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2010-R-20RESOLUTION NO.2010-R-20 A RESOLUTION OF THE COUNCIL OF THE CITY OF EDGEWATER, FLORIDA, AUTHORIZING THE ISSUANCE OF THAT CERTAIN CITY OF EDGEWATER, FLORIDA GUARANTEED ENTITLEMENT REVENUE NOTE, SERIES 2010, IN THE PRINCIPAL AMOUNT OF NOT TO EXCEED $750,000, TO FINANCE A PORTION OF THE COST OF THE ACQUISITION, CONSTRUCTION, EQUIPPING OF A FIRE STATION; AUTHORIZING THE ISSUANCE AND SALE OF THE NOTE TO BRANCH BANKING AND TRUST COMPANY; PROVIDING THAT THE NOTE SHALL BE A LIMITED OBLIGATION OF THE CITY PAYABLE FROM THE GUARANTEED ENTITLEMENT REVENUES RECEIVED BY THE CITY FROM THE STATE OF FLORIDA AS PROVIDED HEREIN; PROVIDING FOR THE RIGHTS, SECURITY AND REMEDIES FOR THE OWNER OF THE NOTE; DESIGNATING THE NOTE AS A QUALIFIED TAX- EXEMPT OBLIGATION WITHIN THE MEANING OF THE INTERNAL REVENUE CODE; MAKING CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; AND PROVIDING FOR AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EDGEWATER, FLORIDA, that: SECTION 1. AUTHORITY FOR THIS RESOLUTION. This resolution is adopted. pursuant to the provisions of the Act (defined below). SECTION 2. DEFINITIONS. The following terms shall have the following meanings herein, unless otherwise expressly set forth herein: A. "Act" means Article VIII, Section 2 of the Constitution of the State of Florida, Chapter 166, Florida Statutes, Chapter 218, Part 11, Florida Statutes, the Charter of the City, and other applicable provisions of law and this Resolution. B. `Beak" means Branch Banking and Trust Company. C. "City" or "Issuer" means the City of Edgewater, Florida. D. "Clerk" means the City Clerk of the Issuer, or in the Clerk's absence or unavailability, a Deputy Clerk of the Issuer. E. "Code" means the Internal Revenue Code of 1986, as amended, and any rules or regulations promulgated thereunder. F. "Council" means the City Council of the City of Edgewater. G. "Default Rate" shall have the meaning set forth in Section 18 of this Resolution. H. "Fiscal Year" means the fiscal year of the Issuer ending on each September 30. I. "Holder" or "Noteholder" means the registered owner of the Note. The Bank shall be the initial Holder. "Interest Rate Limit" means the interest rate limit under Section 215.84, Florida Statutes K. "Mayor" means the Mayor of the Issuer, or in the Mayor's absence or unavailability, the Deputy Mayor, or such other person as may be duly authorized by the City Council to act on his or her behalf. L. "Note" means the Issuer's Guaranteed Entitlement Revenue Note, Series 2010, in an amount of not to exceed $750,000 authorized by this Resolution. M. "Paying Agent and Registrar" means such bank or trust company, within or without the State of Florida, which may be approved by the Council prior to the issuance of the Note, to be the agent of the Council for payment of the principal of and interest on the Note and for maintenance of the registration books of the Council with respect to the exchange and transfer of the Note; or, if no such bank or trust company is appointed, means the Clerk. N. "Pledged Revenues" means, collectively: (i) all of the proceeds of the Note pending the application thereof; and (ii) Guaranteed entitlement revenues received by the City from the State pursuant to and as defined in Chapter 218, Part II, Florida Statutes, all as provided in this Resolution. O. "Project" means the acquisition, construction, equipping and improvement of a Fire Station Number 55 located within the City. P. "Purchase Price" means the face amount of the Note. Q. "Resolution' means this Resolution, pursuant to which the Note is authorized to be issued, including any supplements to or amendments of this Resolution. W. "State" means the State of Florida. SECTION 3. FINDINGS. It is hereby found, determined and declared as follows that: A. The financing of the Project is in the public interest. B. It is necessary, desirable and in the best interests of the Issuer and its inhabitants that the Project be undertaken and that the Note be issued to fund the Project, in order to obtain the benefits of the Project. The Project is appropriate to the needs and circumstances of, and shall serve a public purpose by advancing the economic prosperity, the public health, or the general welfare of the State and its people. The Issuer will be able to cope satisfactorily with the aaaeamz�aiu J)6�IW]3 impact of the Project and will be able to provide, or cause to be provided when needed, the public facilities, including utilities and public services, that will be necessary for the construction, operation, repair and maintenance of the Project and on account of any increases in population or other circumstances resulting therefrom. C. Debt service on the Note will be payable from Pledged Revenues as provided herein. The Pledged Revenues will be sufficient to pay the principal and interest on the Note herein authorized, as the same becomes due, and to make all deposits required by this Resolution. No ad valorem taxing power of the Issuer will ever be exercised nor will any Holder of the Note have the right to compel the exercise of such ad valorem taxing power to pay the principal of or interest on the Note or to make any other payments provided for in this Resolution, and the Note shall not constitute a lien upon any property of the Issuer, except the Pledged Revenues. D. The Bank has, by written proposal, offered to purchase the Note at the Purchase Price, at the interest rate set forth below, resulting in an average net interest cost rate less than the Interest Rate Limit. The Council hereby determines that it is in the best interest of the Issuer to accept the offer of the Bank to purchase the Note. Prior to the issuance of the Note, the Issuer shall receive from the Bank a Purchaser's Certificate, the form of which is attached hereto as Exhibit "B" and the Disclosure Letter containing the information required by Section 218.385(6), Florida Statutes, a form of which is attached hereto as Exhibit "C". E. The Note will not be a "private activity bond" as defined in Section 141 of the F. The Issuer has not and does not reasonably expect to issue (including issues `on behalf of the Issuer, as determined under Section 265(b)(3)(E) of the Code) tax-exempt obligations in excess of $30,000,000 aggregate face amount during the 2010 calendar year. SECTION 4. RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the acceptance of the Note authorized to be issued hereunder by the Holder, this resolution shall be deemed to be and shall constitute a contract between the Issuer and such Holder. The covenants and agreements herein set forth to be performed by the Council and the Issuer shall be for the benefit, protection and security of the legal Holder of the Note. SECTION 5. AUTHORIZATION OF NOTE AND PROJECT. For the purpose of advancing funds to finance the costs of the Project, the Council does hereby authorize and approve of the following: A. the issuance of that certain "City of Edgewater, Florida Guaranteed Entitlement Revenue Note, Series 2010" of the Issuer (the "Note") in the principal amount of not to exceed $750,000, in substantially the form of Exhibit "A" attached hereto, with such changes and additions as the Mayor shall approve, his signature thereon constituting conclusive evidence of such approval; and B. the Council does hereby authorize and approve the application of the proceeds of the Note to pay a portion of the cost of the Project and to pay all or a portion of the costs of issuance of the Note. 0699/C0�3 al 3 SECTION 6. DESCRIPTION OF NOTE. A. The Note shall be issued in fully registered form, without coupons, shall be dated as of the date of its delivery, shall be in the denomination of $750,000 and shall bear interest on the outstanding principal balance thereof at the rate specified below. The Note shall be payable as to principal and interest as set forth therein, and shall mature on October 1, 2030 (the "Maturity Date"). The Note shall be payable with respect to both principal and interest in lawful money of the United States of America at such address as the Holder may from time to time designate. B. Interest, which shall be calculated based on a 360-day year consisting of twelve 30 day months, shall accrue on the outstanding principal balance of the Note as follows: (i) Interest shall accrue on the outstanding principal balance of the Note at a fixed interest rate equal to 2.77% (the "Initial Rate"). On October 1, 2020, the Initial Rate shall be subject to adjustment by the Bank effective on October 1, 2020 to a new fixed rate of interest (the "Reset Rate") determined by the Bank based on then current market conditions for a ten year fixed rate note offered to borrowers whose credit quality is similar to that of the Issuer. The Reset Rate shall apply to the Note on and after October 1, 2020 through the Maturity Date. The Issuer shall pay all accrued but unpaid interest under the Note semiannually on April 1 and October 1 of each Fiscal Year while the Note remains outstanding, commencing on April 1, 2011. (ii) The total liability of the Issuer for payment of interest shall not exceed any limitations imposed on the payment of interest by applicable usury laws. If any interest is received or charged by any Holder of the Note in excess of that amount, the Issuer shall be entitled to an immediate refund of the excess. C. The Issuer shall pay installments of principal under the Note as follows: (i) Before October 1, 2012, the Issuer shall not be obligated to make any principal payments on the Note, as set forth in the Note. (ii) Effective on October 1, 2012, principal payments on the Note shall be due and payable commencing on October 1, 2012, and annually thereafter on October 1 of each Fiscal Year while the Note remains outstanding. (iii) The Issuer shall pay all remaining outstanding principal under the Note, together with all then accrued and unpaid interest, on the Maturity Date, or if earlier, on the date that the Issuer elects to optionally prepay the Note, as provided herein. D. The Issuer may prepay the Note in whole, but not in part, on any scheduled interest or principal payment date for the Note at a prepayment price equal to: (i) the full principal amount due on the Note as of the date of prepayment, plus (ii) a prepayment premium equal to one percent (1%) of the principal amount then due on the Note, plus (iii) accrued but unpaid interest through the date of prepayment. In the event that the Issuer elects to prepay the Note on October 1, 2020, the date of the interest rate adjustment referenced in Section 6.B.