their construction.
SECTION I I. DESIGNATION OF 2011C NOTE AS BANK QUALIFIED.
The City designates the 2011C Note as a "qualified tax - exempt obligation" within the meaning
of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code "). The City
does not reasonably anticipate that the City, any subordinate entities of the City, and issuers of
debt that issue "on behalf' of the City, will during the calendar year 2011 issue more than
$10,000,000 of "tax- exempt" obligations, exclusive of those obligations described in Section
265(b)(3)(C)(ii) of the Code.
SECTION 12. EFFECTIVE DATE. This Resolution shall take effect
immediately upon its adoption.
[Signatures on Following Page]
{01695812;1} 3
[SEAL]
ATTEST:
PASSED, APPROVED AND ADOPTED this 8 day of August, 2011.
By
City Clerk
Approved as to form:
By
City Attorney
101695872;1} 4
CITY OF WINTER SPRINGS, FLORIDA
By:
Mayor
{01696577;1)
LOAN AGREEMENT
Dated as of August 10, 2011
By and Between
THE CITY OF WINTER SPRINGS, FLORIDA
(the "City ")
and
BRANCH BANKING AND TRUST COMPANY
(the "Bank ")
ARTICLE 1
Section 1
Section 1
Section 1
ARTICLE II
Section 2
Section 2
Section 2
ARTICLE III
Section 3
Section 3
Section 3
Section 3
Section 3
Section 3
Section 3
Section 3
ARTICLE IV
Section 4
Section 4
Section 4
Section 4
Section 4
ARTICLE V
Section 5
ARTICLE VI
Section 6.01.
Section 6.02.
Section 6.03.
Section 6.04,
Section 6,05.
Section 6.06.
Section 6.07.
Section 6.08.
Section 6.09.
Section 6.10.
Section 6.11.
401696577;1} 1
TABLE OF CONTENTS
(The Table of Contents for this Loan Agreement is for convenience of reference only and
is not intended to define, limit or describe the scope or intent of any provisions of this Loan
Agreement.)
Page
DEFINITION OF TERMS 1
.01. Definitions 1
,02. Interpretation 3
.03. Titles and Headings 4
REPRESENTATIONS AND WARRANTIES OF THE PARTIES 4
.01. Representations and Warranties of City 4
.02. Covenants of the City 4
.03. Representations and Warranties of Bank 5
THE 2011C NOTE 5
.01. Purpose and Use 5
.02. The 2011C Note 5
.03. Adjustments to 2011C Note Rate 6
.04, Conditions Precedent to Issuance of 2011C Note 7
.05. Registration of Transfer; Assignment of Rights of Bank 8
.06. Ownership of the 2011C Note 9
.07. Use of Proceeds of 2011C Note Permitted Under Applicable Law 9
.08. Authentication 9
COVENANTS OF THE CITY 9
,01. Performance of Covenants 9
.02. Payment of 2011C Note 10
.03. Tax Covenant 10
.04. Application of Provisions of Original Instrument 10
.05. Compliance with Laws and Regulations 10
EVENTS OF DEFAULT AND REMEDIES 11
.01. Events of Default; Remedies 11
MISCELLANEOUS PROVISIONS 11
Covenants of City, Etc.; Successors 11
Term of Agreement I 1
Amendments and Supplements 11
Notices 11
Benefits Exclusive 12
Severability 12
Payments Due on Saturdays, Sundays and Holidays 12
Counterparts 12
Applicable Law 12
No Personal Liability 13
Incorporation by Reference 13
Exhibit A Form of Note Including Purchaser's Certificate A -1
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement "), made and entered into this 10 day of
August, 2011, by and between THE CITY OF WINTER SPRINGS, FLORIDA (the "City "), a
municipal corporation of the State of Florida, and BRANCH BANKING AND TRUST
COMPANY, a North Carolina state banking corporation authorized to do business in Florida,
and its successors and assigns (the "Bank ").
WITNESSETH:
WHEREAS, capitalized terms used in these recitals and not otherwise defined shall have
the meanings specified in Article I of this Agreement;
WHEREAS, the City, pursuant to the provisions of the Florida Constitution, Chapter
166, Florida Statutes, City Resolution No. 665 adopted by the City Commission of the City on
April 29, 1991, and other applicable provisions of law (all of the foregoing, collectively, the
"Act "), and Resolution No. 2011 --37, adopted by the City on August 8, 2011, is authorized to
borrow money, and more particularly issue the Note described below for the City's public
purposes; and
WHEREAS, in response to a request for proposal regarding an intended borrowing to
refund the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 2001 (the
"Refunded Bonds "), the Bank submitted its commitment, dated July 7, 2011, to the City (the
"Commitment "); and
WHEREAS, pursuant to City Resolution No. 2011 ---37, the City has accepted the
Commitment and the Bank is willing to purchase the Note (as hereinafter defined), but only upon
the terms and conditions of this Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITION OF TERMS
Section 1.01. Definitions. Capitalized terms used in this Agreement shall have the
respective meanings assigned thereto by the Original Instrument (as hereinafter defined) and the
following terms not otherwise defined shall have the respective meanings as follows unless the
context clearly requires otherwise:
"Act" shall have the meaning assigned to that term in the recitals hereof.
"Agreement" shall mean this Loan Agreement and all modifications, alterations,
amendments and supplements hereto made in accordance with the provisions hereof.
"Bank" shall mean Branch Banking and Trust Company, a North Carolina state banking
corporation, and its successors and assigns.
{01696577;1) 1
"Bond Counsel" shall mean, Akerinan Senterfitt, or any other attorney at law or firm of
attorneys of nationally recognized standing in matters pertaining to the federal tax exemption of
interest on obligations issued by states and political subdivisions hired by the City to render an
opinion on such matters with regard to the Note.
