HomeMy WebLinkAbout2011 08 08 Consent 201 Resolution 2011-36 BB&T Bank Bond RefinanceREQUEST: The City Manager and Finance and Administrative Services Department are requesting
the Commission adopt Bond Resolution 2011 -36 to accept the proposal by BB &T Bank to purchase the
City's, not to exceed $1,400,000, Improvement Refunding Revenue Bonds, Series 2011B to refund all of
the City's outstanding Improvement Refunding Revenue Bonds, Series 1999; and authorize the City
Manager and City Attorney to execute all necessary documents to complete a loan agreement with BB &T
Bank.
SYNOPSIS:
August 8, 2011
The Purpose of this agenda item is approve the advanced refunding of the Improvement Refunding
Revenue Bonds, Series 1999; 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.
CONSIDERATIONS:
COMMISSION AGENDA
ITEM 201
Regular Meeting
Consent
Informational
Public Hearing
Regular
X
MGR. /DEPT.
Authorization
In 1999 the City of Winter Springs issued $7,998,969.75 Improvement Refunding Revenue Bonds,
Series 1999 with a final maturity of 30 years for the purpose of financing the City's recreational
facilities, traffic control systems and public housing projects.
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
0.02
Refinance the existing debt at
the same remaining life (term)
but at the loly end of the yield
curve
— ■ ■
1999 Bonds are in their last 8
years of the life cycle
■ ■ . -0.02
-0.04
3m 6111 1y 2y 3y 4y 5y 6y 7y 8y 9y 10y 15y 20y 30y
U.S. Treasury Yield Curve (7/28/2011)
5.10%
5 10°i
5.25%
5.25%
5•25 •
3.12! X
L..ibti /o
2.ib" /o
2.3 6%
1..3b%
1.36% 2.36%
5%
2.73%
.625
.006
. 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
Refinancing Opportunit
US
Treasury
BB &T
—2000
Bonds
refinances the Improvement Refunding Revenue Bonds, Series 1999 with a BB &T Bank Note.
There are several considerations that were analyzed to develop the recommendation to refinance
the 1999 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 1999 Bonds were issued on June 15, 1999 with the total principal amount of
$7,998,969.75 and a weight average interest rate (coupon) of 5.22% over the 8 year term. After
12 years, the remaining principal outstanding (Series 1999) is now $4,963,983 (gross principle)
with a weighted average interest rate of 5.52 %. 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 1999) was issued as a 30 year bond now the City has the opportunity
to reissue part of this debt as a 8 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 2.36% (fixed rate) bank note next to the
remaining bond payments. The net (NPV) effect of this refinancing is a savings of $136,565 over
the next 8 years. This savings is accomplished with a minor extension of the 2012 bond.
Current
Date Bond
10/1/2011 153,268.75
10/1/2012 205,672.50
10/1/2013 213,787.50
10/1/2014 230,912.50
10/1/2015 241,725.00
10/1/2016 246,487.50
10/1/2017 260,462.50
10/1/2018 263,125.00
$1,815,441.25
FISCAL IMPACT:
City of Winter Springs
Refunding of the Series 1999 Bonds (BB &T)
Prior Receipts
121,345.83
COMMUNICATION EFFORTS:
SAVINGS
Prior Debt Refunding
Service Debt Service Annual Savings
31,922.92 28,452.59 3,470.33
205,672.50 181,178.20 24,494.30
213,787.50 189,293.18 24,494.32
230,912.50 206,417.52 24,494.98
241,725.00 217,230.14 24,494.86
246,487.50 221,993.32 24,494.18
260,462.50 235,967.44 24,495.06
263,125.00 238,630.84 24,494.16
$121,345.83 $1,694,095.42 $1,519,163.23 $174,932.19
NPV
@2.3179%
3,056.10
24,069.33
23,492.26
22,925.69
22,367.66
21,819.07
21,282.35
20,752.95
$159,765.42
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 $125,000.
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 Improvement Refunding Revenue Bonds, Series 1999 by
BB &T Bank the City will realize a Net Present Value savings of $136,565(net)(9.92 %) over the
remaining 8 years until final maturity of the BB &T note on 10/1/2018. This equates to a savings
for the General Fund of $25,000 (nominal) annually.
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 to issue a bank note to refund the Improvement Refunding Revenue Bonds, Series 1999 not
to exceed $1,400,000 adopt Resolution 2011 -36, and to authorize the City Manager and City
Attorney to complete all applicable paperwork necessary to complete this refinancing.
ATTACHMENTS:
Resolution 2011 -36
BB &T Note Contract
BE IT RESOLVED BY THE CITY COMMISSION 01? 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.
