HomeMy WebLinkAboutExhibit 3EXHIBIT B
2006 CREDIT AGREEMENT
MIAMI/4177401,4
Exhibit "B"
STANDBY BOND PURCHASE AGREEMENT
among
CITY OF MIAMI, FLORIDA,
as Issuer
U. S. BANK NATIONAL ASSOCIATION.
as Tender Agent and Paying Agent
and
WACHOVIA BANK, NATIONAL ASSOCIATION
in connection with
$30,615,000
NON-ADVALOREM REVENUE REFUNDING
BONDS, TAXABLE PENSION SERIES 2006
Dated December 1, 2006
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS 2
Section 1.01 Definitions 2
Section 1.02 Incorporation of Certain Definitions by Reference 9
Section 1.03 Computation of Time Periods 9
Section 1.04 Construction 9
Section 1,05 Accounting Terms and Determinations 9
Section 1.06 Time 10
ARTICLE II THE COMMITMENT; FEES AND CERTAIN PAYMENTS 10
Section 2.01 Commitment to Purchase Bonds 10
Section 2.02 Method of Purchasing 11
Section 2.03 Mandatory Reduction of Commitment 11
Section 2.04 Sale of Purchased Bonds 12
Section 2.05 Fees and Payments 14
Section 2.06 Yield Protection 15
Section 2.07 Payment Particulars 17
ARTICLE III PURCHASED BONDS RATE; REPAYMENT 18
Section 3.01 Bonds to Bear Interest at Purchased Bonds Rate; Other Interest
Provisions 18
Section 3.02 Purchased Bonds Interest Payment Dates; Notification of Rate 19
Section 3.03 Redemption of Purchased Bonds First 20
Section 3.04 Payment of Purchased Bonds 20
Section 3.05 Limitation 21
ARTICLE IV REPRESENTATIONS AND WARRANTIES 21
Section 4.01 Representations of the Issuer 21
Section 4.02 Representation of the Bank 23
ARTICLE V CONDITIONS PRECEDENT 24
Section 5.01 Conditions Precedent to Effectiveness 24
Section 5.02 Conditions Precedent to Purchase 26
ARTICLE VI COVENANTS 26
Section 6.01 Covenants of the Issuer 26
Section 6.02 Bank Information 31
ARTICLE VII EVENTS OF TERMINATION; EVENTS OF DEFAULT;
REMEDIES 31
Section 7.01 Events of Termination 31
Section 7.02 Events of Default 32
Section 7.03 Remedies 33
ARTICLE VIII MISCELLANEOUS 35
Section 8.01 No Waiver of Remedies 35
Section 8.02 Amendments 35
Section 8.03 Binding Effect/Assignment/Participations 35
Section 8.04 Governing Law; Venue; Waiver of Jury Trial 36
Section 8.05 [Reserved.] 36
Section 8.06 Obligations Absolute 37
Section 8.07 Liability of the Bank 37
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Section 8.08 Notice 38
Section 8.09 Term of the Agreement; Right of Issuer to Terminate Upon 39
Certain Events
Section 8.10 Extension of Purchase Period; Increase in Available Interest 41
Commitment 41
Section 8.11 Survival
Section 8.12 Amendments to Rule 2a-7 of the Securities and Exchange Commission 41
421
Section 8.13 Right of Setoff 42
Section 8.14 Beneficiaries 42
Section 8.15 Severability 42
Section 8.16 Counterparts 42
Section 8.17 Complete and Controlling Agreement 42
Section 8.18 Contractual Interpretation
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STANDBY BOND PURCHASE AGREEMENT
THIS STANDBY BOND PURCHASE AGREEMENT (this "Agreement") dated
December 1, 2006 is among the CITY OF MIAMI, FLORIDA, a municipal corporation validly
existing under the laws of the State of Florida (the "Issuer"), U. S. BANK NATIONAL
ASSOCIATION, a national banking association organized and existing under the laws of the
United States of America, as Trustee, Tender Agent and Paying Agent under that certain
Indenture, as hereinafter defined (together with any successors thereto, the "Tender Agent" or
the "Paying Agent"), and WACHOVIA BANK, NATIONAL ASSOCIATION, a national
bank organized and existing under the laws of the United States of America (the "Bank").
WITNESSETH:
WHEREAS, pursuant to Resolution No. R-04-0697 adopted by the Issuer on October 28,
2004, as amended and supplemented, and particularly as supplemented by Resolution No.
adopted by the Issuer on November 21, 2006 (collectively, the "Resolution") and a Master Trust
Indenture dated as of December 1, 1995 as amended and supplemented, and particularly as
supplemented by a Series 2006 Indenture dated as of December 1, 2006 (the "2006 Series
Indenture" and, collectively, the "Indenture") the Issuer is issuing its Non -Ad Valorem Revenue
Refunding Bonds, Taxable Pension Series 2006 (the `Bonds"); and
WHEREAS, the payment of the principal of and interest on the Bonds (including any
Purchased Bonds, as hereinafter defined) when due is insured by one or more municipal bond
insurance policies (together with any and all endorsements thereto, the "Bond Insurance
Policy")
its
to be issued by [Bond Insurer], a [New York stock insurance company] (together
successors and assigns, the "Bond Insurer"), in favor of the holders of the Bonds (including the
Bank when it is the Owner of any Bonds); and
WHEREAS, the Term -out Payments (as herein defined) on Bonds which are Purchased
Bonds are insured by under an endorsement to the Bond Insurance Policy
(the "Term -out Endorsement"); and
WHEREAS, the Bonds are subject to purchase from time to time at the option of the
owners thereof and are required to be purchased in certain events and, to further assure the
availability of funds for the payment of the purchase price therefor, the Issuer has provided for
the remarketing of such Bonds and, to the extent such remarketing may not be successful, for the
purchase of such Bonds by the provider of a liquidity facility, such provider initially being the
Bank under the terms hereof.
NOW, THEREFORE, in consideration of the respective agreements contained herein, the
parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.01 Definitions. The following terms have the meanings indicated below or in
the referenced Section of this Agreement, unless the context shall clearly indicate otherwise:
"Affiliate" means a corporation, partnership, association, agency, authority,
instrumentality, joint venture, business trust or similar entity organized under the laws of any
state that directly, or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, the related party. For purposes of this definition, a Person
"controls" another Person when the first Person possesses or exercises directly, or indirectly
through one or more other Affiliates or related entities, the power to direct the management and
policies of the other Person, whether through the ownership of shares, voting rights,
membership, the power to appoint members, trustees or directors, by contract, or otherwise.
"Assignee" shall have the meaning assigned to such term in Section 8.03 hereof.
"Available Commitment" means, on any day, the sum of the Available Principal
Commitment and the Available Interest Commitment on such day.
"Available Interest Commitment" initially means Five Hundred Thirteen Thousand Three
Hundred Twenty-five Dollars and Forty-eight Cents ($513,325.48) (an amount equal to thirty-
four (34) days' interest on the Bonds, computed as if the Bonds bore interest at the rate of
eighteen percent (18%) per annum). The Available Interest Commitment may be adjusted from
time to time as follows: (a) downward upon any reduction in the Available Principal
Commitment pursuant to the definition of "Available Principal Commitment" by an amount
equal to thirty-four (34) days interest on amounts of such reduction, computed at the rate of
eighteen percent (18%) per annum; and (b) upward upon any increase in the Available Principal
Commitment pursuant to clause (c) of the definition of "Available Principal Commitment" by an
amount equal to thirty-four (34) days interest on such increase, computed at the rate of eighteen
percent (18%) per annum; provided that after giving effect to such adjustment the available
interest commitment shall never exceed Five Hundred Thirteen Thousand Three Hundred
Twenty-five Dollars and Forty-eight Cents ($513,325.48). Any adjustments pursuant to clauses
(a) and (b) above shall occur simultaneously with the event requiring such adjustment.
"Available Principal Commitment" initially means Thirty Million Six Hundred Fifteen
Thousand Dollars ($30,615,000), constituting the principal face amount of the Bonds, and
thereafter means such amount adjusted from time to time as follows: (a) downward by the
amount of any reduction of the Available Principal Commitment pursuant to Section 2.03 hereof;
(b) downward by the principal amount of any Bonds purchased by the Bank pursuant to Section
2.02 hereof; and (c) upward by the principal amount of any Bonds theretofore purchased by the
Bank pursuant to Section 2.02 hereof, which are resold by a Purchased Bondholder pursuant to
Section 2.04(b) hereof, or which cease to bear interest at the Purchased Bonds Rate pursuant to
Section 2.04(d) hereof; provided that after giving effect to such adjustment the Available
Principal Commitment shall never exceed Thirty Million Six Hundred Fifteen Thousand Dollars
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($30,615,000). Any adjustments pursuant to clauses (a), (b) and (c) above shall occur
simultaneously with the event requiring such adjustment.
"Bank" shall have the meaning assigned to that term in the introductory paragraph of this
Agreement.
"Base Rate" means (a) with respect to Purchased Bonds (i) for the first sixty (60) days
from the date such Purchased Bonds are purchased with funds provided by the Bank hereunder,
the Prime Rate, (ii) on and after the sixty-first (6151) day to and including the one hundred and
twentieth (120th) day from the date such Purchased Bonds were purchased with funds provided
by the Bank hereunder, the Prime Rate plus fifty basis points (.50%), and (iii) on and after the
one hundred and twenty-first (121st) day from the date such Purchased Bonds were purchased
with funds provided by the Bank hereunder, the Prime Rate plus one hundred basis points (1%);
and (b) with respect to any other amount hereunder, the Prime Rate plus two hundred basis
points (2%).
"Bond Insurance Policy" shall have the meaning assigned to that term in the recitals to
this Agreement.
"Bond Insurer" shall have the meaning assigned to that term in the recitals to this
Agreement.
"Bond Insurer Event of Insolvency" means the occurrence and continuance of one or
more of the following events: (a) the issuance, under Article 74 of the Insurance Law of New
York or any successor provision thereof (or any other law to which the Bond Insurer is at the
time subject), of an order for relief, rehabilitation, reorganization, conservation, liquidation or
dissolution of the Bond Insurer that is not dismissed within sixty (60) days; (b) the
commencement by the Bond Insurer of a voluntary case or other proceeding seeking an order for
relief, liquidation, supervision, rehabilitation, conservation, reorganization or dissolution with
respect to itself or its debts under the laws of the state of incorporation or formation of the Bond
Insurer or any bankruptcy, insolvency or other similar law now or hereafter in effect including,
without limitation, the appointment of a trustee, receiver, liquidator, custodian or other similar
official for itself or any substantial part of its property; (c) the consent of the Bond Insurer to any
relief referred to in the preceding clause (b) in an involuntary case or other proceeding
'commenced against it; (d) the making by the Bond Insurer of an assignment for the benefit of
creditors; (e) the failure of the Bond Insurer generally to pay its debts or claims as they become
due; provided that any failure by the Bond Insurer to make payment on any municipal bond
insurance policy (i) that is being contested in good faith or (ii) with respect to which thirty (30)
days have not elapsed, shall not constitute a failure by the Bond Insurer generally to pay its debts
or claims as they become due; or (f) the initiation by the Bond Insurer of any actions to authorize
any of the foregoing.
"Bond Purchase Agreement" means the Bond Purchase Agreement with respect to the
Bonds, dated November , 2006, between the Issuer and Morgan Stanley & Co. Incorporated,
as representative of the underwriters named therein.
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"Bond Register" means the bond register maintained by the Tender Agent or other bond
registrar designated in the Indenture in accordance with the Indenture.
"Bonds" shall have the meaning assigned to that term in the recitals to this Agreement
and shall include, unless the context otherwise requires, all Purchased Bonds.
"Book -Entry Bonds" means the Bonds so long as the book -entry system with DTC is
used for determining beneficial ownership of the Bonds.
"Business Day" means any day except (a) a Saturday, Sunday or other day on which
commercial banks in the City of New York, New York, or any other city in which the principal
office of the Issuer, Tender Agent or the Bank is located, are authorized by law to close or (b) a
day on which the New York Stock Exchange is closed.
"Capped Rate" means twenty-five percent (25%) per annum.
"Change of Law" means the adoption of or change in, after the Effective Date, any law,
rule, regulation, statute, treaty, guideline or directive of any Governmental Authority or the
occurrence after the effective date of any of the foregoing if adopted prior to the Effective Date
or any change after the Effective Date in the application, interpretation or enforcement of any of
the foregoing.
"Code" means the Internal Revenue Code of 1986, as amended.
"Debt" means (a) indebtedness or liability for borrowed money, or for the deferred
purchase price of property or services; (b) obligations as lessee under leases which are, should be
or should have been reported as capital leases in accordance with Generally Accepted
Accounting Principles; (c) current liabilities in respect of unfunded vested benefits under plans
covered by Title IV of ERISA; (d) all guarantees, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to purchase, to
provide funds for payment, to supply funds to invest in any Person or otherwise to assure a
creditor against loss; (e) obligations secured by any mortgage, lien, pledge, security interest or
other charge or encumbrance on property, whether or not the obligations have been assumed; and
(f) all other items or obligations which would be included in determining total liabilities on the
balance sheet of a Person; provided, however, that "Debt" shall not include trade payables and
similar obligations incurred in the ordinary course of business.
"Default Rate" means a rate per annum equal to the Prime Rate plus three hundred basis
points (3%).
"Defaulted Interest" means accrued interest payable on a Bond that was not paid when
due under the terms of the Indenture.
"Differential Interest Amount" means, with respect to any Purchased Bond, the excess of
(a) interest which has accrued and could actually be paid on such Purchased Bond at the
Purchased Bonds Rate, as determined in accordance with Section 3.01 hereof, up to but
excluding the Sale Date, less (b) the amount of interest on such Purchased Bond received by the
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Purchased Bondholder on the Sale Date as part of the Sale Price. "Differential Interest Amount"
shall not include the Final Excess Bond Interest Amount.