(i) above, then the prepayment price shall equal (x) the full principal amount due on the Note as of ..A.)]-14I11 G)699/p,OE the date of prepayment, plus (y) accrued but unpaid interest through the date of prepayment. At least fifteen (15) days prior to the optional prepayment date, written notice of any such prepayment shall be mailed, postage prepaid to the Holder at the address appearing upon the registration books of the Issuer SECTION 7. INTEREST RATE ADJUSTMENTS. Notwithstanding any contrary provision set forth herein or in the Note, the interest rate applicable to the Note shall be adjusted as follows: A. Should subsequent but currently unforeseen actions cause the Note to not be classified as a "qualified tax-exempt obligation" pursuant to Section 265(b)(3)(B) of the Code, the interest rate on the Note shall be adjusted to that level necessary to ensure that the anticipated after tax yield contemplated by the Holder at the time of issuance of the Note is received. In the event that the interest on the Note is ever determined to be taxable for purposes of federal or state income taxation, or in the event that any or all of the interest on the Note is deemed to be included in the gross income of the Holder for federal or state income taxation, or in the event the Holder is unable to deduct any other amounts as a result of purchasing or carrying the Note, or in the event of a change in the alternative minimum tax or in the method of calculating the alternative maximum tax to which the Holder may be subject, or in the event of any action which would otherwise decrease the after tax yield to the Holder, the interest on the Note shall be adjusted to that level necessary to ensure that the anticipated after tax yield contemplated by the Holder at the time of issuance of the Note is received. In no event, however, shall the interest rate on the Note exceed the maximum rate permitted by law. B. Any adjustment to the interest rate on the Note resulting from a change in the tax laws or regulations or otherwise will be effective on the effective date of the applicable change or the effective date of the change in tax treatment. Interest on the Note and all other tax rates and interest rates are expressed as annual rates. However, proper partial adjustment will be made if the tax law change is effective after the first day of the Noteholder's tax year or if interest on the Note does not accrue for the entire tax year of the Noteholder. Adjustments which create a circular calculation because the interest rate on the Note is affected by the calculation will be carried out sequentially, increasing the interest rate on the Note accordingly in each successive calculation using as the new value the increase the interest rate on the Note until the change on the interest rate caused by the next successive calculation of the adjustment is de minions. SECTION 8. EXECUTION OF NOTE. The Council hereby authorizes and delegates to the Mayor and the Clerk the authority to negotiate, execute and deliver the Note. The Note shall be executed in the name of the Issuer by the Mayor and countersigned and attested by the Clerk, either manually or with their facsimile signatures, and the Issuer's seal or a facsimile thereof shall be affixed thereto or reproduced thereon. The Certificate of Authentication of the Paying Agent and Registrar shall appear on the Note, and the Note shall not be valid or obligatory for any purpose or be entitled to any security or benefit under this Resolution unless such certificate shall have been duly executed on the Note. The authorized signature for the Paying Agent and Registrar shall be either manual or in facsimile; provided, however, that at least one of the above signatures, including the authorized signature for the Paying Agent and Registrar, appearing on the Note shall at all times be a manual signature. In case any one or more of the officers who shall have signed or sealed the Note shall cease to be such officer of the 0000-00LIa15 E Council or the Issuer before the Note so signed and sealed shall have been actually sold and delivered, the Note may nevertheless be sold and delivered as herein provided and may be issued as if the person who signed or sealed the Note had not ceased to hold such office. SECTION 9. NOTE MUTILATED, DESTROYED, STOLEN OR LOST. In case the Note shall become mutilated, or be destroyed, stolen or lost, the Issuer shall issue and deliver a new Note of like tenor as the Note so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Note, or in lieu of and substitution for the Note, if any, destroyed, stolen or lost, and upon the Holder furnishing the Issuer proof of its ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer may prescribe and paying such reasonable expenses as the Issuer may incur. Any Note so surrendered shall be canceled. If the lost, stolen or destroyed Note shall have matured or be about to mature, instead of issuing a substitute Note, the Issuer may pay the same, upon being indemnified as aforesaid, without surrender thereof Any such duplicate Note issued pursuant to this Section shall constitute an original, additional contractual obligation on the part of the Issuer whether or not the lost, stolen or destroyed Note be at any time found by anyone. SECTION 10. NEGOTIABILITY. The Note shall be and have all the qualities and incidents of a negotiable instrument under the laws of the State of Florida, and the Holder, in accepting the Note, shall be conclusively deemed to have agreed that the Note shall be and have all of the qualities and incidents of a negotiable instrument under the laws of the State of Florida. SECTION 11. REGISTRATION. The Council shall, prior to the proposed date of delivery of the Note, by resolution designate the Paying Agent and Registrar, if the Paying Agent and Registrar will be a bank or trust company. If no such designation is made, the Clerk shall be the Paying Agent and Registrar. The Paying Agent and Registrar shall be responsible for maintaining the books for the registration and transfer of the Note and, if a bank or trust company is so designated, in compliance with a written agreement to be executed between the Issuer and such bank or trust company as Paying Agent and Registrar prior to the delivery date of the Note. The Clerk shall initially serve as Paying Agent and Registrar. Upon surrender to the Paying Agent and Registrar for transfer or exchange of the Note, duly endorsed for transfer or accompanied by an assignment or written authorization for exchange, whichever is applicable, duly executed by the Holder or its attorney duly authorized in writing, the Paying Agent and Registrar shall deliver in the name of the Holder or the transferee or transferees, as the case may be, a new fully registered Note for the principal amount which the Holder is entitled to receive. When the Note is presented for transfer, exchange or payment (if so required by the Council or the Paying Agent and Registrar), it shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in form and with guaranty of signature satisfactory to the Council or the Paying Agent and Registrar, duly executed by the Holder or by its duly authorized attorney. The Paying Agent and Registrar or the Council may require payment from the holder or transferee of a sum sufficient to cover any tax, fee or other governmental charge that may be 6 90F1411ICI ] .99/tltl. ] imposed in connection with any exchange or transfer of the Note. Such charges and expenses shall be paid before any new Note shall be delivered. Any new Note delivered upon any transfer or exchange shall be a valid obligation of the Issuer, evidencing the same debt as the Note surrendered, shall be secured by this Resolution and shall be entitled to all of the security and benefits hereof. The Council and the Paying Agent and Registrar may treat the Holder of the Note as the absolute owner thereof for all purposes, whether or not such Note shall be overdue, and shall not be bound by any notice to the contrary. SECTION 12. DISPOSITION OF NOTE PAID OR REPLACED. Whenever the Note shall be delivered to the Paying Agent and Registrar for cancellation, upon payment of the principal amount thereof, or for replacement, transfer or exchange, it shall, after cancellation, either be retained by the Paying Agent and Registrar for a period of time specified in writing by the Council, or at the option of the Council, shall be destroyed by the Paying Agent and Registrar and counterparts of a certificate of destruction evidencing such destruction shall be famished to the Council. SECTION 13. PAYMENT OF PRINCIPAL: PREMIUM AND INTEREST: LIMITED OBLIGATION. The Issuer promises that it will promptly pay the principal of, premium, if any, and interest on the Note at the place, on the dates and in the manner provided therein according to the true intent and meaning hereof and thereof. The Note shall not be or constitute a general obligation or indebtedness of the State of Florida or the Issuer as "bonds' within the meaning of Article VII, Section 12 of the Constitution of Florida, but shall be payable solely from the Pledged Revenues in accordance with the terms hereof. No holder of the Note issued hereunder shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Note, or be entitled to payment of such Note from any funds of the Issuer except from the Pledged Revenues as described herein. SECTION 14. AVAILABILITY OF NOTE PROCEEDS: COSTS. The Note proceeds are available solely for the purposes provided herein and consistent with the requirements of Florida law, including the Act The money received from the proceeds of the Note shall be deposited into an account established by the Issuer with the Holder and applied to pay the costs of the Project, and, at the election of the Issuer, the costs of issuance of this Note. Any proceeds of the Note remaining after the completion of the Project shall be applied to pay the next available payment of principal and interest on the Note. SECTION 15. NOTEIIOLDER NOT AFFECTED BY USE OF NOTE PROCEEDS. The Holder of the Note shall have no responsibility for the use of the proceeds of the sale of the Note, and the use of the Note proceeds by the Issuer shall in no way affect the rights of such Noteholder. SECTION 16. SALE OF NOTE. The Note is hereby awarded and sold at negotiated sale to the Bank at the Purchase Price. The applicable officers of the Council (including the Mayor and the Clerk) are authorized, in their discretion, to execute and deliver agreements, 7 <�111411z 1i a certificates or documents related to the issuance of the Note, to the extent deemed necessary by the Holder. SECTION 17. TAX EXEMPTION: QUALIFIED TAX-EXEMPT OBLIGATION DESIGNATION. The Issuer covenants that it (i) will not use the proceeds of the Note in any manner which would cause the interest on the Note to be or become includable in the gross income of the owner thereof for federal income tax purposes or cause the Note not to be a "qualified tax-exempt obligation", (ii) will not do any act or fail to do any act which would cause the interest on the Note to become includable in the gross income of the owner thereof for federal income tax purposes or cause the Note not to be a "qualified tax-exempt obligation', and (iii) will comply with all provisions of the Code necessary to maintain the exclusion of interest on the Note from the gross income of the owner thereof for federal income tax purposes, including, in particular, the payment of any amount required to be rebated to the United States Treasury pursuant to the Code. The Clerk, or his designee, is authorized to make or effect any election, selection, choice, consent, approval or waiver on behalf of the Council with respect to the Note as the Council or the Issuer is required to make or give under the federal income tax laws, for the purpose of assuring, enhancing or protecting favorable tax treatment or characterization of the Note or interest thereon or assuring compliance with requirements for that purpose, reducing the burden or expense of such compliance, reducing the rebate amount or payments of penalties thereon, or making payments in lieu thereof, or obviating such amounts or payments, as determined by such officer, or his designee. Any action of such officer, or his designee, in that regard shall be in writing and signed by such officer, or his designee. The Issuer shall be responsible for determining any rebate to the United States Treasury which is required by Section 148 of the Code. The Noteholder shall not be liable for any failure of the Issuer to comply with Section 148 of the Code with respect to the Note. The Council hereby designates the Note as a "qualified tax-exempt obligation' as defined in Section 265(b)(3)(B) of the Code. SECTION 18. REMEDIES OF NOTEHOLDER. If any payment of principal of, premium, if any, or interest on the Note not received by the Holder within 10 days after it is due, then the Holder may, at its option, declare the principal sum outstanding under the Note, together with all accrued interest thereon, to be immediately due and payable. In addition to any other remedies set forth in this Resolution or the Note, either at law or in equity, by suit, action, mandamus or other proceeding in any court of competent jurisdiction, the Holder may protect and enforce any and all rights under the laws of the State, or granted or contained in this Resolution, and may enforce and compel the performance of all duties required by this Resolution, or by any applicable statutes to be performed by the Issuer or by any officer thereof. Any amount due hereunder or under the Note that is not paid when due shall bear interest at a per annum default rate of interest equal to the interest rate then applicable to the Note, plus two percent (2%) (the "Default Rate"). The Default Rate shall apply to such unpaid amount on and after five (5) days following the date such payment is due. SECTION 19. OMER COVENANTS. The Issuer covenants that, so long as the Note remains outstanding: <,sssroom A. As long as any amounts remain outstanding under the Note, the Issuer shall deliver to the Holder (a) a copy of its audited financial statements for the Fiscal Year then ended no later than 210 days after the end of each Fiscal Year; (b) a copy of the accountant's management letter received by Issuer from its accountant; and (c) a copy of its budget for each fiscal year not later than thirty (30) days after it is adopted. The Issuer shall also provide the Noteholder with such other financial information as it shall reasonably request from time to time. Such information may include, but is not limited to, financial information relating to the Project. B. The Issuer covenants to maintain adequate insurance with respect to the Project and its operations, to comply with federal and State laws applicable to its business and operations and the Project, shall maintain the Project in good condition and working order. C. The Issuer will not issue any additional notes, bonds or other indebtedness secured by a lien on Pledged Revenues which is on parity with the lien on Pledged Revenues securing the Note, unless prior to such issuance, either: (i) it has obtained the prior written consent of the Holder to such issuance; or (ii) the Issuer shall have certified to the Holder in writing that, after taking into account the projected debt service associated with the issuance of the additional notes, bonds or other indebtedness, Pledged Revenues anticipated to be received by the Issuer over the term of the additional notes, bonds or other indebtedness equals or exceeds 1.2 times the aggregate debt service on the Note and the additional notes, bonds or other indebtedness proposed to be issued. SECTION 20. BANK FEES AND EXPENSES. The Issuer agrees to pay, and save the Noteholder hamdess against liability for the payment of, all out-of-pocket expenses arising in connection with this transaction (including any renewals or modifications relating hereto), and the fees and expenses of the Noteholder and Noteholder's counsel, provided, however, that in connection with the initial issuance of the Note, such fees and expenses of Noteholder's counsel shall not exceed $2,500. SECTION 21. MODIFICATION AND AMENDMENT. No modification or amendment of this Resolution or of any resolution amendatory hereof or supplemental hereto may be made without the consent in writing of the Holder of the Note. SECTION 22. SEVERABILITY OF INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions of this resolution should be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions and in no way affect the validity of all the other provisions of this resolution or of the Note issued hereunder. SECTION 23. GOVERNING LAW. This Resolution and the Note and the duties and obligations of parties hereunder and thereunder shall be governed by the laws of the State. SECTION 24. REGULARITY OF PROCEEDINGS; COMPLIANCE WITH STATUTES. The adoption of this Resolution, and the issuance and delivery of the Note has been duly authorized by the Council, and all conditions, acts and things necessary and required 9 I<IS.E 41699/WJ3 0 0 by the Constitution and laws of the State of Florida or otherwise, to exist, to have happened, or to have been performed precedent to and in connection with the execution and delivery of the Note, and precedent to and in connection with the adoption of this Resolution, do exist, have happened and have been performed in regular form, time and manner. SECTION 25. EFTECTIVE DATE. This resolution shall take effect immediately upon its adoption. ADOPTED: November 15, 2010. rej0 *[Cp2tMi9 T[lrmir. 13en2ei , 6ty Clerk Approved as to form By: Print Name: City Attorney 10 awtanasu2 uwsr0002 ERIIIBIT A [FORM OF NOTE] ANY HOLDER SHALL, PRIOR TO BECOMING A HOLDER, EXECUTE A PURCHASER'S CERTIFICATE IN THE FORM ATTACHED TO THE RESOLUTION (HEREIN DEFINED). $750,000 CITY OF EDGEWATER, FLORIDA GUARANTEED ENTITLEMENT REVENUE NOTE, SERIES 2010 Issue Date. November 16, 2010 Maturity Date. October 1, 2030 KNOW ALL MEN BY THESE PRESENTS that the City of Edgewater, Florida (the 'Issuer'), a political subdivision created and existing pursuant to the Constitution and the laws of the State of Florida, for value received, promises to pay from the sources hereinafter provided, to the order of Branch Banking and Trust Comoaay or its registered assigns (hereinafter, the "Holder"), the principal sum advanced hereunder in an amount equal to $750,000, together with interest on the outstanding principal balance of this Note at such interest rates described below based upon a year of 360 days consisting of twelve 30-day months. Unless sooner paid in accordance with the terms of this Note, all outstanding amounts under the Note shall be due and payable on the Maturity Date. Principal of and interest on this Note is payable in lawful money of the United States of America at such place as the Holder may designate to the Issuer in writing. Capitalized terms used herein but not defined shall have the respective meanings set forth in that certain Resolution No. 201 O-R-20 duly adopted by the Issuer on November 15, 2010 as from time to time amended and supplemented (herein referred to as the "Resolution"). Interest shall accrue on the outstanding principal balance of this Note at a fixed interest rate equal to 2.77% (the "Initial Rate") and is subject to adjustment as set forth in the Resolution and herein. On October 1, 2020, the Initial Rate shall be subject to adjustment by the Holder effective on October 1, 2020 to a new fixed rate of interest (the "Reset Rate") determined by the Holder based on then current market conditions for a ten year fixed rate note offered to borrowers whose credit quality is similar to that of the Issuer. The Reset Rate shall apply to this Note on and after October 1, 2020 through the Maturity Date. Interest on this Note shall be paid semiannually, commencing April 1, 2011, and on each subsequent October I and April 1 thereafter until the final payment in full of this Note. Principal payments on this Note shall be made annually on October I of each Fiscal Year, commencing on October 1, 2012. The scheduled payments of principal on this Note are set forth in the principal payments schedule attached as Schedule 1 to this Note. This Note is subject to optional prepayment in whole, but not in part, by the Issuer in accordance with the terns of the Resolution. At least fifteen (15) days prior to the optional A-1 .