"Business Day" shall mean any day other than a Saturday, a Sunday, or a day on which
the office of the Holder at which payments on the Note are due or the offices of the City are
lawfully closed.
"City" shall mean the City of Winter Springs, Florida, a municipal corporation of the
State of Florida.
"City Clerk" shall mean the City Clerk or any deputy or assistant city clerk of the City
and such other person as may be duly authorized to act on his or her behalf
"City Manager" shall mean the City Manager of the City and such other person as may be
duly authorized to act on his or her behalf.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time,
and the applicable rules and regulations promulgated thereunder.
"Debt Service" means principal and interest, and other debt - related costs, due in
connection with the Note, as applicable.
"Default Rate" shall mean the 2011C Note Rate plus two percent (2.0 %) provided such
rate shall not exceed the highest rate of interest allowed by applicable law.
"Determination of Taxability" shall mean, with respect to the Note, any determination,
decision or decree by the Commissioner or any District Director of the Internal Revenue Service,
as such officers are identified by the Code, or any court of competent jurisdiction, or delivery of
an opinion of Bond Counsel, that the interest payable under the Note is includable in the gross
income (as defined in Section 61 of the Code) of the I-lolder as a result of the occurrence of a
Taxable Event (as hereinafter defined).
"Escrow Deposit Agreement" shall mean that certain agreement between the City and
U.S. Bank National Association as escrow agent pursuant to which amounts shall be deposited
and invested in trust to provide for the payment of the Refunded Bonds as provided therein,
"Event of Default" shall mean an Event of Default as defined in Section 5.01 of this
Agreement.
"Finance Director" shall mean the City's Finance and Administrative Services Director or
such other person as may be duly authorized to act on his or her behalf.
"Financial Advisor" shall mean Public Financial Management, Inc.
i01696577;1} 2
"Fiscal Year" shaII mean the 12 -month period commencing October 1 of each year and
ending on the succeeding September 30, or such other 12 -month period as the City may
designate as its "fiscal year" as permitted by law.
"Loan" shall refer to an amount equal to the outstanding principal of the Note, together
with unpaid interest and penalties, if any, which have accrued.
"Maturity Date" shall mean the date on which all principal and all unpaid interest accrued
on the Note shall be due and payable in full, which date shall be, if not sooner due to
prepayment, October 1, 2021.
"Noteholder" or "Holder" shall mean the Bank as the holder of the Note and any
subsequent registered holder of the Note.
"Original Instrument" shall mean Resolution No. 665 of the City adopted by the City
Commission on April 29, 1991, as amended and supplemented to the date hereof.
"Parity Obligations" shall mean collectively the City's outstanding Water and Sewer
System Revenue Refunding Note, Series 2011A, the City's outstanding Water and Sewer System
Revenue Refunding Note, Series 201113 and the City's outstanding Water and Sewer Refunding
Revenue Bonds, Series 2000.
"Payment Date" shall mean each April 1 and October 1, commencing October 1, 2011
until the 2011C Note has been paid in full.
"Pledged Revenues" means the Net Revenues.
"Project" shall have the meaning set forth in the "Whereas" clauses to this Agreement.
"Refunded Bonds" shall have the meaning set forth in the "Whereas" clauses to this
Agreement.
"Resolution" shall mean Resolution No. 2011 -37, adopted at a meeting of the City
Commission on August 8, 2011, which, among other things, authorized the execution and
delivery of this Agreement and the issuance of the 2011C Note.
"2011C Note" shall mean the City of Winter Springs, Florida Water and Sewer System
Revenue Refunding Note, Series 2011C issued by the City under the Agreement and the
Resolution.
"2011C Note Rate" shall mean the rate of interest to be borne by the 2011C Note which
shall be a fixed rate equal to 2.66% per annum calculated on the basis of a 360 -day year of 12,
30-day months.
Section 1.02. Interpretation. Unless the context clearly requires otherwise, words of
masculine gender shall be construed to include correlative words of the feminine and neuter
genders and vice versa, and words of the singular number shall be construed to include
correlative words of the plural number and vice versa. This Agreement and all the terms and
101696577;1 } 3
provisions hereof shall be construed to effectuate the purpose set forth herein and to sustain the
validity hereof.
Section 1.03. Titles and Headings. The titles and headings of the Articles and Sections
of this Agreement, which have been inserted for convenience of reference only and are not to be
considered a part hereof, shall not in any way modify or restrict any of the terms and provisions
hereof, and shall not be considered or given any effect in construing this Agreement or any
provision hereof or in ascertaining intent, if any question of intent should arise.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
Section 2.01, Representations and Warranties of City. The City represents and
warrants to the Bank as follows:
(a) Existence. The City is a municipal corporation of the State of Florida, duly
created and validly existing under the laws of the State of Florida, with full power to enter into
this Agreement, to perform its obligations hereunder and to issue and deliver the 2011C Note to
the Bank. The making, execution and performance of this Agreement on the part of the City and
the issuance and delivery of the 2011C Note has been duly authorized by all necessary action on
the part of the City and will not violate or conflict with the Act, or any agreement, indenture or
other instrument by which the City or any of its material properties is bound.
(b) Validity, Etc. This Agreement, the 2011 C Note, the Escrow Deposit Agreement
and the Resolution are valid and binding obligations of the City enforceable against the City in
accordance with their respective terms, except to the extent that enforceability may be subject to
valid bankruptcy, insolvency, financial emergency, reorganization, moratorium or similar laws
relating to or from time to time affecting the enforcement of creditors' rights and except to the
extent that the availability of certain remedies may be precluded by general principles of equity.