"Dollars" and "$" means the lawful currency of the United States of America.
"DTC" means The Depository Trust Company.
"Effective Date" means December 1, 2006.
"Eligible Bonds" means any Bond bearing interest at a Weekly Rate or a Daily Rate
other than Bonds owned by, for the account of, or on behalf of, the Issuer or an Affiliate thereof,
and excludes, in any event, Purchased Bonds, Bonds bearing interest at a Commercial Paper
Rate, Bonds bearing interest at a Term Rate, Bonds bearing interest at a Dutch Auction Rate, and
Bonds that have been removed from coverage under this Agreement by redemption, defeasance
or substitution of a Substitute Liquidity Facility.
"Event of Default" shall have the meaning assigned to that term in Section 7.02 hereof.
"Event of Termination" shall have the meaning assigned to that term in Section 7.01
"Excess Bond Interest" shall have the meaning assigned to that term in Section 3.01(c)
"Excess Bond Interest Amount" shall have the meaning assigned to that term in Section
3.01(c) hereof.
"Extended Purchase Period" shall have the meaning assigned to that term in Section
8.10 hereof.
hereof.
hereof.
"Fee Payment Date" means each March 1, June 1, September 1 and December 1 during
the Purchase Period.
"Final Excess Bond Interest Amount" shall have the meaning assigned to that term in
Section 3.01(c) hereof.
"Financing Transaction" means any transaction in which the Issuer obtains borrowed
monies or funds or raises capital or is relieved of or retires or repays any indebtedness or liability
including, but not limited to, any transaction which involves the deferment of the purchase price
of property or services, the issuance of stocks, bonds, notes, or other evidences of indebtedness,
the forbearance or waiver of any Debt of the Issuer, or the leasing of property by the Issuer
through leases which are, should be or should have been reported as capital leases in accordance
with Generally Accepted Accounting Principles.
"Fitch" means Fitch Ratings.
"Generally Accepted Accounting Principles" means generally accepted accounting
principles consistently applied and maintained throughout the period indicated and consistent
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with the prior financial practice of the Issuer, except for changes permitted by the Financial
Accounting Standards Board or any similar accounting authority of comparable standing.
"Governmental Authority" means any national, state or local government (whether
domestic or foreign), any political subdivision thereof or any other governmental,
quasigovernmental, judicial, public or statutory instrumentality, authority, body, agency, bureau,
central bank or comparable authority.
"Indenture" shall have the meaning assigned to that term in the recitals to this
Agreement.
"Interest Component" shall have the meaning assigned to that term in Section 2.01
hereof.
"Interest Payment Date" with respect to Purchased Bonds means the first Business Day
of each calendar month and, with respect to Bonds that are not Purchased Bonds, shall have the
meaning assigned to that term in the Indenture.
"Issuer" shall have the meaning assigned to that term in the introductory paragraph of
this Agreement.
"Mandatory Purchase Date" means each date Bonds are required to be purchased
pursuant to the Indenture.
"Maximum Recoverable Rate" means the lesser of (a) thirty per cent (30%) per annum
and (b) the maximum rate of interest on the relevant obligation permitted by applicable law.
"Moody's" means Moody's Investors Service, Inc.
"Non -Covered Interest Rate" means a rate of interest borne by bonds that are not Eligible
Bonds.
"Notch Downgrade" means a long-term ratings downgrade evidenced by the removal of
a modifier or numerical qualifier or a downgrade from the lowest category of an alphabetical
rating to the highest category of the next lower alphabetical rating. For example, a downgrade
from A- to BBB+ is a Notch Downgrade, as is a downgrade from BBB+ to BBB. Similarly, a
downgrade from A3 to Baal or from Baal to Baa2 is a Notch Downgrade.
"Notice of Extension" means a notice in the form of Exhibit C attached hereto.
"Notice of Purchase" means a notice in the form of Exhibit A attached hereto.
"Notice of Termination" means a notice in the form of Exhibit B attached hereto.
"Official Statement" means the Official Statement of the Issuer, dated as of November
2006 with respect to the Bonds, and any supplement thereto used with respect to the Bonds.
"Outstanding" has the meaning assigned to such term in the Indenture.
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"Participant" means any entity to which the Bank has sold a participation in this
Agreement pursuant to Section 8.03 hereof
"Paying Agent" shall have the meaning assigned to that term in the introductory
paragraph of this Agreement.
"Permitted Minimum Bond Insurer Rating" means a financial strength rating by
Moody's of A (or its equivalent) or higher or by S&P of A2 (or its equivalent) or higher or by
Fitch of "A" (or its equivalent) or higher.
"Person" means an individual, a corporation, a partnership, a limited liability
corporation, an association, a trust or any other entity or organization, including a government or
a political subdivision or an agency or instrumentality thereof.
"Potential Event of Termination" means the occurrence of any event, which, with the
passage of time, the giving of notice, or both, would become a Termination Event pursuant to the
provisions of Section 7.03(c) hereof.
"Prime Rate" means the rate of interest (but not necessarily the best or lowest rate
charged borrowing customers of the Bank) published or announced by the Bank from time to
time as its prime rate, changes in which shall become effective as of the beginning of the day on
which such change is announced.
"Purchase Date" means a Business Day during the Purchase Period on which the Bank
is required to purchase Tendered Bonds pursuant to Section 2.02 hereof.
"Purchase Notice" shall have the meaning assigned to that term in Section 2.04(b)
hereof.
"Purchase Period" means the period from the Effective Date to and including 5:00 p.m.
on the earliest of (a) the Stated Expiration Date, (b) the date of receipt by the Bank of a
certificate signed by the Tender Agent stating that this Agreement has been terminated pursuant
to the terms of the Indenture because (i) a Substitute Liquidity Facility has been provided and
become effective under the Indenture, provided that this Agreement shall not terminate until the
Bank has purchased any Bonds required to be purchased pursuant to any mandatory tender
resulting from the provision of any Substitute Liquidity Facility, (ii) no Bonds remain
Outstanding under the Indenture or (iii) all of the Bonds have been converted to a Non -Covered
Interest Rate, provided that this Agreement shall not terminate until the Bank has purchased any
Bonds required to be purchased pursuant to any mandatory tender resulting from the conversion
to a Non -Covered Interest Rate, (c) the date specified in a written notice delivered by the Issuer
to the Bank that the Issuer has elected to terminate this Agreement pursuant to Section 8.09(b)
hereof or (d) the Purchase Termination Date.
"Purchase Price" means an amount equal to 100% of the unpaid principal amount of any
Tendered Bond, plus accrued and unpaid interest thereon from and including the Interest
Payment Date next preceding the Purchase Date thereof to the Purchase Date, in each case
without premium; provided, however, that if the Purchase Date is an Interest Payment Date, then
the Purchase Price shall not include accrued and unpaid interest; and provided, further that the
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assigns.
aggregate amount of the Purchase Price constituting the Interest Component shall not exceed the
amount specified in Section 2.01 hereof.
"Purchase Termination Date" means the date on which the Bank is no longer required to
purchase Tendered Bonds pursuant to Section 7.03(a), (b), or (c) hereof.
"Purchased Bonds Rate" means the interest rate applicable from time to time to
Purchased Bonds as determined in accordance with Section 202A of the 2006 Series Indenture
and as specified in Section 3.01 of this Agreement.
"Purchased Bondholder" means the Bank (in its capacity as owner (which shall include
beneficial owner if the Bonds are Book -Entry Bonds) of Purchased Bonds pursuant to this
Agreement) and any Assignee and other Person to whom the Bank has sold Purchased Bonds or
beneficial interests therein pursuant to Section 2.04(a) hereof.
"Purchased Bonds" means each Bond purchased with funds provided by the Bank under
this Agreement, until such Bonds are remarketed in accordance with Section 2.04(b) hereof or
cease to bear interest at the Purchased Bonds Rate pursuant to Section 2.04(c) hereof.
"Rating Agency" means Moody's, S&P and Fitch, so long as such each shall publish a
rating with respect to the Bonds.
"Related Documents" means the Resolution, the Indenture, the Bonds, the Bond
Insurance Policy and the Remarketing Agreement.
"Remarketing Agent" means Morgan Stanley & Co. Incorporated, its successors and
"Remarketing Agreement" means the Remarketing Agreement dated as of December 1,
2006 between the Issuer and the Remarketing Agent, as amended or supplemented in accordance
with the terms hereof or thereof, or such other agreement as may be entered into with any
Remarketing Agent with respect to the remarketing of the Bonds.
"Resolution" shall have the meaning assigned to that term in the recitals to this
Agreement.
"Sale Date" shall have the meaning assigned to that term in Section 2.04(b) hereof, and
shall not be earlier than the Business Day following the Business Day on which a Purchased
Bondholder receives a Purchase Notice.
"Sale Price" shall have the meaning assigned to that term in Section 2.04(b) hereof.
"S&P" means Standard & Poor's Credit Market Service, a Division of The McGraw-Hill
Companies, Inc.
"Section 3, 01(a) Rate" has the meaning set forth in Section 3.01(c) hereof.
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"Stated Expiration Date" means 5:00 p.m. on the later of (a) November 30, 2011 or (b)
the last day of any extension of such date pursuant to Section 8.10 hereof; provided, however,
that if the date specified in (a) or (b), as applicable, is not a Business Day, the next preceding
Business Day.
"Substitute Liquidity Facility" means a replacement standby bond purchase agreement or
other liquidity facility meeting the requirements of an "Alternate Liquidity Facility" set forth in
the 2006 Series Indenture.
"Taxes" has the meaning set forth in Section 2.07(c) hereof.
"Tender Agent" shall have the meaning assigned to that term in the introductory
paragraph of this Agreement.
"Tendered Bonds" means, as of any date, Eligible Bonds that are tendered, or deemed
tendered, for purchase pursuant to the Indenture.
"Termination Event" shall have the meaning assigned to that term in Section 7.03(a)
hereof.
"Term -Out Payments" means the payments on the Purchased Bonds required under
Section 3.04 hereof.
"2006 Series Indenture" shall have the meaning assigned to that term in the recitals to
this Agreement.
"Underlying Rating" means the credit rating that Moody's, S&P, or Fitch would assign
to the Bonds if the Bond Insurance Policy were not in full force and effect.
"written" or "in writing" means any form of written communication or a communication
by means of facsimile or telegram.
Section 1.02 Incorporation of Certain Definitions by Reference. Each capitalized
term used herein and not defined herein shall have the meaning provided therefor in the
Indenture.
Section 1.03 Computation of Time Periods. In this Agreement, in the computation of
a period of time from a specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding."
Section 1.04 Construction. Unless the context of this Agreement otherwise clearly
requires, references to the plural include the singular, the singular includes the plural and the part
includes the whole and "or" has the inclusive meaning represented by the phrase "and/or." The
words "hereof," "herein," "hereunder" and similar terms in this Agreement refer to this
Agreement as a whole and not to any particular provision of this Agreement. The word
"including" has the meaning "including, but not limited to." The section headings contained in
this Agreement and the table of contents preceding this Agreement are for reference purposes
only and shall not control or affect the construction of this Agreement or the interpretation
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thereof in any respect. Section, subsection and exhibit references are to this Agreement unless
otherwise specified.
Section 1.05 Accounting Terms and Determinations. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted,
t toy beldelivered hereunder shall be
inations
hereunder shall be made, and all financial statements
prepared, in accordance with Generally Accepted Accounting Principles.
Section 1.06 Time. All times are the time then in effect in New York, New York.
ARTICLE II
THE COMMITMENT; FEES AND CERTAIN PAYMENTS
Section 2.01 Commitment to Purchase Bonds.
(a) Commitment. The Bank agrees, on the terms and subject to the
satisfaction of the conditions contained in this Agreement, to extend credit to the Issuer
through the purchase of Tendered Bonds, for the Bank's own account, from time to time
during the Purchase Period at the Purchase Price. The the Bank onaggregate principal ount any Purchase Date shall be (or
an
portion thereof) of any Bond purchased by
authorized denomination applicable to Eligible Bonds pursuant to the Indenture, and the
aggregate principal amount of all Bonds urchased on any Purchase mton such date, The aggregateDate amountaolf the
not
exceed the Available Principal Camrtmen
Purchase Price comprising interest on the Bonds (the "Interest Component") purchased
on any Purchase Date shall not exceed the lesser of (i) the Available Interest
Commitment on such date or (ii) the actual aggregate amount of interest accrued on each
such Bond, other than Defaulted Interest, to such Purchase Date; provided, however, that
in the event the Purchase Date is also an Interest Payment Date for the Bonds to be
purchased, no accrued interest on such Bonds shall be included in the Purchase Price.
Any Bonds so purchased shall thereupon constitute Purchased Bonds and shall, from the
date of such purchase and while they are Purchased of Purch aed Bondsonds, rinterest at as set forththe hereinrchased
and in
Bonds Rate and have other characteristics
the Indenture.
(b) Limited Commitment. The Bank's commitment under this Agreement is
limited to the purchase of Tendered Bonds, and does not guarantee the payment of
principal of or interest on the Bonds.
(c) Rights of Bondholder. In the event that the Bank purchases any Tendered
Bonds in accordance with the provisions of this Section 2.01, in addition to its rights
hereunder, the Bank shall be entitled to exercise all of the rights of (except the right to
tender Bonds for purchase under the Indenture), and shall be secured to the same extent
as, any other holder of Bonds under the Indenture, including, without limitation, the right
to receive payments of principal and interest, all rights with respect to payments under
the Bond Insurance Policy, the right to have such Purchased Bonds remarketed pursuant
to the Indenture and the Remarketing Agreement and all rights under the Indenture upon
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the occurrence and continuation beyond any applicable grace period of any "event of
default" under the Indenture.
Section 2.02 Method of Purchasing.
