R00-124RESOLUTION NO. R 00-124
A RESOLUTION OF THE CITY COMMISSION OF THE CITY
OF BOYNTON BEACH, FLORIDA, AUTHORIZING THE
ISSUANCE OF A NOTE OF THE CITY IN THE PRINCIPAL
AMOUNT OF NOT EXCEEDING $5,200,000.00 TO
REFINANCE THE CITY'S GENERAL OBLIGATION
REFUNDING BONDS, SERIES 1992; PROVIDING THAT SUCH
NOTE SHALL BE A GENERAL OBLIGATION OF THE CITY
PAYABLE FROM AD VALOREM TAXES LEVIED BY THE
CITY ON THE TAXABLE PROPERTY WITHIN THE CITY;
APPROVING THE FORM OF AND AUTHORIZING THE
EXECUTION OF AN ESCROW DEPOSIT AGREEMENT;
PROVIDING FOR THE RIGHTS, SECURITIES, AND
REMEDIES FOR THE OWNER OF SUCH NOTE; PROVIDING
FOR THE CREATION OF CERTAIN FUNDS; MAKING
CERTAIN COVENANTS AND AGREEMENTS IN
CONNECTION THEREWITH; AND PROVIDING AN
EFFECTIVE DATE.
Whereas, pursuant to the authority of Resolution No. R91-205 adopted by the City
Commission (the "City Commission") of the City of Boynton Beach, Florida (the "City") on
December 3, 1991, the City issued its General Obligation Refunding Bonds, Series 1992 (the
"1992 Bonds"); and
WHEREAS, as of this date $5,695,000 in aggregate principal mount of the 1992 Bonds
remain outstanding; and
WHEREAS, the City has received a proposal from Bank of America, N.A. to refinance
the 1992 Bonds maturing on and after November 1, 2001 at a lower interest rate resulting in
substantial interest savings to the City, currently estimated at approximately $162,000; and
WHEREAS, the City has determined to proceed with the issuance of a promissory note in
the principal amount of not exceeding $5,200,000 to provide funds, together with other funds
available for such purpose, to refinance the 1992 Bonds. .
NOW, THEREFORE, BE IT RESOLVED BY CITY COMMISSION OF THE CITY OF
BOYNTON BEACH, FLORIDA, THAT:
Section 1. Authori_ty for this Re$olution. This Resolution is adopted pursuant to the
provisions of the Charter of the City, the Constitution of the State of Florida, including, but not
limited to, Article VIII, Section 2 and Article VII, Section 12 thereof, Chapter 166 and Sections
132.33-132.47, Florida Statutes and other applicable provisions of law.
Section 2. Definitions. The following words and phrases shall have the following
meanings when used herein:
"Act" means the Charter of the City, the Constitution of the State of Florida, including,
but not limited to, Article VIII, Section 2 and Article VII, Section 12 thereof, Chapter 166 and
Sections 132.33-132.47, Florida Statutes and other applicable provisions of law.
"Business Day" means any day except any Saturday or Sunday or day on which the
Principal Office of the Original Purchaser is closed.
"Clerk" means the Clerk of the City or any duly authorized deputy thereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any Treasury
Regulations, whether temporary, proposed or final, promulgated thereunder or applicable thereto.
"Mayor" means the Mayor or Vice-Mayor of the City.
"Note" means the Note of the City authorized by Section 4 hereof.
"Original Purchaser" means Bank of America, N.A.
"Owner" means the Person or Persons in whose name or names the Note shall be registered
on the books of the City kept for that purpose in accordance with provisions of this Resolution.
"Person" means natural persons, firms, trusts, estates, associations, corporations,
parmerships and public bodies.
"Principal Office" means, with respect to the Original Purchaser, the office located at 625
North Flagler Drive, 10th Floor, West Palm Beach, Florida 33401, or such other office as the
Original Purchaser may designate to the City in writing.
"Resolution" means this Resolution, pursuant to which the Note is authorized to be issued.
"State" means the State of Florida.
Section 3. Resolution to Constitute a Contract. In consideration of the purchase and
acceptance of the Note authorized to be issued hereunder by those who shall be the Owners thereof
from time to time, this Resolution shall constitute a contract between the City and the Owners.
Section 4. Authorization of Note. Subject and pursuant to the provisions of this
Resolution, an obligation of the City is hereby authorized to be issued under and secured by this
Resolution, in the principal amount of not exceeding $5,200,000, for the purpose of pro,'iding
funds, together with other funds of the City available for such purpose, to refund the 1992 Bonds
and to pay costs of issuance of the Note. The principal amount of the Note shall not exceed the
amount necessary to provide funds, together with other funds available for such purpose, to
provide for the payment of the principal of, premium, and interest on the 1992 Bonds becoming
due on November 1, 2000 either as a regularly scheduled payment of principal and interest or
pursuant to the redemption hereinafter described.
Because of the characteristics of the Note, prevailing market conditions, and additional
savings to be realized from an expeditious sale of the Note, it is in the best interest of the City to
negotiate with the Original Purchaser to purchase the Note at a private negotiated sale. Prior to
the issuance of the Note the City shall receive from the Original Purchaser a disclosure statement
containing the information required by Section 218.385, Florida Statutes.