(c) No Financial Material Adverse Change. No material adverse change in the
financial condition of the City or the Pledged Revenues has occurred since the audited financial
statements of the City for its year ended September 30, 2011.
(d) Powers of City. The City has the legal power and authority to pledge the Pledged
Revenues to the repayment of the 2011C Note as described herein.
(e) Authorizations, etc. No authorization, consent, approval, license, exemption of or
registration or filing with any court or governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, has been or will be necessary for the valid
execution, delivery and performance by the City of this Agreement, the 2011C Note and the
related documents, except such as have been obtained, given or accomplished.
Section 2.02. Covenants of the City. The City covenants as follows:
The City will furnish to the Bank (i) within 210 days following the end of each Fiscal
Year, a comprehensive annual financial report of the City for such Fiscal Year prepared in
{ 01696577;1 } 4
accordance with generally accepted accounting standards, which shall include a balance sheet
and income statement as of the end of such Fiscal Year, and an audit report of an independent
CPA, (ii) within 30 days of adoption in each year the current annual budget of the City, and (iii)
any other information which the Bank may reasonably request.
Section 2.03. Representations and Warranties of Bank. The Bank represents and
warrants to the City as follows:
(a) Existence. The Bank is a North Carolina state banking corporation, authorized to
do business in the State of Florida, with full power to enter into this Agreement, to perform its
obligations hereunder and to make the Loan. The performance of this Agreement on the part of
the Bank and the making of the Loan have been duly authorized by all necessary action on the
part of the Bank and will not violate or conflict with applicable law or any material agreement,
indenture or other instrument by which the Bank or any of its material properties is bound.
(b) Validity. This Agreement is a valid and binding obligation of the Bank
enforceable against the Bank in accordance with its terms, except to the extent that enforceability
may be subject to valid bankruptcy, insolvency, financial emergency, reorganization, moratorium
or similar laws relating to or from time to time affecting the enforcement of creditors' rights (and
specifically creditors' rights as the same relate to banks) and except to the extent that the
availability of certain remedies may be precluded by general principles of equity.
(c) Knowledge and Experience. The Bank (i) has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and risks of making the
Loan and investing in the 2011C Note, (ii) has received and reviewed such financial information
concerning the Pledged Revenues as it has needed in order to fairly evaluate the merits and risks
of making the Loan and investing in the 2011C Note; and (iii) is purchasing the 2011C Note as
an investment for its own account and not with a current view toward resale to the public.
Section 3.01. Purpose and Use. On the date of this Agreement, the Bank shall make
available to the City the Loan in the principal amount of Million
Hundred Thousand Hundred and No /100 Dollars
($ .00). The Loan will be evidenced by the 2011C Note. [The proceeds of the
2011C Note shall be used solely to currently refund the Refunded Bonds and to pay costs of
issuing the 2011C Note.]
Section 3.02. The 2011C Note. The 2011C Note shall be substantially in the form set
forth as Exhibit A to this Agreement. The general terms of the 2011C Note shall be as follows:
be
(a)
ARTICLE III
THE 2011C NOTE
Amount of 2011C Note. The aggregate principal amount of the 2011C Note shall
Million Hundred Thousand Hundred
and No /100 Dollars ($ .00).
t 01696577;1) 5
(b) Interest. The 2011C Note shall bear interest at the 2011C Note Rate payable on
each Payment Date. The 2011C Note Rate shall be subject to adjustment as provided in Section
3.03 hereof. The Noteholder shall promptly notify the City in writing of any adjustments in a
Note Rate. Notwithstanding any provision hereof the contrary, in no event shall the interest rate
on the 2011C Note exceed the maximum rate permitted by law. Interest on the 2011C Note shall
be computed on the basis of 12, 30 -day months and a 360 -day year.
(c) Prepayments and Principal Payments. The 2011C Note shall be subject to
prepayment at the option of the City, as provided in the 2011C Note. Any prepayment shall be
made on such Payment Date as shall be specified by the City in a written notice delivered to the
Noteholder not less than five (5) days prior to the specified prepayment date. Any prepayment
shall be applied first to accrued interest, then to other amounts owed the Holder, and finally to
principal as directed by the City.
Principal on the 2011C Note is payable on each October 1 commencing October 1, 2011
as set forth in the 2011C Note.
Section 3.03. Adjustments to 2011C Note Rate. The 2011C Note Rate shall be subject
to adjustment by the Bank as hereinafter described and as provided in the Note.
In the event of a Determination of Taxability, the 2011C Note Rate shall be adjusted to
cause the yield on such 2011C Note to equal what the yield on that 2011C Note would have been
absent such Determination of Taxability (the "Taxable Rate ") effective retroactively to the date
on which such Determination of Taxability was made. Immediately upon a Determination of
Taxability, the City agrees to pay to the Noteholder subject to such Determination of Taxability
the Additional Amount (as defined herein). "Additional Amount" means (1) the difference
between (a) interest on such 2011C Note for the period commencing on the date on which the
interest on such 2011C Note (or portion thereof) loses its "tax- exempt" status and ending on the
earlier of the date such 2011C Note ceased to be outstanding or such adjustment is no longer
applicable to such 2011C Note (the "Taxable Period ") at a rate equal to the Taxable Rate and (b)
the aggregate amount of interest payable on such 2011C Note for the Taxable Period under the
provisions of such 2011C Note without considering the Determination of Taxability, plus (ii) any
penalties and interest paid or payable by such Noteholder to the Internal Revenue Service by
reason of such Determination of Taxability.
If the 2011C Note ceases to be a "qualified tax - exempt obligation" then the 2011C Note
Rate shall be adjusted to cause the yield on the 2011C Note to equal what the yield on the 2011C
Note would have been in the absence of such change. If the tax laws or regulations are amended
to increase yield on the 2011C Note to the Noteholder, then the Noteholder shall adjust the
interest rate on the 2011C Note to cause the yield on the 2011C Note to equal what the yield on
the 2011C Note would have been in the absence of such change or amendment in the tax laws or
regulations.