(a) Notice of Purchase. By no later than 12:00 noon on the Business Day
on which Bonds are subject to an optional tender or mandatory purchase, the Tender
Agent shall give written notice of purchase, by facsimile, telex or telegram, in the form of
Exhibit "A". If the Bank receives such notice at or before 12:00 noon, and subject to the
satisfaction of the conditions set forth in Section 5.02 hereof, the Bank will transfer to the
Tender Agent not later than 2:00 p.m. on such date (a "Purchase Date"), in immediately
available funds, an amount equal to the aggregate Purchase Price of all or such portion of
such Eligible Bonds as requested by the Tender Agent. Bonds purchased pursuant to this
Section 2.02(a) shall be registered in the name of the Bank, or if directed in writing by
the Bank its nominee or designee, on the Bond Register and shall be promptly delivered
to the Tender Agent to be held as Purchased Bonds or as the Bank may otherwise direct
in writing, and prior to such delivery shall be held in trust by the Tender Agent for the
benefit of the Bank. If the Bonds purchased pursuant to this Section 2.02(a) are Book
Entry Bonds, the beneficial ownership of such Bonds shall be credited to the account of
the Bank, or if directed in writing by the Bank, the Tender Agent or other nominee or
designee of the Bank, maintained at DTC.
(b) Remittance of Extra Funds. In the event that any funds paid by the Bank
to the Tender Agent pursuant to Section 2.02(a) hereof shall not be required to be applied
to purchase Bonds as provided herein, such funds shall be returned to the Bank as soon as
practicable by the Tender Agent and until so returned shall be held in trust by the Tender
Agent for the account of the Bank. To the extent any such amounts are not returned to
the Bank in immediately available funds by 4:00 p.m. on the same day on which such
funds were advanced, such amounts shall bear interest, payable by the Tender Agent on
demand and in any event on the date on which such funds are returned, at a rate equal to
the Base Rate from the date disbursed until the date returned to the Bank (but in any
event for not less than one (1) day). The parties hereto acknowledge that such amount is
not covered by the Bond Insurance Policy.
(c) No Liability of the Bank. The Bank shall not have any responsibility for,
or incur any liability in respect of, any act, or any failure to act, by the Tender Agent (i)
to credit the appropriate account with funds made available by the Bank pursuant to this
Section 2.02 or (ii) to effect the purchase for the account of the Bank of Bonds with funds
provided pursuant to this Section 2.02.
(d) Payment with Own Funds. All purchases of Tendered Bonds made by
the Bank hereunder shall be made with the Bank's own funds.
Section 2.03 Mandatory Reduction of Commitment. Upon (a) any redemption,
prepayment or other payment pursuant to the Indenture of all or any portion of the principal
amount of the Bonds (other than Purchased Bonds) such that such Bonds cease to be Outstanding
or (b) any conversion of all or a portion of the Bonds to a Non -Covered Interest Rate, the
{JA293916;4}
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aggregate Available Principal Commitment shall automatically be reduced by the principal
amount of such Bonds so redeemed, paid, deemed paid or converted, as the case may be, and the
Available Interest Commitment shall also be simultaneously reduced as provided in the
definition thereof in Section 1.01 hereof. The Issuer or the Trustee shall notify the Bank within
one (1) Business Day of such redemption, repayment or other payment or conversion of the
Bonds. The Available Commitment shall automatically terminate when a Substitute Liquidity
Facility has become effective pursuant to the Indenture, provided that this Agreement shall not
terminate until the Bank has purchased any Bonds required to be purchased pursuant to any
mandatory tender resulting from the provision of any Substitute Liquidity Facility.
Notwithstanding the foregoing, solely for purposes determining the Commitment Fee under of
Section 2.05(b) hereof, the Available Commitment shall not be reduced until the Bank receives
the notice of redemption, repayment or other payment or conversion of the Bonds described
above.
Section 2.04 Sale of Purchased Bonds.
(a) Right to Sell Purchased Bonds, The Bank expressly reserves the right to
sell, at any time, any Purchased Bond or the beneficial interest therein subject, however,
to the express terms of this Agreement. The Bank agrees that such sales (other than sales
made pursuant to Section 2.04(b) hereof or to Assignees pursuant to Section 8.03 hereof)
will be made only to institutional investors or other entities or individuals, which
customarily purchase commercial paper or tax-exempt securities in denominations of
$100,000 or greater. The Bank agrees to notify the Bond Insurer, the Tender Agent and
the Remarketing Agent promptly in writing of any such sale (other than a sale made
pursuant to Section 2.04(b) hereof) and to notify the transferee in writing that (i) so long
as such Bond remains a Purchased Bond the Bank is not obligated to purchase it
hereunder, (ii) there may not be a short-term investment rating assigned to such Bond so
long as it remains a Purchased Bond and (iii) such Bond is subject to sale, and may cease
to be a Purchased Bond, as provided in Section 2.04(b) hereof. The Bank shall provide
the Tender Agent with the written agreement of each Purchased Bondholder purchasing a
Purchased Bond or beneficial interest therein (A) acknowledging the terms of this
Agreement relating to Purchased Bonds, (B) agreeing not to sell such Purchased Bond or
beneficial interest except for sales to the Bank, sales to a purchaser identified by the
Remarketing Agent pursuant to Section 2.04(b) hereof and sales to institutional investors
or other entities which customarily purchase tax-exempt securities and who agree to be
bound by the sale restrictions of this Section 2.04(a), (C) acknowledging that such
Purchased Bondholder has no right to tender such Purchased Bond for purchase pursuant
to the Indenture and (D) specifying appropriate notice and account information for
purposes of all notices and payments to such Purchased Bondholder.
(b) Sales by Remarketing Agent. The Bank and, by its acceptance of a
Purchased Bond, each other Purchased Bondholder, subject to Section 2.04(c) hereof,
hereby authorize the Remarketing Agent to sell Purchased Bonds on behalf of the Bank
or such other Purchased Bondholder. If less than all Purchased Bonds are remarketed on
any date, the Purchased Bonds having the lowest aggregate amount of Excess Bond
Interest payable with respect thereto shall be deemed to be remarketed first at a price
equal to the principal amount thereof plus unpaid accrued interest thereon to the Sale
{JA293916:4)
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Date at the interest rate to be borne by the Bonds after such sale or, if less, the Purchased
Bonds Rate (the "Sale Price").
Prior to 11:30 a.m. on any Business Day on which a Purchased Bondholder holds
Purchased Bonds, the Remarketing Agent may deliver a notice (a "Purchase Notice") to a
Purchased Bondholder as registered on the Bond Register and to the Bank stating that the
Remarketing Agent has located a purchaser for some or all of such Purchased Bonds and
that such purchaser desires to purchase an authorized denomination of such Purchased
Bonds at the Sale Price on the Business Day following the date on which a Purchased
Bondholder receives a Purchase Notice (a "Sale Date ").
A Purchased Bondholder shall decide whether to sell any Purchased Bonds by
giving written notice of such decision to the Tender Agent and the Remarketing Agent by
4:00 p.m. on the Business Day preceding the Sale Date. In the event such notice is not
timely delivered by a Purchased Bondholder, such Purchased Bondholder shall be
deemed to have determined to sell such Purchased Bonds. If a Purchased Bondholder
determines or is deemed to have determined to sell such Purchased Bonds, such
Purchased Bondholder shall deliver such Purchased Bonds to the Tender Agent (or, in the
case of Purchased Bonds which are Book -Entry Bonds, shall cause the beneficial
ownership thereof to be credited to the account of the applicable Remarketing Agent at
DTC) by 10:00 a.m. on the Sale Date against receipt of the Sale Price therefor, plus the
Differential Interest Amount, if any, in immediately available funds to the Bank at the
account specified pursuant to Section 2.07(a) hereof or at the Purchased Bondholder's
address listed in the Bond Register, as applicable, and such Bonds shall thereupon no
longer be considered Purchased Bonds. Any sale of a Purchased Bond pursuant to this
Section 2.04(b) shall be without recourse to the seller and without representation or
warranty of any kind. When Purchased Bonds are purchased in accordance with this
Section 2.04(b), the Tender Agent shall, upon receipt of authorization to transfer such
Bonds and upon receipt by such Purchased Bondholder of the Sale Price and the
Differential Interest Amount, if any, notify the Remarketing Agent and the Issuer that
such Bonds are no longer Purchased Bonds. The Tender Agent shall not instruct or
authorize the bond registrar to transfer any such Purchased Bonds, or re -register the
same, pursuant to the instructions of the Remarketing Agent until the Tender Agent has
received from the Purchased Bondholder written confirmation of the receipt of such
funds.
(c) Right to Retain Bonds. If a Purchased Bondholder notifies the Tender
Agent and the Remarketing Agent by 4:00 p.m. on the Business Day preceding the Sale
Date that it will not sell such Purchased Bonds, such Bonds shall no longer be Purchased
Bonds as of the Sale Date, and the Tender Agent shall on the Sale Date give notice to
such effect to the Bank and such Purchased Bondholder. Such election may be revoked
in writing by the Purchased Bondholder at any time prior to 4:00 p.m. on the Business
Day preceding the Sale Date.
(d) Bonds Ceasing to be Purchased Bonds. After any sale of Purchased
Bonds by the Remarketing Agent pursuant to Section 2.04(b) hereof, or any election to
retain Bonds pursuant to Section 2.04(c) hereof, Purchased Bonds shall from such Sale
1JA293916;4 )
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Date or upon such election cease to bear interest at the Purchased Bonds Rate and shall
bear interest at the rate determined by the Remarketing Agent in accordance with the
Indenture. Following any sale of Purchased Bonds pursuant to Section 2.04(b) hereof,
Section 8.03 hereof or otherwise, or any election to retain Bonds pursuant to Section
2.04(c) hereof, the Bank and any other Purchased Bondholders shall retain the right to
receive payment from the Issuer of any accrued Excess Bond Interest Amount and
interest thereon as provided herein and any other amounts then due and owing under this
Agreement.
Section 2.05 Fees and Payments.
(a) Issuance Fee. None.
(b) Commitment Fee. The Issuer hereby agrees to pay or cause to be paid to
the Bank a commitment fee at the rate of Eleven basis points (0.11 %) per annum on the
average daily amount of the Available Commitment based on a year of 360 days. Such
commitment fee shall be payable quarterly in arrears, on each Fee Payment Date,
commencing March 1, 2007, with respect to the period or portion thereof ending on the
last day of the preceding calendar month, and on the last day of the Purchase Period. For
purposes of this Section 2.05(b) only, the Available Commitment shall be deemed not to
be reduced during any period the Bank's obligation to purchase Bonds has been
suspended pursuant to Section 7.03(c) hereof. The Commitment Fee shall be increased
by an additional ten basis points (0.10%) for each Notch Downgrade in the financial
strength rating assigned to the Bond Insurer by Moody's, S&P or Fitch below Aaa, AAA
or AAA, respectively. In the event the financial strength rating assigned to the Bond
Insurer is subsequently upgraded to reversing one or more Notch Downgrades, as
applicable, the Commitment Fee shall be restored to the corresponding lesser rate.
(c) Expenses and Counsel. The Issuer shall pay to the Bank on the Effective
Date its out-of-pocket expenses and fees, not to exceed $ and its counsel fees of
$15,000, in connection with the preparation, execution and delivery of this Agreement,
the Bonds and the other Related Documents.
(d) Amendments. The Issuer shall pay to the Bank a reasonable amendment
fee for the Bank's consideration of any change in the terms of pledged security, collateral
or covenants in the Related Documents or any change to this Agreement (other than
extension of the Stated Expiration Date) and all reasonable costs or expenses (including,
without limitation, reasonable attorney's fees and expenses) which the Bank may incur
by reason of or in connection with said change.
(e) Payment of Interest Component. The Issuer shall pay the Bank interest at
the Purchased Bonds Rate on the amount of the Interest Component, if any, included in
the Purchase Price from the Purchase Date until, and the Interest Component (together
with interest thereon) shall be due and payable on, the earliest of (i) the Interest Payment
Date next succeeding the Purchase Date, (ii) the date on which such Purchased Bonds are
remarketed, paid at maturity or redeemed or (iii) the last day of the Purchase Period.
Alternatively, the Bank may, in its sole discretion, require the Issuer to pay the amount of
(.IA2939I6;4}
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such Interest Component (together with accrued interest thereon) to the Bank not later
than the second Business Day next following the date on which written notice from the
Bank of such requirement and the amount thereof is received by the Issuer. The Bank
and any Purchased Bondholder, by acceptance of the Purchased Bonds, acknowledges
that the obligation of the Issuer to pay interest on the Interest Component pursuant to this
Section 2.05(e) or to pay the Interest Component on a date other than the scheduled
Interest Payment Date is not insured under the terms of the Bond Insurance Policy (such
interest being insured only on the scheduled Interest Payment Date).
(f) Purchase Demand Fee. The Issuer agrees to pay or cause to be paid to
the Bank a purchase demand fee in the amount of $100.00 with respect to each demand
for the Bank to purchase Bonds hereunder. Such fees shall be payable quarterly in
arrears on each Fee Payment Date and shall include all unpaid purchase demand fees, if
any, in respect of demands for the Bank to purchase Bonds that occurred prior to such
Fee Payment Date.
(g) Transfer of Bonds Fee. The Issuer agrees to pay to the Bank on each
Purchase Date or Sale Date, as applicable, an amount equal to any charge imposed on the
bond registrar or Paying Agent pursuant to the Indenture in connection with the transfer
or exchange of Bonds. The Issuer agrees to cause the bond registrar to give the Bank
timely notice of each such charge, including the amount thereof.
(h) Overdue Amounts. If the Issuer shall fail to pay when due any amount
owing to the Bank under this Agreement, then to the extent permitted by law the Issuer
will pay to the Bank on demand interest on the amount in default from the date such
payment became due until payment in full at the Default Rate.
(i) Termination Fee. Upon any termination of this Agreement, the Issuer
agrees to pay all accrued and unpaid fees through and including the date of termination.