Section 5. Description of Note. The Note shall be dated the date of its execution and
delivery, which shall be September 15, 2000, or such other date as may be agreed upon by the
Mayor and Original Purchaser, shall bear interest at the rate of 5.10% per annum, computed on
the basis of a 360-day year consisting of twelve 30-day months, and shall mature November 1,
2009. Payments of principal and interest on the Note shall be payable on each May 1 and
November 1, commencing May 1, 2001, and the Note shall mature on November 1, 2009. The
principal amortization of the Note shall be such that the payments of principal and interest during
each calendar year after 2001 shall be as nearly equal as practicable to the payments that would
have been made on the 1992 Bonds during such years, and so that the payments on the Note during
the year 2001 shall be as low as possible. The Note shall have such other terms and provisions
and shall be in the form of the Note attached hereto as Exhibit A. The Note shall be executed on
behaff of the City with the manual signature of the Mayor, and shall have impressed thereon the
official seal of the City, and be attested with the manual signature of the Clerk, and the said Mayor
and Clerk are hereby authorized to execute and attest to the Note on behalf of the City.
Section 6. Registration and Exchange of Note: Persons Treated as Owner~. The Note
shall be initially registered to the Original Purchaser. In the event of a transfer of the Note, then
thereafter so long as the Note shall remain unpaid, the City will keep books for the registration
and transfer of the Note. The Note shall then be transferable only upon such registration books.
The City will transfer the registration of the Note upon written request of the Owner specifying
the name, address and taxpayer identification number of the transferee.
The Person in whose name the Note shall be registered shall be deemed and regarded as
the absolute owner thereof for all purposes, and payment of principal and interest on the Note shall
be made only to or upon the written order of the Owner. All such payments shall be valid and
effectual to satisfy and discharge the liability upon such Note to the extent of the sum or sums so
paid.
Section 7. Payment of Principal and Interest: General Obligation. The City promises that
it will promptly pay the principal of and interest on the Note at the place, on the dates and in the
manner provided therein according to the true intent and meaning hereof and thereof. The full
faith, credit and taxing power of the City are hereby irrevocably pledged to the payment of the
principal of and interest on the Note. While the Note is outstanding, there shall be assessed,
levied and collected an ad valorem tax on all taxable property within the corporate limits of the
City (excluding exemptions as required by applicable law), sufficient in amount to pay the
principal of and interest on the Note as the same shall become due and payable. The tax assessed,
levied and collected for the payment of the Note shall be assessed, levied and collected in the same
manner and at the same time as other ad valorem taxes of the City and the proceeds of said tax
shall be applied solely to the payment of the principal of and interest on the Note. The City will
diligently enforce its right to receive tax revenues and will diligently enforce and collect such
taxes. The City will not take any action that will impair or adversely affect its rights to levy,
collect and receive said taxes, or impair or adversely affect in any manner the pledge made herein
or the rights of the Owners of the Note.
Section 8. Cornpliance with Tax Requirements. The City hereby covenants and agrees,
for the benefit of the Owners from time to time of the Note, to comply with the requirements
applicable to it contained in Section 103 and Part IV of Subchapter B of Chapter 1 of the Code to
the extent necessary to preserve the exclusion of interest on the Note from gross income for
federal income tax purposes. Specifically, without intending to limit in any way the generality of
the foregoing, the City co{tenants and agrees:
(1) to refrain from using proceeds of the Note in a manner that would
cause the Note to be classified as a private activity bond under Section 141(a) of
the Code; and
(2) to refrain from taking any action or omitting to take any action if
such action or omission would cause the Note to become an arbitrage bond under
Section 103(b) and Section 148 of the Code.
The City understands that the foregoing covenants impose continuing obligations on the
City to comply with the requirements of Section 103 and Part IV of Subchapter B of Chapter 1 of
the Code so long as such requirements are applicable.
Section 9. Application of Note Proceeds. Proceeds of the Note shall be applied to the
refunding of the 1992 Bonds and to the payment of costs of issuance of the Note pursuant to the
written direction of the Finance Director.
Section 10. Refunded Bonds. The City has determined that it is in the best interests of
the City to provide for the refunding of the 1992 Bonds. The City hereby irrevocably elects,
effective upon and only upon the issuance of the Note, that the 1992 Bonds maturing on and after
November 1, 2001, shall be called for redemption on November 1, 2000.
Section 11. Escrow Deposit A~eement. The City hereby appoints First Union National
Bank (the "Escrow Agent") as the Escrow Agent with respect to the 1992 Bonds. The form of
Escrow Deposit Agreement (the "Escrow Agreement") attached hereto as Exhibit B is hereby
approved and the Mayor is hereby authorized and directed for and in the name of the City to
execute, and the City Clerk is hereby authorized and directed to attest to and apply the seal of the
City to the Escrow Agreement, with such changes, alterations or corrections thereto as shall be
approved by the officials executing the same, such execution to constitute conclusive evidence of
such approval.
Section 12. Amendment. This Resolution shall not be modified or amended in any respect
subsequent to the issuance of the Note without the written consent of the Owner.
4
Section 13. Limitation of Rights. With the exception of any rights herein expressly
conferred, nothing expressed or mentioned in or to be implied from this Resolution or the Note
is intended or shall be construed to give to any Person other than the City and the Owner any legal
or equitable right, remedy or claim under or with respect to this Resolution or any covenants,
conditions and provisions herein contained; this Resolution and all of the covenants, conditions
and provisions hereof being intended to be and being for the sole and exclusive benefit of the City
and the Owner.
Section 14. Severabili .ty. If any provision of this Resolution shall be held or deemed to
be or shall, in fact, be illegal, inoperative or unenforceable in any context, the same shall not
affect any other provision herein or render any other provision (or such provision in any other
context) invalid, inoperative or unenforceable to any extent whatever.
Section 15. Business Days. In any case where the due date of interest on or principal of
the Note is not a Business Day, then payment of principal or interest need not be made on such
date but may be made on the next succeeding Business Day, provided that credit for payments
made shall not be given until the payment is actually received by the Owner.