(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 the City's Improvement
Refunding Revenue Bonds, Series 1999 maturing in the years 2012 and 2018 (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 Improvement
{01695778;1 }
RESOLUTION NO. 2011-36
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 51,400,000 IMPROVEMENT REFUNDING
REVENUE NOTE, SERIES 2011 TO REFUND A PORTION OF
THE CITY'S OUTSTANDING IMPROVEMENT REFUNDING
REVENUE BONDS, SERIES 1999; 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
FRANCHISE FEES RECEIVED BY THE CITY FROM FLORIDA
POWER CORPORATION AND THE PUBLIC SERVICE TAXES
LEVIED AND COLLECTED BY THE CITY PURSUANT TO
SECTION 166.231, FLORIDA STATUTES, 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.
SECTION 2. FINDINGS. It is hereby ascertained, determined and declared:
Refunding Revenue Note, Series 2011 (the "2011 Note ") and the execution and delivery of the
Loan Agreement for the purposes of refunding the Refunded Bonds is not prohibited by law.
(C) The 2011 Note will be issued as "Additional Parity Obligations" in
accordance with the provisions of City Resolution No. 615 (the "Original Instrument ") and will
be secured by the Excise Taxes as provided in Section 6 hereof and the Loan Agreement
pursuant to which the City will issue the 2011 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 2011
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 2011 Note pursuant to the Loan
Agreement by negotiated sale, allowing the City to issue the 2011 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 2011 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 2011 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 2011 Note. The
repayment of the loan as evidenced by the 2011 Note shall be pursuant to the terms and
provisions of the Loan Agreement and the 2011 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 2011 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 2011 Note. Pursuant to the
Loan Agreement, the 2011 Note will be secured by the franchise fees collected by the City from
the electric franchise granted by the City to Florida Power Corporation and the Public Service
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Taxes collected by the City pursuant to the authorization in Section 166.231, Florida Statutes
(collectively, the "Excise Taxes ") 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 2011 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 2011 Note.
SECTION 9. LIMITED OBLIGATION. The obligation of the City to repay
amounts under the Loan Agreement and the 2011 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 2011 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 2011 Note or the Loan Agreement, but this Resolution, the Loan Agreement, and
the 2011 Note shalt be construed and enforced as if such illegal or invalid provision had not been
contained therein. The 2011 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 11. DESIGNATION OF 2011 Note AS BANK QUALIFIED. The
City designates the 2011 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]
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[SEAL]
ATTEST:
PASSED, APPROVED AND ADOPTED this 8 day of August, 2011.
By
City Clerk
Approved as to form:
By
City Attorney
(01695778;1 } 4
CITY OF WINTER SPRINGS, FLORIDA
By:
Mayor
{01696619;11
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 ")
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.)
ARTICLE I DEFINITION OF TERMS 1
Section 1.01. Definitions 1
Section 1.02. Interpretation 3
Section 1.03. Titles and Headings 4
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE PARTIES 4
Section 2.01. Representations and Warranties of City 4
Section 2.02. Covenants of the City 5
Section 2.03. Representations and Warranties of Bank 5
ARTICLE III THE NOTE 5
Section 3,01. Purpose and Use 5
Section 3.02. The Note 5
Section 3.03. Adjustments to Note Rate 6
Section 3.04. Conditions Precedent to Issuance of Note 7
Section 3.05. Registration of Transfer; Assignment of Rights of Bank 8
Section 3.06. Ownership of the Note 9
Section 3.07. Use of Proceeds of Note Permitted Under Applicable Law 9
Section 3.08. Authentication 9
ARTICLE IV COVENANTS OF THE CITY 9
Section 4.01. Performance of Covenants 9
Section 4.02. Payment of Note 10
Section 4.03. Tax Covenant 10
Section 4.04. Application of Provisions of Original Instrument 10
Section 4.05. Compliance with Laws and Regulations 10
ARTICLE V EVENTS OF DEFAULT AND REMEDIES 10
Section 5.01. Events of Default; Remedies 10
ARTICLE VI MISCELLANEOUS PROVISIONS 11
Section 6.01. Covenants of City, Etc.; Successors 11
Section 6,02. Term of Agreement 11
Section 6.03. Amendments and Supplements 11
Section 6.04. Notices 11
Section 6.05. Benefits Exclusive 12
Section 6.06. Severability 12
Section 6.07. Payments Due on Saturdays, Sundays and Holidays 12
Section 6.08. Counterparts 12
Section 6.09. Applicable Law 12
Section 6.10. No Personal Liability 12
Section 6.11. Incorporation by Reference 13
Exhibit A Form of Note Including Purchaser's Certificate A -1
{01696619;1) i
Page
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").
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. 615 adopted by the City Commission of the City on
May 1, 1989, as amended, and other applicable provisions of law (all of the foregoing,
collectively, the "Act "), and Resolution No. 2011-36, 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 Improvement Refunding Revenue Bonds, Series 1999 maturing in the years
2012 and 2018 (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 ---36, the City has accepted the
Commitment and the Bank is willing to purchase the Note (as hereinafter defined), but only upon
the teens 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.