If the Issuer terminates or reduces the Available Commitment on or before the date
occurring twelve (12) months from the Effective Date, the Issuer shall pay to the Bank a
fee equal to the commitment fee required pursuant to Section 2.05(b) hereof which would
have been paid to the Bank for the first twelve (12) months subsequent to the Effective
Date, based on the Available Commitment as of the Effective Date, less the commitment
fee previously paid to the Bank pursuant to Section 2.05(b).
(j) Administration. The Issuer hereby agrees to pay all of the Bank's out-of-
pocket expenses (including, without limitation, reasonable fees and disbursements of
counsel for the Bank) arising in connection with the administration and enforcement of,
preservation of rights in connection with a workout, restructuring or default under or
amendment or waiver with respect to, this Agreement, the Bonds and the other Related
Documents.
(k) Transfer of Agreement. The Issuer hereby agrees to pay or cause to be
paid to the Bank a transfer fee of $1,000, payable upon each transfer of this Agreement to
any successor Tender Agent.
{JA293916;4 }
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Section 2.06 Yield Protection.
{a) Reserves. If any United States (or other Governmental Authority having
jurisdiction over the Bank or any Participant or Assignee) federal, state or other law, rule,
regulation or guideline, whether or not having the force of law, or the enforcement,
interpretation or administration thereof by any court or any administrative or
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof shall at any time (i) impose, modify or deem
applicable any reserve, special deposit or similar requirement (including, without
limitation, pursuant to Regulation D of the Board of Governors of the Federal Reserve
System) against credits or commitments to extend credit extended by, or assets (funded or
contingent) of, deposits with or for the account of, or other acquisitions of funds or bonds
by the Bank or any Participant or Assignee, or (ii) subject credits or commitments to
extend credit extended by the Bank or any Participant or Assignee to any assessment or
other cost imposed by the Federal Deposit Insurance Corporation or any successor
thereto, or (iii) impose on the Bank or any Participant or Assignee any other or similar
condition regarding this Agreement, the commitment or obligations of the Bank
hereunder or the purchase or holding of Purchased Bonds, and the result of any event
referred to in clause (i), (ii) or (iii) above shall be to increase the cost to the Bank or any
Participant or Assignee of agreeing to issue, issuing or maintaining the Available
Commitment or making, funding or maintaining (or agreeing to fund or maintain)
purchases of Bonds hereunder or its holding Purchased Bonds by an amount which the
Bank or any Participant or Assignee shall deem to be material (which increase in cost
shall be the result of the reasonable allocation by the Bank or any Participant or Assignee
of the aggregate of such cost increases resulting from such events), then, within thirty
(30) days after the Issuer's receipt of the Bank's written demand, the Issuer shall pay to
the Bank (for itself or the account of such Participant or Assignee) from time to time as
specified by the Bank, additional amounts which shall be sufficient to compensate the
Bank or any Participant or Assignee for such increased cost from the date of such change,
together with interest on each such amount from the date payment is demanded until the
earlier of the date of payment in full thereof and the date on which such payment is due at
the Base Rate, and thereafter at the Default Rate.
{b) Capital Charges. If the Bank or any Participant or Assignee shall have
determined after the Effective Date that the applicability of any law, rule, regulation or
guideline adopted or issued pursuant to or arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices entitled "International
Convergence of Capital Measurement and Capital Standards," or the adoption or issuance
of any other law, rule, regulation or guideline (whether or not having the force of law)
regarding capital adequacy, by any Governmental Authority (including, but not limited to
any Governmental Authority having jurisdiction over the Bank or any Participant or
Assignee), or any change in any applicable law, rule, regulation or guideline, as the case
may be, or any change in the enforcement or interpretation or administration thereof by
any court or any administrative or Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance by the
Bank (or any lending office thereof) or any Participant or Assignee with any request or
directive regarding capital adequacy (whether or not having the force of law) of any such
{JA293916;4}
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Governmental Authority, central bank or comparable agency has or would have the effect
of reducing the rate of return on capital of the Bank or any such Participant or Assignee,
if any, as a consequence of its obligations hereunder or its purchase or holding of
Purchased Bonds to a level below that which the Bank or such Participant or Assignee
could have achieved but for such adoption, change or compliance (taking into
consideration the policies of the Bank or such Participant or Assignee, with respect to
capital adequacy) by an amount deemed by the Bank or such Participant or Assignee to
be material, then within thirty (30) days after the Issuer's receipt of the Bank's written
demand, the Issuer shall pay to the Bank (for itself or for the account of such Participant
or Assignee) such additional amount or amounts as will compensate the Bank or its
Participant or Assignee, if any, as the case may be, for such reduction from the date of
such adoption, change or compliance with respect to such law, rule, regulation, guideline,
request or directive, together with interest on each such amount from the date payment is
due until the earlier of the date of payment in full thereof and the date on which such
payment is due at the Base Rate and thereafter at the Default Rate.
(c) Calculations. The amounts owed by the Issuer as compensation to the
Bank pursuant to this Section 2.06 shall be calculated as though the Bank were the holder
of all Purchased Bonds and without regard to any sales of Purchased Bonds by the Bank
pursuant to Section 2.04(a) hereof.
(d) Demand for Payment. Each demand for compensation pursuant to
Section 2.06(a) or 2.06(b) hereof shall be accompanied by a certificate of the Bank in
reasonable detail setting forth the computation of such compensation (including the
reason therefor), which certificate shall be conclusive, absent manifest error, as against
all other Persons, including without limitation, the Issuer.
(e) Third Party Beneficiaries. The benefits of this Section 2.06 shall be
available to each Assignee and each Participant.
Section 2.07 Payment Particulars.
(a) General. Except to the extent otherwise provided in the Indenture with
respect to payments on Purchased Bonds and in Section 2.02(b) hereof, all payments by
or on behalf of the Issuer under this Agreement shall be made to the Bank prior to 3:00
p.m. on the date such payment is due by wire transfer in Dollars and in immediately
available funds to WACHOVIA BANK, NATIONAL ASSOCIATION (ABA
#063000021) for the account of the Bank (Acct. #0145916-0002008) for credit to City of
Miami, Florida, Obligation No. [TO BE PROVIDED BY BANK], ATTN: Commercial
Loan Servicing - Payment Processing. Any payment received by the Bank after 3:00
p.m. shall be deemed to be received by the Bank on the next succeeding day. Any
amount owed to the Bank hereunder which is not paid when due shall bear interest from
the date such payment was due until paid in full at a rate equal to the Default Rate, such
interest to be payable on demand. All computations of interest and fees shall be made on
the basis of a year of 360 days, actual days elapsed.
(JA293916;4 )
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(b) Payment Dates. Except as may be otherwise provided herein, whenever
any payment or action to be made or taken hereunder shall be stated to be due on a day
which is not a Business Day, such payment or action shall be made or taken on the next
following Business Day, and such extension of time shall be included in computing
interest or fees, if any, in connection with such payment or action.
(c) Net of Taxes. All payments by or on behalf of the Issuer under this
Agreement shall be made without counterclaim, set-off, condition or qualification, and
free and clear of and without deduction or withholding for or by reason of any present or
future taxes, levies, imposts, deductions or charges of any nature whatsoever, excluding,
however, taxes imposed on or measured by the net income or capital of the Bank by any
jurisdiction or any political subdivision or taxing authority thereof or therein (all such
non -excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities
being referred to as "Taxes"). If requested, the Bank, any Assignee and Participant shall
from time to time provide the Issuer, the Tender Agent and the United States Internal
Revenue Service (to the extent such information and forms may be lawfully provided by
the Bank or such Assignee or Participant) with such information and forms as may be
required by Treasury Regulations Section 1.1411 or any other such information and
forms as may be necessary to establish that the Issuer is not subject to any withholding
obligation under Section 1442 or other comparable provisions of the Code. If as a result
of a Change of Law, the Issuer shall be required by law to withhold or deduct any Taxes
imposed by the United States or any political subdivision thereof from or in respect of
any sum payable hereunder to the Bank, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.07(c)) the Bank receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the Issuer shall
make such deductions and (iii) the Issuer shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable law. If the
Issuer shall make any payment under this Section 2.07(c) to or for the benefit of the Bank
with respect to Taxes and if the Bank shall claim any credit or deduction for such Taxes
against any other taxes payable by the Bank to any taxing jurisdiction in the United States
then the Bank shall pay to the Issuer an amount equal to the amount by which such other
taxes are actually reduced; provided, however, that the aggregate amount payable by the
Bank pursuant to this sentence shall not exceed the aggregate amount previously paid by
the Bank with respect to such Taxes.
(d) Application of Payments. Payments received by the Bank (other than
payments made pursuant to the Bond Insurance Policy) shall be applied, first, to any fees,
costs, charges or expenses payable by the Issuer under this Agreement; second, to past
due interest; third, to current interest; and, fourth, to principal.
ARTICLE III
PURCHASED BONDS RATE; REPAYMENT
Section 3.01 Bonds to Bear Interest at Purchased Bonds Rate; Other Interest
Provisions.
(iA293916;4) -18-
(a) Purchased Bonds Rate. As provided in the Bonds and the Indenture, any
Bond purchased by the Bank pursuant to this Agreement shall thereupon become a
Purchased Bond and shall bear interest at the Purchased Bonds Rate for the period
commencing from the date that the Bank shall have purchased such Bond and, subject to
Section 2.04(c) hereof, continuing until such Bond is paid in full or remarketed as
provided in Section 2.04(b) hereof. Subject to Section 3.01(c) hereof, the Purchased
Bonds Rate for any Purchased Bond shall be a rate per annum equal to the Base Rate;
provided, however, that immediately upon the occurrence and continuation of an Event of
Termination, the Purchased Bonds Rate shall be equal to the Default Rate; and provided
further that at no time shall the Purchased Bonds Rate exceed the Capped Rate or be less
than the applicable rate of interest on Eligible Bonds which are not Purchased Bonds.
(b) Overdue Rate. If the principal amount of any Purchased Bond or, to the
extent permitted by law, any interest payment required thereunder, is not paid when due
(whether by acceleration, redemption or otherwise), such overdue principal or interest
payment shall bear interest from the date such obligation was due until paid in full (after
as well as before judgment) at a rate per annum equal to the Default Rate (but not to
exceed the Maximum Recoverable Rate), such interest to be payable on demand.
(c) Excess Bond Interest Amount. The rate set forth in Section 3.01(a)
hereof, without giving effect to the reference therein to this Section 3.01(c) or to the last
proviso therein limiting the Purchased Bonds Rate to the Capped Rate, is referred to in
this Section 3.01(c) as the "Section 3.01(a) Rate". The amount of interest, if any, that
would accrue on Purchased Bonds at the Section 3.01(a) Rate on any date but which does
not so accrue due to the limitation of the Purchased Bonds Rate to the Capped Rate, but
only up to the Maximum Recoverable Rate, shall constitute "Excess Bond Interest" (i.e.,
interest which would have been payable but for the Capped Rate, but only up to the
Maximum Recoverable Rate). As of any date, the cumulative Excess Bond Interest, if
any, on all days since the Effective Date, reduced as set forth in the next sentence, shall
constitute the "Excess Bond Interest Amount". If there is any Excess Bond Interest
Amount on any date when the Section 3.01(a) Rate is less than the Capped Rate, the
Purchased Bonds Rate for such date shall be the Capped Rate rather than the Section
3.01(a) Rate and the Excess Bond Interest Amount shall be reduced on such date by the
excess of the amount of interest accrued on such date at the Capped Rate over the amount
of interest that would have accrued on such date at the Section 3.01(a) Rate; provided that
if the accrual of interest on Purchased Bonds at the Capped Rate on any date would result
in a reduction of the Excess Bond Interest Amount to a negative number, such Purchased
Bonds shall accrue interest on such date at such lesser rate as shall result in the reduction
of the Excess Bond Interest Amount on such date to zero. For so long as a Bond remains
a Purchased Bond, interest thereon at the Purchased Bonds Rate as adjusted pursuant to
this Section 3.01(c) shall be insured by the Bond Insurance Policy. If on the date of
maturity, redemption or remarketing of any Purchased Bonds, or on the date any
Purchased Bonds cease to constitute Purchased Bonds pursuant to Section 2.04(c) hereof,
there remains any unpaid Excess Bond Interest Amount with respect to such Purchased
Bonds (the "Final Excess Bond Interest Amount"), such Final Excess Bond Interest
Amount shall be paid by the Issuer to the Purchased Bondholder on such date. Each
Purchased Bondholder, by acceptance of the Purchased Bonds, acknowledges that
(JA293916;4 )
-19-
payment of any Final Excess Bond Interest Amount and any interest thereon is not
insured under the terms of the Bond Insurance Policy but shall be on a parity with the
Issuer's obligation to pay principal and interest then due and owing on the Bonds and
other parity obligations.
Section 3.02 Purchased Bonds Interest Payment Dates; Notification of Rate.
(a) Payment Dates. Notwithstanding anything to the contrary contained in
the Bonds or the Indenture, the Issuer agrees that, with respect to each Purchased Bond,
(i) the Interest Component, if any, included in the Purchase Price for such Bond shall be
paid as set forth in Section 2.05(e) hereof; (ii) except with respect to the Differential
Interest Amount, which shall be paid as set forth in Section 2.04(b) hereof, and Excess
Bond Interest, the Excess Bond Interest Amount and the Final Excess Bond Interest
Amount, which shall be payable in accordance with Section 3.01(c) hereof, interest
payable pursuant to Section 3.01(a) hereof shall be payable on each Interest Payment
Date, upon redemption (to the extent of the interest accrued on the amount being
redeemed), at maturity (whether by acceleration or otherwise), and after maturity on
demand. In the event any Purchased Bond is remarketed or otherwise transferred by the
Bank before repayment in full of the funds provided by the Bank hereunder with respect
thereto, together with interest thereon, the provisions of this Article III shall continue to
apply to such indebtedness until all sums owing for all periods during which the same
was a Purchased Bond are paid.