The Noteholder shall promptly notify the City in writing of any adjustments pursuant
hereto. Such adjustments shall become effective as of the effective date of the event causing
such adjustment. Adjustments pursuant hereto may be retroactive. The Noteholder shall certify
to the City in writing the additional amount, if any, due to the Noteholder as a result of an
{01696577;1 } 6
adjustment pursuant hereto, Notwithstanding any provision hereto the contrary, in no event shall
the interest rate on the 2011C Note exceed the maximum rate permitted by law,
Section 3.04. Conditions Precedent to Issuance of 2011C Note. Prior to or
simultaneously with the delivery of the 2011C Note, there shall be filed with the Bank_ the
following, each in form and substance reasonably acceptable to the Bank:
(a) an opinion of legal counsel to the City substantially to the effect that (i) the
Resolution has been duly adopted and this Agreement, the Escrow Deposit Agreement and the
2011C Note have been duly authorized, executed and delivered by the City and each constitutes
a valid, binding and enforceable agreement of the City in accordance with their respective terms,
except to the extent that the enforceability of the rights and remedies set forth therein may be
limited by bankruptcy, insolvency, financial emergency or other laws affecting creditors` rights
generally or by usual equity principles; (ii) the City's execution, delivery and performance of this
Agreement, the Escrow Deposit Agreement and execution and issuance of the 2011C Note are
not subject to any authorization, consent, approval or review of any governmental body, public
officer or regulatory authority not heretofore obtained or effected; (iii) the execution, issuance
and delivery of the 2011C Note has been duly and validly authorized by the City, and the 2011C
Note constitutes a valid and binding special obligation of the City enforceable in accordance with
its terms; (iv) the City (A) is a municipal corporation duly organized and validly existing under
the laws of the State of Florida, and (B) has power and authority to adopt the Resolution, to
execute and deliver this Agreement, and the Escrow Deposit Agreement to execute and deliver
the 2011C Note, and to consummate the transactions contemplated by such instruments; (v) the
execution, delivery and performance of the 2011C Note and this Agreement, and compliance
with the terms thereof and hereof, under the circumstances contemplated hereby, do not and will
not in any material respect conflict with, or constitute on the part of the City a breach or default
under, any indenture, mortgage, deed of trust, agreement or other instrument to which the City or
to which its properties are subject or conflict with, violate or result in a breach of any existing
law, administrative rule or regulation, judgment, court order or consent decree to which the City
or its properties are subject; (vi) to the best of such counsel's knowledge, there is no claim,
action, suit, proceeding, inquiry, investigation, litigation or other proceeding, at law or in equity,
pending or threatened in any court or other tribunal, state or federal (W) restraining or enjoining,
or seeking to restrain or enjoin, the issuance, sale, execution or delivery of the 2011C Note, (X)
in any way questioning or affecting the validity or enforceability of any provision of this
Agreement, the 2011C Note, or the Resolution, (Y) in any way questioning or affecting the
validity of any of the proceedings or authority for the authorization, sale, execution or delivery of
the 2011C Note, or of any provision made or authorized for the payment thereof, or (Z)
questioning or affecting the organization or existence of the City or the right of any of its officers
to their respective offices; (vii) the City has the legal authority to refund the Refunded Bonds, to
grant a lien on the Pledged Revenues as described herein and in the Resolution; and (viii) all
conditions contained in the ordinances and resolutions of the City precedent to the issuance of
the 2011C Note have been complied with;
(b) an opinion of Bond Counsel (who may rely on opinion of legal counsel to the
City), substantially to such effect that such counsel is of the opinion that: (i) this Loan
Agreement constitutes a valid and binding obligation of the City enforceable upon the City in
accordance with its terms; (ii) the 2011C Note is a valid and binding special obligation of the
(01696577;1) 7
City enforceable in accordance with their terms, payable solely from the sources provided
therefor in this Loan Agreement; (iii) assuming compliance by the City with certain covenants
relating to requirements contained in the Code interest on the 2011C Note is excluded from gross
income for purposes of federal income taxation; (iv) the lien of the Refunded Bonds on the Net
Revenues has been discharged; and (v) the 2011C Note is a "qualified tax - exempt obligation"
within the meaning of Section 265(b)(3) of the Code;
(c) a copy of a completed and executed Form 8038 -G to be filed with the Internal
Revenue Service by the City;
and
(d) the original executed 2011C Note, Escrow Deposit Agreement and Agreement;
(e) such other documents as the Bank reasonably may request (including, without
limitation, Florida Division of Bond Finance forms).
When the documents and items mentioned in clauses (a) through (e), inclusive, of this
Section shall have been filed with the Bank, and when the 2011C Note shall have been executed
as required by this Agreement, the City shall deliver the 2011C Note to or upon the order of the
Bank upon receipt of the purchase price therefor.
Section 3.05. Registration of Transfer; Assignment of Rights of Bank. The City
shall keep at the office of the City Clerk in the City's records the registration of the 2011C Note
and the registration of transfers of the 2011C Note as provided in this Agreement. The transfer
of the 2011C Note may be registered only upon the books kept for the registration of the 2011C
Note and registration of transfer thereof upon surrender thereof to the City together with an
assignment duly executed by the Noteholder or its attorney or legal representative in the form of
the assignment set forth on the form of the 201 IC Note attached as Exhibit A to this Agreement;
provided, however, that such series of the 2011C Note may be transferred only in whole and not
in part. In the case of any such registration of transfer, the City shall execute and deliver in
exchange for the 2011C Note a new 2011C Note of the applicable series registered in the name
of the transferee. In all cases in which a 2011C Note shall be transferred hereunder, the City
shall execute and deliver at the earliest practicable time a new 2011C Note in accordance with
the provisions of this Agreement. The City may make a charge for every such registration of
transfer of a 2011C Note sufficient to reimburse it for any tax or other governmental charges
required to be paid with respect to such registration of transfer, but no other charge shall be made
for registering the transfer hereinabove granted. The 2011C Note shall be issued in fully
registered form and shall be payable in any lawful coin or currency of the United States.
