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HomeMy WebLinkAboutReso 2009-1425 RESOLUTION NO. 2009- ~ A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF SUNNY ISLES BEACH, FLORIDA AUTHORIZING A RATE LOCK AGREEMENT WITH BANK OF AMERICA, NA.; PROVIDING THE CITY MANAGER WITH THE AUTHORITY TO DO ALL THINGS NECESSARY TO EFFECTUATE THIS RESOLUTION; PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Sunny Isles Beach (the "City"), a municipal corporation, is duly created and existing pursuant to the Constitution and Laws of the State of Florida; and WHEREAS, the City Commission of the City (the "City Commission") finds and determines that there is a substantial need for the financing of certain capital projects to be owned by the City (the "Projects") permitted by Florida Statutes and State Constitution; and WHEREAS, the City Commission finds and determines that it is in the best interest of the City that the City borrow the funds to undertake such capital projects; and WHEREAS, this Resolution is adopted pursuant to the Constitution and Laws of the State of Florida; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF SUNNY ISLES BEACH, FLORIDA that: Section 1. Authority for this Resolution. This Resolution is adopted pursuant to the Constitution and laws of the State of Florida. Section 2. Definitions. Words and phrases used in capitalized form and not otherwise defined herein shall have the meanings ascribed hereto in the Loan Agreement (hereinafter defined) and, in addition, the following words and phrases shall have the following meanings when used herein: "Authorized Signatory" means the Mayor of the City. Section 3. Rate Lock Agreement. The City is authorized to execute a Rate Lock Agreement with Bank of America, N.A. (the "Bank") in substantially the form attached hereto as Exhibit A. The form and terms of the Rate Lock Agreement attached hereto are hereby approved by the City and the Authorized Signatory is authorized to execute the same, with such changes as may be approved by the Authorized Signatory, such approval to be conclusively evidenced by the execution thereof by the Authorized Signatory. The City Manager has the authority to do all things necessary to effectuate this Resolution. Section 4. Applicable Provisions of Law. This Resolution shall be governed by and construed in accordance with the Jaws of the State of Florida. Section 5. repealed. Repealer. All Resolutions or parts thereof in conflict herewith are hereby Section 6. adoption. Effective Date. This Resolution shall take effect immediately upon its PASSED AND ADOPTED on the 21st day of May, 2009. ATTEST: ~~~ Jane A. Hines, CMC, City Clerk Moved by: rf)~ ~tL",()LL Seconded by: Y l<..D M~~cc..~ Vote: 6--0 Mayor Edelcup Vice Mayor Thaler Commissioner Brezin Commissioner Goodman Commissioner Scholl ~(Yes) ~(Yes) ~(Yes) V (Yes) ---V(Yes) (No) _(No) _(No) _(No) _(No) 2 Exhibit A to Resolution Rate Lock Agreement 1. The City of Sunny Isles Beach, Florida (the "City") has requested Bank of America, N.A. (the "Bank") to consider loaning (the "Loan") $20,000,000 to the City. The Loan would be made pursuant to a Loan Agreement and Promissory Note in substantially the forms attached hereto as Exhibit A (the "Loan Documents"). 2. The City desires to obtain the agreement of the Bank that the Loan, if completed, will bear an interest rate locked in by the Bank at this time. In response to the City's request, the Bank has agreed to lock in a fixed rate of 4.03% (the "Rate") for the Loan. 3. The City understands that, if the Loan is not completed during the period beginnning on the date hereof and ending at 5:00p.m. EDT on June 9, 2009 (the "Closing Period"), or if the Loan is made in a lesser amount than specified above, the Bank may suffer breakage costs and other losses, expenses and liabilities, including lost revenue and lost profits, as a result of having locked in the interest rate in advance. Accordingly, in consideration of the Bank's agreement to lock in the Rate, the City agrees to pay to the Bank a breakage fee as provided herein in the event the Loan is not closed (or is closed in an amount less than $20,000,000) during the Closing Period for any reason other than the Bank's refusal to complete the Loan having the terms and conditions as set forth herein and in the Loan Documents. 