(b) Notification of Rate. The Bank will give telephonic notice (promptly
confirmed in writing) to the Issuer and the Tender Agent not later than 10:00 am, on
each Sale Date of the Differential Interest Amount owed by the Issuer hereunder as a
result of any sale of Purchased Bonds pursuant to Section 2.04(b) hereof.
Notwithstanding the preceding sentence, the Issuer's obligations to make payments in
respect of any Differential Interest Amount (together with accrued interest thereon, if
applicable) shall not be discharged or reduced in any way as a result of the Bank's failure
to deliver any notice referred to in the preceding sentence. The Bank will notify the
Issuer or the Tender Agent, as the case may be, of the Purchased Bonds Rate in effect
during any period in which Purchased Bonds are held by the Bank or any other Purchased
Bondholders or during which any Differential Interest Amount, Excess Bond Interest,
Excess Bond Interest Amount, Final Excess Bond Interest Amount or any amount in
respect of the Interest Component remains unpaid. Absent manifest error, the Bank's
determination of any of the foregoing shall be binding upon the Issuer and the Tender
Agent.
Section 3.03 Redemption of Purchased Bonds First. Amounts applied for the
redemption of Bonds (whether optional, pursuant to sinking fund requirements or otherwise)
shall be used first to redeem Purchased Bonds.
Section 3.04 Payment of Purchased Bonds. Notwithstanding anything to the contrary
contained in the Indenture, the Bonds or in the Agreement, the Issuer will cause the payment of
the principal of Purchased Bonds (through mandatory or optional redemption, or payment when
due or otherwise), over a period of five (5) years (or, if less, the period to the maturity date of
{JA293916;4 }
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such Purchased Bonds) with principal payments in equal annual installments, the first such
installment to be due on the one year anniversary of the day on which such Purchased Bonds first
became Purchased Bonds; interest at the Purchased Bond Rate or the Default Rate, as applicable,
shall be payable monthly in arrears. All accrued and unpaid interest and principal of Purchased
Bonds shall be due and paid no later than the fifth (5`") anniversary of the day on which such
Purchased Bonds first became Purchased Bonds (or, if earlier, the maturity date of such
Purchased Bonds). In addition, Purchased Bonds shall be mandatorily redeemed upon the
occurrence of an Event of Termination. The installments of principal and interest required
pursuant to this Section 3.04 are to be covered under and insured by the Bond Insurance Policy.
Section 3.05 Limitation. The Bank hereby agrees that payment of amounts payable
under Section 8.05 hereof, are subordinate to the Issuer's obligation to pay principal and interest
then due and owing on the Bonds and to make deposits to the debt service reserve fund required
by the 2006 Series Indenture.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations of the Issuer. To induce the Bank and the Tender Agent
to enter into this Agreement and for the Bank to purchase Bonds as provided herein, the Issuer
makes the following representations and warranties to, and agreements with the Bank and the
Tender Agent (which representations, warranties and agreements shall survive the execution and
delivery of this Agreement and any purchases of Bonds by the Bank):
(a) Existence and Standing. The Issuer is a municipal corporation organized
under the laws of the State of Florida, validly existing under the laws of the State of
Florida with all requisite power and authority to execute and deliver, and to perform its
obligations under, this Agreement, the Indenture, and the other Related Documents to
which it is a party and to issue, execute and deliver the Bonds.
(b) Authorization. The execution, delivery and performance by the Issuer of
this Agreement, the Indenture, and the other Related Documents and the issuance,
execution and delivery of the Bonds have been duly authorized by all necessary action of
the governing body of the Issuer.
(c) Compliance with Laws and Contracts. Neither the execution and
delivery by the Issuer of this Agreement and the Related Documents to which the Issuer
is a party, nor the consummation of the transactions herein and therein contemplated, nor
compliance with the provisions hereof or thereof will violate any constitutional provision
or any law, rule, regulation, order, writ, judgment, injunction, decree or award of any
court or Governmental Authority, arbitration, agency or other instrumentality applicable
to the Issuer binding on the Issuer, the Issuer's charter, bylaws or other organizational
documents or the provisions of any indenture, instrument or agreement to which the
Issuer is a party or is subject, or by which it or its property is bound, or conflict with or
constitute a default under or result in the creation or imposition of any security interest,
{JA293916;4 }
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lien, charge or encumbrance (other than the lien of the Indenture) on any of its assets
pursuant to the provisions of any of the foregoing.
(d) Litigation. There is no action, suit, proceeding, inquiry or investigation at
law or in equity or before or by any court, public board or body pending or, to the
knowledge of the Issuer, threatened against or affecting the Issuer wherein an
unfavorable decision, ruling or finding would materially adversely affect (i) the
transactions contemplated by or the validity of this Agreement or any of the Related
Documents, (ii) the Issuer's capacity or authority to enter into similar agreements, (iii)
the status of the Issuer as municipal corporation of the State of Florida, or (iv) the
Issuer's property, assets, operations or conditions, financial or otherwise, or its ability to
perform its obligations under this Agreement or under the Related Documents.
(e) No Defaults. No Event of Default, Termination Event, or Potential Event
of Termination has occurred and is continuing.
(f) Financial Statements. The audited financial statements for the period
ended September 30, 2005, including the balance sheet as of such date of said period, all
examined and reported on by Rachlin Cohen & Holtz, LLP, the Issuer's independent
public accountants, as heretofore delivered to the Bank correctly and fairly present the
financial condition of the Issuer as of said date and the results of the operations of the
Issuer for such period, and have been prepared in accordance with Generally Accepted
Accounting Principles consistently applied except as stated in the notes thereto; and there
has been no material adverse change in the condition, financial or otherwise, of the Issuer
since September 30, 2005, from that set forth in said financial statements as of, and for
the period ended on, that date.
(g) Bonds; Parity of Obligations. The Bonds (including all Purchased
Bonds) will be duly issued under the Resolution and the Indenture and entitled to the
benefits thereof. The Issuer's obligations under this Agreement constitute "Payment
Obligations" under the Indenture and are secured by, and are on parity with all "Parity
Debt" (as defined in the Indenture).
(h) Official Statement. The information contained in the Official Statement,
(other than the information concerning the Bank contained therein under the sub -caption
"Liquidity Facility" and the information under the captions "MUNICIPAL BOND
INSURANCE" and "Book -Entry Only System" as to which the Issuer makes no
representation or warranty), is correct in all material respects and does not contain an
untrue statement of a material fact or omit to state a material fact necessary to make the
statements made therein, in light of the circumstances under which they were made, not
misleading.
(i) Bond Insurance. The Bonds (including all Purchased Bonds and the
Term -out Payments) are entitled to the benefits of the Bond Insurance Policy.
(j) Consents. All consents, licenses, approvals, validations and
authorizations of, and registrations, validations or declarations by or with any court or
(JA293916;4)
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any Governmental Authority required to be obtained in connection with the execution,
delivery, performance, validity or enforceability of this Agreement and the Related
Documents (including the Bonds) have been obtained and are in full force and effect.
(k) Incorporation of Representations and Warranties. The Issuer hereby
makes to the Bank the same representations and warranties as were made by it in the
Indenture, the Remarketing Agreement and the Bond Purchase Agreement, which
representations and warranties, together with the related definitions of terms contained
therein, are hereby incorporated by reference with the same effect as if each and every
such representation and warranty and definition were set forth herein in its entirety. No
amendment to such representations and warranties or definitions, which amendment
could have a material adverse effect on the Bank, shall be effective to amend such
representations and warranties and definitions as incorporated by reference herein
without the prior written consent of the Bank.
(1) Accurate Information. No representation, warranty or other statement
made by the Issuer in or pursuant to this Agreement or any Related Document or any
other document or financial statement provided by the Issuer or its agents to the Bank in
connection with this Agreement or any other Related Document, contains any untrue
statement of a material fact or omits (as of the date made or furnished) any material fact
necessary to make the statements herein or therein not misleading in light of the
circumstances under which they are made. All information, reports and other papers and
data with respect to the Issuer furnished to the Bank by the Issuer or its agents were, at
the time the same were so furnished, accurate in all material respects. Any financial,
budget and other projections furnished to the Bank by the Issuer or its agents were
prepared in good faith on the basis of the assumptions stated therein, which assumptions
were fair and reasonable in light of conditions existing at the time of delivery of such
financial, budget or other projections, and represented, and as of the date of this
representation, represent the Issuer's best estimate of its future financial performance.
No fact is known to the Issuer, that has not been disclosed in the Official Statement, that
materially and adversely affects the security for any of the Bonds, or the Issuer's ability
to repay when due its obligations under this Agreement, any of the Bonds and the Related
Documents or in the financial statements and other documents referred to in this Section
4.01 or in such information, reports, papers and data or otherwise disclosed in writing to
the Bank.
(m) Business of the Issuer. The Issuer is not engaged principally, or as one of
its important activities, in the business of extending credit for the purpose of purchasing
or carrying any margin stock as defined in Regulation U of the Board of Governors of the
Federal Reserve System.
(n) No Sovereign Immunity. The Issuer is not entitled to claim immunity on
the grounds of sovereignty or other similar grounds with respect to the enforcement of its
obligations under this Agreement or any Related Document.
(JA293916;4}
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Section 4.02 Representation of the Bank. The Bank represents and warrants that, on
the Effective Date, the Bank is rated Aa2/P-1 by Moody's, AA-/A-1+ by S&P and AA-/F1+ by
Fitch.
(a) Existence and Standing. The Bank is a banking corporation duly
organized and validly existing under the laws of the United States of America and has all
requisite power and authority to execute and deliver this Agreement and to perform its
obligations hereunder.
(b) Authorization and Validity. All approvals, authorizations or consents
required by law for the execution and delivery by the Bank of this Agreement have been
obtained, and this Agreement constitutes the legal, valid and binding obligation of the
Bank, enforceable in accordance with its terms, except to the extent that the
enforceability hereof may be limited by bankruptcy, insolvency or other laws affecting
creditors' rights generally and except to the extent that the obligations of the Bank under
this Agreement are subject to the application of general principles of equity including but
not limited to the right of specific performance.
(c) Compliance with Laws, Etc. Neither the execution and delivery by the
Bank of this Agreement, the consummation of the transactions herein contemplated nor
compliance with the provisions hereof will violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Bank, or the Bank's organic
instruments or charter under the laws of Canada.
(d) Litigation. There is no action, suit, proceeding, inquiry or investigation at
law or in equity or before or by an court, public board or body pending against the Bank,
or, to the knowledge of the Bank, threatened against the Bank (a) wherein in unfavorable
decision, ruling or finding would materially adversely affect the validity of this
Agreement, or any agreement or instrument to which the Bank is a party and which is
used or contemplated for use in the consummation of the transactions contemplated by
this Agreement; or (b) which in any material way contests the existence or organization
of the Bank or the powers of the Bank to enter into and perform its obligations under this
Agreement.
ARTICLE V
CONDITIONS PRECEDENT
Section 5.01 Conditions Precedent to Effectiveness. This Agreement shall become
effective on the Effective Date provided that each of the conditions enumerated in this Section
5.01 has been fulfilled to the satisfaction of the Bank. The Bank's execution and delivery of this
Agreement shall evidence its agreement that such conditions have been met to its satisfaction or
have been waived and that the Effective Date has occurred.
(a) Representations. On the Effective Date (and after giving effect to the
issuance of the Bonds and the effectiveness of this Agreement), there shall exist no Event
of Termination or Event of Default.
(JA293916;4)
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(b) Supporting Documents. On or prior to the Effective Date, the Bank shall
have received, in form and substance satisfactory to the Bank, the following:
(i) true and complete executed originals of this Agreement, each
of the Related Documents and the Official Statement and a photocopy of the
Bond Insurance Policy;
(ii) resolutions of the Issuer authorizing this Agreement and the
Related Documents to which it is a party and the execution of the Official
Statement, certified prior to the Effective Date by an authorized officer of the
Issuer;
(iii) signature and incumbency certificates, dated the Effective
Date, of the signatories of the Issuer executing this Agreement, the Related
Documents to which it is a party, and the Official Statement;
(iv) a certificate of an authorized officer of the Issuer, dated the
Effective Date, to the effect set forth in Section 5.01(a) hereof;
(v) executed copies of the legal opinions, certificates, reports and
other documents rendered or delivered in connection with the issuance of the
Bonds, the Official Statement, the sale of the Bonds pursuant to the Bond
Purchase Agreement, the delivery of this Agreement and the delivery of the
Related Documents; and
(vi) executed legal opinions, dated the Effective Date, addressed to
the Bank and in form and substance satisfactory to the Bank (A) of counsel to the
Bond Insurer, as to (1) the due organization of the Bond Insurer and the due
authorization, execution and delivery of the Bond Insurance Policy and (2) the
legality, validity, binding effect and enforceability of the Bond Insurance Policy;
(B) of counsel to the Issuer, to the effect set forth in Section 4.01(a) through (d);
and (n) hereof and covering such other matters as the Bank may reasonably
request; and (C) of Bond Counsel, covering such matters relating to the Purchased
Bonds and the Issuer's obligations under the Related Documents as the Bank may
reasonably request.
(c) Bond Insurance Policy. On or prior to the Effective Date, the Bond
Insurance Policy (including the Term -out Endorsement), in form and substance
satisfactory to the Bank, shall have been issued by the Bond Insurer and delivered to the
Tender Agent, insuring the payment of regularly scheduled principal of and interest on
the Bonds and the Term -out Payment and such Bond Insurance Policy shall be in full
force and effect on the Effective Date.