The registration of transfer of a 2011C Note on the registration books of the City shall be
deemed to effect a transfer of the rights and obligations of the Bank under this Agreement to the
transferee. Thereafter, such transferee shall be deemed to be the Bank under this Agreement and
shall be bound by all provisions of this Agreement that are binding upon the Bank. The City and
the transferor shall execute and record such instruments and take such other actions as the City
and such transferee may reasonably request in order to confirm that such transferee has
succeeded to the capacity of Bank under this Agreement and the 2011C Note.
{01696577;1) 8
The Holder of a 2011C Note is hereby granted power to transfer absolute title thereof by
assignment thereof to a bona fide purchaser for value (present or antecedent) without notice of
prior defenses or equities or claims of ownership enforceable against such owner's assignor or
any person in the chain of title and before the maturity of the 2011C Note; provided, however,
that no transfer shall be permitted absent the City's receipt of a certificate in form and substance
similar to the one included as part of Exhibit A hereto from such proposed transferee. Every
prior Holder of a 2011C Note shall be deemed to have waived and renounced all of such owner's
equities or rights therein in favor of every such bona fide purchaser, and every such bona fide
purchaser shall acquire absolute title thereto and to all rights represented thereby.
In the event any 2011C Note is mutilated, lost, stolen, or destroyed, the City shall execute
a new 2011C Note of like date and denomination as that mutilated, lost, stolen or destroyed,
provided that, in the case of any mutilated 2011C Note, such mutilated 2011C Note shall first be
surrendered to the City, and in the case of any lost, stolen, or destroyed 2011C Note, there first
shall be furnished to the City evidence of such loss, theft or destruction together with an
indemnity satisfactory to it.
Section 3.06. Ownership of the 2011C Note. The person in whose name a 2011C Note
is registered shall be deemed and regarded as the absolute owner thereof for all purposes, and
payment of or on account of a 2011C Note shall be made only to the Holder thereof or such
owner's legal representative. All such payments shall be valid and effectual to satisfy and
discharge the liability upon the 2011C Note, and interest thereon, to the extent of the sum or
sums so paid.
Section 3.07. Use of Proceeds of 2011C Note Permitted Under Applicable Law. The
City represents, warrants and covenants that the proceeds of the 2011C Note will be used as
provided in Section 3,01 hereof, and that such use is permitted by applicable law.
Section 3.08. Authentication. Until a 2011C Note shall have endorsed thereon a
certificate of authentication substantially in the form set forth in Exhibit A, duly executed by the
manual signature of the registrar as authenticating agent, it shall not be entitled to any benefit or
security under this Loan Agreement. A 2011C Note shall not be valid or obligatory for any
purpose unless and until such certificate of authentication shall have been duly executed by the
registrar, and such certificate of the registrar upon a 2011C Note shall be conclusive evidence
that such 2011C Note has been duly authenticated and delivered under this Loan Agreement.
ARTICLE IV
COVENANTS OF THE CITY
Section 4.01. Performance of Covenants. The City covenants that it will perform
faithfully at all times its covenants, undertakings and agreements contained in this Agreement
and the 2011C Note and in any proceedings of the City relating to the Loan,
{01696577M i } 9
Section 4.02. Payment of 2011C Note.
(a) The City does hereby irrevocably pledge the Pledged Revenues as security for the
repayment of the 2011C Note. The lien of the 2011C Note on the Pledged Revenues is on parity
with the lien thereon of the Parity Obligations.
(b) The 2011C Note is a special obligation of the City secured solely by the Pledged
Revenues and payable from the Pledged Revenues as provided in this Agreement. The 2011C
Note will not constitute a general debt, liability or obligation of the City or the State of Florida or
any political subdivision thereof within the meaning of any constitutional or statutory limitation.
Neither the faith and credit nor the taxing power of the City or of the State of Florida or any
political subdivision thereof is pledged to the payment of the principal of or interest on the
2011C Note and the Noteholder shall never have the right to compel any exercise of any ad
valorem taxing power of the City or of the State of Florida or any political subdivision thereof,
directly or indirectly to enforce such payment. The 2011C Note shall not constitute a lien upon
any property of the City except upon the Pledged Revenues.
Section 4.03. Tax Covenant. The City covenants to the Noteholder that the City will
not make any use of the proceeds of the 2011C Note at any time during the term of such 2011C
Note which, if such use had been reasonably expected on the date the 2011C Note was issued,
would have caused such 2011C Note to be an "arbitrage bond" within the meaning of the Code.
The City will do all acts including complying with the requirements of the Code and any valid
and applicable rules and regulations promulgated thereunder necessary to insure the exclusion of
interest on the 2011C Note from the gross income of the Holders thereof for purposes of federal
income taxation.
Section 4.04. Application of Provisions of Original Instrument. The 201IC Note
shall for all purposes be considered to be Additional Parity Obligations issued under the
authority of Section 19N of the Original Instrument and shall be entitled to all the protection and
security provided in and by the Original Instrument for Additional Parity Obligations, and the
2011C Note shall be in all respects entitled to the same security, rights and privileges enjoyed by
the Parity Obligations except as otherwise provided herein. The debt service on the 2011C Note
shall be payable on a parity with the Parity Obligations provided however, the 2011C Note shall
have no lien or otherwise be entitled to payments from any amounts on deposit in the Reserve
Account or any subaccount therein. The terns and provisions of the Original Instrument as
supplemented hereby shall remain in full force and effect and be applicable with respect to the
2011C Note.
