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Res 78-03RESOLUTION NO. 78-03 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF DELRAY BEACH, FLORIDA, AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $9,685,000 IN AGGREGATE PRINCIPAL AMOUNT OF REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 2003, OF THE CITY OF DELRAY BEACH, FLORIDA FOR THE PURPOSE OF REFINANCING CERTAIN OUTSTANDING REVENUE OBLIGATIONS OF THE CITY AND FINANCING CERTAIN CAPITAL COSTS ASSOCIATED WITH A NEW LIBRARY PROJECT AND PAYING ALL INCIDENTAL AND NECESSARY COSTS RELATING THERETO; DETERMINING THE NEED FOR A NEGOTIATED SALE OF SUCH BONDS TO SUNTRUST BANK; PROVIDING FOR THE TERMS AND PAYMENT OF SAID REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 2003, AND THE RIGHTS, REMEDIES AND SECURITY OF THE OWNERS THEREOF; MAKING CERTAIN COVENANTS RELATING TO THE ISSUANCE OF SAID REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 2003; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION OF A BOND PURCHASE AGREEMENT WITH SUNTRUST BANK; DESIGNATING THE REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 2003 AS "QUALIFIED TAX-EXEMPT OBLIGATIONS" WITHIN THE MEANING OF SECTION 265(i>) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AUTHORIZING THE PROPER OFFICERS OF THE CITY TO DO p,I,I. OTHER THINGS DEEMED NECESSARY OR ADVISABLE IN CONNECTION WITH THE ISSUANCE OF SAID BONDS; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City Commission of the City of Delray Beach, Florida (the "City Commission"), hereby determines that it is in the best interest of the City of Delray Beach, Florida (the "City"), to refinance the Prior Debt (as herein defined) and to finance certain costs relating to the acquisition, construction and equipping of the City's new library facility, as further described on Exhibit C attached hereto, together with all incidental and necessary costs relating thereto (the "2003 Project"); and WHEREAS, on December 14, 1999, the City Commission did adopt Resolution No. 76-99 (the "Bond Resolution") authorizing the issuance, from time to time, of revenue bonds (the "Bonds") to financial capital projects in the City; and WHEREAS, any capitalized term used in this Resolution and not othemrise defined, shall have the meaning ascribed to such term in the Bond Resolution; and WHEREAS, pursuant to the Bond Resolution each series of Bonds issued thereunder shall be payable solely from the City's covenant contained in the Bond Resolution to budget and appropriate in each Fiscal Year, by budget amendment if necessary, Non-Ad Valorem Revenues and deposit the same in the Debt Setarice Fund created and established under the Bond Resolution; and WHEREAS, pursn.nt to the terms and provisions of the Bond Resolution and this Resolution, the City shall issue a series of Bonds known as "City of Delray Beach, Florida Revenue Refunding and Improvement Bonds, Series 2003" (herein, the "2003 Bonds") to refinance the Prior Debt and finance the costs of the 2003 Project, including the costs of issuing such 2003 Bonds; and ~gtHEREAS, the principal amount of the 2003 Bonds authorized under this Resolution shall not exceed $9,685,000; and WHEREAS, the 2003 Bonds shall be secured by a pledge of and lien on the Pledged Revenues; and WHEREAS, City staff has previously solidted bids from q~ulified lending institutions to provide a closed-end line of credit or term loan as the vehicle by which the 2003 Bonds are to be issued, the Prior Debt is to be refinanced and the 2003 Project is to be financed; and WHEREAS, City staff has determined and the City Commission hereby concurs that SunTrust Bank, a banking organization organized under the laws of the State of Georgia with its designated office in West Palm Beach, Florida (herein, the "Bank") has provided the best overall bid to the City; and WHEREAS, the City Commission hereby finds that in light of present market conditions, the aforementioned bid provided by the Bank, the necessity for the funds in calendar year 2003, and other factors described herein, it would be in the best interest of the City to sell the 2003 Bonds to the Bank on a negotiated basis pursuant to the terms and provisions of the Bond Resolution, this Resolution and that certain Bond Purchase Agreement dated the date of delivery of the 2003 Bonds (herein, the "Agreement") by and between the City and the Bank in substantially the form attached hereto as Exhibit A. WHEREAS, the City does not expect to issue more than $9,685,000 of its tax-exempt obligations in calendar year 2003, and based upon the advice of its Bond Counsel, the City Commission shall designate the 2003 Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b) of the Code. NOW, THEREFORE, be it resolved by the City Commission of the City of Delray Beach, Florida, as follows: 2 RES. NO. 78-03 ARTICI.~. I STATUTORY AUTHORITY; FINDINGS AND DEFINITIONS SECTION 1.1 AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted pursuant to the provisions of the Charter of the City of Delray Beach, Florida, as amended and supplemented, the Florida Constitution, Chapter 166, Florida Statutes, as amended and supplemented, and other applicable provisions of hw (collectively, the "Act") and the authority provided for in the Bond Resolution. SECTION 1.2. FINDINGS. It is hereby ascertained, determined and declared: (a) That in order to provide long-term financing for certain municipal projects of the City initially financed on a short-term basis, the City hereby authorizes the refinancing of the Prior Debt using a portion of the proceeds of the 2003 Bonds. (b) That the City hereby authorizes that the 2003 Project be financed from a portion of the proceeds derived from the 2003 Bonds issued pursuant to this Resolution, together with all incidental and necessat~ costs and expenses associated therewith, as more fully set forth in Section 1.2(e) hereof. (c) That it is necessary and in the best economic interest of the City to acquire, construct and implement the 2003 Project in order to promote cultural, recreational and educational advancement in the City. (d) That the 2003 Project will serve a valid municipal purpose. (e) That the cost of refinancing the Prior Debt and the 2003 Project shall be deemed to include, but not be limited to, the cost of acquisition, construction, improving, renovating and equipping all or a portion of the 2003 Project, the cost of all real or personal property necessary therefor; admin.istrafive expenses; design, engineering and legal expenses; the fees and expenses of Bond Counsel; the fees and reasonable expenses of counsel for the Bank; expenses for estimates of costs; expenses for plans, specifications, licenses and permits; and such other expenses as may be necessary or incidental to the refinancing of the Prior Debt and the financing of the 2005 Project and the issuance of the 2003 Bonds herein authorized. (f) That the principal of and interest on the 2003 Bonds shall be secured solely by the Pledged Revenues and payable from the Non-Ad Valorem Revenues induding such pledged revenues provided that the Owner of the 2003 Bonds shall have no lien on the Non-Ad Valorem Revenues until deposited into the Debt Service Fund. The ad valorem taxing power of the City will never be necessary or authorized to pay the principal of and interest on the 2003 Bonds, and the 2003 Bonds issued pursuant to this Resolution shall not constitute a lien upon any other property whatsoever of or in the City. 3 RES. NO. 78-03 (g) That the City, having previously solicited bids for the sale of the 2003 Bonds, has determined that the best qualified bid for the 2003 Bonds was delivered by the Bank. (la) That the negotiated sale of the 2003 Bonds to the Bank is in the best interest of the City by reason of the nature of and schedule for the completion of the refinancing of the Prior Debt and the 2003 Project, the aforementioned solicitation of bids and present market conditions. That the Agreement, in the form attached hereto as Exhibit A, is hereby approved, with such omissions, insertions and variations as may be necessary and desirable, as evidenced by the City's execution thereof and the Mayor (or in his absence, the Vice Mayor) and City Clerk are hereby authorized to execute the same on behalf of the City. 0) That pursuant to the provisions of the Bond Resolution and this Resolution, the City may issue obligations in the future secured by Pledged Revenues. (k) The City hereby designates the 2003 Bonds to be qualified "tax-exempt obligations" within the meaning of 265(1>) of the Code. 0) That any capitalized term not otherwise defined herein, shall have the meaning ascribed to such term in the Bond Resolution. SECTION 1.3 DEFINITIONS. That, in addition to terms defined elsewhere in this Resolution, the following terms shall have the following meanings unless the context otherwise clearly requires: "Bond Counsel" shall mean Greenberg Traudg, P2t. or any other firm of nationally recognized bond counsel selected by the City and acceptable to the Bank. "Bond Resolution" shall mean Resolution No. 76-99, adopted by the City Commission on December 14, 1999, as amended and supplemented. ''Business Day" shall mean any day other than a Saturday or Sunday, or a day on which the Bank is closed. "City" shall mean the City of Delmy Beach, Florida, a municipal corporation in the County of palm Beach, State of Florida, and its successors and assigns. "City Commission" shall mean the duly constituted governing body of the City. "Code" shall mean the Internal Revenue Code of 1986, as amended, the applicable Treasury Regulations promulgated thereunder and any administrative or judicial interpretations of the same published in a form on which the City may rely as a matter of law. 4 RES. NO. 78-03 "Determination of Taxability" shall mean the circumstance of interest paid or payable on the 2003 Bonds becoming includable for federal income tax purposes in the gross income of the Bondholder. A Determination of TaXability will be deemed to have occurred upon (i) the receipt by the City or Bondholder of an o~ginal or a copy of an Internal Revenue Service Technical Advice Memorandum or Statutory Notice of Deficiency which bolds that any interest payable on the 2003 Bonds is includable in the gross income of the Bondholder for federal income tax purposes; (ii) the issuance of any public or private ruling of the Internal Revenue Service that any interest payable on the 2003 Bonds is includable in the gross income of the Bondholder for federal income tax purposes; or ('th") teceipt by the City or Bondholder of an opinion of a Bond Counsel that any interest on the 2003 Bonds has become includable in the gross income of the Bondholder for federal income tax purposes. For all purposes of this definition, a Determination of Taxability will be deemed to occur on the date as of which the interest on the 2003 Bonds is first deemed includable in the gross income of the Bondholder for federal income tax purposes. "Interest Rate" shall mean with respect to the 2003 Bonds, unless the 2003 Bonds bear interest at the Taxable Rate or the intexest rote is otherwise adiusted pursuant to Section 3.7 hereof, a fixed rate of interest on the 2003 Bonds which, shall be equal to 3.659 percent per annum. The Interest Rate shall be calculated on the basis of a 360 day year of twelve thirty-day months. "Maturity Date" shall mean, with respect to the unpaid principal of and interest on the 2003 Bonds, June I, 2019. "2003 Bonds" shall mean the not to exceed $9,685,000 aggregate principal amount of Revenue Refunding and Improvement Bonds, Series 2003, authorized by the Bond Resolution and this Resolution. "Owner," "Bondholder" or "registered holder" or any similar term shall mean the Bank or, subject to the provisions of Section 2.4 hereof, any successor registered holder of the 2003 Bonds; provided no Bondholder may be the registered owner of less than $1,000,000 in the aggregate principal amount of the 2003 Bonds. "Paying Agent" shall mean the City's Finance Department or, if the City Commission shall so determine by subsequent proceeding, any bank or mast company and any successor bank or mast company appointed by the City to act as Paying Agent hereunder. "Payment Date" shall mean, with respect to interest on the 2003 Bonds, each June 1 and December 1, commencing June 1, 2004 and with respect to scheduled principal on the 2003 Bonds, on each June 1, commencing June 1, 2004 in the prindpal amounts set forth in Section 2.2 hereof, and, prior to the Maturity Date, on any date the prindpal of the 2003 Bonds is optionally or mandatorily prepaid in whole or in part, provided that ff such date is not a Business Day, the payment shall be made on the next succeeding Business Day. 5 RES. NO. 78-03 "Pledged Revenues" shall mean (I) the Non-Ad Valorem Revenues deposited in the Debt Se~rice Fund created and established under the Bond Resolution, (ii) investment income received from the investment of moneys in the Debt Service Fund and accounts established theretmder, other than any eserow deposit trust fund established under a escrow deposit agreement, and ('Iii) any other moneys deposited ha the Debt Service Fund or received by the Paying Agent in connection with the repayment of any Bonds. "Prior Debt" shall mean the City's Revenue Bonds, Series 1999, in the principal amount of $2,355,000, the City's Revenue Notes (Taxable), Series 2002, in the principal amount of $548,000 and the City's Revenue Bonds, Series 2002, in the principal amount of $4,929,000. "Registrar" shall mean the City's Finance Depaxtment or, if the City Commission shall so determine by subsequent proceeding, any bank or trust company and any successor bank or trust company appointed by the City to act as Registrar hereunder. "Resolution" shall mean this Resolution as the same may from time to time be amended and supplemented in accordance with the terms hereof. "Taxable Rate" shall mean the Interest Rate times 1.5234. ''Tax Certificate" shall mean the Arbitrage Certificate of the City executed on the date of initial delivery of the 2003 Bonds. Words importing s'mgnlar number shall include the plural number and vice versa, as the case may be, and words importing persons shall include firms and corporations. SECTION1.4 RESOLUTION AND BOND RESOLUTION CONSTITIJTE CONTRACT. In consideration of the acceptance of the 2003 Bonds authorized to be issued hereunder by those who shall own the same from time to time, this Resolution and the Bond Resolution shall be deemed to be and shall constitute a contract between the City and the Bondholders and the covenants and agreements herein and therein set forth to be performed by said City shall be for the benefit, protection and security of the Bondholders. ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF 2003 BONDS SECTION 2.1 AUTHORIZATION OF 2003 BONDS. Subject and pursuant to the provisions of this Resolution and the Bond Resolution, obligations of the City of Delray Beach, Florida, to be known as "Revenue Refunding and Improvement Bonds, Series 2003" are hereby authorized to be issued in the aggregate principal amount of not exceeding Nine Million Six 6 RES. NO. 7803 Hundred Eighty-Five Thousand Dollars ($9,685,000) for the purpose of refinancing the Prior Debt and financing the costs of the 2003 Proiect. SECTION 2.2 DESCRIPTION OF 2003 BONDS. Notwithstanding the form of Bonds set forth in the Bond Resolution, the text of the 2003 Bonds shall be substantially in the form attached hereto as Exhibit B with such omissions, insertions and variations as may be necessary and desirable, as evidenced by the City's execution thereof. The 2003 Bonds (hajri~lly issued in one (1) typewritten cetrificate) shall be dated the date of initial issuance. The 2003 Bonds shall be issued in registered form. Unless the interest rate on the 2003 Bonds is adjusted in accordance with Section 3.7 hereof, the 2003 Bonds shall bea~ interest on the outstanding principal amount of the 2003 Bonds from time to time at the Interest Rate and shall be payable on each Payment Date, commencing June 1, 2003. Unless all or a portion of the Bonds is optionally or mandatorily prepaid in accordance with the terms of this Resolution, the outstanding principal of the 2003 Bonds shall be payable on each June 1 in the yeats and amounts set forth below: Date Principal Amount 2004 $380,000 2005 255,000 2006 265,000 2007 270,000 2008 275,000 2009 920,000 2010 590,000 2011 605,000 2012 630,000 2013 655,000 2014 675,000 2015 695,000 2016 820,000 2017 850,000 2018 880,000 2019' 920.000 7 RF~. NO. 78-03 Total $9,685,000 ' Final matmity Principal and interest on the 2003 Bonds shall be payable at the office of the Paying Agent (the des'~nated corporate trust office of the Paying Agent if the City's Finance Department is not the Paying Agent). The 2003 Bonds shall be numbered in such manner as may be prescribed by the Registrar. The 2003 Bonds shall be payable, with respect to interest and principal, 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. Subject to the next succeeding paragraph, the City may prepay the 2003 Bonds in whole or in part, at any time or from time to time, without penalty or premium, except as may be applicable by the provisions set forth below, by paying to the registered holder all or part of the principal amount of the 2003 Bonds, together with the unpaid interest accrued on the amount of principal so prepaid to the date of such prepayment. Each prepayment shall be made on such date and in such principal amount as shall be specified by the City in a written notice delivered to the registered owner not less than two (2) Bus'mess Days prior thereto. Notice having been given as aforesaid, the principal amount stated in such notice or the whole thereof, as the case may be, shall become due and payable on the prepayment date stated in such notice; and the amount of principal shall be paid (i) in case the entire unpaid balance of the principal of the 2003 Bonds is to be paid, upon presentation and surrender of the 2003 Bonds to the office of the Paying Agent (the designated corporate trust office, if the Paying Agent is not the City's Finance Department), and (ii) in case only part of the unpaid b~hnce of principal of the 2003 Bonds is to be paid, upon presentation of such 2003 Bonds at the office of the Paying Agent (the designated corporate trust office, if the Paying Agent is not the City's Finance Department) for notation thereon of the amount of principal then paid or for issuance of a replacement 2003 Bond in the principal amount not redeemed. Notwithstanding the provisions of clause (ii) above, if all of the 2003 Bonds are registered in the name of the Bank, a partial prepayment may be effected by payment to the Bank of the principal, together with unpaid interest accrued thereon, without surrender of the 2003 Bonds. If, on the prepayment date, funds for the payment of the principal amount to be prepaid, together with unpaid interest accrued thereon, shall not have been provided to the Paying Agent, as above provided, the principal amount of the 2003 Bonds shall continue to be outstanding and to bear interest until payment thereof at the Interest Rate. In the event of prepayment, the City may be required pay the Bank an additional fee, determined in the manner provided below, to compensate the Bank for all losses, costs and expenses incurred In connection with such prepayment. 8 RES. NO. 78-03 Such additional fee, if applicable, shall be equal to the present value of the difference between (1) the mount that would have been realized by the Bank on the prepaid amount for the remaining term of the 2003 Bonds at 4.99% (the Federal Reserve H.15 Statistical Release rate for fixed-rate payers in interest rate swaps for a term corresponding to the term of the 2003 Bonds, interpolated to the nearest month, if necessary, that was in effect three Business Days prior to the delivery date of the 2003 Bonds) and (2) the amount that would be realized by the Bank by reinvesting such prepaid funds for the remaining term of the 2003 Bonds at the Federal Reserve H.15 Statistical Release rate for fixed-rate payers in interest rate swaps, interpolated to the nearest month, that was in effect three Business Day's prior to the prepayment date; both (1) and (2) discounted at the Interest Rate. Should the present value have no value or a negative value, the City may prepay the 2003 Bonds without paying any additional fee. Should the Federal Reserve no longer release rates for fixed-rate payers in interest rate swaps, the Bank may substitute the Federal Reserve HAS Statistical Release with another similar index. The Bank shall provide the City with a written statement explaining the calculation of the additional payment, which statement shall, in absence of manifest error, be condusive and binding on the City. Partial prepayments may be made subject to payment of an additional fee based upon the same calculation methodology described above. Any partial prepayment shall be applied to installments of pdndpal in the inverse order of maturity and shall not postpone the due dates of, or relieve the amounts of, any scheduled installment payments due hereunder. SECTION 2.3 EXECUTION OF THE 2003 BONDS. The 2003 Bonds shall be executed in the name of the City by the signature of the Mayor or Vice Mayor of the City and its official seal shall be affixed thereto or imprinted or reproduced thereon and attested by the City Clerk. The signatures of the Mayor or Vice Mayor of the City and City Clerk on the 2003 Bonds may be manual or facsimile signatures. In case any one or more of the officers who shall have signed or sealed the 2003 Bonds shall cease to be such officer of the City before the 2003 Bonds so signed and sealed shall have been actually sold and delivered, such 2003 Bonds may nevertheless be sold and delivered as herein provided and may be issued as if the person who signed or sealed such 2003 Bonds had not ceased to hold such office. The 2003 Bonds may be signed and sealed on behalf of the City by such person who at the actual time of the execution of the 2003 Bonds shull hold the proper office, although at the date the 2003 Bonds shall be actually delivered such person may not have held such office or may not have been so authorized. The 2003 Bonds shall bear thereon a certificate of authentication, in the form set forth on Exhibit B attached hereto, executed manually by the Registrar (when the City's Finance Depatlment shall act as Registrar, the certificate of authentication shall be manually executed by the City's Finance Director). Only the 2003 Bonds as shall bear thereon such certificate of authentication shall be entitled to any right or benefit under this Resolution and no 2003 Bonds shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the Registrar. The certificate of authentication of the Registrar upon the 2003 Bonds executed on behalf of the City shall be conclusive evidence that the 2003 Bonds so authenticated have been duly 9 RES. NO. 78-03 authenticated and delivered under this Resolution and that the Owner thereof is entifled to the benefits of this Resolution. SECTION 2.4 NEGOTIABILITY, REGISTRATION AND CeANCF-I J.&TION. The Registrar shall keep books for the registration of the 2003 Bonds and for the registration of transfers of the 2003 Bonds. The 2003 Bonds shall be transferable at the option of the registered Owner thereof to an institutional holder, but subject to the prior written approval of the City's Director of Finance (which shall not be nnreasonably withheld if the intended transferee provides a suitability letter addressed to the City as to the sophistication of the investor) unless such institutional holder is a bank or trust company, or unless such institutional holder, which is not a bank or trust company, certifies in writing to the City prior to the transfer that it is an accredited investor within the meaning of Rule 501 of the Securities Act of 1933, as amended and supplemented, in which case such approval shall not be required, and upon surrender thereof at the office of the Registrar (the designated corporate trust office of the Registrar ff the City's Finance Dep~lment is not the Registrar) with a written instrument of transfer satisfactory to the Registrar duly executed by the registered Owner or his duly authorized attorney. Upon the transfer of such 2003 Bond, the City shall issue in the name of the transferee a new 2003 Bond. The City, the Paying Agent and the Registrar shall deem and treat the person in whose name the 2003 Bonds shall be registered upon the books kept by the Registrar as the absolute Owner of such 2003 Bonds, whether such 2003 Bonds shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such 2003 Bonds as the same become due and for all other purposes. All such payments so made to any such Owner or upon his/her order shall be valid and effectual to satisfy and discharge the liability upon such 2003 Bonds to the extent of the sum or sums so paid, and neither the City, the Paying Agent nor the Registrar shall be affected by any notice to the contrary. In all cases in which the privilege of transferring the 2003 Bonds is exercised, the City shall execute and the Registrar shall authenticate and deliver the 2003 Bonds in accordance with the provisions of this Resolution. The 2003 Bonds surrendered in any such transfers shall forthwith be delivered to the Registrar and canceled by the Registrar in the manner provided in this Section. The City or the Registrar (if not the City's Finance Dep~tment) may require the payment of a sum sufficient to pay any tax, fee or other governmental charges required to be paid with respect to such transfer. The 2003 Bonds paid or redeemed, in whole, either at or before maturity, shall be delivered to the Registrar within a reasonable period of time after the payment or redemption is made, and such 2003 Bonds shall thereupon be canceled upon written acknowledgement from the Owner that the 2003 Bonds have been paid in whole. The 2003 Bonds so canceled may at any time be destroyed by the Registrar, who shall execute a certificate of destruction in duplicate by the signature of one of its authorized officers describing the 2003 Bonds, and one executed certificate shall be filed with the City and the other executed certificate shall be retained by the Registrar (ff not the City's Finance Department). 10 RES. NO. 78-O3 SECTION 2.5 MUTILATED. DESTROYED. STOLEN OR LOST 2003 Bonds. In case any 2003 Bond shall become mutilated, destroyed, stolen or lost, the City shall execute and the Registrar shall authenticate and deliver a new 2003 Bond of like date, maturity and denomination as the 2003 Bond so mutilated, destroyed, stolen or lost; provided that, in the case of any mutilated 2003 Bond, such mutilated 2003 Bond shall first be surrendered to the City and, in the case of any lost, stolen or destroyed 2003 Bond, there shall first be furnished to the City and the Registrar (if not the City's Finance Department) evidence of such loss, theft, or destruction satisfactory to the City and the Registrar, together with indemnity satisfactory to them. In the event the 2003 Bonds shall be about to mature or have matured, instead of issuing a duplicate 2003 Bond, the City may pay the same without surrender thereof. The City and the Registrar (if not the City's Finance Department) may charge the Owner of such 2003 Bond their reasonable fees and expenses in connection with this transaction. Any 2003 Bonds surrendered for replacement shall be canceled in the same manner as provided in Section 2.4 hereof. Any such duplicate 2003 Bond issued pursuant to this Section shall constitute additional contractual obligations on the part of the City, whether or not the lost, stolen or destroyed 2003 Bond be at any time found by anyone, and such duplicate 2003 Bonds shall be entitled to equal proportionate benefits and tights as to lien on the source and security for payment from Pledged Revenues with the 2003 Bond issued hereunder. SECTION 2.6 CONDITIONS FOR ISSUANCE OF THE 2003 BONDS. Prior to the issuance of the 2003 Bonds, the City shall comply with the following conditions: (a) Deliver to the Banlr a fully executed Tax Certificate; and Co) Deliver to the Bank a copy of a completed and executed Form 8038-G to be filed by the City with the Internal Revenue Service; and (c) Deliver to the Bank an opinion of Bond Counsel, satisfactory to the Bank, regarding the due authorization, execution, delivery, validity and enforceability of the 2003 Bonds and the due adoption of this Resolution (enforceability of such instruments may be subject to standard bankruptcy exceptions and the like) and the exclusion of interest on the 2003 Bonds from gross income for federal income tax purposes, that the 2003 Bonds are not spedfied "private activity bonds" within the meaning of Section 57(a)(5) of the Code and, therefore, the interest on the 2003 Bonds will not be treated as a preference item for purposes of computing the alternative minimum tax imposed by Section 55 of the Code (however, a portion of the interest on the 2003 Bonds owned by corporations may be subject to the federal alternative minimum tax which is based in part on adjusted current earnings). Such opinion shall also state that the 2003 Bonds are "qualified tax- exempt obligations" within the meaning of Section 265Co) of the Code; and (d) Deliver to the Bank an opinion of the City Attorney, satisfactory to the Bank, regarding the due authorization, execution, delivery, validity and enforceability of the 2003 Bonds, 11 RES. NO. 7803 the Agreement and the due adoption of this Resolution and the Bond Resolution (enforceability may be subject to standard bankruptcy exceptions and the like); and (e) Deliver to the Bank one or more certificates of the City in form satisfactory to the Bank certif3fing, among other things, that the City is in compliance with the term of the Bond Resolution. SECTION 2.7 INCORPORATION OF TERMS OF BOND RESOLUTION: EXCEPTION Unless otherwise provided in this Resolution, the terms and provisions of the Bond Resolution applicable to the 2003 Bonds are incorporated herein by reference and such terms shall have the same effect as if expressly stated herein. ARTICLE III COVENANTS, FUNDS AND APPLICATION THEREOF SECTION 3.1 2003 BONDS NOT TO BE INDEBTEDNESS OF THE CITY. The 2003 Bonds shall not be or constitute an indebtedness of the City within the meaning of any constitutional, statutory or other limitation of indebtedness, but shall be secured solely by the Pledged Revenues and payable from Non-Ad Valorem Revenues including the Pledged Revenues. No Bondholder shall ever have the right to compel the exercise of the ad valorem taxing power of the City, or taxation in any form of any real property therein, to pay said 2003 Bonds or the interest thereon. The pledge of the Pledged Revenues will not constitute a lien upon any property of the City including any Non-Ad Valorem Revenues which have not been deposited into the Debt Service Fund. SECTION3.2 2003 