(d) Other Supporting Documents. There shall have been delivered to the
Bank such information and copies of documents, approvals (if any) and records (certified,
where appropriate) of corporate and legal proceedings as the Bank may have requested
relating to the entering into and performance by each of the parties (other than the Bank)
thereto, of each of the Related Documents or the transactions contemplated thereby or the
IJA293916;4)
-25-
tax-exempt status of the Bonds upon conversion. The Bank shall have received such
other documents, instruments, approvals (and, if requested by the Bank, certified
duplicates or executed copies thereof) or opinions as the Bank may reasonably request.
(e) Certain Payments. The Issuer shall have paid all the fees then due
referred to in Section 2.05(a) hereof and the fees and expenses of counsel to the Bank as
provided in Section 2.05(c) hereof.
(f) Rating. The Bank shall have received satisfactory evidence that the
Bonds shall have been rated AaaNMIG 1 by Moody's, AAA/A-1+ by S&P and
AAAIF 1+ by Fitch.
Section 5.02 Conditions Precedent to Purchase. The obligation of the Bank to
purchase Bonds on any date is subject to the satisfaction of the following conditions, unless
waived in writing by the Bank:
(a) No Termination Event. No Event of Termination specified in Section
7.01(a), (b), (c), (d) or (e) hereof or Potential Event of Termination as described in
Section 7.03(c) hereof shall have occurred and be continuing; and
(b) Notice of Purchase. The Bank shall have timely received by no Iaer than
12:00 noon on the Business Day on which Bonds are to be purchased, a Notice of
Purchase as provided in Section 2.02 hereof; provided that if a Notice of Purchase is
received after 12:00 noon on a Business Day, the Bank will be obligated to purchase
Eligible Bonds on the Business Day following receipt thereof, and provided further that if
a Notice of Purchase is received before the end of the Purchase Period, the end of the
Purchase Period shall not, in and of itself, relieve the Bank of its obligation to purchase
Bonds.
ARTICLE VI
COVENANTS
Section 6.01 Covenants of the Issuer. During the term of this Agreement, and until
the obligations of the Issuer to the Bank under this Agreement are paid in full and the Bank has
no further commitment under this Agreement and until payment in full of all Purchased Bonds,
unless the Bank shall otherwise consent in writing, the Issuer covenants and agrees as follows:
(a) Notices. The Issuer will promptly furnish, or require to be furnished by
including appropriate provisions in the Indenture, to the Bank notice of (i) the failure by
the Bond Insurer to perform any of its obligations under the Bond Insurance Policy, (ii)
each demand for payment made under the Bond Insurance Policy, (iii) the failure by the
Remarketing Agent or the Tender Agent to perform any of its obligations under the
Remarketing Agreement or the Indenture, (iv) any proposed substitution of this
Agreement or of the Bond Insurance Policy, (v) each event or occurrence of which notice
is required to be given to the Bank pursuant to the Indenture, (vi) the occurrence of any
Event of Termination or Event of Default; (vii) any change in the ratings of the Bonds of
which the Issuer has actual knowledge; (viii) any ratings which may be assigned to
{JA293916;4 }
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uninsured debt of the Issuer which ranks on a parity with the Bonds (or any changes in
such ratings); and (ix) any shadow rating (or changes therein) assigned to the Bonds of
which the Issuer has knowledge.
(b) Compliance With Laws. The Issuer shall comply with all laws, rules and
regulations, and with all final orders, writs, judgments, injunctions, decrees or awards to
which it may be subject; provided, however, that the Issuer may contest the validity or
application thereof and appeal or otherwise seek relief therefrom, and exercise any and all
of the rights and remedies which it may have with regard thereto, so long as such acts do
not affect the Issuer's power and authority to execute this Agreement and the Related
Documents to which it is a party or to perform its obligations and pay all amounts
payable by it hereunder and thereunder.
(c) Use of Proceeds. The Issuer shall (i) cause the proceeds from purchases
of Bonds made hereunder to be used solely to pay the Purchase Price of such Bonds as
more fully described in Sections 2.01 and 2.02 hereof and (ii) use the proceeds of the
Bonds solely for the purposes set forth in the Indenture.
(d) Related Obligations. The Issuer shall promptly pay all amounts payable
by it under this Agreement and the Related Documents according to the terms hereof and
thereof and shall duly perform each of its obligations under this Agreement and the other
Related Documents to which it is a party. The Issuer shall take such action as may be
necessary to enforce the obligations of other Persons owed to the Issuer and the Tender
Agent pursuant to the Related Documents.
(e) Reporting Requirements. The Issuer shall keep proper books of record
and account in which full, true and correct entries will be made of all dealings and
transactions of or in relation to affairs, operations, transactions and activities of the Issuer
in accordance with Generally Accepted Accounting Principles consistently applied, and
will furnish to the Bank a copy of each of the following:
(i) As soon as available, and in any event within two hundred and
ten (210) days after the close of each fiscal year of the Issuer, the comprehensive
annual financial report of the City, which shall include audited financial
statements including the balance sheet as of the end of such fiscal year, all in
reasonable detail, certified by an independent certified public accountant as
having been prepared in accordance with Generally Accepted Accounting
Principles, consistently applied, such audit having been conducted with generally
accepted auditing standards;
(ii) Promptly, and in any event within five (5) days after any
officer of the Issuer obtains knowledge thereof, a certificate of the chief financial
officer for the Issuer setting forth the occurrence of any Event of Default, the
details thereof and the action which the Issuer is taking or proposes to take with
respect thereto;
(JA2939I6;4 )
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(iii) Copies of any other information pertaining to the Issuer
required to be delivered to the Bond Insurer, no later than the date on which such
deliveries are required to be made to the Bond Insurer;
(iv) A copy of the Issuer's budget, prepared by the Issuer prior to
the beginning of each fiscal year, not later than thirty (30) days after its adoption;
and
(v) Such other information respecting the affairs, condition and/or
operations, financial or otherwise, of the Issuer as the Bank may from time to time
reasonably request. The information and reports required by the Subsection
6.01(c) shall be provided in printed rather than electronic form).
(f) Inspection Rights. The Issuer will permit the Bank, upon reasonable
notice and during normal business hours, to meet with officers, directors and employees
of the Issuer to discuss the affairs, finances, business and accounts of the Issuer and to
visit the Issuer's properties in order to enable the Bank to monitor the Issuer's
compliance with the Agreement.
(g) Amendments. The Issuer shall not amend, modify, terminate or permit the
amendment, modification or termination of, or consent to, or permit or suffer to occur
any action or omission which results in, or is equivalent to, an amendment, termination or
modification of the Bond Insurance Policy, the Indenture or other Related Documents
without the prior written consent of the Bank which consent shall not be unreasonably
withheld or delayed. However, if the Bank is in default of its obligation hereunder to
purchase Bonds, the Bank's consent shall not be required so long as either (i) such
amendment or other action shall not materially adversely affect the rights and obligations
of the Bank if the Bank cures such default or (ii) the Issuer terminates this agreement in
connection with such amendment or other action such that the Bank is no longer
obligated to purchase Bonds hereunder (which termination shall not cancel or otherwise
affect the then existing Bank default).
(h) Voluntary Redemption or Conversion. The Issuer shall not voluntarily
redeem any Bonds pursuant to the Indenture prior to redeeming Purchased Bonds in full
or if, after giving effect to such redemption, there would be any unpaid Excess Bond
Interest Amount owing under this Agreement or any other amount in respect of such
Purchased Bonds which shall not have been paid in full. The Issuer shall not voluntarily
convert any Bonds to a Non -Covered Interest Rate pursuant to the Indenture if, after
giving effect to such conversion, there would be any unpaid Excess Bond Interest
Amount owing under this Agreement or any other amount in respect of such Purchased
Bonds which shall not have been paid in full.
Rate.
{JA293916;4)
(1) Substitute Liquidity Facility or Conversion to a Non -Covered Interest
(i) The Issuer agrees to use its best efforts to obtain a Substitute
Liquidity Facility to replace this Agreement or to convert all of the Bonds to a
-28-
Non -Covered Interest Rate in the event (A) the Bank shall determine not to
extend the Stated Expiration Date (such replacement or conversion to occur on or
before the mandatory purchase date established pursuant to the Indenture), (B) the
Bank shall give a Notice of Termination in accordance with Section 7.03(b)
hereof (such replacement or conversion to occur on or before the mandatory
purchase date established pursuant to the Indenture), (C) a mandatory purchase of
Bonds shall have been effected with any funds made available under this
Agreement, (D) the Bond Insurer shall fail to maintain the Permitted Minimum
Bond Insurer Rating, or (E) the Issuer terminates this Agreement pursuant to
Section 8.09(b) hereof.
(ii) The Issuer agrees that, as a condition to the effectiveness of
any Substitute Liquidity Facility, the provider of the Substitute Liquidity Facility
will provide funds, to the extent necessary, in addition to other funds available, on
the date the Substitute Liquidity Facility becomes effective for the purchase of all
Purchased Bonds at a purchase price of par plus accrued interest (at the Purchased
Bonds Rate) through the purchase date, and that as a condition to the effectiveness
of the conversion to a Non -Covered Interest Rate all Purchased Bonds will be
purchased on the conversion date at a purchase price of par plus accrued interest
(at the Purchased Bonds Rate) through the purchase date. On the effective date of
such Substitute Liquidity Facility or conversion to a Non -Covered Interest Rate,
as the case may be, the Issuer shall pay in full all other amounts due under this
Agreement (including the Excess Bond Interest Amount and unpaid interest
thereon).
(iii) The Issuer shall not permit a Substitute Liquidity Facility to
become effective with respect to less than all of the Bonds without the prior
written consent of the Bank.
(j) Appointment of Successors. The Issuer shall not, without the prior
written consent of the Bank, (i) permit the appointment of a successor Tender Agent, or
Remarketing Agent, (ii) permit the surrender, cancellation, termination, modification or
amendment of the Bond Insurance Policy, or (iii) permit a substitute or additional bond
insurance policy to become effective. Any successor Tender Agent shall meet the
requirements set forth in the Indenture.
(k) Incorporation of Covenants. The covenants of the Issuer set forth in each
of the Resolution, the Indenture, the Remarketing Agreement and the Bond Purchase
Agreement are hereby incorporated by reference in this Agreement for the benefit of the
Bank and other Purchased Bondholders. To the extent that any such incorporated
provision permits any Person to waive compliance with or consent to such provision or
requires that a document, opinion, report or other instrument or any event or condition be
acceptable or satisfactory to any Person, for purposes of this Agreement, such compliance
shall be waived, or such provision shall be consented to, only if it is waived or consented
to, as the case may be, by the Bank and such document, opinion, report or other
instrument shall be acceptable or satisfactory to the Bank. No amendment to such
{JA293916;4)
-29-
covenants (or the defined terms relating thereto) shall be effective to amend such
incorporated covenants without the written consent of the Bank.
(1) Maintenance of Existence. The Issuer will maintain its corporate
existence. The Issuer will not merge or consolidate with another entity or transfer
substantially all of its assets to another entity in a way that adversely affects the Issuer's
obligations under this Agreement or the Related Documents.
(m) Maintenance and Approvals; Filings, etc. The Issuer shall at all times
maintain in effect, renew and comply with all the terms and conditions of all consents,
licenses, approvals and authorizations as may be necessary or appropriate under any
applicable law or regulation for its execution, delivery and performance of this
Agreement and the Related Documents to which it is a party.
(n) Regulation U. The Issuer is not engaged principally, or as one of its
important activities, in the business of extending credit for the purposes of purchasing or
carrying margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System), and will not use the proceeds of the Bonds or any amounts
paid by the Bank hereunder so as to violate Regulation U as it may be amended or
interpreted from time to time by the Board of Governors of the Federal Reserve System.
(o) Indenture a Contract. The provisions of the Indenture constitute a
contract between the Issuer and the owner or owners of the Bonds, the Bond Insurer and
the Bank, and any such owner or owners, the Bond Insurer or the Bank may at law or in
equity, by suit, action, mandamus or other proceedings, enforce and compel the
performance of all duties required to be performed by the Issuer as a result of issuing the
Bonds.
(p) Budget; Audit. As long as any of the Bonds are outstanding and unpaid in
principal or interest, the Issuer shall prepare and adopt a budget prior to the beginning of
each Fiscal Year, which budget shall provide for appropriations at levels required under
the Indenture to make all payments of principal, interest, fees, reserves and any other
expenditures required or contemplated under the Indenture with respect to the Bonds.
Not later than six (6) months after the close of each Fiscal Year, the Issuer shall cause an
audit of its general fund books and accounts to be made by an independent firm of
certified public accountants showing the receipts and disbursements made by the Issuer
during the previous Fiscal Year.
(q) Subsequent Documents and Instruments. The Issuer shall execute and
deliver to the Bank (or as directed by the Bank) all such documents and instruments as
may be necessary or reasonably required by the Bank to enable the Bank or the holders of
Bonds to exercise and enforce its rights under this Agreement or with respect to the
Bonds and to realize thereon, and the Issuer shall record and file and re-record and re -file
all such documents and instruments, at such time or times, in such manner and at such
place or places, all as may be necessary or reasonably required by the Bank to validate,
preserve and protect the rights of the Bank or the holders of the Bonds under this
Agreement or with respect to the Bonds.
{JA293916;4}
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(r) Affiliates. The Issuer shall not permit the Remarketing Agent to sell
Tendered Bonds to any Affiliate of the Issuer.