Section 16. Applicable Provisions of Law. This Resolution shall be governed by and
construed in accordance with the laws of the State.
Section 17. Rules of Interpretation. Unless expressly indicated otherwise, references to
sections or articles are to be construed as references to sections or articles of this instrument as
originally executed. Use of the words "herein," "hereby," "hereunder," "hereof," "hereinbefore,"
"hereinafter" and other equivalent words refer to this Resolution and not solely to the particular
portion in which any such word is used.
Section 18. Captions. The captions and headings in this Resolution are for convenience
only and in no way define, limit or describe the scope or intent of any provisions or sections of
this Resolution.
Section 19. Officers and Ernployees of the ci-tY Exempt from Personal Liability. No
recourse under or upon any obligation, covenant or agreement of this Resolution or the Note or
for any claim based thereon or otherwise in respect thereof, shall be had against any member of
the City COmmission of the City, or any officer, agent or employee, as such, of the City past,
present or future, it being expressly understood (a) that the obligation of the City under this
Resolution is solely a c0rPor~tte One, (b) that no personal liability whatsoever shall attach to, or
is or shall be incurred by, the members of the City Commission of the City, or the officers,
agents, or employees, as such, of the City, or any of them, under or by reason of the obligations,
covenants or agreements contained in this Resolution or implied therefrom, and (c) that any and
all such personal liability of every such member of the City Commission of the City, and every
officer, agent, or employee, as such, of the City under or by reason of the obligations, covenants
or agreements contained in this Resolution, or implied therefrom, are waived and released as a
condition of, and as a consideration for, the execution of this Resolution and the issuance of the
Note on the part of the City.
Section 20. Authorizations. The Mayor, the Clerk, and any other member of the City
Commission of the City, and such other officials and employees of the City as may be designated
by the Mayor are each designated as agents of the City in connection with the issuance and
delivery of the Note and are authorized and empowered, collectively or individually, to take all
action and steps and to execute all instruments, documents, certificates and contracts on behalf of
the City that are necessary or desirable in connection with the execution and delivery of the Note,
and which are specifically authorized or are not inconsistent with the terms and provisions of this
Resolution.
Section 21. Note Mutilated. Destroyed. Stolen or Lost. In case the Note shall become
mutilated, or be destroyed, stolen or lost, the City shall issue and deliver a new Note of like tenor
as the Note so mutilated, destroyed, stolen or lost, in exchange and in substitution for such
mutilated Note, or in lieu of and in substitution for the Note destroyed, stolen or lost and upon the
Owner furnishing the City proof of ownership thereof and indemnity reasonably satisfactory to the
City and complying with such other reasonable regulations and conditions as the City may
prescribe and paying such expenses as the City may incur. The Note so surrendered shall be
cancelled.
Section 22. Impairment of Contract. The City covenants with the Owner of the Note
that it will not, without the written consent of the Owner of the Note, adopt or enact any resolution
or ordinance which repeals, impairs or amends in any manner adverse to the Owner the rights
granted to the Owner of the Note hereunder.
Section 23. Budget and Financial Information. The City shall provide the Owner of the
Note with (a) a copy of its annual operating budget for each fiscal year ending after September 30,
2000 promptly after the same is adopted and (b) its audited financial statements for each fiscal year
ending after September 30, 1999 Within 270 days after the end thereof until the Note is satisfied.
The City hereby covenants that it shall promptly give written notice to the Owner of the Note of
the commencement of any litigation or proceeding Which if determined adversely to the City could
adversely affect the security for the payment of the Note.
Section 24. Remedies of Noteholder. Should the City default in any obligation created
by this Resolution or the Note, the Owner of the Note may, in addition to any other remedies set
forth in this Resolution or the Note, 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 or 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.
Section 25. Qualified Tax-Exernpt Obligation. The reasonably anticipated amount of tax-
exempt obligations which will be issued by the City during 2000 does not exceed $10,000,000.
There are no entities that are subordinate to the City or that issue obligations on behalf of the City.
The City hereby designates the Note as a "qualified m-exempt obligation" within the meaning of
Section 265(b)(3) of the Code.
6
Section 26. Repealer. All resolutions or parts thereof in conflict herewith are hereby
repealed.
Section 27. Effective Date. This ResolUtion shall take effect immediately upon its
adoption.
PASSED AND APPROVED THIS 6TH DAY OF SEPTEMBER, 2000.
Suzgnne M. tinsel city
CITY OF BOYNTON BEACH, FLORIDA
ts ~ce-Mayor
Commissioner
G:\O2345~30XResolutionf2).wpd 7
September 15, 2000
EXHIBIT A
CITY OF BOYNTON BEACH, FLORIDA
PROMISSORY NOTE
KNOW ALL MEN BY THESE PRESENTS that the City of Boynton Beach, Florida (the
"City"), a municipal corporation and political subdivision of the State of Florida created and
existing pursuant to the Constitution and the laws of the State of Florida, for value received,
promises to pay to the order of Bank of America, N.A. or registered assigns (hereinafter, the
"Owner"), the principal sum of $ together with interest on the principal balance
outstanding at the rate per annum of ~% (subject to adjustment as hereinafter provided) based
upon a year of 360 days consisting of twelve 30-day months.