BONDS. The lien of the 2003 Bonds on the Pledged Revenues shall be on parity with any of the Bonds issued pursuant to the requirements of the Bond Resolution. SECTION3.3 2003 BONDS SECURED BY PLEDGE OF PLEDGED REVENUES. From and after the issuance of any of the 2003 Bonds, and continuing until the payment of all 2003 Bonds as to prindpal and interest, the Pledged Revenues shall continue to be pledged for the prompt payment of principal of and interest on said 2003 Bonds. SECTION 3.4 COVENANTS OF THE CITY. As long as any of the pdndpal of or interest on any of the 2003 Bonds shall be outstanding and unpaid, or until there shall have been set apart in the Debt Service Fund in accordance with Section 4.H of Article III of the Bond Resolution a sum sufficient to pay, when due, the entire principal of the 2003 Bonds remaining unpaid, together with interest accrued and to accrue thereon, the City covenants with the Bondholders as follows: 12 RES. NO. 784)3 (a) Tax Covenants Relating to the Internal Revenue Code of 198~, as amended. (1) In order to maintain the exclusion from gross income for purposes of federal income taxation of interest on the 2003 Bonds, the City covenants to comply with each requirement of the Code. In furtherance of the covenant contained in the preceding sentence, the City agrees to continually comply with the provisions of the Tax Certificate, as such certificate may be amended from time to time, as a source of guidance for achieving compliance with the Code. (2) The City covenants and agrees with the Bondholders that the City shall not take any action or omit to take any action, which action or omission, if reasonably expected on the date of initial issuance and delivery of the 2003 Bonds, would cause any of the 2003 Bonds to be "private activity bonds" or "arbitrage bonds" within the meaning of Sections 141(a) and 148(a), respectively, of the Code. (3) The City shall make any and all payments required to be made to the United States Department of the Treasury in connection with the 2003 Bonds pursuant to Section 148(0 of the Code. (4) Notwithstanding any other provision of this Resolution to the contr~, so long as necessary in order to maiotain the exclusion from gross income for purposes of federal income taxation of interest on the 2003 Bonds, the covenants contained in this Section shall surfive the payment of the 2003 Bonds and the interest thereon, including any payment or discharge thereof pursuant to Section 4.H of the Bond Resolution. Debt Service Fund. The Debt Senqce Fund created and established under the Bond Resolution shall constitute a trust fund for the benefit of the Bondholder and shall be held by the City and shall be kept separate and distinct from all other funds of the City, and shall be used only for the purpose and in the manner provided in this Resolution. Notwithstanding the provisions of the next preceding sentence, the City may deposit the Pledged Revenues in a single bank account for the City, provided that adequate accounting procedures are maintained to reflect and control the restricted allocations of the funds on deposit therein for the various purposes of such funds. The designation and establishment of the Debt Service Fund in and by the Bond Resolution shall not be construed to require the establishment of any completely independent self-balancing fund, as such term is commonly defined and used in governmental accounting, but rather is intended solely to constitute an allocation of certain revenues of the City for certain purposes and to establish certain priorities for application of such revenues as provided herein. Any excess amounts remaining in the Debt Service Fund after payment has been made on the 2003 Bonds on any Payment Date, may be withdrawn and deposited at the direction of the City to be used for any lawful municipal purpose. Moneys on deposit in the Debt Service Fund may be invested in Permitted Investments as authorized pursuant to the Bond Resolution, provided such investments mature not latex than the 13 RES. NO. 78-03 next succeeding Payment Date. Subiect to the terms and provisions of the Code, all income and earnings received from the investment and reinvestment of the moneys on deposit in the Debt Service Fund shall remain on deposit in the Debt Service Fund and be used in the same manner as other moneys on deposit therein. (c) Non-Ad Valorem ll?eveones. The City will not repeal, amend or modify any resolution or ordinance or take any action within its power to take relating to the imposition and collection of Non-Ad Valorem Revenues in any manner so as to impair or adversely affect in any manner the availability of such Non- Ad Valorem Revenues to pay debt service on the 2003 Bonds as provided herein. (d) Budget and Other Financial Imeormation. The City shall demonstrate in each annual budget that there are sufficient Non-Ad Valorem Revenues to pay the principal of and interest on the 2003 Bonds coming due in such Fiscal Year and to meet the City's other obligations hereunder and under the Bond Resolution. The City shall, upon the request of the Bank, provide the Bank with a copy of its annual budget within thirty 00) days of adoption, a copy of its Comprehensive Annual Financial Report, when available and, upon the request of the Bank, such other financial information regarding the City as the Bank may reasonably request. (e) The City shall comply with the terms of the Bond Resolution. SECTION 3.5 REMEDIES OF BONDHOLDER. Subject to the equal tights of any registered owner of Bonds issued pursuant to the provisions of the Bond Resolution, should the City default in any obligation created by this Resolution, the Bondholders may, in addition to any remedy set forth in this Resolution, either at law or in equity, by suit, action, mandamus or other proceeding in any court of competent jurisdiction, protect and enforce any and all rights under the laws of the State of Florida, or granted and contained in this Resolution, and may enforce and compel the performance of all duties required by this Resolution, or by any applicable statutes to be performed by the City or by any officer thereof. The City hereby agrees with the Bondholders that the filing of any b~nlrruptcy or insolvency under any federal or state law by or against the City which is not dismissed with prejudice within tifirty (30) days of such filing shall give the Bondholders the fight to exercise any of the remedies provided to them under this Section 3.5, and Section 4.G of Article III of the Bond Resolution. Notxvithstanding anything in this Section 3.5 to the contrary the Bondholders' right to exercise any remedy permitted hereunder shall be consistent with the fights afforded all registered owners of Bonds issued pursuant to the provisions of the Bond Resolution. SECTION 3.6 APPLICATION OF 2003 BONDS PROCEEDS. A portion of the proceeds of the 2003 Bonds shall be used to refinance the Prior Debt. The balance of the proceeds of the 2003 Bonds shall be used to finance the costs of the 2003 Project. The City may replace all or a portion of the 2003 Project for any other capital projects permitted under the Act; provided that Bond Counsel shall first deliver to the City and the Bank an opinion to the effect that such substitution will not adversely affect the exclusion of interest on the 2003 Bonds from gross income for federal income tax purposes. 14 RES. NO. 7803 SECTION 3.7 ADJUSTMENTS TO INTEREST RATE. Upon a Determination of Taxability the interest rate on the Bonds shall be converted to the Taxable Rate. In addition, the City shall also pay to the Bank any additions to tax, penalties, and any interest on the 2003 Bonds and any arrears in interest resulting from a Determination of Taxability. Any penalties in the form of interest or otherwise shall be paid by the City on the next succeeding Payment Date. The Interest Rate shMl also be adjusted automatically as of the effective date of any change in the maximum corporate tax rate, presently 35%, or in the Preference Reduction Rate (hereinafter defined), presently 20%, based upon the following calculations. Provided, however, ff the 2003 Bonds are not a "qualified tax-exempt obligation" within the meaning of Section 265 (b) (3) of the Code on the date of delivery of the 2003 Bonds, or if the 2003 Bonds at any time subsequent to delivery of the 2003 Bonds no longer qualify as a "qualified tax-exempt obligation," then the Preference Reduction Rate shall be adjusted as of the date of delivery of the 2003 Bonds or as of such subsequent date, as the case may be. Upon the occurrence of any of the foregoing events, the Interest Rate shall be adjusted to the product obtained by multiplying the Interest Rate by a fraction, the numerator of which is equal to the sum of (i) the product of the Fully Taxable Equivalent (hereinafter defined) times one minus the maximum corporate tax rate in effect as of the day of adjustment, plus (ii) the TEFRA Adjustment (hereinafter defined) in effect as of the date of adjustment, and the denominator of which is equal to the sum of (i) the product of the "Fully Taxable Equivalent" times one minus the ma:drmml corporate tax rate in effect as of the date of delivery of the 2003 Bonds plus (h) the TEFRA Adjustment (hereinafter defined) in effect as of the date of delivery of the 2003 Bonds. For the purpose hereofi (1) "TEFRA Adjustment' means an adjustment equal to the product of the foHowin~ Cost of Funds multiplied by the applicable maximum corporate tax rate multiplied by the applicable Preference Reduction Rate; (2) "Cost of Funds" means one hundred (100) multiplied by a fraction, the numerator of which is equal to the total interest expense of SunTrust Banks, Inc., for the immediately preceding tax year and the denominator of which is equal to the average total assets of SunTrust Banks, Inc., but at no time will be determined to exceed the cost of Fed Funds; (3) "Preference Reduction Rate" means the percentage reduction to be applied to the amount allowable as a deduction under Chapter I of the Code with respect to any finandal institution preference item (as such term is defined in Section 291(e) of the Code); and (4) "Fully Taxable Equivalent" means the Interest Rate times 1.5234 expressed as a number and not as a percentage. 15 RES. NO. 78-03 ARTICLE IV MISCEI-I.~uNEOUS PROVISIONS SECTION4.1 MODIFICATION OR AMENDMENT. No modification or amendment of this Resolution or of any resolution amendatory thereof or supplemental thereto, may be made without the consent in writing of all of the Bondholders. SECTION 4.2 ADDITIONAL AUTHORIZATION. The Mayor, the Vice- Mayor, the City Manager, the Finance Director, the Treasurer and any other proper official of the City, be and each of them is hereby authorized and directed to execute and deliver any and all documents and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated by this Resolution. SECTION 4.3 SEVERABILITY OF INVALID PROVISIONS. If any one or more of the covenants, agseements or provisions of this Resolution should be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions, and shall in no way affect the validity of any of the other provisions of this Resolution or of the 2003 Bonds issued hereunder. SECTION 4.4 REPEALER~ All resolutions and orders, or parts thereof, in conflict herewith are, to the extent of such conflict, hereby repealed, and thi~ Resolution shall take effect upon its passage in the manner provided by law. In the event of a conflict between the provisions of this Resolution and the Bond Resolution, the provisions of this Resolution shall control. SECTION 4.5 I~FFECTIVE DATE. immediatdy upon its adoption. This Resolution shall be effective PASSED AND ADOPTED IN regnbr session on this 18m day of November, 2003. A'I'YEST: City Clerk THE CITY OF DELRAY BEACH, FLORIDA 16 RES. NO. 78-03 The foregoing resolution is hereby approved by me as to form this 18m day of November, 2003. BY: ~om~ey ~~ 17 RES. NO. 78-03 EXHIBIT A BOND PURCHASE AGREEMENT THIS BOND PURCHASE AGREEMENT (the "Agreement") dated December __, 2003, by and between SunTrust Bank, a banldng corporation organized under the hws of the State of Georgia (herein the "Bank") and the City of Ddray Beach, Florida, a municipal corporation of the State of Florida (together with its successors and assigns, the "City"). WHEREAS, pursuant to the Act, as such term is defined in Resolution No. 76-99, as supplemented by Resolution No. 78-03 (collectively, the "Resolution"), adopted by the City Commission of the City on December 14 1999 and November 18, 2003, respectively, the City authorized the issuance of not to exceed $9,685,000 in aggregate principal amount of City of Delray Beach, Florida Revenue Refunding and Improvement Bonds, Series 2003 (the "Bonds"); and WHEREAS, any capitalized term used in this Agreement and not othenvise defined shall have the meaning ascribed to such term in the Resolution; and WHEREAS, the Bank has reviewed the Resolution and hereby finds the terms acceptable; and WHEREAS, on this date, the City has, pursuant to provisions of the Act, the Resolution and this Agreement, agreed to issue and sell to the Bank and the Bank has, pursuant to the terms of this Agreement and the terms and provisions of the Resolution, agreed to purchase, all but not less than all, of the Bonds; and WHEREAS, the City and the Bank have heretofore negotiated the terms of the Bonds and the Resolution and by execution of this Agreement each will have confirmed that such are acceptable. NOW THEREFORE, the City and the Bank hereby agree as follows: 1. Purchase and Sale. Upon the terms and conditions set forth herein and in the Bonds and the Resolution and upon the representations and warranties of the City set forth in the Resolution, the Tax Certificate and other dos'mg certificates, the City agrees to sell on this date the Bonds on a negotiated basis to the Bank and the Bank agrees on this date to purchase, with immediately available funds, all but not less than all, of the Bonds. The purchase price for the Bonds shall be $9,685,000, which purchase price is equal to the principal amount of the Bonds. Since the dated date of the Bonds is the date hereof, there will be no accrued interest as part of the purchase price. If the principal amount of Bonds sold to the Bank pursuant to this paragraph is less \\~Dbq~OI\$ANFORm\447485vOTMl/14~\99~03.426594 Resolution No. 78-03 A-1 than $9,685,000.00, the Bank agrees to purchase any additional Bonds under the same terms as the Bonds so issued (except the dated date) up to a total aggregate amount of $9,685,000. 2. Private Placement Negotiated Sale. The Bank hereby acknowledges that the purchase of the Bonds from the City was on a negotiated private placement basis and that there has been no offering document prepared by the City in connection with such sale. 3. Conditions for Purchase. The Bank's agreement to purchase the Bonds on this date is subject to the satisfaction of the conditions set forth in Section 2.6 of Resolution No. 78-03. The Bank's purchase of the Bonds will constitute full evidence that such conditions have been satisfied or waived. 