Section 4.05. Compliance with Laws and Regulations. The City shall maintain
compliance with all federal, state and local laws and regulations applicable to the refunding of
the Refunded Bonds and the Loan.
101696577;1 }
10
Section 5.01. Events of Default; Remedies. The provisions of Section 21 of the
Original Instrument shall apply for purposes of this Loan Agreement and shall be applied to the
2011C Note as though fully restated herein,
{01696577;11
(a) As to the City:
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01. Covenants of City, Etc.; Successors. All of the covenants, stipulations,
obligations and agreements contained in this Agreement shall be deemed to be covenants,
stipulations, obligations and agreements of the City to the full extent authorized or permitted by
law, and all such covenants, stipulations, obligations and agreements shall be binding upon the
successor or successors thereof from time to time, and upon any officer, board, commission,
authority, agency or instrumentality to whom or to which any power or duty affecting such
covenants, stipulations, obligations and agreements shall be transferred by or in accordance with
law.
Section 6.02. Term of Agreement. This Agreement shall be in full force and effect
from the date hereof until the 2011C Note and all other sums payable to the Holder hereunder
have been paid in full.
Section 6.03. Amendments and Supplements. This Agreement may be amended or
supplemented from time to time only by a writing duly executed by each of the City and the
Noteholders.
Section 6.04. Notices. Any notice, demand, direction, request or other instrument
authorized or required by this Agreement to be given to or filed with the City or the Bank, shall
be deemed to have been sufficiently given or filed for all purposes of this Agreement if and
when sent by certified mail, return receipt requested:
City of Winter Springs, Florida
City Hall
1126 East State Road 434
Winter Springs, Florida 32708
Attention: Finance and Administrative Services Director
11
(b) As to the Bank:
Branch Banking and Trust Company
5130 Parkway Plaza Boulevard, Building No. 9
Charlotte, North Carolina 28217
Attention: Account Administration/Municipal
or at such other address as shall be furnished in writing by any such party to the other, and shall
be deemed to have been given as of the date so delivered or deposited in the United States mail.
Either party may, by notice sent to the other, designate a different or additional address to which
notices under this Agreement are to be sent.
Section 6.05. Benefits Exclusive. Except as herein otherwise provided, nothing in this
Agreement, expressed or implied, is intended or shall be construed to confer upon any person,
firm or corporation, other than the City and the Noteholder, any right, remedy or claim, legal or
equitable, under or by reason of this Agreement or any provision hereof, this Agreement and all
of its provisions being intended to be and being for the sole and exclusive benefit of the City and
the Noteholder.
Section 6.06. Severability. In case any one or more of the provisions of this
Agreement, any amendment or supplement hereto or of the 2011C Note shall for any reason be
held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of
this Agreement, any amendment or supplement hereto or the 2011C Note, but this Agreement,
any amendment or supplement hereto and the 201 C Note shall be construed and enforced at the
time as if such illegal or invalid provisions had not been contained therein, nor shall such
illegality or invalidity or any application thereof affect any legal and valid application thereof
from time to time. In case any covenant, stipulation, obligation or agreement contained in the
2011C Note or in this Agreement shall for any reason be held to be in violation of law, then such
covenant, stipulation, obligation, or agreement shall be deemed to be the covenant, stipulation,
obligation or agreement of the City to the full extent from time to time permitted by law.
Section 6.07. Payments Due on Saturdays, Sundays and Holidays. In any ease where
the date of maturity of interest on or principal of the 2011C Note or the date fixed for
prepayment of the 2011C Note shall be other than a Business Day, then payment of such interest
or principal shall be made on the next succeeding Business Day with the same force and effect as
if paid on the date of maturity or the date fixed for prepayment, and no interest on any such
principal amount shall accrue for the period after such date of maturity or such date fixed for
prepayment.
Section 6.08. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered, shall be an original; but such
counterparts shall together constitute but one and the same Agreement, and, in making proof of
this Agreement, it shall not be necessary to produce or account for more than one such
counterpart.
Section 6.09. Applicable Law. This Agreement shall be governed exclusively by and
construed in accordance with the applicable laws of the State of Florida.
{01696577;1}
12
Section 6.10. No Personal Liability. Notwithstanding anything to the contrary
contained herein or in the 2011C Note, or in any other instrument or document executed by or on
behalf of the City in connection herewith, no stipulation, covenant, agreement or obligation of
any present or future member of the City Commission, officer, employee or agent of the City,
officer, employee or agent of a successor to the City, in any such person's individual capacity,
shall cause such person to be liable personally for any breach or non - observance of or for any
failure to perform, fulfill or comply with any such stipulations, covenants, agreements or
obligations, nor shall any recourse be had for the payment of the principal of or interest on the
2011C Note or for any claim based thereon or on any such stipulation, covenant, agreement or
obligation, against any such person, in his or her individual capacity, either directly or through
the City or any successor to the City, under any rule or law or equity, statute or constitution or by
the enforcement of any assessment or penalty or otherwise and all such liability of any such
person, in his or her individual capacity, is hereby expressly waived and released.
Section 631. Incorporation by Reference. All of the terms and obligations of the
Resolution are hereby incorporated herein by reference as if all of the foregoing were fully set
forth in this Agreement. All recitals appearing at the beginning of this Agreement are hereby
incorporated herein by reference.
( 01646577;1 }
13
[Signature Page for LOAN AGREEMENT
dated as ofAugust 10, 2011 between
the City of Winter Springs, FL and Branch Banking and Trust Company]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first set forth herein.