Principal of and interest on this Note are payable in lawful money of the United States of
America at such place as the Owner may designate to the City in writing, in the following manner:
Interest shall be payable on the outstanding principal amount of this Note on the first day
of each May and November, commencing May 1, 2001. Installments of principal shall be due
hereon on the fu:st day of each May and November, commencing May 1, 2001, in accordance with
the table set forth below:
?rincipal
Installment Installment
Due Date Payable
5/1/01
11/1/01
5/1/02
11/1/02
5/1/03
11/1/03
5/1/04
11/1/04
5/1/05
11/1/05
5/1/06
11/1/06
5/1/07
11/1/07
5/1/08
11/1/08
5/1/09
11/1/09
The entire unpaid principal balance, together with all accrued and unpaid interest thereon, shall
be due and payable in full on November 1, 2009. All payments by the City pursuant to this Note
shall apply first to accrued interest, then to other charges, due the Owner, and the balance thereof
shall apply to the principal sum due.
The principal of this Note may not be prepaid at the option of the City prior to maturity.
If any payment hereunder is not made when due, the same shall constitute a default, and
if such payment is not made within ten Business Days after written demand therefor by the Owner,
the Owner may declare the entire debt then remaining unpaid hereunder immediately due and
payable; and in any such default and acceleration, the City shall also be obligated to pay, from
lawfully available funds, all costs of collection and enforcement hereof, including such fees as may
be incurred on appeal or incurred in any proceeding under bankruptcy laws as they now or
hereafter exist, including specifically but without limitation, claims, disputes, and proceedings
seeking adequate protection or relief from the automatic stay.
To the extent permitted by law, interest at the lesser of 12% per annum or the maximum
lawful rate per annum shall be payable on the entire principal balance owing hereunder from and
after the occurrence of and during the continuation of a default described in the preceding
paragraph, irrespective of a declaration of acceleration of maturity.
The City, to the extent permitted by law, hereby waives presentment, demand, protest and
notice of dishonor. The City, to the extent permitted by law, and the Owner, by acceptance
hereof, hereby waive trial by jury in any litigation commenced by either in respect hereof or of
the Resolution (hereinafter defined).
The full faith, credit and taxing power of the City are irrevocably pledged to the prompt
payment of the principal of and interest on this Note. The City has covenanted in the Resolution
(hereinafter defined) that while this Note is outstanding there shall be assessed, levied and
collected a tax, on all taxable property within the corporate limits of the City (excluding
exemptions as required by applicable law), sufficient in amount to pay the principal of and interest
on this Note as the same shall become due.
This Note is issued pursuant to Resolution No. R00- duly adopted by the City on
September 6, 2000, as from time to time amended and supplemented (herein referred to as the
"Resolution"), and is subject to all the terms and conditions of the Resolution. All terms,
conditions and provisions of the Resolution are by this reference thereto incorporated herein as
a part of this Note.
This Note may be exchanged or transferred by the Owner hereof but only upon the
registration books maintained by the City and in the manner provided in the Resolution.
It is hereby certified, recited and declared that all acts, conditions and prerequisites
required to exist, happen and be performed precedent to and in the execution, the delivery and the
issuance of this Note do exist, have happened and have been performed in due time, form and
A-2
manner as required by law, and that the issuance of this Note is in full compliance with and does
not exceed or violate any constitutional or statutory limitation.
IN WITNESS WHEREOF, City of Boynton Beach, Florida has caused this Note to be
executed in its name by the manual signature of its Mayor and attested by the manual signature
of its Clerk, and its seal to be impressed hereon, all this 15th day of September, 2000.
[SEAL]
CITY OF BOYNTON BEACH, FLORIDA
Attest:
By:
Mayor
city Clerk
A-3
EXHIBIT B
ESCROW DEPOSIT AGREEMENT
THIS ESCROW DEPOSIT AGREEMENT (the "Agreement"), is made and dated as of
September 15, 2000, and is by and between CITY OF BOYNTON BEACH, FLORIDA (the
"Issuer") and FIRST UNION NATIONAL BANK (the "Escrow Agent"), Miami, Florida, a
national banking association, as Escrow Agent and as Paying Agent (in such capacity, the "Paying
Agent") for the hereinafter described Refunded Bonds.
WITNESSETH:
WHEREAS, the Issuer has heretofore issued its $10,075,000 General Obligation
Refunding Bonds, Series 1992, of which $5,695,000 are currently outstanding (the "1992 Bonds");
and
WHEREAS, the Issuer has determined to provide for the payment of all of the 1992 Bonds
maturing on and after November 1, 2000, (the "Refunded Bonds"), and to obtain a portion of the
funds necessary for such payment by issuing $ in aggregate principal amount of its
Promissory Note (the "Note"); and
WHEREAS, a portion of the proceeds derived from the sale of the Note, together with
other moneys made available by the Issuer for such purpose, will be applied to the purchase of
certain direct obligations of the United States of America ("Government Obligations"), the
principal of which, together with investment earnings thereon and an initial cash balance, will be
sufficient to pay when due the principal, redemption premium, and interest on the Refunded Bonds
to and including November 1, 2000, on which date the Refunded Bonds will be discharged; and
WHEREAS, in order to provide for the proper and timely application of the moneys
deposited in the trust created herein to the payment of the Refunded Bonds, it is necessary for the
Issuer to enter into this Escrow Deposit Agreement with the Escrow Agent on behalf of the owners
from time to time of the Refunded Bonds;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenahts herein
set forth and in order to secure the payment of the principal of, premium, and interest on the
Refunded Bonds, according to their tenor and effect, the Issuer does by these presents hereby
deliver to and give, grant, assign and pledge to the Escrow Agent and to its successors in the trust
hereby created, and to it and its assigns forever, all and singular the property hereinafter
described, to wit:
CLAUSE I.
All right, title, and interest of the Issuer in and to $
behalf of the Issuer with the Escrow Agent hereunder.
deposited by or on
CLAUSE II.
All right, title, and interest of the Issuer in and to the Government Obligations purchased
from the moneys described in Clause I above.
CLAUSE IH.