4. Section 218.385 Florida Statutes. On or before the purchase of the Bonds, the Bank has provided the City with the disclosure and truth-in-bonding statements required by and in accordance with, Section 218.385, Florida Statutes, as amended and supplemented. The above- referenced statements are attached to this Agreement as Schedule A. 5. Expenses. As between the City and the Bank, the Bank shall not be liable for any expenses incurred by the City in connection with the issuance of the Bonds. The Bank represents to the City that it has not employed or used the services of any attorney or other professional in connection with the Bank's negotiations with the City and its purchase of the Bonds other than Adorno & Yoss, P.A., which fee, in the amount of $2,500 shall be paid by the City. 6. The City and the Bank, for mutual consideration, each acknowledged to be received by the other patty hereto, mutually and willingly waive the right to a trial by a jury in connection with any and all chims by any party hereto against the other arising from or in connection with the transactions contemplated by this Agreement or the Resolution. 7. Effectiveness. This Agreement shall become effective upon the execution by the appropriate offi~-i~lg of the City and the Bunk. 8. Heading. The headings set forth in this Agreement are inserted for convenience only and shall not be deemed to be a part hereof. 9. Amendment. No modification, alteration or amendment to this Agreement shall be binding upon any patty until such modification, alternation or amendment is reduced to writing and executed by all parties hereto. 10. Govemin~ Law. The laws of the State of Florida shall govern this Agreement. 11. Counterparts. This Agreement may be signed in any number of counterparts with the same effect as ff the signatures thereto and hereto were signatories upon the same instrument. \\W!~i:~OtX~ANFOI~DSX~47485V07~I 1/14/0~\99903.426~,1 Resolution No. 78-03 ^-2 IN WITNESS WHEREOF, the City and the Bank has Caused this Agreement to be executed by its respective duly authorized officers all as of the date hereof. SUNTRUST BANK (SEAL) By:. Title: Date: December 2, 2003 CITY OF DI~.i.RAY BEACH, FLORIDA (SEAL) By:. Title: Date: December 2, 2003 Resolution No. 78-03 A-3 No. R- EXHIBIT B FORM OF 2003 BOND $9,685,000 UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF DELRAY BEACH, FLORIDA REVENUE REFUNDING AND IMPROVEMENT BOND, SERIES 2003 Interest Rate 3.659% Maturi _ty Date June 1, 2019 Dated Date December __, 2003 REGISTERED OWNER: ......................... SUNTRUST BANK ......................... PRINCIPAL AMOUNT:---NINE MII.I.ION SIX HUNDRED EIGHTY-FIVE THOUSAND DOI.IARS ($9,685,000.00) ..... KNOW ~l.l. MEN BY THESE PRESENTS, that the City of Delmy Beach (the "City") in Palm Beach County, Florida, for value received, hereby promises to pay from the sources herein mentioned, to the Registered Owner specified above or registered assigns on the Maturity Date specified above or earlier upon mandatory or optional prepayment as provided below, upon the presentation and surrender hereof at the City's Finance Dep~U,~ent or (if so determined by the City) the designated trust office of the bank or trust company appointed by the City to act as paying agent (said City's Finance Depaiti,~ent or such bank or trust company and any bank or trust company becoming successor paying agent being herein called the '~Paying Agent"), the Principal Amount outstanding from time to time and not previously prepaid with interest thereon at the stated interest rate calculated on the basis of a 360-day year of 12 thkty-day months, on each Payment Date in the manner specified in the within described Bond Resolution to the registered owner. The interest rate on the Bond may be converted to a Taxable Rate or is otherwise adjusted as provided in the Bond Resolution. The principal amount and accrued interest thereon is payable in any coin or currency of the United States of America, which, on the date of payment thereof, shall be legal tender for the payment of public and private debts. This Bond is authorized to be issued in a principal amount of $9,685,000 under the authority of and in full compliance with the Constitution and statutes of the State of Florida, including, particularly, Chapter 166, Florida Statutes, as amended and supplemented, the Charter of the City of Delray Beach, Florida, as amended and supplemented, and other applicable provisions of law (the \\w~q~01~,gANfiORD~.447485v07'xl 1/14/03\99~03,42&594 Resolution NO. 78-03 B-1 "Act"), and Resolution No. 76-99 duly adopted on December 14, 1999 and Resolution No. 78-03 duly adopted on November 18, 2003 (collectively, the "Bond Resolution''), as such resolutions may be further amended and supplemented fi'om time to time, and is subiect to all terms and conditions of said resolution. Any term used in this Bond and not othexwise defined, shall have the meaning ascribed to such term in the Bond Resolution. It is hereby certified and recited that all acts, conditions and things required to exist, to happen, and to be performed, precedent to and in the issuance of this Bond exist, have happened and have been performed in regular and due form and time as required by the Laws and Constitution of the State of Florida and the Charter of the City applicable thereto, and that the issuance of this Bond, is in full compliance with all constitutional or statutory limitations or provisions. This Bond shall not be valid or become obligatory for any purpose or be entided to any security or benefit under the Bond Resolution until the certificate of authentication hereon shall have been signed by an authorized officer of the Registrar. This Bond shall bear interest at the Interest Rate, as such rate may be adiusted in accordance with the terms of the Bond Resolution. Upon the occurrence of a Deterrnln~rion of Taxability this Bond shall bear interest at the Taxable Rate. Interest shall be payable on June 1, 2004, and each December I and June I thereafter and prindpal on the Bonds, unless prepaid, shall be payable on each June 1 in the amounts set forth below; provided that ff such date is not a Bus'mess Day, the payment shall be made on the next succeeding Business Day (each a "Payment Date"). The principal of and interest on the Bonds shall be secured solely by the Pledged Revenues (as defined in the Bond Resolution), and payable from the Non-Ad Valorem Revenues (as such term is defined in the Bond Resolution) including the Pledged Revenues, all in the manner provided in the Bond Resolution. Date Principal Amount 2004 $380,000 2005 255,000 2006 265,000 2007 270,000 2008 275,000 2009 920,000 2010 590,000 \\',V131:~II~O)XSANFORD$\447485v07~I 1/14/~3\99903~26594 Resolution No. 78-03 B-2 2011 605,000 2012 630,000 2013 655,000 2014 675,000 2015 695,000 2016 820,00O 2017 850,000 2018 880,000 2019' 920.000 Total $9,685,000.00 * Final maturity Subject to the terms and provisions of the Section 2.2 of Resolution No. 78-03 of the City, the City may prepay this Bond in whole or in part, at any time or from time to time, without penalty or premium, except as provided below, by paying to the registered holder all or part of the principal mount of this Bond, together with the unpaid interest accrued on the mount of principal so prepaid to the date of such prepayment. Each prepayment shall be made on such date and in such principal amount as shall be specified by the City in a written notice delivered to the registered owner not less than two (2) Business Days prior thereto. Notice having been given as aforesaid, the principal amount stated in such notice or the whole thereof, as the case may be, shall become due and payable on the prepayment date stated in such notice; and the amount of principal shall be paid (i) in case the entire unpaid balance of the principal of this Bond is to be paid, upon presentation and surrender of such Bond to the office of the Paying Agent (the designated corporate trust office, if the Paying Agent is not the City's Finance Depa~i~ent), and (ii) in case only part of the unpaid bahnce of principal of this Bond is to be paid, upon presentation of such Bond at the office of the Paying Agent (the designated corporate trust office, ff the Paying Agent is not the City's Finance Department) for notation thereon of the amount of principal then paid or for issuance of a replacement Bond in the principal amount not redeemed. Notwithstanding the provisions of clause (ii) above, if all of the Bonds are registered in the name of the Bank~ a partial prepayment may be effected by payment to the Bank of the principal, together with unpaid interest accrued thereon, without surrender of this Bond. If, on the prepayment date, funds for the payment of the principal amount to be prepaid, together with unpaid interest accrued thereon, shall not have been provided to the Paying Agent, as above provided, the principal amount of this Bond shall continue to be outstanding and to bear interest until payment thereof at the Interest Rate. In the event of such prepayment, the City may be required to pay to SunTrust Bank, as the registered owner of the Bonds (herein, the "Bank'S, an additional fee, determined in the manner provided below, to compensate the Bank for all losses, costs and expenses incurred in connection with such prepayment. Such additional fee shall be equal to the present value of the difference between (1) the amount that would have been realized by the Bank on the prepaid amount for the remaining term of the Bonds at 4.99% (the Federal Reserve H.15 Statistical Release rate for fixed-rate payers in interest \\Wi~>~01'~ANEORD~4474&SvOTM 1/14/03\99~3.42~5'~4 Resolution No. 78-03 B-3 rate swaps for a term corresponding to the term of the Bonds, interpolated to the nearest month, if necessary, that was in effect three Business Days prior to the delivery date of the Bonds) and (2) the mount that would be realized by the Bank by reinvesting such prepaid funds for the remaining term of the 2003 Bonds at the Federal Reserve H.15 Statistical Release rate for fixed-rate payers in interest rate swaps, interpolated to the nearest month, that was in effect three Business Day's prior to the prepayment date; both (1) and (2) discounted at the Interest Rate stated above. Should the present value have no value or a negative value, the City may prepay the Bonds with no additional fee. Should the Federal Reserve no longer release rates for fixed-rote payers in interest rote swaps, the Bank may substitute the Federal Reserve H.15 Statistical Release with another sinailar index. The Bank shall provide the City with a written statement explaining the calculation of the additional payment due, which statement shall, in absence of manifest error, be conclusive and binding. Partial prepayments may be made subject to payment of an additional fee based upon the same calculation methodology described above. Any partial prepayment shall be applied to installments of principal in the inverse order of maturity and shall not postpone the due dates of, or relieve the amounts of, any scheduled installment payments due hereunder. This Bond shall not be and shall not constitute an indebtedness of the City within the meaning of any constitutional, statutory, charter or other limitations of indebtedness but shall be secured solely by the Pledged Revenues and payable from the Non-Ad Valorem Revenues which includes the Pledged Revenues. No Holder of this Bond shall ever have the right to compel the exercise of ad valorem taxing power of the City, or taxation in any form of any real property therein to pay the Bond or the interest thereon. No holder shall have a lien on any Non-Ad Valorem Revenues until deposited into the Debt Service Fund created and established under the Bond Resolution. The terms and provisions of the Bond Resolution are incorporated in this Bond as though such terms and provisions have been set out in full herein. IN WITNESS WHEREOF, the City of Delray Beach, Florida, has caused this Bond to be signed by its Mayor, either manually or with his facsimile signature, and the seal of the City Commission of the City of Delray Beach, Florida, to be affixed hereto or imprinted or reproduced hereon, and attested by the Clerk of the City, either manually or with her facsimile signature, and this Bond to be dated the Dated Date set forth above. \\wpt~01Xs^NFORDsX~.4?~8~v07M 1/14.~3\9~0~.42659~ Resolution No. 78-03 B-4 CITY OF DELRAY BEACH, FLORIDA A'IWISST: By:. Clerk of the City of Delray Beach, Florida By: Mayor \\Wp~Ji,~OI\$ANFORDS\~I7485VOIM 1/14,~G\~O3.425594 Resolution No. 78-03 B-5 FORM OF CERTIFICATE OF AUTHENTICATION Date of Authentication: December ,2003 This Bond is the Bond delivered pursuant to the within mentioned Resolution. CITY OF DELRAY BF-,ACH Finance Depai~,ent, as Registrar By: Authorized Officer \\wi:/oq~Oi\SANFORDg.44748:h~IM 1/14/08\99903.426594 Resolution No. 78-03 B-6 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 Bond and all rights thereunder, and hereby irrevocably constitutes and appoints , Attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed: In the presence off NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within Bond in every parficnl~r~ without alteration or enlargement, or any change whatever. \\W~I>4*~OI\SANFORDS\44748&,OTM 1/14/03~99903.426594 Resolution NO. 78-03 B-7 EXHIBIT C 2005 P~oject (1) Acquisition, construction and equipping of a new library facility, including all facilities relating thereto. All related, necessary and inddental engineering, design, labor, contingency and costs of issuing 2003 Bonds. xxm~,-~o~xs^.m. Dsx~7~o~0~x~ m4/o3x~4 Resolution No. 78-03 C-1 MEMORANDUM To: City Commission From: David T. Harden, City Manager Subject: Proposed $9,685,000 Revenue and Refunding Note Resolution No. R 78-03 Date: November 13, 2003 The City Commission approved SunTrust as the lending institution that will provide a Note to the City. The attached resolution determines the details of the loan transaction which are summarized as follows: Resolution Number 78-03 authorizes the issuance of Revenue Bonds not to exceed $9,685,000; approves the form and execution of a note with SunTrust at a fixed rate of 3.659% for an approximate 15.5 year term for the purpose of re-financing, in part, the City of Delray Beach 2002 Revenue Bonds and the City of Delray Beach 2002 (Taxable) Revenue Bonds, and in whole, the City of Delray Beach 1999 Revenue Bonds. In addition, the new bonds will finance costs associated with the Library project. The resolution also designates the borrowing as qualified tax- exempt bonds; and authorizes proper officers of the City to do all things necessary in connection with the issuance. The Finance Department recommends approval of this resolution. I concur with their recommendation. c: R.S. O'Connor, Treasurer File: commiss03res.doc MEMORANDUM To: From~;=~ Thru: Subject: Date: David T. Harden, City Manager Rebecca S. O'Connor, Treasurer M. Saffor~or of Finance Joseph Proposed $9,685,000 Revenue and Refunding Note November 13, 2003 Backqround On October 23, 2003, the City Finance Department received bids for the above ~eferenced financing (the "Note"). The $9,685,000 Note will be issued for the purpose refinancing, in part, the City of Delray Beach Revenue Note, Series 2002 {interim financing of the Atlantic High Project, Temple ,Sinai land acquisition, Barwick property acquisition) and the City of Delray Beach Revenue (Taxable) Note, Series 2002 (interim financing of the Golf Course Improvement Project); and in whole, the City of Delray Beach 1999 Revenue Bonds (permanent financing for communications equipment). In addition, the new bonds will finance costs associated with the new Library Project. Term We asked that the banks make their bids based on 1.) one note ($9,685,000) with a 15.5-year bank qualified tax exempt rate and 2.) two separate notes based on a bank qualified tax exempt rate. We