�swmooz a� z prepayment date, written notice of any such prepayment shall be mailed, postage prepaid to the registered Holder at the address appearing upon the registration books of the Issuer. If any date for the payment of principal and interest hereon shall fall on a day which is not a business day the payment due on such date shall be due on the next succeeding day which is a business day, but the Issuer shall not receive credit for the payment until it is actually received by the Holder. All payments by the Issuer pursuant to this Note shall apply first to accrued interest, then to other charges due the Holder, and the balance thereof shall apply to principal. THIS NOTE DOES NOT CONSTITUTE A GENERAL INDEBTEDNESS OF THE ISSUER WITHIN THE MEANING OF ANY CONSTITUTIONAL, STATUTORY OR CHARTER PROVISION OR LIMITATION, AND IT IS EXPRESSLY AGREED BY THE HOLDER OF THIS NOTE THAT SUCH NOTEHOLDER SHALL NEVER HAVE THE RIGHT TO REQUIRE OR COMPEL THE EXERCISE OF THE AD VALOREM TAXING POWER OF THE ISSUER OR TAXATION OF ANY REAL OR PERSONAL PROPERTY THEREIN FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THIS NOTE OR THE MAKING OF ANY OTHER PAYMENTS PROVIDED FOR IN THE RESOLUTION. This Note is issued pursuant to the Act. All terms, conditions and provisions of the Resolution, including without limitation interest rate adjustments and remedies upon the occurrence of an event of default, are by this reference thereto incorporated herein as a part of this Note. Payment of this Note is secured by Pledged Revenues. This Note may be exchanged or transferred by the Holder hereof but only upon the registration books maintained by the Issuer and in the manner provided in the Resolution. It is hereby certified, recited and declared that all acts, conditions and prerequisites required to exist, happen and be performed precedent to and in connection with the execution, delivery and the issuance of this Note do exist, have happened and have been performed in due time, form and manner as required by law, and that the issuance of this Note is in full compliance with and does not exceed or violate any constitutional or statutory limitation. Should subsequent but currently unforeseen actions cause this Note to not be classified as a "qualified tax-exempt obligation" pursuant to Section 265(b)(3)(B) of the Code, the interest rate on this Note shall be adjusted to that level necessary to ensure that the anticipated after tax yield contemplated by the Holder at the time of issuance of this Note is received. In the event that the interest on this Note is ever determined to be taxable for purposes of federal or state income taxation, or in the event that any or all of the interest on this Note is deemed to be included in the gross income of the Holder for federal or state income taxation, or in the event the Holder is unable to deduct any other amounts as a result of purchasing or carrying this Note, or in the event of a change in the alternative minimum tax or in the method of calculating the alternative maximum tax to which the Holder may be subject, or in the event of any action which would otherwise decrease the after tax yield to the Holder, the interest on this Note shall be adjusted to that level necessary to ensure that the anticipated after tax yield contemplated by the A-2 Holder at the time of issuance of this Note is received. In no event, however, shall the interest rate on this Note exceed the maximum rate permitted by law. IN WITNESS WHEREOF, the City of Edgewater, Florida has caused this Note to be executed in its name by the manual signature of its Mayor and attested by the manual signature of its City Clerk, and its seal to be impressed hereon, all as of this 16ih day of November, 2010. CITY OF EDGEWATER, FLORIDA 10 Mayor ATTEST: City Clerk A-3 �4152 Gl6C9IGW3 SCHEDULEI PRINCIPAL PAYMENTS SCHEDULE Principal October 1 Pavment 2012 $ 30,000 2013 30,000 2014 30,000 2015 35,000 2016 35,000 2017 35,000 2018 35,000 2019 35,000 2020 40,000 2021 40,000 2022 40,000 2023 40,000 2024 45,000 2025 45,000 2026 45,000 2027 45,000 2028 45,000 2029 50,000 2030 50.000 total IMM A-4 4848-0fII-14152 4)6 ., EXHIBIT B FORM OF PURCHASER'S CERTIFICATE This is to certify that Branch Banking and Trust Company (the "Purchaser') has not required the City of Edgewater, Florida (the "Issuer") to deliver any offering document and has conducted its own investigation, to the extent it deems satisfactory or sufficient, into matters relating to business affairs or conditions (either financial or otherwise) of the Issuer in connection with the issuance of its Guaranteed Entitlement Revenue Note, Series 2010 dated November 16, 2010, in an aggregate principal amount of the not to exceed $750,000 (the "Note"), and no inference should he drawn that the Purchaser, in the acceptance of said Note, is relying on Bond Counsel or Counsel to the Issuer as to any such matters other than the legal opinion rendered by Bond Counsel, Broad and Cassel, and by Issuer's Counsel, Doran, Wolfe, Ansay & Kundid, P.A. Any capitalized undefined terms used herein not otherwise defined shall have the meaning set forth in Resolution No. 2010-R-20, adopted by the City Council of the Issuer on November 15, 2010 (the "Resolution"). We acknowledge and understand that the Resolution is not being qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act"), and is not being registered in reliance upon the exemption from registration under Section 3(a)(2) of the Securities Act of 1933, Section 517.051(1), Florida Statutes, and/or Section 517.061(7), Florida Statutes, and that neither the Issuer, Bond Counsel nor Issuer's Counsel shall have any obligation to effect any such registration or qualification. We are not acting as a broker or other intermediary, and are purchasing the Note as an investment for our own account and not with a present view to a resale or other distribution to the public. We understand that the Note may not be transferred except to a bank, savings association, insurance company or other "accredited investor" as such term is defined in the Securities Act of 1933, as amended, and Regulation D thereunder. We are a bank as contemplated by Section 517.061(7), Florida Statutes. We are not purchasing the Note for the direct or indirect promotion of any scheme or enterprise with the intent of violating or evading any provision of Chapter 517, Florida Statutes. DATED this 16th of November, 2010. BRANCH BANIONG AND TRUST COMPANY By: Name: David Pierce Its: Banking Officer B-t nBGBdGIL1G153 EXIDBIT C FORM OF DISCLOSURE LETTER The undersigned, as purchaser, proposes to negotiate with the City of Edgewater, Florida (the 'Issuer') for the purchase of its Guaranteed Entitlement Revenue Note, Series 2010 (the "Note") in the principal amount of not to exceed $750,000. Prior to the award of the Note, the following information is hereby furnished to the Issuer: 1. Set forth is an itemized list of the nature and estimated amounts of expenses to be incurred for services rendered to us (the 'Bank") in connection with the issuance of the Note (such fees and expenses to be paid by the Issuer): Bank and Bank's Counsel (Edward Cohen) Fees -- $2,500 2. (a) No other fee, bonus or other compensation is estimated to be paid by the Bank in connection with the issuance of the Note to any person not regularly employed or retained by the Bank (including any "finder" as defined in Section 218.386(1)(a), Florida Statutes), other than the expenses to be incurred with respect to Bank's Counsel, as described in paragraph (1) above. (b) No person has entered into an understanding with the Bank, or to the knowledge of the Bank, with the Issuer, for any paid or promised compensation or valuable consideration, directly or indirectly, expressly or implied, to act solely as an intermediary between the Issuer and the Bank or to exercise or attempt to exercise any influence to effect any transaction in the purchase of the Note. 3. The amount of the underwriting spread expected to be realized by the Bank is $0. 4. The management fee to be charged by the Bank is $0. 