All right, title, and interest of the Issuer in and to all cash balances held frOm time to time
hereunder and all income and earnings derived from or accruing to the Government Obligations
described in Clause II above.
CLAUSE IV.
'All (i) property which by the express provisions of this Agreement is required to be subject
to the pledge hereof and (ii) additional property of every kind and nature that may, from time to
time hereafter, by delivery or by writing of any kind, be conveyed, pledged, assigned, or
transferred as and for additional security hereunder or to be subject to the pledge hereof, by the
Issuer or by anyone in its behalf, and the Escrow Agent is hereby authorized to receive the same
at any time as additional security hereunder, provided that no property described in (ii) shall be
accepted by the Escrow Agent unless the Escrow Agent shall receive an opinion of nationally
recognized bond counsel to the effect that such acceptance will not cause the interest on the
Refunded Bonds and Note to be included in the gross income of the owners thereof for federal
income tax purposes.
TO HAVE AND TO HOLD, all and the same, forever; in trust nevertheless, upon the
terms and trusts herein set forth, for the equal and proportionate benefit, security and protection,
as herein described, of the owners from time to time of the Refunded Bonds in the manner herein
provided; but if the Refunded Bonds shall be fully and prOmptly paid when due or redeemed in
accordance with the terms thereof and hereof, then this Agreement shall be and become void and
of no further force and effect, otherwise the same shall remain in full force and effect, and upon
the trusts and subject to the covenants and conditions hereinafter set forth.
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. In addition to words and terms elsewhere defmed in this
Agreement, as used herein, unless some other meaning is plainly intended, the following terms
and phrases shall have the following meanings:
"Escrow Deposit Trust Fund" means the fund so designated and established under Section
2.01 of this Agreement.
B-2
"Government Obligations', means direct obligations of the United States of America that
are not callable or subject to redemption or prepayment prior to maturity by the obligor thereon.
Section 1.02. Uses of Phrases. Words of the masculine gender shall be deemed and
construed to include correlative words of the feminine and neuter genders. Unless the context
shall otherwise indicate, words importing the singular number shall include the plural number and
vice-versa.
ARTICLE II
ESTABLISHMENT OF FUNDS: FLOW OF FUNDS
Section 2.01. Creation of Escrow Deposit Trust Fund. There is hereby created and
established with the Escrow Agent a special and irrevocable trust fund designated the "Escrow
Deposit Trust Fund" to be held in the custody of the Escrow Agent separate and apart from other
funds of the Issuer or the Escrow Agent.
Section 2.02. Deposit to Escrow Deposit Trust Fund. Concurrently with the execution
of this Agreement the Issuer has deposited or caused to be deposited with the Escrow Agent and
the Escrow Agent acknowledges receipt of immediately available moneys in the amount of
$ , for deposit in the Escrow Deposit Trust Fund. The funds deposited in the Escrow
Deposit Trust Fund pursuant to the preceding sentence shall, except for a cash balance of
$ , be immediately invested by the Escrow Agent in the Government Obligations
described in Exhibit A attached hereto, and retained in the Escrow Deposit Trust Fund until
applied as hereinafter authorized.
Section 2.03. Application of Escrow Deposit Trust Fund. The Escrow Agent shall
apply the Government Obligations and other moneys or additional property deposited in the
Escrow Deposit Trust Fund, together with all income and earnings thereon, in accordance with
the provisions hereof. The Escrow Agent shall not invest any moneys or additional property held
hereunder or make substitutions of the Government Obligations hereunder or sell, transfer, or
otherwise dispose of the Government Obligations or moneys held hereunder except as provided
in this Agreement.
Section 2.04. Irrevocable Trust Created. Except as expressly provided herein, the
deposit of (or purchase for deposit of) the Government Obligations and moneys in the Escrow
Deposit Trust Fund shall constitute an irrevocable deposit for the benefit of the owners of the
Refunded Bonds and the owners of the Refunded Bonds shall have an express lien on the principal
of and earnings on the Government Obligations, other moneys and any additional property held
in the Escrow Deposit Trust Fund hereunder until applied in accordance with this Agreement. The
Government Obligations, earnings thereon, other moneys and any additional property shah be held
in trust by the Escrow Agent and used only for the purposes and in the manner provided in this
Agreement.
B-3
Section 2.05. Redemption of Refunded Bonds. The Issuer has irrevocably called the
Refunded Bonds maturing on and after November 1, 2001, for redemption on November 1, 2000
and hereby irrevocably instructs the Escrow Agent, and the Escrow Agent hereby agrees, to at
least thirty (30) days, but not more than sixty (60) days, before November 1, 2000, mail a notice
of redemption substantially in the form attached hereto as Exhibit B to all registered owners of
such Refunded Bonds to be redeemed at their addresses as they appear on the registration books
for the Refunded Bonds.
Section 2.06. Use of Moneys in Escrow Deposit Trust Fund. On each date on which
principal, premium, and/or interest on any of the Refunded Bonds shall become payable, the
Escrow Agent shall use funds in the Escrow Deposit Trust Fund to pay the interest, principal
and/or redemption price of the Refunded Bonds coming due on such dates, as shown on Exhibit C.