requested bids for a note totalling $7,330,000 for a 20 year term and the second note totalling $2,355,000 for an 11,5 year term. Security The Line of Credit will be secured by budget and appropriate on an annual basis from non-ad valorem revenues the amount sufficient to pay debt service. Prepayment Provisions/Gross-up Provisions The City asked the banks to bid with and without a "pre-payment penalty". The "pre-payment pertain' is a fee charged or a premium paid by the City in the event the City chooses to pre-pay the note. The penalty described by the bidding banks is based upon a formula that basically protects the banks from any loss due to a decrease in the interest rate at the time of pre-payment. If the rates are higher at the time of pre-payment there would be no pre-payment penalty. Bid Res;3onses The City received responses from Bank of America, SunTrust, and Wachovia. (See Attachment A) Note: The banks also placed additional conditions with respect to the financing. Wachovia placed an additional pledge requiring debt service coverage of 1.5x instead of 1.10. Bank of America and SunTrust placed no additional conditions. Recommendation We recommend (Option 1) the fixed rate financing option for a 15.5-year term with the "pre- payment penalty and gross-up" language offered by SunTrust. This option offers the lowest bid offered by the bidding banks. We have attached a resolution provided by Steve Sanford of Greenberg Traurig, the City's Bond Counsel, which authorizes the agreement with Bank of America. Note: The present value savings associated with the refunding of the 1999 Revenue Note was approximately $232,000 or 9.84% of the refunded bonds. The approximate annual savings is $25,000. File: commiss03B.doc RESOLUTION NO. 78-03 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF DELRAY BEACH, FLORIDA, AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $9,685,000 IN AGGREGATE PRINCIPAL AMOUNT OF REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 2003, OF THE CITY OF DELRAY BEACH, FLORIDA FOR THE PURPOSE OF REFINANCING CERTAIN OUTSTANDING REVENUE OBLIGATIONS OF THE CITY AND FINANCING CERTAIN CAPITAL COSTS ASSOCIATED WITH A NEW LIBRARY PROJECT AND PAYING ALL INCIDENTAL AND NECESSARY COSTS RELATING THERETO; DETERMINING THE NEED FOR A NEGOTIATED SALE OF SUCH BONDS TO SUNTRUST BANK; PROVIDING FOR THE TERMS AND PAYMENT OF SAID REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 2003, AND THE RIGHTS, REMEDIES AND SECURITY OF THE OWNERS THEREOF; MAKING CERTAIN COVENANTS RELATING TO THE ISSUANCE OF SAID REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 2003; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION OF A BOND PURCHASE AGREEMENT WITH SUNTRUST BANK; DESIGNATING THE REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 2003 AS "QUALIFIED TAX-EXEMPT OBLIGATIONS" WITHIN THE MEANING OF SECTION 265(b) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AUTHORIZING THE PROPER OFFICERS OF THE CITY TO DO ALL OTHER THINGS DEEMED NECESSARY OR ADVISABLE IN CONNECTION WITH THE ISSUANCE OF SAID BONDS; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City Commission of the City of Delray Beach, Florida (the "City Commission"), hereby determines that it is in the best interest of the City of Delray Beach, Florida (the "City"), to refinance the Prior Debt (as herein defined) and to finance certain costs relating to the acquisition, construction and equipping of the City's new library facility, as further described on Exhibit C attached hereto, together with all incidental and necessary costs relating thereto (the "2003 Project"); and WHEREAS, on December 14, 1999, the City Commission did adopt Resolution No. 76-99 (the "Bond Resolution") authorizing the issuance, from time to time, of revenue bonds (the "Bonds") to financial capital projects in the City; and WHEREAS, any capitalized term used in this Resolution and not otherwise defined, shall have the meaning ascribed to such term in the Bond Resolution; and WHEREAS, pursuant to the Bond Resolution each series of Bonds issued thereunder shall be payable solely from the City's covenant contained in the Bond Resolution to budget and appropriate in each Fiscal Year, by budget amendment if necessary, Non-Ad Valorem Revenues and deposit the same in the Debt Service Fund created and established under the Bond Resolution; and WHEREAS, pursuant to the terms and provisions of the Bond Resolution and this Resolution, the City shall issue a series of Bonds known as "City of Delray Beach, Florida Revenue Refunding and Improvement Bonds, Series 2003" (herein, the "2003 Bonds") to refinance the Prior Debt and finance the costs of the 2003 Project, including the costs of issuing such 2003 Bonds; and ~\wpb-s~01/SANFOt'~OS\447465v07~11/[4/03\99903.426594 Resolution No. 78-03 WHEREAS, the principal amount of the 2003 Bonds authorized under this Resolution shall not exceed $9,685,000; and WHEREAS, the 2003 Bonds shall be secured by a pledge of and lien on the Pledged Revenues; and WHEREAS, City staff has previously solicited bids from qualified lending institutions to provide a closed-end line of credit or term loan as the vehicle by which the 2003 Bonds are to be issued, the Prior Debt is to be refinanced and the 2003 Project is to be financed; and WHEREAS, City staff has determined and the City Commission hereby concurs that SunTrust Bank, a banking organization organized under the laws of the State of Georgia with its designated office in West Palm Beach, Florida (herein, the "Bank") has provided the best overall bid to the City; and WHEREAS, the City Commission hereby finds that in light of present market conditions, the aforementioned bid provided by the Bank, the necessity for the funds in calendar year 2003, and other factors described herein, it would be in the best interest of the City to sell the 2003 Bonds to the Bank on a negotiated basis pursuant to the terms and provisions of the Bond Resolution, this Resolution and that certain Bond Purchase Agreement dated the date of delivery of the 2003 Bonds (herein, the "Agreement") by and between the City and the Bank in substantially the form attached hereto as Exhibit A. WHEREAS, the City does not expect to issue more than $9,685,000 of its tax-exempt obligations in calendar year 2003, and based upon the advice of its Bond Counsel, the City Commission shall designate the 2003 Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b) of the Code. NOW, THEREFORE, be it resolved by the City Commission of the City of Delray Beach, Florida, as follows: ARTICLE I STATUTORY AUTHORITY; FINDINGS AND DEFINITIONS SECTION 1.1 AUTHORITY FOR THIS RESOLUTION. This Resoldtion is adopted pursuant to the provisions of the Charter of the City of Delray Beach, Florida, as amended and supplemented, the Florida Constitution, Chapter 166, Florida Statutes, as amended and supplemented, and other applicable provisions of law (collectively, the "Act") and the authority provided for in the Bond Resolution. SECTION 1.2. FINDINGS. It is hereby ascertained, determined and declared: (a) That in order to provide long-term financing for certain municipal projects of the City initially financed on a short-term basis, the City hereby authorizes the refinancing of the Prior Debt using a portion of the proceeds of the 2003 Bonds. (b) That the City hereby authorizes that the 2003 Project be financed from a portion of the proceeds derived from the 2003 Bonds issued pursuant to this Resolution, together with all incidental and necessary costs and expenses associated therewith, as more fully set forth in Section 1.2(e) hereof. i \wpb-srvO1 \SANFORDS\447486v07\ 11/14/[]3'~99q(]3.426594 2 Resolution No. 78-03 (c) That it is necessary and in the best economic interest of the City to acquire, construct and implement the 2003 Project in order to promote cultural, recreational and educational advancement in the City. (d) That the 2003 Project will serve a valid municipal purpose. (e) That the cost of refinancing the Prior Debt and the 2003 Project shall be deemed to include, but not be limited to, the cost of acquisition, construction, improving, renovating and equipping all or a portion of the 2003 Project, the cost of all real or personal property necessary therefor; administrative expenses; design, engineering and legal expenses; the fees and expenses of Bond Counsel; the fees and reasonable expenses of counsel for the Bank; expenses for estimates of costs; expenses for plans, specifications, licenses and permits; and such other expenses as may be necessary or incidental to the refinancing of the Prior Debt and the financing of the 2003 Project and the issuance of the 2003 Bonds herein authorized. (f) That the principal of and interest on the 2003 Bonds shall be secured solely by the Pledged Revenues and payable from the Non-Ad Valorem Revenues including such pledged revenues provided that the Owner of the 2003 Bonds shall have no lien on the Non-Ad Valorem Revenues until deposited into the Debt Service Fund. The ad valorem taxing power of the City will never be necessary or authorized to pay the principal of and interest on the 2003 Bonds, and the 2003 Bonds issued pursuant to this Resolution shall not constitute a lien upon any other property whatsoever of or in the City. (g) That the City, having previously solicited bids for the sale of the 2003 Bonds, has determined that the best qualified bid for the 2003 Bonds was delivered by the Bank. (h) That the negotiated sale of the 2003 Bonds to the Bank is in the best interest of the City by reason of the nature of and schedule for the completion of the refinancing of the Prior Debt and the 2003 Project, the aforementioned solicitation of bids and present market conditions. (i) That the Agreement, in the form attached hereto as Exhibit A, is hereby approved, with such omissions, insertions and variations as may be necessary and desirable, as evidenced by the City's execution thereof and the Mayor (or in his absence, the Vice Mayor) and City Clerk are hereby authorized to execute the same on behalf of the City. (j) That pursuant to the provisions of the Bond Resolution and this Resolution, the City may issue obligations in the future secured by Pledged Revenues. (k) The City hereby designates the 2003 Bonds to be qualified "tax-exempt obligations" within the meaning of 265(b) of the Code. (I) That any capitalized term not otherwise defined herein, shall have the meaning ascribed to such term in the Bond Resolution. SECTION 1.3 DEFINITIONS. That, in addition to terms defined elsewhere in this Resolution, the following terms shall have the following meanings unless the context otherwise clearly requires: "Bond Counsel" shall mean Greenberg Traurig, P.A. or any other firm of nationally recognized bond counsel selected by the City and acceptable to the Bank. \lwpb-s~O)\SANFORDS\447485vO7\11/14/03\ggqo3.426594 3 Resolution No. 78-03 "Bond Resolution" shall mean Resolution No. 76-99, adopted by the City Commission on December 14, 1999, as amended and supplemented. "Business Day" shall mean any day other than a Saturday or Sunday, or a day on which the Bank is closed. "City" shall mean the City of Delray Beach, Florida, a municipal corporation in the County of Palm Beach, State of Florida, and its successors and assigns. "City Commission" shall mean the duly constituted governing body of the City. "Code" shall mean the Internal Revenue Code of 1986, as amended, the applicable Treasury Regulations promulgated thereunder and any administrative or judicial interpretations of the same published in a form on which the City may rely as a matter of law. "Determination of Taxability" shall mean the cimumstance of interest paid or payable on the 2003 Bonds becoming includable for federal income tax purposes in the gross income of the Bondholder. A Determination of Taxability will be deemed to have occurred upon (i) the receipt by the City or Bondholder of an original or a copy of an Internal Revenue Service Technical Advice Memorandum or Statutory Notice of Deficiency which holds that any interest payable on the 2003 Bonds is includable in the gross income of the Bondholder for federal income tax purposes; (ii) the issuance of any public or private ruling of the Internal Revenue Service that any interest payable on the 2003 Bonds is includable in the gross income of the Bondholder for federal income tax purposes; or (iii) receipt by the City or Bondholder of an opinion of a Bond Counsel that any interest on the 2003 Bonds has become includable in the gross income of the Bondholder for federal income tax purposes. For all purposes of this definition, a Determination of Taxability will be deemed to occur on the date as of which the interest on the 2003 Bonds is first deemed includable in the gross income of the Bondholder for federal income tax purposes. "Interest Rate" shall mean with respect to the 2003 Bonds, unless the 2003 Bonds bear interest at the Taxable Rate or the interest rate is otherwise adjusted pursuant to Section 3.7 hereof, a fixed rate of interest on the 2003 Bonds which, shall be equal to 3.659 percent per annum. The Interest Rate shall be calculated on the basis of a 360 day year of twelve thirty-day months. "Maturity Date" shall mean, with respect to the unpaid principal of and interest on the 2003 Bonds, June 1, 2019. "2003 Bonds" shall mean the not to exceed $9,685,000 aggregate principal amount of Revenue Refunding and Improvement Bonds, Series 2003, authorized by the Bond Resolution and this Resolution. "Owner," "Bondholder" or "registered holder" or any similar term shall mean the Bank or, subject to the provisions of Section 2.4 hereof, any successor registered holder of the 2003 I~onds; provided no Bondholder may be the registered owner of less than $1,000,000 in the aggregate principal amount of the 2003 Bonds. "Paying Agent" shall mean the City's Finance Department or, if the City Commission shall so determine by subsequent proceeding, any bank or trust company and any successor bank or trust company appointed by the City to act as Paying Agent hereunder. \\wpb-sr~Ol\$ANFOED$\447485vO7\11/14/03~(;;qqO3.426594 Z~ Resolution No. 78-03 "Payment Date" shall mean, with respect to interest on the 2003 Bonds, each June 1 and December 1, commencing June 1, 2004 and with respect to scheduled principal on the 2003 Bonds, on each June 1, commencing June 1, 2004 in the principal amounts set forth in Section 2.2 hereof, and, prior to the Maturity Date, on any date the principal of the 2003 Bonds is optionally or mandatorily prepaid in whole or in part, provided that if such date is not a Business Day, the payment shall be made on the next succeeding Business Day. "Pledged Revenues" shall mean (I) the Non-Ad Valorem Revenues deposited in the Debt Service Fund created and established under the Bond Resolution, (ii) investment income received from the investment of moneys in the Debt Service Fund and accounts established thereunder, other than any escrow deposit trust fund established under a escrow deposit agreement, and (iii) any other moneys deposited in the Debt Service Fund or received by the Paying Agent in connection with the repayment of any Bonds. "Prior Debt" shall mean the City's Revenue Bonds, Series 1999, in the principal amount of $2,355,000, the City's Revenue Notes (Taxable), Series 2002, in the principal amount of $548,000 and the City's Revenue Bonds, Series 2002, in the principal amount of $4,929,000. "Registrar" shall mean the City's Finance Department or, if the City Commission shall so determine by subsequent proceeding, any bank or trust company and any successor bank or ';.rust company appointed by the City to act as Registrar hereunder. "Resolution" shall mean this Resolution as the same may from time to time be amended and supplemented in accordance with the terms hereof. "Taxable Rate" shall mean the Interest Rate times 1.5234. "Tax Certificate" shall mean the Arbitrage Certificate of the City executed on the date of initial delivery of the 2003 Bonds. Words importing singular number shall include the plural number and vice versa, as the case may be, and words importing persons shall include firms and corporations. SECTION 1.4 RESOLUTION AND BOND RESOLUTION CONSTITUTE CONTRACT. In consideration of the acceptance of the 2003 Bonds authorized to be issued hereunder by those who shall own the same from time to time, this Resolution and the Bond Resolution shall be deemed to be and shall constitute a contract between the City and the Bondholders and the covenants and agreements herein and therein set forth to be performed by said City shall be for the benefit, protection and security of the Bondholders. ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF 2003 BONDS SECTION 2.1 AUTHORIZATION OF 2003 BONDS. Subject and pursuant to the provisions of this Resolution and the Bond Resolution, obligations of the City of Delray Beach, Florida, to be known as "Revenue Refunding and Improvement Bonds, Series 2003" are hereby authorized to be issued in the aggregate principal amount of not exceeding Nine Million Six Hundred Eighty-Five Thousand Dollars ($9,685,000) for the purpose of refinancing the Prior Debt and financing the costs of the 2003 Project. \\wpb-$r~l\$ANFORD$\447485vO7~11/14/0~\9'~03.42(~94 ~ Resolution No. 78-03 SECTION 2.2 DESCRIPTION OF 2003 BONDS. Notwithstanding the form of Bonds set forth in the Bond Resolution, the text of the 2003 Bonds shall be substantially in the form attached hereto as Exhibit B with such omissions, insertions and variations as may be necessary and desirable, as evidenced by the City's execution thereof. The 2003 Bonds (initially issued in one (1) typewritten certificate) shall be dated the date of initial issuance. The 2003 Bonds shall be issued in registered form. Unless the interest rate on the 2003 Bonds is adjusted in accordance with Section 3.7 hereof, the 2003 Bonds shall bear interest on the outstanding principal amount of the 2003 Bonds from time to time at the Interest Rate and shall be payable on each Payment Date, commencing June 1, 2003. Unless all or a portion of the Bonds is optionally or mandatorily prepaid in accordance with the terms of this Resolution, the outstanding principal of the 2003 Bonds shall be payable on each June 1 in the years and amounts set forth below: Date Principal Amount 2004 $380,000 2005 255,000 2006 265,000 2007 270,000 2O08 275,000 2009 920,000 2010 590,000 2011 605,000 2012 630,000 2013 655,000 2014 675,O00 2015 695,000 2016 820,000 2017 850,000 2018 880,000 2019' 920.000 Total $9,685,000 Final maturity Principal and interest on the 2003 Bonds shall be payable at the office of the Paying Agent (the designated corporate trust office of the Paying Agent if the City's Finance Department is not the Paying Agent). The 2003 Bonds shall be numbered in such manner as may be prescribed by the Registrar. \\wpt~$rv01 \SANFOr~D$\447485V07\11/14/03\(~gqO3.426594 (5 Resolution No. 78-03 The 2003 Bonds shall be payable, with respect to interest and principal, in any coin cr currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. Subject to the next succeeding paragraph, the City may prepay the 2003 Bonds in whole or in part, at any time or from time to time, without penalty or premium, except as may be applicable by the provisions set forth below, by paying to the registered holder all or part of the principal amount of the 2003 Bonds, together with the unpaid interest accrued on the amount of principal so prepaid to the date of such prepayment. Each prepayment shall be made on such date and in such principal amount as shall be specified by the City in a written notice delivered to the registered owner not less than two (2) Business Days prior thereto. Notice having been given as aforesaid, the principal amount stated in such notice or the whole thereof, as the case may be, shall become due and payable on the prepayment date stated in such notice; and the amount of principal shall be paid (i) in case the entire unpaid balance of the principal of the 2003 Bonds is to be paid, upon presentation and surrender of the 2003 Bonds to the office of the Paying Agent (the designated corporate trust office, if the Paying Agent is not the City's Finance Department), and (ii) in case only part of the unpaid balance of principal of the 2003 Bonds is to be paid, upon presentation of such 2003 Bonds at the office of the Paying Agent (the designated corporate trust office, if the Paying Agent is not the City's Finance Department) for notation thereon of the amount of principal then paid or for issuance of a replacement 2003 Bond in the principal amount not redeemed. Notwithstanding the provisions of clause (ii) above, if all of the 2003 Bonds are registered in the name of the Bank, a partial prepayment may be effected by payment to the Bank of the principal, together with unpaid interest accrued thereon, witnout surrender of the 2003 Bonds. if, on the prepayment date, funds for the payment of the principal amount to be prepaid, together with unpaid interest accrued thereon, shall not have been provided to the Paying Agent, as above provided, the principal amount of the 2003 Bonds shall continue to be outstanding and to bear interest until payment thereof at the Interest Rate. In the event of prepayment, the City may be required pay the Bank an additional fee, determined in the manner provided below, to compensate the Bank for all losses, costs and expenses incurred In connection with such prepayment. Such additional fee, if applicable, shall be equal to the present value of the difference between (1) the amount that would have been realized by the Bank on the prepaid amount for the remaining term of the 2003 Bonds at 4.99% (the Federal Reserve H.15 Statistical Release rate for fixed-rate payers in interest rate swaps for a term corresponding to the term of the 2003 Bonds, interpolated to the nearest month, if necessary, that was in effect three Business Days prior to the delivery date of the 2003 Bonds) and (2) the amount that would be realized by the Bank by reinvesting such prepaid funds for the remaining term of the 2003 Bonds at the Federal Reserve H.15 Statistical Release rate for fixed-rate payers in interest rate swaps, interpolated to +.he nearest month, that was in effect three Business Day's prior to the prepayment date; both (1) and (2) discounted at the Interest Rate. Should the present value have no value or a negative value, the City may prepay the 2003 Bonds without paying any additional fee. Should the Federal Reserve no longer release rates for fixed-rate payers in interest rate swaps, the Bank may substitute the Federal Reserve H.15 Statistical Release with another similar index. The Bank shall provide the City with a written statement explaining the calculation of the additional payment, which statement shall, in absence of manifest error, be conclusive and binding on the City. Partial prepayments may be made subject to payment of an additional fee based upon the same calculation methodology described above. Any partial prepayment shall be applied to \\Wpb-~,Ol\SANFORDS\447485VOT\11/14/O3\Qg~33,426594 7 Resolution No. 78-03 installments of principal in the inverse order of maturity and shall not postpone the due dates of, or relieve the amounts of, any scheduled installment payments due hereunder. SECTION 2.3 EXECUTION OF THE 2003 BONDS. The 2003 Bonds shall be executed in the name of the City by the signature of the Mayor or Vice Mayor of the City and its official seal shall be affixed thereto or imprinted or reproduced thereon and attested by the City Clerk. The signatures of the Mayor or Vice Mayor of the City and City Clerk on the 2003 Bonds may be manual or facsimile signatures. In case any one or more of the officers who shall have signed or sealed the 2003 Bonds shall cease to be such officer of the City before the 2003 Bonds so signed and sealed shall have been actually sold and delivered, such 2003 Bonds may nevertheless be sold and delivered as herein provided and may be issued as if the person who signed or sealed such 2003 Bonds had not ceased to hold such office. The 2003 Bonds may be signed and sealed on behalf of the City by such person who at the actual time of the execution of the 2003 Bonds shall hold the proper office, although at the date the 2003 Bonds shall be actually delivered such person may not have held such office or may not have been so authorized. The 2003 Bonds shall bear thereon a certificate of authentication, in the form set forth on Exhibit B attached hereto, executed manually by the Registrar (when the City's Finance Department shall act as Registrar, the certificate of authentication shall be manually executed by the City's Finance Director). Only the 2003 Bonds as shall bear thereon such certificate of authentication shall be entitled to any right or benefit under this Resolution and no 2003 Bonds shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the Registrar. The certificate of authentication of the Registrar upon the 2003 Bonds executed on behalf of the City shall be conclusive evidence that the 2003 Bonds so authenticated have been duly authenticated and delivered under this Resolution and that the Owner thereof is entitled to the benefits of this Resolution. SECTION2.4 NEGOTIABILITY~ REGISTRATION AND CANCELLATION. The Registrar shall keep books for the registration of the 2003 Bonds and for the registration of transfers of the 2003 Bonds. The 2003 Bonds shall be transferable at the option of the registered Owner thereof to an institutional holder, but subject to the prior written approval of the City's Director of Finance (which shall not be unreasonably withheld if the intended transferee provides a suitability letter addressed to the City as to the sophistication of the investor) unless such institubonal holder is a bank or trust company, or unless such institutional holder, which is not a bank or trust company, certifies in writing to the City prior to the transfer that it is an accredited investor within the meaning of Rule 501 of the Securities Act of 1933, as amended and supplemented, in which case such approval shall not be required, and upon surrender thereof at the office of the Registrar (the designated corporate trust office of the Registrar if the City's Finance Department is not the Registrar) with a written instrument of transfer satisfactory to the Registrar duly executed by the registered Owner or his duly authorized attorney. Upon the transfer of such 2003 Bond, the City shall issue in the name of the transferee a new 2003 Bond. The City, the Paying Agent and the Registrar shall deem and treat the person in whose name the 2003 Bonds shall be registered upon the books kept by the Registrar as the absolute Owner of such 2003 Bonds, whether such 2003 Bonds shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such 2003 Bonds as the same become due and for all other purposes. All such payments so made to any such Owner or upon his/her order shall be valid and effectual to satisfy and discharge the liability \\Wpb-sI~O1\$ANFOROS\447485VO7\ll/14/o3\gge'O3'426594 8 Resolution No. 78-03 upon such 2003 Bonds to the extent of the sum or sums so paid, and neither the City, the Paying Agent nor the Registrar shall be affected by any notice to the contrary. In all cases in which the privilege of transferring the 2003 Bonds is exemised, the City shall execute and the Registrar shall authenticate and deliver the 2003 Bonds in accordance with the provisions of this Resolution. The 2003 Bonds surrendered in any such transfers shall forthwith be delivered to the Registrar and canceled by the Registrar in the manner provided in this Section. The City or the Registrar (if not the City's Finance Department) may require the payment of a sum sufficient to pay any tax, fee or other governmental charges required to be paid with respect to such transfer. The 2003 Bonds paid or redeemed, in whole, either at or before maturity, shall be delivered to the Registrar within a reasonable period of time after the payment or redemption is made, and such 2003 Bonds shall thereupon be canceled upon written acknowledgement from the Owner that the 2003 Bonds have been paid in whole. The 2003 Bonds so canceled may at any time be destroyed by the Registrar, who shall execute a certificate of destruction in duplicate by the signature of one of its authorized officers describing the 2003 Bonds, and one executed certificate shall be filed with the City and the other executed certificate shall be retained by the Registrar (if not the City's Finance Department). SECTION 2.5 MUTILATED~ DESTROYED~ STOLEN OR LOST 2003 Bonds. In case any 2003 Bond shall become mutilated, destroyed, stolen or lost, the City shall execute and the Registrar shall authenticate and deliver a new 2003 Bond of like date, maturity and denomination as the 2003 Bond so mutilated, destroyed, stolen or lost; provided that, in the case of any mutilated 2003 Bond, such mutilated 2003 Bond shall first be surrendered to the City and, in the case of any lost, stolen or destroyed 2003 Bond, there shall first be furnished to the City and the Registrar (if not the City's Finance Department) evidence of such loss, theft, or destruction satisfactory to the City and the Registrar, together with indemnity satisfactory to them. in the event the 2003 Bonds shall be about to mature or have matured, instead of issuing a duplicate 2003 Bond, the City may pay the same without surrender thereof. The City and the Registrar (if not the City's Finance Department) may charge the Owner of such 2003 Bond their reasonable fees and expenses in connection with this transaction. Any 2003 Bonds surrendered for replacement shall be canceled in the same manner as provided in Section 2.4 hereof. Any such duplicate 2003 Bond issued pursuant to this Section shall constitute additional contractual obligations on the part of the City, whether or not the lost, stolen or destroyed 2003 Bond be at any time found by anyone, and such duplicate 2003 Bonds shall be entitled to equal proportionate benefits and rights as to lien on the source and security for payment from Pledged Revenues with the 2003 Bond issued hereunder. SECTION 2.6 CONDITIONS FOR ISSUANCE OF THE 2003 BONDS. Prior to the issuance of the 2003 Bonds, the City shall comply with the following conditions: (a) Deliver to the Bank a fully executed Tax Certificate; and (b) Deliver to the Bank a copy of a completed and executed Form 8038-G to be filed by the City with the internal Revenue Service; and (c) Deliver to the Bank an opinion of Bond Counsel, satisfactory to the Bank, regarding the due authorization, execution, delivery, validity and enfomeability of the 2003 \\wpb-s~01\SANFOF'<OS\447485vO7\11114/03\gQqO3.426594 9 Resolution No. 78-03 Bonds and the due adoption of this Resolution (enforceability of such instruments may be subject to standard bankruptcy exceptions and the like) and the exclusion of interest on the 2003 Bonds from gross income for federal income tax purposes, that the 2003 Bonds are not specified "private activity bonds" within the meaning of Section 57(a)(5) of the Code and, therefore, the interest or, the 2003 Bonds will not be treated as a preference item for purposes of computing the alternative minimum tax imposed by Section 55 of the Code (however, a portion of the interest on the 2003 Bonds owned by corporations may be subject to the federal alternative minimum tax which is based in part on adjusted current earnings). Such opinion shall also state that the 2003 Bonds are "qualified tax-exempt obligations" within tl',e meaning of Section 265(b) of the Code; and (d) Deliver to the Bank an opinion of the City Attorney, satisfactory to the Bank, regarding the due authorization, execution, delivery, validity and enforceability of the 2003 Bonds, the Agreement and the due adoption of this Resolution and the Bond Resolution (enforceability may be subject to standard bankruptcy exceptions end the like); and (e) Deliver to the Bank one or more certificates of the City in form satisfactory to the Bank certifying, among other things, that the City is in compliance with the term of the Bond Resolution. SECTION 2.7 INCORPORATION OF TERMS OF BOND RESOLUTION; EXCEPTIOI',I Unless otherwise provided in this Resolution, the terms and provisions of the Bond Resolution applicable to the 2003 Bonds ere incorporated herein by reference and such terms shall have the same effect as if expressly stated herein. ARTICLE III COVENANTS, FUNDS AND APPLICATION THEREOF SECTION 3.1 2003 BONDS NOT TO BE INDEBTEDNESS OF THE CITY. The 2003 Bonds shall not be or constitute an indebtedness of the City within the meaning of any constitutional, statutory or other limitation of indebtedness, but shall be secured solely by the Pledged Revenues and payable from Non-Ad Valorem Revenues including the Pledged Revenues. No Bondholder shall ever have the right to compel the exercise of the ad valorem taxing power of the City, or taxation in any form of any real property therein, to pay said 2003 Bonds or the interest thereon. The pledge of the Pledged Revenues will not constitute a lien upon any property of the City including any Non-Ad Valorem Revenues which have not been deposited into the Debt Service Fund. SECTION 3.2 2003 BONDS. The lien of the 2003 Bonds on the Pledged Revenues shall be on parity with any of the Bonds issued pursuant to the requirements of the Bond Resolution. SECTION 3.3 2003 BONDS SECURED BY pLFI~GE OF PLEDGED REVENUES. From and after the issuance of any of the 2003 Bonds, and continuing until the payment of all 2003 Bonds as to principal and interest, the Pledged Revenues shall continue to be pledged for the prompt payment of principal of and interest on said 2003 Bonds. SECTION 3.4 COVENANTS OF THE CITY. As long as any of the principal of or interest on any of the 2003 Bonds shall be outstanding and unpaid, or until there shall have been set apart in the Debt Service Fund in accordance with Section 4.H of Article III of the Bond Resolution a sum sufficient to pay, when due, the entire principal of the 2003 Bonds remaining \\wpb-s~01 \$ANFO~\a47485V07'~] 1/14/0.3\9gq03.426.594 10 Resolution NO. 78-03 unpaid, together with interest accrued and to accrue thereon, the City covenants with the Bondholders as follows: (a) Tax Covenants Relating to the Internal Revenue Code of 1986, as amended. (1) In order to maintain the exclusion from gross income for purposes of federal income taxation of interest on the 2003 Bonds, the City covenants to comply with each requirement of the Code. In furtherance of the covenant contained in the preceding sentence, the City agrees to continually comply with the provisions of the Tax Certificate, as such certificate may be amended from time to time, as a source of guidance for achieving compliance with the Code. (2) The City covenants and agrees with the Bondholders that the City shall not take any action or omit to take any action, which action or omission, if reasonably expected on the date of initial issuance and delivery of the 2003 Bonds, would cause any of the 2003 Bonds to be "private activity bonds" or "arbitrage bonds" within the meaning of Sections 141(a) and 148(a), respectively, of the Code. (3) The City shall make any and all payments required to be made to the United States Department of the Treasury in connection with the 2003 Bonds pursuant to Section 148(f) of the Code. (4) Notwithstanding any other provision of this Resolution to the contrary, so long as necessary in order to maintain the exclusion from gross income for purposes of federal income taxation of interest on the 2003 Bonds, the covenants contained in this Section shall survive the payment of the 2003 Bonds and the interest thereon, including any payment or discharge thereof pursuant to Section 4.H of the Bond Resolution. (b) Debt Service Fund. The Debt Service Fund created and established under the Bond Resolution shall constitute a trust fund for the benefit of the Bondholder and shall be held by the City and shall be kept separate and distinct from all other funds of the City, and shall be used only for the purpose and in the manner provided in this Resolution. Notwithstanding the provisions of the next preceding sentence, the City may deposit the Pledged Revenues in a single bank account for the City, provided that adequate accounting procedures are maintained to reflect and control the restricted allocations of the funds on deposit therein for the various purposes of such funds. The designation and establishment of the Debt Service Fund in and by the Bond Resolution shall not be construed to require the establishment of any completely ~ndependent self-balancing fund, as such term is commonly defined and used in governmental accounting, but rather is intended solely to constitute an allocation of certain revenues of the City for certain purposes and to establish certain priorities for application of such revenues as provided herein. Any excess amounts remaining in the Debt Service Fund after payment has been made on the 2003 Bonds on any Payment Date, may be withdrawn and deposited at the direction of the City to be used for any lawful municipal purpose. Moneys on deposit in the Debt Service Fund may be invested in Permitted Investments as authorized pursuant to the Bond Resolution, provided such investments mature not later than the next succeeding Payment Date. Subject to the terms and provisions of the Code, all income and earnings received from the investment and reinvestment of the moneys on deposit in the \\wpb-~v01\$ANFORDS\447485vO7\11/14/03\gq~O3.426594 11 Resolution No. 78-03 Debt Service Fund shall remain on deposit in the Debt Service Fund and be used in the same manner as other moneys on deposit therein. (c) Non-Ad Valorem Revenues. The City will not repeal, amend or modify any resolution or ordinance or take any action within its power to take relating to the imposition and collection of Non-Ad Valorem Revenues in any manner so as to impair or adversely affect in any manner the availability of such Non- Ad Valorem Revenues to pay debt service on the 2003 Bonds as provided herein. (d) Budget and Other Financial Information. The City shall demonstrate in each annual budget that there are sufficient Non-Ad Valorem Revenues to pay the principal of and interest on the 2003 Bonds coming due in such Fiscal Year and to meet the City's other obligations hereunder and under the Bond Resolution. The City shall, upon the request of the Bank, provide the Bank with a copy of its annual budget within thirty (30) days of adoption, a copy of its Comprehensive Annual Financial Report, when available and, upon the request of the Bank, such other financial information regarding the City as the Bank may reasonably request. (e) The City shall comply with the terms of the Bond Resolution. SECTION 3.5 REMEDIES OF BONDHOLDER. Subject to the equal rights of any registered owner of Bonds issued pursuant to the provisions of the Bond Resolution, should the City default in any obligation created by this Resolution, the Bondholders may, in addition to any remedy set forth in this Resolution, either at law or in equity, by suit, action, mandamus or other proceeding in any court of competent jurisdiction, protect and enforce any and alt rights under the laws of the State of Florida, or granted and contained in this Resolution, and may enforce and compel the performance of ail duties required by this Resolution, or by any applicable statutes to be performed by the City or by any officer thereof. The City hereby agrees with the Bondholders that the filing of any bankruptcy or insolvency under any federal or state law by or ag,zinst the City which is not dismissed with prejudice within thirty (30) days of such filing shall give the Bondholders the right to exercise any of the remedies provided to them under this Section 3.5, and Section 4.G of Article III of the Bond Resolution. Notwithstanding anything in this Section 3.5 to the contrary the Bondholders' right to exercise any remedy permitted hereunder shall be consistent with the rights afforded all registered owners of Bonds issued pursuant to the provisions of the Bond Resolution. SECTION 3.6 APPLICATION OF 2003 BONDS PROCEEDS. A portion of the proceeds of the 2003 Bonds shall be used to refinance the Prior Debt. The balance of the proceeds of the 2003 Bonds shall be used to finance the costs of the 2003 Project. The City may replace all or a portion of the 2003 Project for any other capital projects permitted under the Act; provided that Bond Counsel shall first deliver to the City and the Bank an opinion to the effect that such substitution will not adversely affect the exclusion of interest on the 2003 Bonds from gross income for federal income tax purposes. SECTION 3.7 ADJUSTMENTS TO INTEREST RATE. Upon a Determination of Taxability the interest rate on the Bonds shall be converted to the Taxable Rate. In addition, the City shall also pay to the Bank any additions to tax, penalties, and any interest on the 2003 Bonds and any arrears in interest resulting from a Determination of Taxability. Any penalties in the form of interest or otherwise shall be paid by the City on the next succeeding Payment Date. \ \wpb-s~01 \SANFORDS\447485V07\ 11/14/03\qq903 42~594 1 2 Resolution No. 78-03 The Interest Rate shall also be adjusted automatically as of the effective date of any change in the maximum corporate tax rate, presently 35%, or in the Preference Reduction Rate (hereinafter defined), presently 20%, based upon the following calculations. Provided, however, if the 2003 Bonds are not a "qualified tax-exempt obligation" within the meaning of Section 265 (b) (3) of the Code on the date of delivery of the 2003 Bonds, or if the 2003 Bonds at any time subsequent to delivery of the 2003 Bonds no longer qualify as a "qualified tax-exempt obligation," then the Preference Reduction Rate shall be adjusted as of the date of delivery of the 2003 Bo;~ds or as of such subsequent date, as the case may be. Upon the occurrence of any of the foregoing events, the Interest Rate shall be adjusted to the product obtained by multiplying the Interest Rate by a fraction, the numerator of which is equal to the sum of (i) the product of the Fully Taxable Equivalent (hereinafter defined) times one minus the maximum corporate tax rate in effect as of the day of adjustment, plus (ii) the TEFRA Adjustment (hereinafter defined) in effect as of the date of adjustment, and the denominator of which is equal to the sum of (i) the product of the "Fully Taxable Equivalent" times one minus the maximum corporate tax rate in effect as of the date of delivery of the 2003 Bonds plus (ii) the TEFRA Adjustment (hereinafter defined) in effect as of the date of delivery of the 2003 Bonds. For the purpose hereof: (1) "TEFRA Adjustment' means an adjustment equal to the product of the following: Cost of Funds multiplied by the applicable maximum corporate tax rate multiplied by the applicable Preference Reduction Rate; (2) "Cost of Funds" means one hundred (100) multiplied by a fraction, the numerator of which is equal to the total interest expense of SunTrust Banks, Inc., for the immediately preceding tax year and the denominator of which is equal to the average total assets of SunTrust Banks, Inc., but at no time will be determined to exceed the cost of Fed Funds; (3) "Preference Reduction Rate" means the percentage reduction to be applied to the amount allowable as a deduction under Chapter I of the Code with respect to any financial institution preference item (as such term is defined in Section 291(e) of the Code); and (4) "Fully Taxable Equivalent" means the Interest Rate times 1.5234 expressed as a number and not as a percentage. ARTICLE IV MISCELLANEOUS PROVISIONS SECTION 4.1 MODIFICATION OR AMENDMENT. No modification or amendment of this Resolution or of any resolution amendatory thereof or supplemental thereto, may be made without the consent in writing of all of the Bondholders. SECTION 4.2 ADDITIONAL AUTHORIZATION. The Mayor, the Vice-Mayor, the City Manager, the Finance Director, the Treasurer and any other proper official of the City, be and each of them is hereby authorized and directed to execute and deliver any and all documents and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated by this Resolution. SECTION 4.3 SEVERABILITY OF INVALID PROVISIONS. If any o~e or more of the covenants, agreements or provisions of this Resolution should be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such \\wpb-srvOl\$ANFORDS\447485'vO7\ll/la/O3\gqgO3.426594 13 Resolution No. 78-03 covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions, and shall in no way affect the validity of any of tho other provisions of this Resolution or of the 2003 Bonds issued hereunder. SECTION 4.4 REPEALER. All resolutions and orders, or parts thereof, in conflict herewith are, to the extent of such conflict, hereby repealed, and this Resolution shall take effect upon its passage in the manner provided by law. in the event of a conflict between the provisions of this Resolution and the Bond Resolution, the provisions of this Resolution shall control. SECTION 4.5 EFFECTIVE DATE. This Resolution shall be effective immediately upon its adoption. PASSED AND ADOPTED IN special session on this 18th day of November, 2003. ATTEST: By: City Clerk The foregoing resolution is hereby approved by me as to form this 18th day of November, 2003. THE CITY OF DELRAY BEACH, FLORIDA By: Mayor By: City Attorney \\wpb-s~v01\SANFORDS\447485v07\11/14/03\9qqO3.42~594 14 Resolution No. 78-03 EXHIBIT A BOND PURCHASE AGREEMENT THIS BOND PURCHASE AGREEMENT (the "Agreement") dated December _, 2003, by and between SunTrust Bank, a banking corporation organized under the laws of the State of Georgia (herein the "Bank") and the City of Delray Beach, Florida, a municipal corporation of the State of Florida (together with its successors and assigns, the "City"). WITNESSETH: WHEREAS, pursuant to the Act, as such term is defined in Resolution No. 76-99, as supplemented by Resolution No. 78-03 (collectively, the "Resolution"), adopted by the City Commission of the City on December 14 1999 and November 18, 2003, respectively, the City authorized the issuance of not to exceed $9,685,000 in aggregate principal amount of City of Delray Beach, Florida Revenue Refunding and Improvement Bonds, Series 2003 (the "Bonds"); and WHEREAS, any capitalized term used in this Agreement and not otherwise defined shall have the meaning ascribed to such term in the Resolution; and WHEREAS, the Bank has reviewed the Resolution and hereby finds the terms acceptable; and WHEREAS, on this date, the City has, pursuant to provisions of the Act, the Resolution and this Agreement, agreed to issue and sell to the Bank and the Bank has, pursuant to the terms of this Agreement and the terms and provisions of the Resolution, agreec~ to pumhase, all but r, ot less than all, of the Bonds; and WHEREAS, the City and the Bank have heretofore negotiated the terms of the Bonds and the Resolution and by execution of this Agreement each will have confirmed that such are acceptable. NOW THEREFORE, the City and the Bank hereby agree as follows: 1. Purchase and Sale. Upon the terms and conditions set forth herein and in the Bonds and the Resolution and upon the representations and warranties of the City set forth in the Resolution, the Tax Certificate and other closing certificates, the City agrees to sell on this date the Bonds on a negotiated basis to the Bank and the Bank agrees on this date to purchase, with immediately available funds, all but not less than all, of the Bonds. The purchase price for the Bonds shall be $9,685,000, which purchase price is equal to the principal amount of the Bonds. Since the dated date of the Bonds is the date hereof, there will be no accrued interest as part of the pumhase price. If the principal amount of Bonds sold to the Bank pursuant to this paragraph is less than $9,685,000.00, the Bank agrees to purchase any additional Bonds under the same terms as the Bonds so issued (except the dated date) up to a total aggregate amount of $9,685,000. 