ARTICLE VII
EVENTS OF TERMINATION; EVENTS OF DEFAULT; REMEDIES
Section 7.01 Events of Termination. Each of the following shall constitute an "Event
of Termination" under this Agreement:
(a) Non Payment of Insured Amounts. Any principal or interest due on the
Bonds is not paid when due and such principal or interest is not paid by the Bond Insurer
when, as, and in the amounts required to be paid pursuant to the terms of the Bond
Insurance Policy; or
(b) Invalidity or Contest of Validity of Bond Insurance Policy. The Bond
Insurer shall in writing claim that the Bond Insurance Policy with respect to the payment
of principal of or interest on the Bonds is not valid and binding on the Bond Insurer, and
repudiate the obligations of the Bond Insurer under the Bond Insurance Policy with
respect to payment of principal of or interest on the Bonds or Term -out Payments, or the
Bond Insurer shall initiate any legal proceedings to seek an adjudication that the Bond
Insurance Policy, with respect to the payment of principal or interest of the Bonds or the
Term -out Payments is not valid and binding on the Bond Insurer, or any court or
Governmental Authority with jurisdiction to rule on the validity of the Bond Insurance
Policy shall announce, find or rule that the Bond Insurance Policy is not valid and
binding on the Bond Insurer; or
(c) Bond Insurer Insolvency; Bond Insurer Downgrade Below Investment
Grade. Either (i) the occurrence of a Bond Insurer Event of Insolvency, or (ii) the
withdrawal for credit reasons by S&P, Moody's and Fitch of the financial strength rating
of the Bond Insurer or the reduction of such rating, in the case of Moody' s, below Baa3,
in the case of S&P, below BBB-, and in the case of Fitch, below BBB-; or
(d) Termination of Bond Insurance Policy. The Bond Insurance Policy is (i)
canceled or terminated for any reason without the consent of the Bank or (ii) is amended
or modified in any material respect without the consent of the Bank.
(e) Bond Insurer Default on other Policies. Any default by the Bond Insurer
in making payment when, as and in the amounts required to be made pursuant to the
express terms and provisions of any other bond insurance policy issued by the Bond
Insurer insuring publicly -rated bonds; or
(f) Permitted Minimum Bond Insurer Rating. The Bond Insurer shall fail to
maintain the Permitted Minimum Bond Insurer Rating for a period of thirty (30)
consecutive days.
Section 7.02 Events of Default. Each of the following shall constitute an "Event of
Default" under this Agreement.
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(a) Misrepresentation. Any material representation or warranty made by the
Issuer under or in connection with this Agreement shall prove to be untrue in any
material respect on the date as of which it was made; or
(b) Non -Payment of Fees. Non-payment of any amounts payable under
Section 2.05 hereof (together with interest thereon at the Default Rate) within ten (10)
days after the Paying Agent, the Tender Agent, the Bond Insurer and the Issuer have
received written notice from the Bank that the same were not paid when due; or
(c) Other Non Payments. Non-payment of any other fees or amounts payable
under this Agreement (together with interest thereon at the Default Rate) within twenty
(20) days after written notice thereof to the Issuer, the Paying Agent, the Tender Agent
and the Bond Insurer by the Bank; or
(d) Certain Breaches. The breach by the Issuer of any of the terms or
provisions of Section 6.01(c)(i) (in respect of proceeds from the purchases of Bonds
hereunder), (g) (in a material respect), (i), (j)(i) (with respect to the Remarketing Agent
only) and (1) hereof; or
(e) Other Breaches. The breach by the Issuer of any terms or provisions of
this Agreement for which no cure period is otherwise specifically provided with respect
thereto which is not remedied within thirty (30) days after written notice thereof from the
Bank shall have been received by the Issuer; provided, however, that in the event such
breach or failure is such that it can be corrected but cannot be corrected within said 30-
day period, the same shall not constitute an Event of Default hereunder if (x) corrective
action is instituted by the Issuer within said 30-day period and is being diligently pursued
and (y) such breach or failure is corrected within 90 days or such longer period to which
the Bank shall consent in writing; or
(f) Insolvency. (i) The Issuer shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding -up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian or other similar official for it or for all or
any substantial part of its assets, or the Issuer shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against the Issuer any case,
proceeding or other action of a nature referred to in clause (i) above which (A) results in
an order for such relief or in the appointment of a receiver or similar official or (B)
remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii)
there shall be commenced against the Issuer any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process against all or
any substantial part of its assets, which results in the entry of an order for any such relief
which shall not have been vacated, discharged, or stayed or bonded pending appeal
within sixty (60) days from the entry thereof; or (iv) the Issuer shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the
{IA293916;4}
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acts set forth in clause (i), (ii) or (iii) above; or (v) the Issuer shall generally not, or shall
be unable to, or shall admit in writing its inability to, pay its debts; or (vi) the Governor
or the Legislature of the State shall have declared the Issuer to be in a state of financial
emergency as provided by Florida law; or
(g) Invalidity. Any material provision of this Agreement or any Related
Document (other than the Bond Insurance Policy) shall at any time for any reason cease
to be valid and binding on the Issuer or shall be declared to be null and void, or the
validity or enforceability thereof shall be contested by the Issuer or by any Governmental
Authority having jurisdiction, or the Issuer shall deny that it has any further liability or
obligation under any such document, or such document is cancelled or terminated
without the Bank's prior written consent; or
(h) Cross Default. The occurrence of any "event of default" as defined in any
of the Related Documents (which is not waived pursuant to the terms thereof) which is
not otherwise described in this Section 7.02, other than the failure of the Bank to provide
funds for the purchase of Tendered Bonds when required by the terms and conditions of
this Agreement; or
(i) Other Debt. The Issuer shall have defaulted in the payment or
performance of any obligation of a principal amount of $5,000,000 or more, which
constitutes Debt ranking on a parity of payment with the Bonds or payable from a
covenant of the Issuer to budget and appropriate available non ad valorem revenues, and
such default permits the acceleration of the payment of moneys or an increase in the debt
service payable thereon such that the Issuer would not be able to issue $1 of additional
Included Debt under Section 2.02(b) of the Master Indenture,
Section 7.03 Remedies. If any Event of Termination or Event of Default shall have
occurred and be continuing:
(a) Immediate Termination. In the case of an Event of Termination specified
in Section 7.01(a), (b), (c), (d) or (e) hereof, the Available Commitment and Purchase
Period and the obligation of the Bank to purchase Bonds shall immediately terminate
without notice or demand (a "Termination Event"), and thereafter the Bank shall be under
no obligation to purchase Bonds. Promptly upon the Bank obtaining knowledge of an
Event of Termination specified in Section 7.01(a), (b), (c), (d) or (e), the Bank shall give
written notice of the same to the Paying Agent, the Tender Agent, the Issuer, the
Remarketing Agent and the Bond Insurer; provided, that the Bank shall incur no liability
or responsibility whatsoever by reason of its failure to give such notice and such failure
shall in no manner affect the immediate termination of the Available Commitment and of
the Bank's obligation to purchase Bonds pursuant to this Agreement.
(b) Termination with Notice. In the case of an Event of Termination
specified in Section 7.01(f) or an Event of Default specified in Section 7.02(b) or (c)
hereof, the Bank may terminate the Available Commitment and Purchase Period by
giving written notice to the Paying Agent, the Tender Agent, the Issuer, the Remarketing
Agent and the Bond Insurer, specifying the date on which the Available Commitment and
{JA293916;4}
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Purchase Period shall terminate (a "Notice of Termination"), which date, the Purchase
Termination Date (which shall also be a mandatory Purchase Date pursuant to the 2006
Series Indenture), shall be not less than thirty (30) days from the date of receipt of such
notice by the Paying Agent and the Tender Agent. On and after the Purchase
Termination Date, the Bank shall be under no further obligation to purchase Bonds
hereunder.
(c) Suspension relating to Bond Insurance Policy. During the pendency of
an Event of Termination pursuant to Section 7.01(c) hereof (with respect to an order
described in clause (a) of the definition of Bond Insurer Event of Insolvency) (a
"Potential Event of Termination"), the Bank's obligations to purchase Bonds shall be
immediately suspended without notice or demand and thereafter the Bank shall be under
no obligation to purchase Bonds until the Available Commitment is reinstated as
described in this Section 7,03(c). Promptly upon the Bank obtaining knowledge of any
such Potential Event of Termination, the Bank shall give written notice of the same to the
Issuer, the Paying Agent, the Tender Agent, the Remarketing Agent and the Bond Insurer
of such suspension; provided, however, that the Bank shall incur no liability or
responsibility whatsoever by reason of its failure to give such notice and such failure
shall in no way affect the suspension of the Bank's obligations under this Agreement. In
the event such Potential Event of Termination is cured prior to becoming a Termination
Event, the Bank's obligations shall be automatically reinstated and the terms of this
Agreement will continue in full force and effect (unless this Agreement shall otherwise
have terminated or been suspended by its terms or in accordance with Section 7.03(a) or
(b) hereof).
(d) Other Remedies. In addition to the rights and remedies set forth in
Section 7.03(a), (b), and (c) hereof, in the case of any Event of Termination specified in
Section 7.01 hereof or in the case of any Event of Default specified in Section 7.02
hereof, upon the election of the Bank: (i) all amounts payable hereunder (other than
payments of principal and redemption price of and interest on the Bonds or payments of
Excess Bond Interest) shall upon notice to the Issuer become immediately due and
payable without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Issuer; and (ii) the Bank shall have all the rights and
remedies available to it under this Agreement, the Related Documents, the Bond
Insurance Policy or otherwise pursuant to law or equity; provided, however, that the
Bank shall not have the right to terminate its obligation to purchase Bonds or to declare
any amount due hereunder due and payable except as expressly provided herein, or to
accelerate the maturity date of any Bonds except as provided in the Indenture. Without
limiting the generality of the foregoing, the Bank agrees to purchase Bonds on the terms
and conditions of this Agreement notwithstanding the institution or pendency of any
bankruptcy, insolvency or similar proceeding with respect to the Issuer. The Bank will
not assert as a defense to its obligation to purchase Bonds under this Agreement (y) the
institution or pendency of a bankruptcy, insolvency or similar proceeding with respect to
the Issuer, or (z) a determination by a court of competent jurisdiction in a bankruptcy,
insolvency or similar proceeding with respect to the Issuer that this Agreement is not
enforceable against the Issuer under applicable bankruptcy, insolvency or similar laws.
(JA293916;4}
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This subsection shall not limit the exercise of the Bank's remedies expressly provided for
under any other subsection of this Section 7.03,
ARTICLE VIII
MISCELLANEOUS
Section 8.01 No Waiver of Remedies. No failure or delay on the part of the Bank in
exercising any right, power or privilege hereunder and no course of dealing shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein expressly provided are cumulative and not exclusive
of any rights or remedies which the Bank would otherwise have. No notice to or demand on the
Issuer or any other party hereto in any case shall entitle the Issuer or such other party to any
other or further notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Bank to any other or further action in any circumstances without notice or demand,
Section 8.02 Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by the parties hereto
and only with the consent of the Bond Insurer; provided, however, that the provisions of Sections
2.05, 2.06 and 2.07 hereof, and Sections 8.07 hereof may be changed, waived, discharged or
terminated and the Stated Expiration Date may be extended in accordance with Section 8.10
hereof by instruments in writing signed solely by the Bank and the Issuer, with written notice to
the Tender Agent and the Bond Insurer; provided, however, that the provisions hereof relating to
the Bond Insurance Policy may not be changed, waived, discharged or terminated without the
prior written consent of the Bond Insurer. The Issuer shall give notice to S&P, Fitch and
Moody's of any amendments to this Agreement.
Section 8.03 Binding Effect/Assignment/Participations. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, that the Issuer may not assign or transfer any of
its rights or obligations hereunder without the prior written consent of the Bank, and any
purported assignment in contravention hereof shall be void; and such assignee shall not be any
Person registered as an investment company under the Investment Company Act of 1940, as
amended, substantially all of the assets of which are invested in obligations exempt from federal
income taxation under Section 103 or 103A of the Code or any similar or successor provision.
The Bank may assign to one or more banks or other entities (collectively, "Assignees") all or any
part of any of its rights or obligations hereunder, including, without limitation, the Purchased
Bonds, and to the extent of any such assignment the Bank shall be relieved of its obligations
hereunder and each Assignee shall have the same rights and benefits hereunder and under the
Bonds, as it would have if it were the Bank hereunder; provided, however, that any such
assignment by the Bank which would relieve the Bank of any of its duties or obligations
hereunder shall not result in the withdrawal or reduction of the ratings, if any, then assigned by
Moody's, Fitch or S&P to the Bonds and such assignment shall not be effected without the prior
written consent of the Issuer, the Bond Insurer and written notice to the Tender Agent.
Additionally, the Bank shall have the right at any time to sell, assign, grant or transfer
participations in all or part of its obligations hereunder and the obligations of the Issuer
{ JA293916;4 }
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hereunder to any Participant without the consent of or notice to the Issuer, Tender Agent, the
Bond Insurer or any other party (other than notice to the Issuer of any direct participants;
provided, that any such participation shall not relieve the Bank from any of its obligations
hereunder and the Issuer, the Remarketing Agent, the Tender Agent and the Bond Insurer may
deal exclusively with the Bank for all purposes of this Agreement, including the making of
payment on Purchased Bonds, notwithstanding such participation. The Bank may disclose to
any Participants or prospective Participants any information or other data or material in the
Bank's possession relating to this Agreement, any Related Document and the Bond Insurer,
without the consent of or notice to the Issuer or the Bond Insurer.
Section 8.04 Governing Law; Venue; Waiver of Jury Trial.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA WITHOUT
REGARD TO ITS CHOICE OF LAW RULES, PROVIDED, HOWEVER, THAT THE
OBLIGATIONS OF THE BANK SHALL BE GOVERNED BY THE LAWS OF THE
UNITED STATES OF AMERICA.
(b) TO THE EXTENT PERMITTED BY LAW, THE ISSUER AND THE
BANK AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY AND ALL CLAIMS OR CAUSES OF ACTION BASED UPON OR ARISING
OUT OF THIS AGREEMENT AND THE OTHER RELATED DOCUMENTS. IT IS
HEREBY ACKNOWLEDGED THAT THE WAIVER OF A JURY TRIAL IS A
MATERIAL INDUCEMENT FOR THE ISSUER AND THE BANK TO ENTER INTO
THIS AGREEMENT AND THAT THE EXECUTION AND DELIVERY OF THIS
AGREEMENT BY THE ISSUER AND THE BANK IS MADE IN RELIANCE UPON
SUCH WAIVER. THE ISSUER AND THE BANK EACH FURTHER WARRANT
AND REPRESENT THAT SUCH WAIVER HAS BEEN KNOWINGLY AND
VOLUNTARILY MADE BY EACH PARTY HERETO, FOLLOWING
CONSULTATION WITH THEIR RESPECTIVE LEGAL COUNSEL.