5. Truth -in -Bonding Statement: The Note is being issued primarily to finance the acquisition, construction, equipping and improvement of a fire station to be located in the City of Edgewater. Unless earlier redeemed, the Note is expected to be repaid at the end of twenty (20) years. Using the initial interest rate of 2.77% as the interest rate applicable to the Note over its term, total interest paid over the life of the Note is estimated to be $243,517.63. The Note will be payable solely from Pledged Revenues of the Issuer under and as described in its Resolution No. 2010-R-20 adopted by the Issuer on November 15, 2010 (the 'Resolution"). See the Resolution for a definition of Pledged Revenues. Based on the above assumptions, issuance of the Note is estimated to result in a maximum of $54,002.50 of Pledged Revenues of the Issuer not being available to finance the services of the Issuer in any one year during the life of the Note. C-1 4e1a4411 d111 4�w 2 6. The name and address of the Bank is as follows: Branch Banking & Trust Company 5130 Parkway Plaza Blvd., Building No. 9 Charlotte, NC 28217 IN WITNESS WHEREOF, the undersigned has executed this Disclosure Statement on behalf of the Bank this 16th day of November, 2010. BRANCH BANKING AND TRUST COMPANY By: Name: David Pierce Its: Banking Officer C-2 ae 743z14152 36w 2 CERTIFICATE AS TO PUBLIC MEETINGS We, the undersigned members of the City Council of the City of Edgewater, Florida (the "City Council'), recognizing that the purchasers of its not to exceed $750,000 City of Edgewater, Florida Guaranteed Entitlement Revenue Note, Series 2010 (the "2010 Note") will have purchased said 2010 Note in reliance upon this Certificate, DO HEREBY CERTIFY, individually and collectively, that we have no personal knowledge that any two or more members of the City Council, meeting together, reached any prior conclusion as to whether the actions taken by the City Council, with respect to said 2010 Note, the security therefor and the application of the proceeds thereof, should or should not be taken by the City Council or should or should not be recommended as an action to be taken or not to be taken by the City Council, except at public meetings of the City Council held after due notice to the public was given in the ordinary manner required by law and custom of the City Council. IN WITNESS WHEREOF, we have hereunto affixed cta] si natures this 15th day of November, 2010. Name: "chaeKE-Thomas, Mayor By: 461daA0(- Name: Harriet E. Rhodes, MR Name: Ted Cooper, Cbun�cjilman By: Xk 'fl1iY� r l0 Name: Debra 7ea Rogers, ouncilwoman aessiooai • • CITY OF EDGEWATER, FLORIDA $750,000 GUARANTEED ENTITLEMENT • REVENUE NOTE, SERIES 2010 • • t BROAD AND CASSEL ATTORNEYS AT LAW r Department of Treasury Notice CPI52 _ CoInternalRevenue Service Taxperiod -- November341010 IRS Ogden UT 84201-0074 Notice date January 17,2012 _ Employer to number, 596000314 To contact us Phone 1-677-829-5500 Pagel of - ----- - - 001105.026345.0005.001 1 M 0.303 372 rPu'hidt^P131Ir91Ilrf� rdlhhlhlhh'hl^uhhl14 CITY OF EDGEWATER FLORIDA 104 N RIVERSIDE DR EDGEWATER FL 32132-1716040 001'105 Acknowledgment of your November 23, 2010 Form 8038-G We received your tax-exempt bond form This notice serves as official acknowledgment Tax-exempt bond information that we received your Form 8038-G.If you filed more than one form,you will receive a separate Band issuer CITY OF EDGEWATER FLORIDA acknowledgment for each one. Name of issue CITY OF EDGEWATER FLORIDAGUARANTEE Address 104 N RIVERSIDE DR EDGEWATER FL 32132 CUSIP number - -- - __-_- Issue date November 23,2010 Issue price 5750,000.00 Maturity date October 1,2030 - IRSreportnumber 302 Important reminders • Attach a copy of this notice to all of your correspondence and documents related to this tax-exempt bond. • If a tax practitioner or someone else prepared your form,you may want to give them a copy of this notice.(A copy was automatically sent to all representatives authorized with a Power-of-Attomey for this form.) Additional information • Visitwww.lrsgovtcp152. • For tax forms,call 1-800-TAX-FORM I1-800-629-3676). • if you have questions about tax-exempt bonds,call TEGE Customer Account Services at 1-877-829-5500. • Keep this notice for your records. If you need assistance,please don't hesitate to contact us. BILK O'AI,.CCHUt J9(1NOMLOM EAVEY S.14W O. Fv,.0 3WI _ PA-Bxx4961(32802d96n IELEPxONE.SP II£M7,139 42W CMSEL FACM143581]] ROAD AND ww,r.mo.d..dc.sscL<om ATTORNEYS AT LAW December 8, 2010 Jonathan C. McKinney Finance Director City of Edgewater, Florida 104 N. Riverside Drive Edgewater, Florida 32132 Re: $750,000 City of Edgewater, Florida Guaranteed Entitlement Revenue Note, Series 2010 Dear Mr. McKinney: Enclosed please find an original transcript of the closing documents for the above- referenced Note. If you have any questions regarding the enclosed transcript,please contact me. Very truly yours, AD AND CASSEL L "By Rey Public Fina4nce Cler Enclosure BOCA RATON• DESTIN•FT.LAUDERDALE•MIAMI•ORLANDO•TALLAHASSEE• TAMPA•WEST PALM BEACH MIS-95569Po41 4MS9/W1 Steve Bays From: John McKinney Sent: Thursday, December 01, 20118:38 AM To: Steve Bays Subject: FW: Project Fund Requisition Form-financing from BB&T Attachments: Project Fund Requisition-Schedule V1.doc FYI From: Pierce, David [maiRo:Daviid.Pierce@bbandt.comj Sent: Friday, November 19, 2010 5:52 PM To: John McKinney Subject: Project Fund Requisition Form-financing from BB&T «Project Fund Requisition-Schedule V1.dcc» Hi John, Hope everything is going well. I'm looking forward to Monday for the preclosing for the City's Revenue Note. I'm happy we were able to provide the winning bid and do business with the City. Attached is a project fund requisition form to be used when you need to draw funds out of the project fund to pay project costs.When you incur costs,just fill out the form, email or fax it to Trina and we will have you the funds by the next day. Her contact information is on the form. Having the project fund allows us to help the City track project costs and also allows us to offer you such a low rate on the financing. Interest will accrue on the project fund for the benefit of the City. Let me know if you have any questions when we meet on Monday. Otherwise, have a great weekend, and I look forward to seeing you then. Dave David W. Pierce HB&T Governmental Finance 200 W.Forsyth Street,Suite 200 Jacksonville, FL 32202 Office:(904)361-5253 Cell:(386)795-3495 Fax:(904)361-5276 1 • CITY OF EDGEWATER,FLORIDA $750,000 GUARANTEED ENTITLEMENT REVENUE NOTE,SERIES 2010 • November 23,2010 INDEX OF CLOSING DOCUMENTS BASIC DOCUMENTS: • 1. Copy of Resolution No.2010-R-20,adopted on November 15,2010 2. Specimen Guaranteed Entitlement Revenue Note,Series 2010 3. Opinion of Broad and Cassel,Bond Counsel • 4. Opinion of Doran,Wolfe,Ansay&Kundid,Issuer's Counsel DELIVERIES BY THE CITY: 5. Certificate as to Signatures,No Litigation, Incumbency and Other Matters 6. Certificate Regarding Interest Rate • 7. Bank Qualified Certificate 8. Certificate of Delivery,Payment and Application of Proceeds 9. IRS Form 8038-G 10. Tax Certificate • It. Certificate as to Public Meetings DELIVERIES BY THE BANK: 12. Receipt for Series 2010 Bond 13. Disclosure Letter • 14. Purchaser's Certificate MISCELLANEOUS DOCUMENTS: 15. Notice of Sale to Division of Bond Finance • 16. Bond Finance Forms 2003 and 2004-B 17. Closing Memorandum Distribution: (I) City of Edgewater,Florida • (1) Doran,Wolfe,Ansay&Kundid (1) Branch Banking and Trust Company (1) Broad and Cassel (1) Edwards Cohen 0]69MCW1 • ary EDGEWATER • CERTIFICATION • I, Bonnie A. Wenzel,City Clerk of the City of Edgewater Florida, do hereby certify that the attached is a true and correct copy of Resolution 2010-R-20 as it appears in the public • records of the City of Edgewater, Florida. IN WITNESS WHEREOF,I have set my hand and the seal of the City of Edgewater, Florida, this 22" day of November 2010. • N10. N U Bonnie A- Wenzel City Clerk • SEAL • Office of the Citv Clerk P.O.Box 100•Edgewater,FL 32132-0100 (386)424-2400 Eat 1101 .Fe (386)424-2410 www.cityofedgmater.org • RESOLUTION NO.2010-R-20 • A RESOLUTION OF THE COUNCIL OF THE CITY OF EDGEWATER, FLORIDA, AUTHORIZING THE ISSUANCE OF THAT CERTAIN CITY OF EDGEWATER, FLORIDA GUARANTEED ENTITLEMENT REVENUE NOTE, SERIES 2010, IN THE PRINCIPAL AMOUNT OF • NOT TO EXCEED $750,000, TO FINANCE A PORTION OF THE COST OF THE ACQUISITION, CONSTRUCTION, EQUIPPING OF A FIRE STATION; AUTHORIZING THE ISSUANCE AND SALE OF THE NOTE TO BRANCH BANKING AND TRUST COMPANY; PROVIDING THAT • THE NOTE SHALL BE A LIMITED OBLIGATION OF THE CITY PAYABLE FROM THE GUARANTEED ENTITLEMENT REVENUES RECEIVED BY THE CITY FROM THE STATE OF FLORIDA AS PROVIDED HEREIN; PROVIDING FOR THE RIGHTS, SECURITY • AND REMEDIES FOR THE OWNER OF THE NOTE; DESIGNATING THE NOTE AS A QUALIFIED TAX- EXEMPT OBLIGATION WITHIN THE MEANING OF THE INTERNAL REVENUE CODE; MAKING CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION • THEREWITH; AND PROVIDING FOR AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EDGEWATER, FLORIDA, that: • SECTION 1. AUTHORITY FOR THIS RESOLUTION. This resolution is adopted. pursuant to the provisions of the Act(defined below). SECTION 2. DEFINITIONS. The following terms shall have the following meanings herein,unless otherwise expressly set forth herein: • A. "AM" means Article VIII, Section 2 of the Constitution of the State of Florida, Chapter 166, Florida Statutes, Chapter 218, Part II, Florida Statutes, the Charter of the City, and other applicable provisions of law and this Resolution. B. "Bank"means Branch Banking and Trust Company. • C. "City" or"Issuer"means the City of Edgewater, Florida. D. "Clerk" means the City Clerk of the Issuer, or in the Clerk's absence or unavailability, a Deputy Clerk of the Issuer. • E. "Code" means the Internal Revenue Code of 1986, as amended, and any rules or regulations promulgated thereunder. • narwnausz uewmwz • F. "Council"means the City Council of the City of Edgewater. • G. "Default Rate" shall have the meaning set forth in Section 18 of this Resolution. H. "Fiscal Year"means the fiscal year of the Issuer ending on each September 30. 