Section 2.07. Investment of Trust Funds. Subject to the requirements of this Section
2.07, the Issuer may direct in writing the Escrow Agent to invest and reinvest any moneys
remaining from time to time in the Escrow Deposit Trust Fund until such time as they are needed,
and the Escrow Agent shall comply with such request, otherwise the Escrow Agent shall hold such
moneys uninvested (except as otherwise provided herein). Such moneys may be invested and
reinvested only in Government Obligations bearing interest at such rate or rates and maturing on
such date or dates and in such amounts as directed in writing by the Issuer. The Issuer shall give
no such instruction to the Escrow Agent unless the Issuer and the Escrow Agent shall have
received in writing an opinion of nationally recognized bond counsel to the effect that such
investment of such moneys will not adversely affect the tax-exempt status of the interest on the
Refunded Bonds and the Note for federal income tax purposes. Provided further, that no such
investment instruction shall be given unless the Issuer and the Escrow Agent shall have received
verification from a firm of independent certified public accountants to the effect that, taking into
account such investment, the amounts held hereunder will be sufficient to pay the principal,
premium, and interest on the Refunded Bonds in full as the same shall become due.
Section 2.08. Transfer of Funds After All Payments Required by the Agreement Are
Made. After all the principal of, interest on, and redemption premium, if any, with respect to the
Refunded Bonds has been paid in full, all remaining moneys and Government Obligations,
together with any income and interest thereon, in the Escrow Deposit Trust Fund shall, upon
written direction of the Issuer, be transferred to the Issuer by the Escrow Agent and shall be used
by the Issuer in the following order of priority (i) if the Note shall be outstanding, to pay principal
or interest on the Note, and (ii) otherwise, for any lawful purpose of the Issuer authorized by a
written opinion of nationally recognized bond counsel. The Escrow Agent shall have no
responsibility for the application of amounts transferred by it to the Issuer as provided above.
Section 2.09. Deficiencies. If at any time it shall appear to the Escrow Agent that the
available proceeds in the Escrow Deposit Trust Fund will not be sufficient to make any payment
when due to the owners of any of the Refunded Bonds, the Escrow Agent shall notify the Issuer
as promptly as possible prior to such payment date and the Issuer agrees that it will make available
to the Escrow Agent, from legally available funds, if any, amounts sufficient to eliminate the
anticipated deficit so that the Escrow Agent will have sufficient funds to make such payment on
B-4
the Refunded Bonds. The Escrow Agent shall in no manner be responsible for the Issuer's failure
to-make such deposits.
Section 2.10. Escrow Agent Fees. The Issuer hereby agrees to provide for the payment,
from lawfully available funds of the Issuer, of the compensation due and owing the Escrow Agent
which compensation shall be paid at such times and in such amounts shown on Exhibit D. In no
event shall the Escrow Agent have any lien, security interest or right of set-off whatsoever upon
any of the moneys or investments in the Escrow Deposit Trust Fund for the payment of such
compensation, or for the payment or reimbursement of any expenses incurred by the Escrow
Agent in connection with this Agreement.
ARTICLE IH
CONCERNING THE ESCROW AGENT
Section 3.01. Appointment of Escrow Agent. The Issuer hereby appoints First Union
National Bank, Miami, Florida as Escrow Agent under this Agreement.
Section 3.02. Acceptance by Escrow Agent. By execution of this Agreement, the
Escrow Agent accepts its duties and obligations hereunder.
Section 3.03. Liability of Escrow Agent. The Escrow Agent shall not be liable in
connection with the performance of its duties hereunder except for its own negligence, malfeasance
or willful misconduct. The Escrow Agent shall not be liable for any loss or any taxability of
interest on the Refunded Bonds or Note resulting from any investment made pursuant to the terms
and provisions of this Agreement.
The Escrow Agent shall not be liable for the accuracy of the calculations as to the
sufficiency of moneys and of the principal amount of the Government Obligations and the earnings
thereon to pay the Refunded Bonds. So long as the Escrow Agent applies all moneys,' additional
property and the Government Obligations and the interest earnings therefrom to pay the Refunded
Bonds as provided herein, and complies fully with the terms of this Agreement, it shall not be
liable for any deficiencies in the amounts necessary to pay the Refunded Bonds caused by such
calculations.
The Escrow Agent shall keep such books and records as shall be consistent with prudent
industry practice and shall make such books and records available for inspection by the Issuer at
all reasonable times. In the event of the Escrow Agent's failure to account for any of the
Government Obligations, additional property or moneys received by it, said Government
Obligations, additional property or moneys shall be and remain the property of the Issuer in trust
for the owners of the Refunded Bonds, as herein provided, and if for any reason such Government
Obligations or moneys are not properly applied by the Escrow Agent as herein provided, the
Escrow Agent shall be liable to the owners of the Refunded Bonds for the amount thereof until the
required application shall be made.
B-5
The duties and obligations of the Escrow Agent Shall be determined by the express
provisions of this Agreement. The Escrow Agent may consult with counsel with respect to any
matter relevant to this Agreement, who may or may not be counsel to the Issuer, and be entitled
to receive from the Issuer reimbursement of the reasonable fees and expenses of such counsel, and
in reliance upon the opinion of such counsel have full and complete authorization and protection
in respect of any action taken, suffered or omitted by it in good faith in accordance therewith.
Whenever the Escrow Agent shall deem it necessary or desirable that a matter be proved or
established prior to taking, suffering or omitting any action under this Agreement, such matter
may be deemed to be conclusively established by a certificate signed by an authorized officer of
the Issuer, and the Escrow Agent may in good faith conclusively rely upon such certificate.
Section 3.04. Permitted Acts. The Escrow Agent and its aff'fliates may become the
owner of or may deal in any obligations of the Issuer described herein as fully and with the same
rights as if it were not the Escrow Agent.
Section 3.05. Resignation of Escrow Agent. The Escrow Agent at the time acting
hereunder may at any time resign by giving not less than sixty (60) days' written notice to the
Issuer, but no such resignation shall take effect unless a successor Escrow Agent shall have been
appointed by the owners of the Refunded Bonds or by the Issuer as hereinafter provided and such
successor Escrow Agent shall have accepted such appointment, in which event such resignation
shall take effect immediately upon the appointment and acceptance of a successor Escrow Agent
and the transfer to suCh successor Escrow Agent of the funds and accounts held by the Escrow
Agent hereunder.