(c) The waivers made pursuant to this Section 8.04 shall be irrevocable and
unmodifiable, whether in writing or orally, and shall be applicable to any subsequent
amendments, renewals, supplements or modifications of this Agreement. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the court sitting
without a jury.
Section 8.05 [Reserved].
Section 8.06 Obligations Absolute. The obligations of the Issuer under this
Agreement shall be absolute, unconditional and irrevocable, and shall be paid and performed
strictly in accordance with the terms of this Agreement, under all circumstances whatsoever,
including, without limitation, the following circumstances:
(a) any lack of validity or enforceability of all or any of the Related
Documents; or
{JA293916;4)
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(b) any amendment or waiver of or any consent to or departure from the terms
of all or any of the Related Documents; or
(c) any exchange, release or non -perfection of any collateral or any release or
amendment or waiver of or consent to departure from any of the Related Documents; or
(d) the existence of any claim, set-off, defense, or other right which the Issuer
may have at any time against the Tender Agent, the Remarketing Agent, the Bond
Insurer, the Bank (other than the defense of the payment to the Bank in accordance with
the terms of this Agreement) or any other Person, whether in connection with this
Agreement, the Related Documents or any unrelated transactions; or
(e) any certificate, notice or any other document presented other than by the
Bank under this Agreement or any of the Related Documents proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever; or
(f) any other circumstances or happening whatsoever, whether or not similar
to any of the foregoing.
Section 8.07 Liability of the Bank. The Issuer and the Tender Agent agree that the
Bank shall have no liability or responsibility for the acts or omissions of the Remarketing Agent
or the Tender Agent in respect of the use of this Agreement or any amounts made available by
the Bank hereunder. The Bank shall have no responsibility for, nor incur any liability in respect
of, any act, or any failure to act, by the Tender Agent or the Remarketing Agent which results in
the failure of the Tender Agent to effect the purchase of Tendered Bonds for the account of the
Bank with funds provided by the Bank pursuant to Section 2.02 hereof or to comply with the
applicable provisions of the Indenture or any Related Document to which the Tender Agent is a
party. Neither the Bank nor any of its officers or directors shall be liable or responsible for: (a)
the use which may be made of this Agreement or any amounts made available by the Bank
hereunder or for any acts or omissions of the Tender Agent or the Remarketing Agent or their
agents in connection therewith; (b) the validity, sufficiency or genuineness of documents, or of
any endorsement(s) thereon, even if such documents should in fact prove to be in any or all
respects invalid, insufficient, fraudulent or forged; or (c) any other circumstances whatsoever in
making or failing to make payment under this Agreement, except only that the Issuer shall have a
claim against the Bank and the Bank shall be liable to the Issuer to the extent of any direct, as.
distinguished from consequential, damages suffered by the Issuer when the Issuer proves in a
final, non -appealable judgment that such direct damages were caused by the Bank's willful
failure to purchase Tendered Bonds when required under the terms and conditions of this
Agreement or were caused by the gross negligence ofthe Bank.
Section 8.08 Notice. Any notice, demand, direction, request or other instrument
authorized or required by this Agreement to be given to or filed with Issuer, the Tender Agent,
the Remarketing Agent, the Bank or the Bond Insurer, shall be deemed or have been sufficiently
given or filed for all purposes when delivered by hand, nationally recognized overnight delivery
service, or when sent by registered mail, return receipt requested, postage prepaid, or, if given by
facsimile transmission when receipt is acknowledged by the individual or an authorized
(JA293916;4}
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representative of the entity specified below; provided that any such notice, demand, direction,
request or other instrument to the Bank shall be effective only when actually received by the
Bank:
If to the Issuer:
If to the Tender Agent:
If to the Bond Insurer:
If to the Remarketing Agent:
If to the Bank:
For operations and funding:
{]A2939I 6;4 }
City of Miami, Florida
444 Southwest 2nd Avenue
Miami,Florida 33131-1910
Attention: Chief Financial Officer
Telephone:
Facsimile:
U. S, BANK NATIONAL ASSOCIATION.
500 Cypress Creek Road, Ste 560
Fort Lauderdale, Florida
Attention: Scott Schule
Telephone:
Facsimile:
[Bond Insurer]
Attention: Risk Management
Telephone:
Facsimile:
Morgan Stanley & Co., Incorporated
1221 Avenue of the Americas
New York, New York 10020
Attention: Remarketing
Telephone:
Facsimile:
Wachovia Bank, National Association
1950 Hillsboro Blvd.
Government Banking, 2nd Floor
Deerfield Beach, FL 33442
Attention: Irene Sutter
Wachovia Bank, National Association
1950 Hillsboro Blvd.
Government Banking, 2nd Floor
Deerfield Beach, FL 33442
Attention:
Telephone:
Facsimile:
-38-
Copies of any notices hereunder shall be sent to the Bond Insurer.
Section 8.09 Term of the Agreement; Right of Issuer to Terminate Upon Certain
Events.
(a) General. The term of this Agreement shall be until the later of (i) the last
day of the Purchase Period (as it may be extended pursuant to Section 8.10 hereof) or
(ii) the payment in full of the principal of and interest on all Bonds purchased by the
Bank hereunder together with all other amounts due and owing to the Bank pursuant to
this Agreement.
(b) Issuer's Right to Terminate. To the extent permitted by the Indenture,
this Agreement may, with the written consent of the Bond Insurer, be terminated at any
time by written notice from the Issuer to the Bank if
(i) the Bank fails to purchase Bonds when obligated to do so in
accordance with the provisions of this Agreement and the Issuer elects to replace
the Bank with a Substitute Liquidity Facility; or
(ii) a proceeding is instituted in a court having jurisdiction in the
premises seeking an order for relief, rehabilitation, reorganization, conservation,
liquidation or dissolution in respect of the Bank or for any substantial part of its
property under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or for the appointment of a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or other similar official) and such proceeding is
not terminated for a period of sixty (60) consecutive days or such court enters an
order granting the relief sought in such proceeding or the Bank shall institute or
take any corporate action for the purpose of instituting any such proceeding; or
the Bank shall become insolvent or unable to pay its debts as they mature, shall
commence a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, shall consent to the entry of an order for
relief in an involuntary case under any such law or shall consent to the
appointment of or taking possession by a receiver, liquidator, assignee, trustee,
custodian or sequestrator (or other similar official) of the Bank or for any
substantial part of its property, or shall make a general assignment for the benefit
of creditors, or shall fail generally to pay its debts as they become due, or shall
take any corporate action in furtherance of any of the foregoing and the Issuer
elects to replace the Bank with a Substitute Liquidity Facility; or
(iii) (A) the Bank shall have notified the Issuer that pursuant to
Section 2.06 hereof it requires compensation for an increase in costs, reduction in
income or additional expense specified therein, (B) the Issuer shall have delivered
to the Bank a certificate to the effect that the Issuer has identified a financial
institution which will furnish a Substitute Liquidity Facility at a price which is
equal to or less than the price charged by the Bank after giving effect to such
increased cost, reduction in income or additional expense and (C) within ten (10)
{JA293916;4}
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Business Days following receipt by the Bank of such certificate the Bank shall not
have withdrawn or modified its imposition of such increased costs so that the
commitment fee charged by the Bank is not in excess of the amount proposed to
be charged by such other financial institution; or
(iv) the Issuer for any other reason elects to replace the Bank with
an Substitute Credit Facility.
The effective date of a termination on account of an event described in clause (i), (ii),
(iii), or (iv) shall be the effective date of a Substitute Liquidity Facility. The Issuer agrees to
send to the Tender Agent a copy of any termination notice given by the Issuer to the Bank
pursuant to this Section 8.09 promptly after delivery of such notice to the Bank.
Section 8.10 Extension of Purchase Period; Increase in Available Interest
Commitment.
(a) The Stated Expiration Date may be extended from time to time by
agreement in writing between the Bank and the Issuer (the period from the preceding
Stated Expiration Date to such new Stated Expiration Date being herein sometimes called
the "Extended Purchase Period"). The Extended Purchase Period may itself be extended
in a like manner for additional periods. If no Event of Termination or Event of Default is
continuing, on December 1 of each year the then current Stated Expiration Date shall
automatically be extended for a period of one year unless, on or before the 120th day
preceding such December 1, the Bank shall have notified the Issuer in writing that it will
not extend the Stated Expiration Date. The Bank has no obligation to agree to any
Extended Purchase Period, and all terms of the extension (including the term,
commitment and other fees, interest rates and other provisions) shall be mutually
acceptable to the Bank and the Issuer. The Bank shall give written notice in the form of a
Notice of Non -Extension substantially in the form of Exhibit "C" hereto of its
determination not to extend to the Issuer, with a copy to the Tender Agent, the Bond
Insurer, each Rating Agency and the Remarketing Agent. If under the terms of the
Indenture, an extension (giving effect to any such changes in the terms and conditions of
this Agreement) requires the consent of the Bond Insurer, such extension shall not
become effective unless the Bond Insurer shall have consented thereto.
(b) If no Event of Termination or Event of Default is continuing, the Issuer
may make written request to the Bank that the Bank increase the Available Interest
Commitment under this Agreement; provided, however, that the Bank may, in its sole
discretion, deny any such request. If the Bank fails to respond to any such request by the
Issuer within thirty (30) days of receipt of such request, the Bank shall be deemed to have
denied the request.
Section 8.11 Survival. All representations, warranties, covenants and agreements of
the Issuer contained in this Agreement as amended or supplemented from time to time or made
in writing in connection herewith shall survive the execution and delivery hereof and the
purchase of Bonds by the Bank hereunder and shall continue in full force and effect until
payment in full of all the obligations of the Issuer hereunder and with respect to the Bonds, it
(JA293916;4)
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being understood that the agreements of the Issuer found in Sections 2.05, 2.06 and 8.05 hereof
shall survive the termination of this Agreement and payment in full of such obligations.
Section 8.12 Amendments to Rule 2a-7 of the Securities and Exchange
Commission. If Rule 2a-7 of the Securities and Exchange Commission promulgated under the
Investment Company Act of 1940, as amended, is amended so that, (a) in the opinion of counsel
to the Issuer, this Agreement must be amended in order for the Bonds to be considered to have a
maturity of less than one year under such Rule 2a-7 and (b) the Remarketing Agent certifies in
writing that the failure to so amend this Agreement will have an adverse effect on the
marketability of the Bonds, then the Bank and the Issuer agree to negotiate in good faith to so
amend this Agreement on or prior to the date on which the amendments to Rule 2a-7 are
scheduled to be effective. If the Bank and the Issuer are unable to agree on such amendment, the
Issuer shall have the right to replace the Bank in accordance with Section 8.09 hereof.
Section 8.13 Right of Setoff. Upon the occurrence of an Event of Default, the Bank
may, at any time and from time to time, without notice to the Issuer or any other Person (any
such notice being expressly waived), set off and appropriate and apply, against and on account
of, any obligations and liabilities of the Issuer to the Bank arising under or connected with this
Agreement and the Related Documents, without regard to whether or not the Bank shall have
made any demand therefor, and although such obligations and liabilities may be contingent or
unmatured, any and all deposits (general or special, including but not limited to indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not including trust
accounts) and any other indebtedness at any time held or owing by the Bank to or for the credit
or the account of the Issuer. If the Bank exercises its rights under this Section 8.13, it shall
promptly provide to the Issuer notice that the Bank has so exercised its rights.
Section 8.14 Beneficiaries. This Agreement is not intended and shall not be construed
to confer upon any Person other than the parties hereto and their successors and permitted
assigns and participants any rights or remedies hereunder provided that (a) the agreement of the
Bank to purchase Bonds in accordance with the terms and conditions of this Agreement is made
for the benefit of the holders from time to time of the Bonds and (b) the Bond Insurer shall be a
third -party beneficiary of this Agreement.
Section 8.15 Severability. If any provision of this Agreement shall be held or deemed
to be or shall in fact be illegal, inoperative or unenforceable, the same shall not affect any other
provisions herein contained or render the same invalid, inoperative or unenforceable to any
extent whatever.
Section 8.16 Counterparts. This Agreement may be simultaneously executed in
several counterparts, each of which shall be deemed an original and all of which shall constitute
but one and the same instrument.
Section 8.17 Complete and Controlling Agreement. This Agreement and the Related
Documents completely set forth the agreements between the Bank and the Issuer and fully
supersede all prior agreements, both written and oral, between the Bank and the Issuer relating to
the matters set forth in this Agreement and the Related Documents.
{JA293916;4}
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Section 8.18 Contractual Interpretation. The parties acknowledge that they have
read and fully understand the terms of this Agreement, have consulted with such attorneys,
accountants, advisors, or other professionals as they have deemed appropriate prior to executing
this Agreement with adequate opportunity and time for review thereof, and are fully aware of its
contents and of its legal effect. Accordingly, this Agreement shall not be construed against any
party on the grounds that such party drafted this Agreement and instead, this Agreement shall be
interpreted as though drafted equally by all parties.
(JA293916;4 )
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IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized,
have executed and delivered this Agreement, effective as of the day and year first above written.
Attest:
By
Name
Title City Clerk
(JA293916;4)
WACHOVIA BANK, NATIONAL
ASSOCIATION
By
Senior Vice President
CITY OF MIAMI, FLORIDA, as Issuer
By
Name
Title City Manager
U. S. BANK NATIONAL ASSOCIATION., as
Tender Agent and Paying Agent
By
Name
Title
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