4. The Breakage Fee shall be the sum of fees calculated separately for each Nonborrowed Installment, as follows: (a) Determine the amount of interest which would have accrued each month for the Nonborrowed Installment had it been borrowed on the last day of the Closing Period ("Measurement Date") and had remained outstanding until the applicable Original Payment Date, using the Initial Money Market Funds Rate. (b) Subtract, from each monthly interest amount determined in (a) above, the amount of interest which would accrue for that Nonborrowed Installment if it were invested from the Measurement Date until the Original Payment Date, using the Subsequent Money Market Funds Rate. (c) If(a) minus (b) for the Nonborrowed Installment is greater than zero, discount the monthly difference to the Measurement Date by the rate used in (b) above. The sum of the discounted monthly differences is the Breakage Fee for that Nonborrowed Installment. 5. For purposes of this Agreement: (a) "Money Market" means one or more wholesale funding markets available to the Bank, including domestic negotiable certificates of deposit, eurodollar deposits, bank dcposit notcs or othcr appropriatc moncy markct instrumcnts sclcctcd by thc Bank. A-I - (b) "Initial Money Market Funds Rate" means the fixed interest rate per annum, determined solely by the Bank on the date of this Agreement, as the rate at which the Bank would be able to obtain funds through forward rate commitments in the Money Market in the amount of the Loan and with a term, interest payment frequency and principal repayment schedule equal to the Loan. (c) "Subsequent Money Market Funds Rate" means the fixed interest rate per annum, determined solely by the Bank on the Measurement Date, as the rate at which the Bank would be able to borrow funds in the Money Market in the amount of the Nonborrowed Installment for a period of time approximating the period starting on the Measurement Date and ending on the Original Payment Date. (d) "Original Payment Dates" mean the dates on which principal of the Loan would have been paid if the Loan had closed on the Measurement Date and payments had been made as scheduled through maturity, as set forth on Exhibit B. (e) "Nonborrowed Installment" means the portion of the principal of the Loan which would have been paid on a single Original Payment Date if the Loan had been disbursed on the Measurement Date and payments had been made as scheduled through maturity. 6. The Bank may adjust the Initial Money Market Funds Rate and the Subsequent Money Market Funds Rate to reflect the compounding, accrual basis, or other costs of the Loan. The rates shall include adjustments for reserve requirements, federal deposit insurance, and any other similar adjustment which the Bank deems appropriate. Each of the rates is the Bank's estimate only, and the Bank is under no obligation fo actually purchase or match funds for any transaction or reinvest any prepayment. The rates are not fixed by or related in any way to any rate the Bank quotes or pays for deposits accepted through its branch system. 7. The City agrees that the Breakage Fee represents a reasonable estimate of the breakage costs and other losses, expenses and liabilities, including lost revenue and lost profits, that the Bank may suffer if the Loan does not close during the Closing Period. The City agrees that the Bank's willingness to lock in the Rate in advance of the Closing Period is sufficient consideration for the City's agreement to pay the Breakage Fee. 8. This Agreement shall be governed by Florida law. Any amount due under this Agreement which is not paid upon demand by the Bank shall bear interest until paid at the Rate plus five percentage points. Any disputes between the parties concerning this Agreement, at the election of any party, will be resolved by binding arbitration according to the applicable rules and procedures for the arbitration of disputes of the American Arbitration Association or any successor thereof. The prevailing party in any arbitration or litigation will be entitled to its reasonable attorneys' fees, including the allocated cost of in-house counsel. Once the Loan is completed in the amount of $20,000,000, this Agreement will terminate. A-2 Bank of America, N.A. ~;~c: H~~!! Uu--- Title: Senior Vice President City of Sunny Isles Beach, Florida orman S. Edelcup ayor A-3