ATTEST:
City Clerk
Approved as to form:
City Attorney
101696577;1}
14
CITY OF WINTER SPRINGS, FLORIDA
By:
Mayor
BRANCH BANKING AND TRUST
COMPANY
By:
Michael C. Smith
Title: Assistant Vice President
EXHIBIT A
FORM OF 2011C Note
PRIOR TO BECOMING A HOLDER, A PROPOSED PURCHASER SHALL
EXECUTE A PURCHASER'S CERTIFICATE IN THE FORM ATTACHED HERETO
CERTIFYING, AMONG OTHER THINGS, THAT SUCH HOLDER IS AN "ACCREDITED
INVESTOR" AS SUCH TERM IS DEFINED IN THE SECURITIES ACT OF 1933, AS
AMENDED, AND REGULATION D TI-IEREUNDER.
0[696577;1}
CITY OF WINTER SPRINGS, FLORIDA
WATER AND SEWER SYSTEM REVENUE REFUNDING NOTE,
SERIES 20110
Principal Sum
Maturity Date Note Rate Date of Issuance
$ October 1, 2021 2.66% August 10, 2011
The CITY OF WINTER SPRINGS, FLORIDA (the "City "), for value received, hereby
promises to pay, solely from the sources described in the within mentioned Agreement, to the
order of BRANCH BANKING AND TRUST COMPANY, a North Carolina state banking
corporation, or its assigns (the "I-Iolder "), at 5 130 Parkway Plaza Boulevard, Building No. 9,
Charlotte, North Carolina 28217, Attention: Account Administration/Municipal or at such place
as the Holder• may from time to time designate in writing, the Principal Sum, such principal to be
repaid in installments due on the dates and in the amounts set forth on Exhibit "A" hereto, with
all unpaid principal and interest due in full on the above referenced Maturity Date, and to pay
interest on the outstanding principal amount hereof from the most recent date to which interest
has been paid or provided for, or if no interest has been paid, from the Date of Issuance shown
above, on April 1 and October 1 of each year (each, an "Interest Payment Date "), commencing
on October 1, 2011, until payment of said principal sum has been made or provided for, at the
above referenced Note Rate calculated on the basis of 12, 30 -day months and a 360 -day year.
Payments due hereunder shall be payable in any coin or currency of the United States of America
which, at the time of payment, is legal tender for the payment of public and private debts, which
payments shall be made to the Holder hereof by cheek mailed to the Holder at the address
designated in writing by the Holder for purposes of payment or by bank wire or bank transfer as
such Holder may specify in writing to the City or otherwise as the City and the Holder may
agree.
The Note Rate may be adjusted in accordance with Sections 3.03 of that certain Loan
Agreement by and between the Holder and the City, dated as of August 10, 2011 (the
"Agreement`). Such adjustments may be retroactive.
This Note is issued for the purpose of refunding the City's outstanding Water and Sewer
Refunding Revenue Bonds, Series 2001, under the authority of and in full compliance with the
Constitution and Statutes of the State of Florida, including particularly Chapter 166, Florida
Statutes City Resolution No. 665 as amended and other applicable provisions of law, and
Resolution No. 2011 -37, adopted by the City Commission (the "Commission ") on August 8,
2011, and a Loan Agreement dated August 10, 2011 by and between the City and the Holder (the
Exhibit A -1
"Agreement "). This Note is being issued as "Additional Parity Obligations" within the meaning
of City Resolution No. 665 adopted by the City Commission of the City on April 29, 1991.
This Note is a limited, special obligation of the City, payable from and secured solely by
a lien upon and pledge of the Pledged Revenues, as defined and described and in the manner
provided in the Agreement, The pledge of the Pledged Revenues to the payment of this Note is
on a parity (except as otherwise provided in the Agreement) with the City's outstanding Parity
Obligations.
All capitalized terms not otherwise defined herein shall have the meanings ascribed to
such terms in the Agreement.
This Note may be prepaid by the City in whole, but not in part, on any Payment Date as
provided in the Agreement from any legally available monies at a prepayment price of 101% of
the principal amount to be redeemed, plus accrued interest to the prepayment date. Prepayment
shall be made on such date as shall be specified by the City in a written notice delivered to the
Holder not less than five (5) days prior to the specified prepayment date. Any prepayments shall
be applied as provided in Section 3.02(c) of the Agreement.
Notice having been given as aforesaid, the principal amount to be prepaid shall become
due and payable on the prepayment date stated in such notice; together with interest accrued and
unpaid to the prepayment date on such principal amount; and the amount of principal and interest
then due and payable shall be paid upon presentation and surrender of this Note to the office of
the City. If, on the prepayment date, funds for the payment of the principal amount, together
with interest to the prepayment date on such principal amount, shall have been given to the
Holder, as above provided, then from and after the prepayment date interest on such principal
amount of this Note shall cease to accrue.
Notwithstanding any provision in this Note to the contrary, in no event shall the interest
contracted for, charged or received in connection with this Note (including any other costs or
considerations that constitute interest under the laws of the State of Florida which are contracted
for, charged or received) exceed the maximum rate of nonusurious interest allowed under the
State of Florida as presently in effect and to the extent an increase is allowable by such laws, but
in no event shall any amount ever be paid or payable by the City greater than the amount
contracted for herein. In the event the maturity of this Note is prepaid in accordance with the
provisions hereof, the Agreement or the Resolution, then such amounts that constitute payments
of interest, together with any costs or considerations which constitute interest under the laws of
the State of Florida, may never exceed an amount which would result in payment of interest at a
rate in excess of that permitted by Section 215,84(3), Florida Statutes, as presently in effect and
to the extent an increase is allowable by such laws; and excess interest, if any, shall be cancelled
automatically as of the date of such prepayment, or, if theretofore paid, shall be credited on the
principal amount of this Note unpaid, but such crediting shall not cure or waive any default
under the Agreement or Resolution.