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WITNESSETH:
"Bond Counsel" shall mean, Akerman 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 tune,
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 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 Holder 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.
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"Fiscal Year" shall 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, 2018.
"Noteholder" or "Holder" shall mean the Bank as the holder of the Note and any
subsequent registered holder of the Note.
"Note" shall mean the City of Winter Springs, Florida Improvement Refunding Revenue
Note, Series 2011.
"Original Instrument" shall mean Resolution No. 615 of the City adopted by the City
Commission on May 1, 1989, as amended and supplemented to the date hereof.
"Parity Obligations" shall mean collectively the City's outstanding Improvement
Refunding Revenue Bonds, Series 2003 and the City's outstanding Improvement Refunding
Revenue Bonds, Series 1999 not refunded in connection with the issuance of the Note.
"Payment Date" shall mean each April 1 and October 1, commencing October 1, 2011
until the Note has been paid in full.
"Pledged Revenues" means collectively the franchise fees levied and collected pursuant
to Ordinance No. 290 of the City, as amended and supplemented, which granted an electric
franchise to Florida Power Corporation for a period of thirty years from April 1, 1984 the
"Franchise Fees ") and the public service tax levied and collected by the City pursuant to Section
166.231, Florida Statutes and an ordinance duly enacted by the Issuer on March 27, 1989, as
amended and supplemented (the "Public Services Taxes ").
"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 -36, 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 Note.
"Note Rate" shall mean the rate of interest to be borne by the Note which shall be a fixed
rate equal to 2.36% 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
{01696619;1} 3
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
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 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 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 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 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 Note and the related
documents, except such as have been obtained, given or accomplished.
101696619;1) 4
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
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
f and business matters that it is capable of evaluating the merits and risks of making the
Loan and investing in the 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 Note; and (iii) is purchasing the Note as an investment
for its own account and not with a current view toward resale to the public.
ARTICLE III
THE NOTE
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 Note. The proceeds of the Note shall be
used solely to currently refund the Refunded Bonds.
Section 3.02. The Note. The Note shall be substantially in the form set forth as
Exhibit A to this Agreement. The general terms of the Note shall be as follows:
f01696619;1} 5
(a) Amount of Note. The aggregate principal amount of the Note shall be
Million Hundred Thousand Hundred
and No /100 Dollars ($ .00).
(b) Interest. The Note shall bear interest at the Note Rate payable on each Payment
Date. The Note Rate shall be subject to adjustment as provided in Section 3.03 hereof. The
Noteholder shall prolhptly 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 Note
exceed the maximum rate permitted by law. Interest on the Note shall be computed on the basis
of 12, 30 -day months and a 360 -day year.
(c) Prepayments and Principal Payments. The Note shall be subject to prepayment at
the option of the City, as provided in the 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 Note is payable on each October 1 commencing October 1, 2011 as set
forth in the Note.
Section 3.03. Adjustments to Note Rate. The 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 Note Rate shall be adjusted to cause the
yield on such Note to equal what the yield on that 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 (i) the difference between
(a) interest on such Note for the period commencing on the date on which the interest on such
Note (or portion thereof) loses its "tax- exempt" status and ending on the earlier of the date such
Note ceased to be outstanding or such adjustment is no longer applicable to such Note (the
"Taxable Period ") at a rate equal to the Taxable Rate and (b) the aggregate amount of interest
payable on such Note for the Taxable Period under the provisions of such 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 Note ceases to be a "qualified tax - exempt obligation" then the Note Rate shall be
adjusted to cause the yield on the Note to equal what the yield on the Note would have been in
the absence of such change. If the tax laws or regulations are amended to increase yield on the
Note to the Noteholder, then the Noteholder shall adjust the interest rate on the Note to cause the
yield on the Note to equal what the yield on the Note would have been in the absence of such
change or amendment in the tax laws or regulations.
{01696619;1). 6
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
adjustment pursuant hereto. Notwithstanding any provision hereto the contrary, in no event shall
the interest rate on the Note exceed the maximum rate permitted by law.
Section 3.04. Conditions Precedent to Issuance of Note. Prior to or simultaneously
with the delivery of the 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
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 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 Note has been duly and validly authorized by the City, and the 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 Note, and to
consummate the transactions contemplated by such instruments; (v) the execution, delivery and
performance of the 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 Note, (X) in any way questioning or
affecting the validity or enforceability of any provision of this Agreement, the 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 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 Note have been complied with;
{0106619;1) 7
(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 Note is a valid and binding special obligation of the 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 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 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;
(d) the original executed Note, Escrow Deposit Agreement and Agreement; and
(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 Note shall have been executed as
required by this Agreement, the City shall deliver the 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 Note and the
registration of transfers of the Note as provided in this Agreement. The transfer of the Note may
be registered only upon the books kept for the registration of the 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 Note attached as Exhibit A to this Agreement; provided, however, that such series of
the 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 Note a new Note of the applicable
series registered in the name of the transferee. In all cases in which a Note shall be transferred
hereunder, the City shall execute and deliver at the earliest practicable time a new Note in
accordance with the provisions of this Agreement. The City may snake a charge for every such
registration of transfer of a 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 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 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
{01696619;1} 8
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 Note.