Section 3.06. Removal of Escrow Agent.
(a) The Escrow Agent may be removed at any time if the owners of a majority in
aggregate principal amount of the Refunded Bonds then outstanding file a request for removal in
writing with the Issuer, but the Escrow Agent shall remain in office until the appointment and
taking office of a successor Escrow Agent in accordance with the provisions of this Agreement.
A copy of any such bondowners' request shall be delivered by the Issuer to the Escrow Agent.
(b) The Escrow Agent may also be removed at any time for any breach of trust or for
any violation of this Agreement by a court of competent jurisdiction upon the application of the
Issuer or the owners of not less than fifty percent (50%) in aggregate principal ambunt of the
Refunded Bonds then outstanding.
(c) The Escrow Agent shall be deemed to have been removed if it is dissolved,
becomes incapable of exercising the powers of Escrow Agent hereunder or is taken over by any
governmental action.
(d) Prior to the removal of the Escrow Agent, all fees and expenses of the Escrow
Agent, including, without limitation, if such removal is without reasonable cause, reasonable
attorney's fees and expenses, shall have been paid to the Escrow Agent.
B-6
Section 3.07. Successor Escrow Agent.
(a) When the position of the Escrow Agent becomes or is about to become vacant, the
Issuer shall appoint a successor Escrow Agent to fill such vacancy.
(b) If no appointment of a successor Escrow Agent shall be made pursuant to the
foregoing provisions of this Section, the owner of any Refunded Bond then outstanding may, or
any Escrow Agent retiring or being removed from such position shall, apply to any court of
competent jurisdiction to appoint a successor Escrow Agent. Upon the deposit by the retiring or
removed Escrow Agent of all funds and securities held by it under the provisions hereof into the
registry of such court, such retiring or removed Escrow Agent shall be relieved of all future duties
hereunder.
(c) ~amy corporation or association into with the Escrow Agent may be converted or
merged, or with which it may sell its corporate trust business and assets as a whole or substantially
as a whole, or any corporation or association resulting from any such conversion, sale, merger,
consolidation or transfer shall be and become successor Escrow Agent hereunder without the
necessity of any further act.
Section 3.08. Limitation on Resignation or Removal. The Escrow Agent may not resign
or be removed hereunder unless it also resigns or is removed as Paying Agent for the Refunded
Bonds.
ARTICLE IV
MISCELLANEOUS
Section 4.01. Amendments to this Agreement. This Agreement is made for the benefit
of the Issuer and the owners from time to time of the Refunded Bonds and it shall not be repealed,
revoked, altered or amended without the written consent all such owners, the Escrow Agent and
the Issuer; provided, however, that the Issuer and the Escrow Agent, may, without the consent
of, or notice to, such owners, enter into such agreements supplemental to this Agreement as shall
not adversely affect the exclusion from gross income for federal income tax purposes of the
interest on the Refunded Bonds and the Note and the rights of such owners and as shall not be
inconsistent with the terms and provisions of this Agreement, for any one or more of the following
purposes:
(a) to cure any ambiguity or defect or omission in this Agreement;
(b) to grant to, or confer upon, the Escrow Agent for the benefit of the owners
of the Note, any additional rights, remedies, powers or authority that may lawfully be
granted to, or conferred upon, such owners or the Escrow Agent; and
(c) to subject to this Agreement additional funds, securities or properties.
B-7
The Escrow Agent shall be entitled to rely exclusively.upon an unqualified opinion of
Moyle, Flanigan, Katz, Kolins, Raymond & Sheehan, P.A. or other nationally recognized bond
counsel with respect to compliance with this Section, including the extent, if any, to which any
change, modification, addition or elimination affects the rights of the owners of the Refunded
Bonds, or that any instrument executed hereunder complies with the conditions and provisions of
this Section.
Section 4.02. Substitution of Securities. Notwithstanding the foregoing or any other
provision of this Agreement, at the written direction of the Issuer and upon compliance with the
conditions hereinafter stated, the Escrow Agent shall in simultaneous transactions, sell, transfer,
otherwise dispose of or request the redemption of the Government Obligations held hereunder and
to substitute therefor other Government Obligations, subject to the condition that such moneys or
securities together with the interest or income thereof, shall be sufficient to pay, when due, the
principal of, interest on and redemption premiums, if any, with respect to the Refunded Bonds.
The Escrow Agent shall upon the written direction of the Issuer purchase such substituted
securities with the proceeds derived from the sale, transfer, disposition or redemption of the
Government Obligations held hereunder or from other moneys available. The transactions may
be effected only if there shall have been obtained: (1) an opinion from Moyle, Flanigan, Katz,
Kolins, Raymond & Sheehan, P.A. or other nationally recognized bond counsel to the Issuer and
the Escrow Agent to the effect that the disposition and substitution or purchase of such securities
will not adversely affect the tax-exempt status of the interest on the Refunded Bonds and Note for
federal income tax purposes; and (2) new cash flow schedules showing (i) the cash and
Government Obligations to be on deposit in the Escrow Account upon making such substitution,
(ii) the dates and amounts of maturing principal and interest to be received by the Escrow Agent
from such Government Obligations, and (iii) that the cash on hand in the Escrow Account plus
cash to be derived from the maturing principal and interest of such Government Obligations shall
be sufficient to pay when due all remaining debt service payments on the Refunded Bonds.