THIS NOTE SHALL NOT BE OR CONSTITUTE AN INDEBTEDNESS OF THE
CITY OR THE STATE OF FLORIDA (THE "STATE "), WITHIN THE MEANING OF ANY
CONSTITUTIONAL, STATUTORY OR CHARTER LIMITATIONS OF' INDEBTEDNESS,
101696577;1}
Exhibit A -2
BUT SHALL BE PAYABLE SOLELY FROM THE PLEDGED REVENUES, AS PROVIDED
IN THE AGREEMENT AND THE RESOLUTION. THE HOLDER SHALL NEVER HAVE
THE RIGHT TO COMPEL THE EXERCISE OF THE AD VALOREM TAXING POWER OF
THE CITY, OR TAXATION IN ANY FORM OF ANY PROPERTY THEREIN TO PAY THIS
NOTE OR THE INTEREST HEREON.
Upon the occurrence of an Event of Default the Holder of the Note shall also have such
remedies as described in the Agreement.
The City hereby waives presentment, demand, protest and notice of dishonor. This Note
is governed and controlled by the Agreement and reference is hereby made thereto regarding
interest rate adjustments and other matters.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
{01696577;1} Exhibit A -3
IN WITNESS WHEREOF, the City has caused this Note to be signed by its Mayor,
either manually or with facsimile signature, and the seal of the City to be affixed hereto or
imprinted or reproduced hereon, and attested by a City Clerk of the City, either manually or with
facsimile signature, and this Note to be dated the Date of Issuance set forth above.
[SEAL]
ATTEST:
By:
City Clerk
Approved as to form:
City Attorney
(01696577;1 }
CITY OF WINTER SPRINGS, FLORIDA
By:
Mayor
Exhibit A -4
FORM OF CERTIFICATE OF AUTHENTICATION
Date of Authentication:
This Note is being delivered pursuant to the within mentioned Agreement.
{01696577:I}
CITY OF WINTER SPRINGS, FLORIDA,
as Registrar
By:
City Clerk
Exhibit A -5
ASSIGNMENT
FOR VALUE RECEIVED the undersigned sells, assigns and transfers unto
(please print or typewrite name, address
and tax identification number of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints
Attorney to transfer the within Note on the books kept for
registration thereof, with full power of substitution in the premises.
101696577;1}
Naive of Noteholder:
By:
Exhibit A -6
101696577;1)
EXHIBIT A
SERIES 2011C NOTE -- PRINCIPAL REPAYMENT SCHEDULE
Date
10 /1 /2011
10 /1 /2012
10/1/2013
10/1/2014
10/1/2015
10 /1 /2016
10 /1 /2017
10/1/2018
10/1/2019
10/1/2020
10/1/2021
Amount
Exhibit A -7
City of Winter Springs, Florida (the "City ")
Ladies and Gentlemen:
PURCHASER'S CERTIFICATE
The undersigned, as a purchaser of the City of Winter Springs, Florida Water and Sewer
System Revenue Refunding Note, Series 2011C (the "Note ") dated August 10, 2011, consisting
of one typewritten Note, hereby certifies that we have been provided (a) a copy of City of Winter
Springs Resolution No. 2011 -37, adopted by the City on August 8, 2011, authorizing the
issuance of the Note (the "Resolution "), (b) the Loan Agreement dated as of August 10, 2011,
between the City and us as assignee of Branch Banking and Trust Company (the "Agreement ")
and (c) such financial and general information respecting the Pledged Revenues (as such term is
defined in the Agreement) and the City, and the Note described above as we deem necessary to
enable us to make an informed investment judgment with respect to the purchase of said Note.
We hereby make the following representations, which representations may be relied upon
by the City:
{0 1696577;1 }
A. We are aware:
{i) that investment in the Note involves various risks;
(ii) that the Note is not a general obligation of the City; and
(iii) that the principal or premium, if any, and interest on the Note is payable
solely from the Pledged Revenues as specified in the Resolution and the
Agreement.
B. We understand that no official statement, offering memorandum or other form of
offering document was prepared or is being used in connection with the offering
or sale of the Note (collectively, "Disclosure Documents "), but we have been
afforded access to all information we have requested in making our decision to
purchase the Note and have had sufficient opportunity to discuss the business of
the City with its officers, employees and others. We have not requested any
Disclosure Documents in connection with the sale of the Note. We do not require
any further information or data incident to our purchase of the Note.
C, In purchasing the Note, we have relied solely upon our own investigation,
examination, and evaluation of the City, and other relevant matters.
A -1
{01696577;1 ?
D. We have knowledge and experience in financial and business matters and are
capable of evaluating the merits and risks of our investment in the Note and have
determined that we can bear the economic risk of our investment in the Note.
E. We acknowledge the understanding that the Note is not registered under the
Securities Act of 1933, as amended (the "1933 Act ") or Chapter 517, Florida
Statutes, and that the Resolution and Agreement are not qualified under the Trust
Indenture Act of 1939, as amended, and that the City has no obligation to effect
any such registration or qualification.
F. We are not acting as a bond house, broker or other intermediary, in our purchase
of the Note. Although we retain the right to transfer the Note in the future, we
understand that the Note may not be readily tradable.
G. We have received all documents requested by us incident to our purchase of the
Note.
H. We acknowledge that we are an "accredited investor" within the meaning of
Chapter 517, Florida Statutes and Regulation D of the 1933 Act.
Signed as of the day of
By:
Authorized Officer
A -2