1. "Holder" or "Noteholder" means the registered owner of the Note. The Bank shall be the initial Holder. • J. "Interest Rate Limit"means the interest rate limit under Section 215.84, Florida Statutes. K. "Mayor' means the Mayor of the Issuer, or in the Mayor's absence or • unavailability, the Deputy Mayor, or such other person as may be duly authorized by the City Council to act on his or her behalf. L. "Note"means the Issuer's Guaranteed Entitlement Revenue Note, Series 2010, in an amount of not to exceed $750,000 authorized by this Resolution. • M. "Paying Agent and Registrar" means such bank or trust company, within or without the State of Florida, which may be approved by the Council prior to the issuance of the Note, to be the agent of the Council for payment of the principal of and interest on the Note and for maintenance of the registration books of the Council with respect to the exchange and transfer of the Note; or, if no such bank or trust company is appointed, means the Clerk. • N. "Pledged Revenues" means, collectively: (i) all of the proceeds of the Note pending the application thereof; and (ii) Guaranteed entitlement revenues received by the City from the State pursuant to and as defined in Chapter 218, Part 11, Florida Statutes,all as provided in this Resolution. • O. "Project" means the acquisition, construction, equipping and improvement of a Fire Station Number 55 located within the City. P. "Purchase Price"means the face amount of the Note. • Q. "Resolution" means this Resolution, pursuant to which the Note is authorized to be issued,including any supplements to or amendments of this Resolution. W. "State"means the State of Florida. SECTION 3.FINDINGS. It is hereby found, determined and declared as follows that: • A. The financing of the Project is in the public interest. B. It is necessary, desirable and in the best interests of the Issuer and its inhabitants that the Project be undertaken and that the Note be issued to fund the Project, in order to obtain • the benefits of the Project. The Project is appropriate to the needs and circumstances of, and shall serve a public purpose by advancing the economic prosperity, the public health, or the general welfare of the State and its people. The Issuer will be able to cope satisfactorily with the 2 • ncssioom • impact of the Project and will be able to provide, or cause to be provided when needed, the public facilities, including utilities and public services, that will be necessary for the • construction, operation, repair and maintenance of the Project and on account of any increases in population or other circumstances resulting therefrom. C. Debt service on the Note will be payable from Pledged Revenues as provided herein. The Pledged Revenues will be sufficient to pay the principal and interest on the Note herein authorized, asthe same becomes due, and to make all deposits required by this • Resolution. No ad valorem taxing power of the Issuer will ever be exercised nor will any Holder of the Note have the right to compel the exercise of such ad valorem taxing power to pay the principal of or interest on the Note or to make any other payments provided for in this Resolution, and the Note shall not constitute a lien upon any property of the Issuer, except the Pledged Revenues. • D. The Bank has, by written proposal, offered to purchase the Note at the Purchase Price, at the interest rate set forth below,resulting in an average net interest cost rate less than the Interest Rate Limit. The Council hereby determines that it is in the best interest of the Issuer to accept the offer of the Bank to purchase the Note. Prior to the issuance of the Note, the Issuer • shall receive from the Bank a Purchaser's Certificate, the form of which is attached hereto as Exhibit "B" and the Disclosure Letter containing the information required by Section 218.385(6),Florida Statutes,a form of which is attached hereto as Exhibit"C". E. The Note will not be a "private activity bond" as defined in Section 141 of the • Code. F. The Issuer has not and does not reasonably expect to issue (including issues "on behalf of the Issuer, as determined under Section 265(b)(3)(E) of the Code) tax-exempt obligations in excess of$30,000,000 aggregate face amount during the 2010 calendar year. • SECTION 4.RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the acceptance of the Note authorized to be issued hereunder by the Holder, this resolution shall be deemed to be and shall constitute a contract between the Issuer and such Holder. The covenants and agreements herein set forth to be performed by the Council and the Issuer shall be for the benefit,protection and security of the legal Holder of the Note. • SECTION 5.AUTHORIZATION OF NOTE AND PROJECT. For the purpose of advancing funds to finance the costs of the Project, the Council does hereby authorize and approve of the following: A. the issuance of that certain "City of Edgewater, Florida Guaranteed Entitlement • Revenue Note, Series 2010" of the Issuer (the "Note") in the principal amount of not to exceed $750,000, in substantially the form of Exhibit "A" attached hereto, with such changes and additions as the Mayor shall approve, his signature thereon constituting conclusive evidence of such approval; and • B. the Council does hereby authorize and approve the application of the proceeds of the Note to pay a portion of the cost of the Project and to pay all or a portion of the costs of issuance of the Note. 3 • SECTION 6.DESCRIMON OF NOTE. • A. The Note shall be issued in fully registered form, without coupons, shall be dated as of the date of its delivery, shall be in the denomination of$750,000 and shall bear interest on the outstanding principal balance thereof at the rate specified below. The Note shall be payable as to principal and interest as set forth therein, and shall mature on October 1, 2030 (the "Maturity Date"). The Note shall be payable with respect to both principal and interest in lawful • money of the United States of America at such address as the Holder may from time to time designate. B. Interest, which shall be calculated based on a 360-day year consisting of twelve 30 day months, shall accrue on the outstanding principal balance of the Note as follows: • (i) Interest shall accrue on the outstanding principal balance of the Note at a fixed interest rate equal to 2.77% (the `Initial Rate"). On October 1, 2020, the Initial Rate shall be subject to adjustment by the Bank effective on October 1, 2020 to a new fixed rate of interest (the "Reset Rate") determined by the Bank based on then current market conditions for a ten year fixed rate note offered to borrowers whose credit quality • is similar to that of the Issuer. The Reset Rate shall apply to the Note on and after October 1, 2020 through the Maturity Date. The Issuer shall pay all accrued but unpaid interest under the Note semiannually on April 1 and October 1 of each Fiscal Year while the Note remains outstanding,commencing on April 1,2011. (ii) The total liability of the Issuer for payment of interest shall not exceed any • limitations imposed on the payment of interest by applicable usury laws. If any interest is received or charged by any Holder of the Note in excess of that amount, the Issuer shall be entitled to an immediate refund of the excess. C. The Issuer shall pay installments of principal under the Note as follows: • (i) Before October 1, 2012, the Issuer shall not be obligated to make any principal payments on the Note,as set forth in the Note. (ii) Effective on October 1, 2012,principal payments on the Note shall be due • and payable commencing on October 1, 2012, and annually thereafter on October i of each Fiscal Year while the Note remains outstanding. (iii) The Issuer shall pay all remaining outstanding principal under the Note, together witli all then accrued and unpaid interest, on the Maturity Date, or if earlier, on the date that the Issuer elects to optionally prepay the Note,as provided herein. • D. The Issuer may prepay the Note in whole, but not in part, on any scheduled interest or principal payment date for the Note at a prepayment price equal to: (i) the full principal amount due on the Note as of the date of prepayment,plus (ii) a prepayment premium equal to one percent (1%) of the principal amount then due on the Note, plus (iii) accrued but • unpaid interest through the date of prepayment. In the event that the Issuer elects to prepay the Note on October 1, 2020, the date of the interest rate adjustment referenced in Section 6.B.(i) above, then the prepayment price shall equal: (x) the full principal amount due on the Note as of 4 • aeasimzaasi aswmroz • the date of prepayment, plus (y) accrued but unpaid interest through the date of prepayment. At least fifteen (15) days prior to the optional prepayment date, written notice of any such • prepayment shall be mailed, postage prepaid to the Holder at the address appearing upon the registration books of the Issuer SECTION 7. INTEREST RATE ADJUSTMENTS. Notwithstanding any contrary provision set forth herein or in the Note, the interest rate applicable to the Note shall be adjusted as follows: • A. Should subsequent but currently unforeseen actions cause the Note to not be classified as a "qualified tax-exempt obligation' pursuant to Section 265(b)(3)(B) of the Code, the interest rate on the Note shall be adjusted to that level necessary to ensure that the anticipated after tax yield contemplated by the Holder at the time of issuance of the Note is received. In the • event that the interest on the Note is ever determined to be taxable for purposes of federal or state income taxation, or in the event that any or all of the interest on the Note is deemed to be included in the gross income of the Holder for federal or state income taxation, or in the event the Holder is unable to deduct any other amounts as a result of purchasing or carrying the Note, or in the event of a change in the alternative minimum tax or in the method of calculating the • alternative maximum tax to which the Holder may be subject,or in the event of any action which would otherwise decrease the after tax yield to the Holder, the interest on the Note shall be adjusted to that level necessary to ensure that the anticipated after tax yield contemplated by the Holder at the time of issuance of the Note is received. In no event, however, shall the interest rate on the Note exceed the maximum rate permitted by law. B. Any adjustment to the interest rate on the Note resulting from a change in the tax laws or regulations or otherwise will be effective on the effective date of the applicable change or the effective date of the change in tax treatment. Interest on the Note and all other tax rates and interest rates are expressed as annual rates. However, proper