2. Private Placement Neqotiated Sale. The Bank hereby acknowledges that the pumhase of the Bonds from the City was on a negotiated private placement basis and that there has been no offering document prepared by the City in connection with such sale. \\wpb-$rvOl\SANFOr~DS\44748§v07\lll]4103\99°03.426594 Resolution No. 78-03 3. Conditions for Purchase. The Bank's agreement to purchase the Bonds on this date is subject to the satisfaction of the conditions set forth in Section 2.6 of Resolution No. 78-03. The Bank's purchase of the Bonds will constitute full evidence that such conditions have been satisfied or waived. 4. Section 218.385 Florida Statutes. On or before the purchase of the Bonds, the Bank has provided the City with the disclosure and truth-in-bonding statements required by and in accordance with, Section 218.385, Florida Statutes, as amended and supplemented. The above-referenced statements are attached to this Agreement as Schedule A. 5. Expenses. As between the City and the Bank, the Bank shall not be liable for any expenses incurred by the City in connection with the issuance of the Bonds. The Bank represents to the City that it has not employed or used the services of any attorney or other professional in connection with the Bank's negotiations with the City and its purchase of the Bonds other than Adorno & Yoss, P.A., which fee, in the amount of $2,500 shall be paid by the City. 6. The City and the Bank, for mutual consideration, each acknowledged to be received by the other party hereto, mutually and willingly waive the right to a trial by a jury in connection with any and all claims by any party hereto against the other arising from or in connection with the transactions contemplated by this Agreement or the Resolution. 7. Effectiveness. This Agreement shall become effective upon the execution by the appropriate officials of the City and the Bank. 8. Headinqs. The headings set forth in this Agreement are inserted for convenience only and shall not be deemed to be a part hereof. 9. Amendment. No modification, alteration or amendment to this Agreement shall be binding upon any party until such modification, alternation or amendment is reduced to writing and executed by all parties hereto. 10. Governinq Law. The laws of the State of Florida shall govern this Agreement. 11. Counterparts. This Agreement may be signed in any number of counterparts with the same effect as if the signatures thereto and hereto were signatories upon the same instrument. Resolution No. 78-03 A-2 IN WITNESS WHEREOF, the City and the Bank has caused this Agreement to be executed by its respective duly authorized officers all as of the date hereof. SUNTRUST BANK (SEAL) By: Title: Date: December 2, 2003 CITY OF DELRAY BEACH, FLORIDA (SEAL) By: Title: Date: December 2, 2003 Resolution No. 78-03 A-3 No. R- EXHIBIT B FORM OF 2003 BOND $9,685,000 UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF DELRAY BEACH, FLORIDA REVENUE REFUNDING AND IMPROVEMENT BOND, SERIES 2003 Maturity Date June 1, 2019 Dated Date December _, 2003 Interest Rate 3.659% REGISTERED OWNER: ......................... SUNTRUST BANK ................................ PRINCIPAL AMOUNT:--NINE MILLION SlX HUNDRED EIGHTY-FIVE THOUSAND DOLLARS ($9,685,000.00) ..... KNOW ALL MEN BY THESE PRESENTS, that the City of Delray Beach (the "City") in Palm Beach County, Florida, for value received, hereby promises to pay from the sources herein mentioned, to the Registered Owner specified above or registered assigns on the Maturity Date specified above or earlier upon mandatory or optional prepayment as provided below, upon the presentation and surrender hereof at the City's Finance Depertment or (if so determined by the City) the designated trust office of the bank or trust company appointed by the City to act as paying agent (said City's Finance Department or such bank o~ trust cornpany and any bank or trust company becoming successor paying agent being herein called the "Paying Agent"), the Principal Amount outstanding from time to time and not previously prepaid with interest thereon at the stated interest rate calculated on the basis of a 360-day year of 12 thirty-day months, on each Payment Date in the manner specified in the within described Bond Resolution to the registered owner. The interest rate on the Bond may be converted to a Taxable Rate or is otherwise adjusted as provided in the Bond Resolution. The principal amount and accrued interest thereon is payable in any coin or currency of the United States of America, which, on the date of payment thereof, shall be legal tender for the payment of public and private debts. This Bond is authorized to be issued in a principal amount of $9,685,000 under the authority of and in full compliance with the Constitution and statutes of the State of Florida, including, particularly, Chapter 166, Florida Statutes, as amended and supplemented, the Charter of the City of Delray Beach, Florida, as amended and supplemented, and other applicable provisions of law (the "Act"), and Resolution No. 76-99 duly adopted on December14, 1999 and Resolution No. 78-03 duly adopted on November 18, 2003 (collectively, the "Bond Resolution"), as such resolutions may be further amended and supplemented from time to time, and is subject to all terms and conditions of said resolution. Any term used in this Bond and not otherwise defined, shall have the meaning ascribed to such term in the Bond Resolution. It is hereby certified and recited that all acts, conditions and things required to exist, to happen, and to be performed, precedent to and in the issuance of this Bond exist, have happened and have been performed in regular and due form and time as required by the Laws \\wp~-srvO]\SANFORD$\aa7485vO7\]l/14/03\gg903.426594 Resolution NO. 78-03 B-1 and Constitution of the State of Florida and the Charter of the City applicable thereto, and that the issuance of this Bond, is in full compliance with all constitutional or statutory limitations or provisions. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Resolution until the certificate of authentication hereon shall have been signed by an authorized officer of the Registrar. This Bond shall bear interest at the Interest Rate, as such rate may be adjusted in accordance with the terms of the Bond Resolution. Upon the occurrence of a Determination of Taxability this Bond shall bear interest at the Taxable Rate. Interest shall be payable on June 1,2004, and each December 1 and June 1 thereafter and principal on the Bonds, unless prepaid, shall be payable on each June 1 in the amounts set forth below; provided that if such date is not a Business Day, the payment shall be made on the next succeeding Business Day (each a "Payment Date"). The principal of and interest on the Bonds shall be secured solely by the Pledged Revenues (as defined in the Bond Resolution), and payable from the Non-Ad Valorem Revenues (as such term is defined in the Bond Resolution) fncluding the Pledged Revenues, all in the manner provided in the Bond Resolution. Date Principal Amount 2004 $380,000 2005 255,000 2006 265,000 2007 270,000 2008 275,000 2009 920,000 2010 590,000 2011 605,000 2012 630,000 2013 655,000 2014 675,000 2015 695,000 2016 820,000 2017 850,000 2018 880,000 2019' 920,000 Total $9,685,000.00 Final maturity Subject to the terms and provisions of the Section 2.2 of Resolution No. 78-03 of the City, the City may prepay this Bond in whole or in part, at any time or from time to time, without \\wpb-$NOi \SANFORDS\447485v07\11/14/03\99~3.426594 Resolution No. 78-03 B-2 penalty or premium, except as provided below, by paying to the registered holder all or part of the principal amount of this Bond, together with the unpaid interest accrued on the amount of principal so prepaid to the date of such prepayment. Each prepayment shall be made on such date and in such principal amount as shall be specified by the City in a written notice delivered to the registered owner not less than two (2) Business Days prior thereto. Notice having been given as aforesaid, the principal amount stated in such notice or the whole thereof, as the case may be, shall become due and payable on the prepayment date stated in such notice; and the amount of principal shall be paid (i) in case the entire unpaid balance of the principal of this Bond is to be paid, upon presentation and surrender of such Bond to the office of the Paying Agent (the designated corporate trust office, if the Paying Agent is not the City's Finance Department), and (ii) in case only part of the unpaid balance of principal of this Bond is to be paid, upon presentation of such Bond at the office of the Paying Agent (the designatgd corporate trust office, if the Paying Agent is not the City's Finance Department) for notation thereon of the amount of principal then paid or for issuance of a replacement Bond in the principal amount not redeemed. Notwithstanding the provisions of clause (ii) above, if all of the Boqds are registered in the name of the Bank, a partial prepayment may be effected by payment to the Bank of the principal, together with unpaid interest accrued thereon, without surrender of this Bond. If, on the prepayment date, funds for the payment of the principal amount to be prepaid, together with unpaid interest accrued thereon, shall not have been provided to the Paying Agent, as above provided, the principal amount of this Bond shall continue to be outstanding and to bear interest until payment thereof at the Interest Rate. In the event of such prepayment, the City may be required to pay to SunTrust Bank, as the registered owner of the Bonds (herein, the "Bank"), an additional fee, determined in the manner provided below, to compensate the Bank for all losses, costs and expenses incurred in connection with such prepayment. Such additional fee shall be equal to the present value of the difference between (1) the amount that would have been realized by the Bank on the prepaid amount for the remaining term of the Bonds at 4.99% (the Federal Reserve H.15 Statistical Release rate for fixed-rate payers in interest rate swaps for a term corresponding to the term of the Bonds, interpolated to the nearest month, if necessary, that was in effect three Business Days prior to the delivery date of the Bonds) and (2) the amount that would be realized by the Bank by reinvesting such prepaid funds for the remaining term of the 2003 Bonds at the Federal Reserve H.15 Statistical Release rate for fixed-rate payers in interest rate swaps, interpolated to the nearest month, that was in effect three Business Day's prior to the prepayment date; both (1) and (2) discounted at the Interest Rate stated above. Should the present value have no value or a negative value, the City may prepay the Bonds with no additional fee. Should the Federal Reserve no longer release rates for fixed-rate payers in interest rate swaps, the Bank may substitute the Federal Reserve H.15 Statistical Release with another similar index. The Bank shall provide the City with a written statement explaining the calculation of the additional payment due, which statement shall, in absence of manifest error, be conclusive and binding. Partial prepayments may be made subject to payment of an additional fee based upon the same calculation methodology described above. Any partial prepayment shall be applied to installments of principal in the inverse order of maturity and shall not postpone the due dates of, or relieve the amounts of, any scheduled installment payments due hereunder. This Bond shall not be and shall not constitute an indebtedness of the City within the meaning of any constitutional, statutory, charter or other limitations of indebtedness but shall be secured solely by the Pledged Revenues and payable from the Non-Ad Valorem Revenues which includes the Pledged Revenues. No Holder of this Bond shall ever have the right to \\wpb-m/O1 ~SANFOI~DS\447485'~OT\11/14/03~99903.426594 Resolution No. 78-03 B-3 compel the exercise of ad valorem taxing power of the City, or taxation in any form of any real property therein to pay the Bond or the interest thereon. No holder shall have a lien on any Non-Ad Valorem Revenues until deposited into the Debt Service Fund created and established under the Bond Resolution. The terms and provisions of the Bond Resolution are incorporated ir1 this Bond as though such terms and provisions have been set out in full herein. IN WITNESS WHEREOF, the City of Delray Beach, Florida, has caused this Bond to be signed by its Mayor, either manually or with his facsimile signature, and the seal of the City Commission of the City of Delray Beach, Florida, to be affixed hereto or imprinted or reproduced hereon, and attested by the Clerk of the City, either manually or with her facsimile signature, and this Bond to be dated the Dated Date set forth above. (SEAL) CITY OF DELRAY BEACH, FLORIDA ATTEST: By: Clerk of the City of Delray Beach, Florida By: Mayor Resolution No. 78-03 B-4 FORM OF CERTIFICATE OF AUTHENTICATION Date of Authentication: December ,2003 This Bond is the Bond delivered pursuant to the within mentioned Resolution. CITY OF DELRAY BEACH Finance Department, as Registrar By: Authorized Officer Resolution No. 78-03 B-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 Bond and all rights thereunder, and hereby irrevocably constitutes and appoints , Attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed: In the presence of: NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within Bond in every particular, without alteration or enlargement, or any change whatever. Resolution No. 78-03 B-6 EXHIBIT C 2003 Project (4) (2) Acquisition, construction and equipping of a new library facility, including all facilities relating thereto. All related, necessary and incidental engineering, design, labor, contingency and costs of issuing 2003 Bonds. \\wpb-srvOl\SANFORDS\4a7a85vO7\11/1,~/03\g~<~O3.a2~5(~4 Resolution No. 78-03 C-1