If securities are substituted pursuant to this Section 4.02, any surplus moneys resulting
from the sale, transfer, other disposition or redemption of the Government Obligations held
hereunder and the substitutions therefor of Government Obligations, as shown in the verification
referred to in (1) above shall be released from the Trust Estate created hereunder and shall be
transferred to the Issuer, and shall be used by the Issuer in the following order of priority (i) if the
Note shall be outstanding, to pay principal and/or interest on the Note, and (ii) otherwise, for any
lawful purpose of the Issuer approved in writing by nationally recognized bond counsel.
Section 4.03. Severability. If any one or more of the covenants or agreements provided
in this Agreement should be determined by a court of competent jurisdiction to be contrary to law,
such covenant or agreement shall be deemed to be separate and shall in no way affect the validity
of the remaining provisions of this Agreement.
Section 4.04. Agreement Binding. Ail the covenants, promises and agreements in this
Agreement contained by or on behalf of the Issuer or by or on behalf of the Escrow Agent shall
bind and inure to the benefit of their respe, ctive successors and assigns, and to the benefit of the
owners of the Refunded Bonds, whether so expressed or not.
B-8
Section 4.05. Termination. This Agreement shall terminate when all transfers and
payments required to be made by the Escrow Agent under the provisions hereof shall have been
made.
Section 4.06. Governing Law. This Agreement shall be governed by the applicable laws
of the State of Florida.
Section 4.07. Execution by Counterparts. This Agreement may be executed in several
counterparts, each of which shall be regarded for all purposes as an original, and all of which,
together, shall constitute and be but one and the same instrument.
Section 4.08. Notices. Any notice, demand, direction, request or other instrument
authorized or required by this Agreement to be given shall be deemed sufficiently given on the day
sent by registered mall, return receipt requested, addressed as follows or to such other address
furnished in writing by any of the following to all of the following:
If to the Issuer:
Finance Director
City of Boynton Beach, Florida
100 East Boynton Beach Boulevard
Boynton Beach, Florida 33425
If to the Escrow Agent:
First Union National Bank
Corporate Trust Department FL6065
First Union Financial Center
200 South Biscayne Boulevard
14th Floor
Miami, Florida 33131
IN WITNESS WHEREOF, the Issuer and the Escrow Agent have duly executed this
Agreement dated as of September 15, 2000.
Attest:
CITY OF BOYNTON BEACH, FLORIDA
By: By:
City Clerk Mayor
FIRST UNION NATIONAL BANK,
as Escrow Agent
By:
Vice-President
B-9
EXHIBIT A
GOVERNMENT OBLIGATIONS TO BE DEPOSITED
INTO ESCROW DEPOSIT TRUST FUND
Maturity
Date
Cou_r) on Principal
%
Type
Type: =U.S. Treasury
EXHIBIT B
REDEMPTION NOTICE
CITY OF BOYNTON BEACH, FLORIDA
GENERAL OBLIGATION REFUNDING BONDS, SERIES 1992
Maturity CUSIP Nos.*
(November 1)
2001 103565 DF1
2002 103565 DG9
2003 103565 DH7
2004 103565 DJ3
2009 103565 DL8
Notice is hereby given that the bonds of the above issue maturing on and after
November 1, 2001 are called for payment and redemption on November 1, 2000 (the "Redemption
Date") at a redemption price of 101% of the principal amount thereof plus accrued interest thereon
to the Redemption Date.
The Bonds so called for redemption should be presented for payment and redemption at
the office of the Paying Agent set forth below, on or after November 1, 2000, and will cease to
bear or accrue interest after that date, whether or not so presented.
First Union National Bank
'First Union Customer Information Center
Corporate Trust Operations
1525 West W.T. Harris Boulevard, 3C3
Charlotte, N.C. 28262-1153
1-800-665-9343
Withholding of 31% of gross redemption proceeds of any payment made within the United
States of America may be required by the Interest and Dividend Tax Compliance Act of 1983
unless the Paying Agent has the correct taxpayer identification number (social security or employer
identification number) or exemption certificate of the payee. Please furnish a properly.completed
IRS Form W-9 or exemption certificate or equivalent when presenting your securities for
redemption.
DATED this day of ,2000.
FIRST UNION NATIONAL BANK
CUSIP numbers are included solely for the convenience of the owners, and no
representation is made as to the correctness of the CUSIP numbers indicated in this
Redemption Notice.
B-1
EXHIBIT C
REFUNDED BONDS
DEBT SERVICE SCHEDULE
Date
11/01/00
Called Premium
PrinCipal Principal 1% Interest Total
$ 735,000.00 $4,960,000.00 $ 49,600.00 $168,721.25 $5,913,321.25
C-1
EXHIBIT D
ESCROW AGENT FEES AND EXPENSES
(i)
In consideration of the services rendered by the Escrow Agent, the Issuer agrees to pay the
Escrow Agent a one-time fee of $1000.00 to be paid at closing and not from the escrow
fund for all services to be incurred as Escrow Agent in connection with such services,
including the cost of giving the notice of redemption.
(ii)
The Issuer shall also reimburse the Escrow Agent for any extraordinary expenses incurred
by it in connection herewith. The term "extraordinary expenses" includes (a) expenses
arising out of the assertion of any third party to any interest in the Escrow Deposit Trust
Fund or any challenge to the validity hereof, including reasonable attorneys' fees, (b)
expenses relating to any substitution under Section 4.02 hereof, and (c) expenses (other
than ordinary expenses) not occasioned by the Escrow Holder's misconduct or negligence.
(iii)
The fees and expenses payable by the Issuer under Sections (i) or (ii) shall not be paid from
the Escrow Deposit Trust Fund, but shall be paid by the Issuer from legally available funds
of the Issuer.
D-1