partial adjustment will be made if the tax law change is effective after the first day of the Noteholder's tax year or if interest on • the Note does not accrue for the entire tax year of the Noteholder. Adjustments which create a circular calculation because the interest rate on the Note is affected by the calculation will be carried out sequentially, increasing the interest rate on the Note accordingly in each successive calculation using as the new value the increase the interest rate on the Note until the change on the interest rate caused by the next successive calculation of the adjustment is de minimis. • SECTIONS. EXECUTION OF NOTE. The Council hereby authorizes and delegates to the Mayor and the Clerk the authority to negotiate, execute and deliver the Note. The Note shall be executed in the name of the Issuer by the Mayor and countersigned and attested by the Clerk, either manually or with their facsimile signatures, and the Issuer's seal or a facsimile • thereof shall be affixed thereto or reproduced thereon. The Certificate of Authentication of the Paying Agent and Registrar shall appear on the Note, and the Note shall not be valid or obligatory for any purpose or be entitled to any security or benefit under this Resolution unless such certificate shall have been duly executed on the Note. The authorized signature for the Paying Agent and Registrar shall be either manual or in facsimile; provided, however, that at least one of the above signatures, including the authorized signature for the Paying Agent and • Registrar, appearing on the Note shall at all times be a manual signature. In case any one or more of the officers who shall have signed or sealed the Note shall cease to be such officer of the 5 • W6743L14152 Ufi9J/UNS • Council or the Issuer before the Note so signed and sealed shall have been actually sold and delivered, the Note may nevertheless be sold and delivered as herein provided and may be issued • as if the person who signed or sealed the Note had not ceased to hold such office. SECTION 9. NOTE MUTILATED, DESTROYED, STOLEN OR LOST. In case the Note shall become mutilated, or be destroyed, stolen or lost, the Issuer shall issue and deliver a new Note of like tenor as the Note so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Note, or in lieu of and substitution for the Note, if any, destroyed, • stolen or lost, and upon the Holder furnishing the Issuer proof of its ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer may prescribe and paying such reasonable expenses as the Issuer may incur. Any Note so surrendered shall be canceled. If the lost, stolen or destroyed Note shall have matured or be about to mature, instead of issuing a substitute Note,the Issuer may pay the same,upon being • indemnified as aforesaid, without surrender thereof Any such duplicate Note issued pursuant to this Section shall constitute an original,additional contractual obligation on the part of the Issuer whether or not the lost, stolen or destroyed Note be at any time found by anyone. SECTION 10. NEGOTIABII.ITY. The Note shall be and have all the qualities and • incidents of a negotiable instrument under the laws of the State of Florida, and the Holder, in accepting the Note, shall be conclusively deemed to have agreed that the Note shall be and have all of the qualities and incidents of a negotiable instrument under the laws of the State of Florida. SECTION 11. REGISTRATION. The Council shall, prior to the proposed date of • delivery of the Note,by resolution designate the Paying Agent and Registrar, if the Paying Agent and Registrar will be a bank or trust company. If no such designation is made, the Clerk shall be the Paying Agent and Registrar. The Paying Agent and Registrar shall be responsible for maintaining the books for the registration and transfer of the Note and, if a bank or trust company is so designated, in compliance with a written agreement to be executed between the Issuer and such bank or trust company as Paying Agent and Registrar prior to the delivery date • of the Note. The Clerk shall initially serve as Paying Agent and Registrar. Upon surrender to the Paying Agent and Registrar for transfer or exchange of the Note, duly endorsed for transfer or accompanied by an assignment or written authorization for exchange, whichever is applicable, duly executed by the Holder or its attorney duly authorized in • writing,the Paying Agent and Registrar shall deliver in the name of the Holder or the transferee or transferees,as the case may be, a new fully registered Note for the principal amount which the Holder is entitled to receive. When the Note is presented for transfer, exchange or payment (if so required by the • Council or the Paying Agent and Registrar), it shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in form and with guaranty of signature satisfactory to the Council or the Paying Agent and Registrar,duly executed by the Holder or by its duly authorized attorney. The Paying Agent and Registrar or the Council may require payment from the holder or • transferee of a sum sufficient to cover any tax, fee or other governmental charge that may be 6 • ua.�mz�nsz �sssr000x • imposed in connection with any exchange or transfer of the Note. Such charges and expenses shall be paid before any new Note shall be delivered. • Any new Note delivered upon any transfer or exchange shall be a valid obligation of the Issuer, evidencing the same debt as the Note surrendered,shall be secured by this Resolution and shall be entitled to all of the security and benefits hereof. The Council and the Paying Agent and Registrar may treat the Holder of the Note as the • absolute owner thereof for all purposes, whether or not such Note shall be overdue, and shall not be bound by any notice to the contrary. SECTION 12. DISPOSITION OF NOTE PAID OR REPLACED. Whenever the Note shall be delivered to the Paying Agent and Registrar for cancellation, upon payment of the • principal amount thereof, or for replacement, transfer or exchange, it shall, after cancellation, either be retained by the Paying Agent and Registrar for a period of time specified in writing by the Council,or at the option of the Council, shall be destroyed by the Paying Agent and Registrar and counterparts of a certificate of destruction evidencing such destruction shall be furnished to the Council. • SECTION 13.PAYMENT OF PRINCIPAL: PREMIUM AND INTEREST; LIMITED OBLIGATION. The Issuer promises that it will promptly pay the principal of, premium, if any, and interest on the Note at the place, on the dates and in the manner provided therein according to the true intent and meaning hereof and thereof The Note shall not be or constitute a general obligation or indebtedness of the State of Florida or the Issuer as "bonds" • within the meaning of Article VII, Section 12 of the Constitution of Florida,but shall be payable solely from the Pledged Revenues in accordance with the terms hereof. No holder of the Note issued hereunder shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Note, or be entitled to payment of such Note from any funds of the Issuer except from the Pledged Revenues as described herein. • SECTION 14.AVAH ABII,ITY OF NOTE PROCEEDS: COSTS. The Note proceeds are available solely for the purposes provided herein and consistent with the requirements of Florida law, including the Act. The money received from the proceeds of the Note shall be deposited into an account established by the Issuer with the Holder and applied to • pay the costs of the Project, and, at the election of the Issuer, the costs of issuance of this Note. Any proceeds of the Note remaining after the completion of the Project shall be applied to pay the next available payment of principal and interest on the Note. SECTIONI5.NOTEHOLDER NOT AFFECTED BY USE OF NOTE PROCEEDS. The Holder of the Note shall have no responsibility for the use of the proceeds of • the sale of the Note, and the use of the Note proceeds by the Issuer shall in no way affect the rights of such Noteholder. SECTION 16.SALE OF NOTE. The Note is hereby awarded and sold at negotiated sale to the Bank at the Purchase Price. The applicable officers of the Council (including the • Mayor and the Clerk) me authorized, in their discretion, to execute and deliver agreements, 7 • certificates or documents related to the issuance of the Note, to the extent deemed necessary by the Holder. • SECTION 17. TAX EXEMPTION: OUALIFIED TAX-EXEMPT OBLIGATION DESIGNATION. The Issuer covenants that it (i) will not use the proceeds of the Note in any manner which would cause the interest on the Note to be or become includable in the gross income of the owner thereof for federal income tax purposes or cause the Note not to be a "qualified tax-exempt obligation", (ii)will not do any act or fail to do any act which would cause • the interest on the Note to become includable in the gross income of the owner thereof for federal income tax purposes or cause the Note not to be a "qualified tax-exempt obligation', and (iii) will comply with all provisions of the Code necessary to maintain the exclusion of interest on the Note from the gross income of the owner thereof for federal income tax purposes, including, in particular, the payment of any amount required to be rebated to the United States • Treasury pursuant to the Code. The Clerk, or his designee, is authorized to make or effect any election, selection, choice, consent, approval or waiver on behalf of the Council with respect to the Note as the Council or the Issuer is required to make or give under the federal income tax laws, for the purpose of assuring, enhancing or protecting favorable tax treatment or characterization of the Note or interest thereon or assuring compliance with requirements for that • purpose, reducing the burden or expense of such compliance, reducing the rebate amount or payments of penalties thereon, or making payments in lieu thereof, or obviating such amounts or payments, as determined by such officer, or his