The Holder of a 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 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 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 Note is mutilated, lost, stolen, or destroyed, the City shall execute a new
Note of like date and denomination as that mutilated, lost, stolen or destroyed, provided that, in
the case of any mutilated Note, such mutilated Note shall first be surrendered to the City, and in
the case of any lost, stolen, or destroyed 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 Note. The person in whose name a Note is registered
shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or
on account of a 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 Note, and interest thereon, to the extent of the sum or sums so paid.
Section 3.07. Use of Proceeds of Note Permitted Under Applicable Law. The City
represents, warrants and covenants that the proceeds of the 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 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 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 Note shall be conclusive evidence that such 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 Note and in any proceedings of the City relating to the Loan.
{01696619;1} 9
Section 4.02. Payment of Note.
(a) The City does hereby irrevocably pledge the Pledged Revenues as security for the
repayment of the Note. The lien of the Note on the Pledged Revenues is on parity with the lien
thereon of the Parity Obligations.
(b) The 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 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 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 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 Note at any time during the term of such Note which, if
such use had been reasonably expected on the date the Note was issued, would have caused such
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 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 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 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 Note shall be payable
on a parity with the Parity Obligations provided however, the 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 terms and provisions of the Original Instrument as supplemented hereby
shall remain in full force and effect and be applicable with respect to the 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.
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
Section 5.01. Events of Default; Remedies. The provisions of Sections 19 and 20 of
the Original Instrument shall apply for purposes of this Loan Agreement and shall be applied to
the Note as though fully restated herein.
{01696619;1)
10
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 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:
{01696619j}
(a) As to the City:
(b) As to the Bank:
ARTICLE VI
MISCELLANEOUS PROVISIONS
City of Winter Springs, Florida
City Hall
1126 East State Road 434
Winter Springs, Florida 32708
Attention: Finance and Administrative Services Director
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.
11
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 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 Note, but this Agreement, any
amendment or supplement hereto and the 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 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 case where
the date of maturity of interest on or principal of the Note or the date fixed for prepayment of the
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.
Section 6.10. No Personal Liability. Notwithstanding anything to the contrary
contained herein or in the 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 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
(01696619;1}
12
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 6.11. 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.
{01696619;1 }
13
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
101696619;1}
[Signature Page for LOAN AGREEMENT
dated as of August 10, 2011 between
the City of Winter Springs, FL and Branch Banking and Trust Company]
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 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 1N THE SECURITIES ACT OF 1933, AS
AMENDED, AND REGULATION D THEREUNDER.
{01696619;1)
CITY OF WINTER SPRINGS, FLORIDA
IMPROVEMENT REFUNDING REVENUE REFUNDING NOTE,
SERIES 2011
Principal Sum
Maturity Date Note Rate Date of Issuance
$ October 1, 2018 236% 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 "Holder "), at 5130 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 check 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 Improvement
Refunding Revenue Bonds, Series 1999 maturing in the years 2012 and 2018, 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. 615 as amended and other
applicable provisions of law, and Resolution No. 2011 -36, adopted by the City Commission (the
"Commission ") on August 8, 2011, and a Loan Agreement dated August 10, 2011 by and
Exhibit A -1
between the City and the Holder (the "Agreement "). This Note is being issued as "Additional
Parity Obligations" within the meaning of City Resolution No. 618 adopted by the City
Commission of the City on May 1, 1989.
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 matvier
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
{01696619;1}
Exhibit A -2
CONSTITUTIONAL, STATUTORY OR CHARTER LIMITATIONS OF INDEBTEDNESS,
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.
{01696619;1}
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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
{01696619;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.
CITY OF WINTER SPRINGS, FLORIDA,
as Registrar
{01696619;1}
By:
City Clerk
Exhibit A -5
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,
(01696619;1}
ASSIGNMENT
Name of Noteholder:
By:
Exhibit A -6
EXHIBIT A
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
Amount
101696619;1) Exhibit A -7
City of Winter Springs, Florida (the "City ")
Ladies and Gentlemen:
The undersigned, as a purchaser of the City of Winter Springs, Florida Improvement
Refunding Revenue Note, Series 2011 (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 -36, 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:
{01696619;1}
PURCHASER'S CERTIFICATE
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
f016966190 }
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
1
By:
Authorized Officer
A -2