designee. Any action of such officer, or his designee, in that regard shall be in writing and signed by such officer, or his designee. The Issuer shall be responsible for determining any rebate to the United States Treasury which is • required by Section 148 of the Code. The Noteholder shall not be liable for any failure of the Issuer to comply with Section 148 of the Code with respect to the Note. The Council hereby designates the Note as a"qualified tax-exempt obligation'as defined in Section 265(b)(3)(B)of the Code. • SECTION 18.REMEDIES OF NOTEHOLDER. If any payment of principal of, premium, if any, or interest on the Note not received by the Holder within 10 days after it is due, then the Holder may, at its option,declare the principal sum outstanding under the Note,together with all accrued interest thereon, to be immediately due and payable. In addition to any other remedies set forth in this Resolution or the Note, either at law or in equity, by suit, action, • mandamus or other proceeding in any court of competent jurisdiction, the Holder may protect and enforce any and all rights under the laws of the State, or granted or contained in this Resolution, and may enforce and compel the performance of all duties required by this Resolution, or by any applicable statutes to be performed by the Issuer or by any officer thereof. Any amount due hereunder or under the Note that is not paid when due shall bear interest at a per • annum default rate of interest equal to the interest rate then applicable to the Note, plus two percent (2%) (the "Default Rate"). The Default Rate shall apply to such unpaid amount on and after five(5) days following the date such payment is due. SECTION 19.OTHER COVENANTS. The Issuer covenants that, so long as the Note • remains outstanding: 8 0 4491810151 697, 1 • A. As long as any amounts remain outstanding under the Note, the Issuer shall deliver to the Holder(a) a copy of its audited financial statements for the Fiscal Year then ended no later than 210 days after the end of each Fiscal Year; (b) a copy of the .accountant's management letter received by Issuer from its accountant; and (c) a copy of its budget for each fiscal year not later than thirty (30) days after it is adopted. The Issuer shall also provide the Noteholder with such other financial information as it shall reasonably request from time to time. Such information may include, but is not limited to, financial information relating to the Project. • B. The Issuer covenants to maintain adequate insurance with respect to the Project and its operations,tocomplywith federal and State laws applicable to its business and operations and the Project, shall maintain the Project in good condition and working order. C. The Issuer will not issue any additional notes, bonds or other indebtedness • secured by a lien on Pledged Revenues which is on parity with the lien on Pledged Revenues securing the Note, unless prior to such issuance, either: (i) it has obtained the prior written consent of the Holder to such issuance; or (ii) the Issuer shall have certified to the Holder in writing that, after taking into account the projected debt service associated with the issuance of the additional notes, bonds or other indebtedness, Pledged Revenues anticipated to be received by the Issuer over the term of the additional notes, bonds or other indebtedness equals or exceeds 1.2 times the aggregate debt service on the Note and the additional notes, bonds or other indebtedness proposed to be issued. SECTION 20.BANK FEES AND EXPENSES. The Issuer agrees to pay, and save the Noteholder harmless against liability for the payment of, all out-of-pocket expenses arising in connection with this transaction (including any renewals or modifications relating hereto), and the fees and expenses of the Noteholder and Noteholder's counsel, provided, however, that in connection with the initial issuance of the Note, such fees and expenses of Noteholder's counsel shall not exceed$2,500. • SECTION 21.MODIFICATION AND AMENDMENT. No modification or amendment of this Resolution or of any resolution amendatory hereof or supplemental hereto may be made without the consent in writing of the Holder of the Note. SECTION 22. SEVERABILITY OF INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions of this resolution should be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions and in no way affect the validity of all the other provisions • of this resolution or of the Note issued hereunder. SECTION 23. GOVERNING LAW. This Resolution and the Note and the duties and obligations of parties hereunder and thereunder shall be governed by the laws of the State. SECTION 24. REGULARITY OF PROCEEDINGS, COMPLLINCE WITH STATUTES. The adoption of this Resolution, and the issuance and delivery of the Note has been duly authorized by the Council, and all conditions, acts and things necessary and required 9 46 743b 4152 W a3699iWJ2 • by the Constitution and laws of the State of Florida or otherwise,to exist,to have happened, or to have been performed precedent to and in connection with the execution and delivery of the Note, • and precedent to and in connection with the adoption of this Resolution, do exist, have happened and have been performed.in regular form, time and manner. - SECTION 25.EFFECTIVE DATE. This resolution shall take effect immediately upon its adoption. • ADOPTED: November 15, 2010. CITY COUNCIL CITY OF EDGEW FL • (SEAL) � By ! 0/h Mayor ATTEST: • f ona I Danz ity Clerk • Approved as to form By: Print Name: • City Attorney 10 • CBC6A3b10151 3699KK01 • $750,000 CITY OF EDGEWATER,FLORIDA • GUARANTEED ENTITLEMENT REVENUE NOTE, SERIES 2010 Issue Date:November 23,2010 Maturity Date: October 1, 2030 0 KNOW ALL MEN BY THESE PRESENTS that the City of Edgewater, Florida (the "Issuer'), a political subdivision created and existing pursuant to the Constitution and the laws of the State of Florida, for value received, promises to pay from the sources hereinafter provided,to the order of Branch Banking and Trust Company or its registered assigns (hereinafter, the "Holder"), the principal sum advanced hereunder in an amount equal to $750,000, together with interest on the outstanding principal balance of this Note at such interest rates described below 9 based upon a year of 360 days consisting of twelve 30-day months. Unless sooner paid in accordance with the terms of this Note, all outstanding amounts under the Note shall be due and payable on the Maturity Date. Principal of and interest on this Note is payable in lawful money of the United States of America at such place as the Holder may designate to the Issuer in writing. Capitalized terms used herein but not defined shall have the respective meanings set • forth in that certain Resolution No. 2010-R-20 duly adopted by the Issuer on November 15,2010 as from time to time amended and supplemented (herein referred to as the "Resolution"). Interest shall accrue on the outstanding principal balance of this Note at a fixed interest rate equal to 2.77% (the "Initial Rate") and is subject to adjustment as set forth in the Resolution 0 and herein. On October 1, 2020, the Initial Rate shall be subject to adjustment by the Holder effective on October 1, 2020 to a new fixed rate of interest (the "Reset Rate") determined by the Holder based on then current market conditions for a ten year fixed rate note offered to borrowers whose credit quality is similar to that of the Issuer. The Reset Rate shall apply to this Note on and after October 1, 2020 through the Maturity Date. Interest on this Note shall be paid semiannually, commencing April 1, 2011, and on each subsequent October 1 and April 1 thereafter until the final payment in full of this Note. Principal payments on this Note shall be made annually on October 1 of each Fiscal Year, commencing on October 1, 2012. The scheduled payments of principal on this Note are set forth in the principal payments schedule attached as Schedule 1 to this Note. • This Note is subject to optional prepayment in whole, but not in part, by the Issuer in accordance with the terms of the Resolution. At least fifteen (15) days prior to the optional prepayment date, written notice of any such prepayment shall be mailed, postage prepaid to the registered Holder at the address appearing upon the registration books of the Issuer. • If any date for the payment of principal and interest hereon shall fall on a day which is not a business day the payment due on such date shall be due on the next succeeding day which YO-9118)1121 • 9I6K/Jbl • is a business day, but the Issuer shall not receive credit for the payment until it is actually received by the Holder. • All payments by the Issuer pursuant to this Note shall apply first to accrued interest, then to other charges due the Holder, and the balance thereof shall apply to principal. THIS NOTE DOES NOT CONSTITUTE A GENERAL INDEBTEDNESS OF THE • ISSUER WITHIN THE MEANING OF ANY CONSTITUTIONAL, STATUTORY OR CHARTER PROVISION OR LIMITATION, AND IT IS EXPRESSLY AGREED BY THE HOLDER OF THIS NOTE THAT SUCH NOTEHOLDER SHALL NEVER HAVE THE RIGHT TO REQUIRE OR COMPEL THE EXERCISE OF THE AD VALOREM TAXING POWER OF THE ISSUER OR TAXATION OF ANY REAL OR PERSONAL PROPERTY THEREIN FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THIS NOTE • OR THE MAKING OF ANY OTHER PAYMENTS PROVIDED FOR IN THE RESOLUTION. This Note is issued pursuant to the Act. All terms, conditions and provisions of the Resolution, including without limitation interest rate adjustments and remedies upon the occurrence of an event of default, are by this reference thereto incorporated herein as a part of • this Note. Payment of this Note is secured by Pledged Revenues. This Note may be exchanged or transferred by the Holder hereof but only upon the registration books maintained by the Issuer and in the manner provided in the Resolution. • It is hereby certified, recited and declared that all acts, conditions and prerequisites required to exist, happen and be performed precedent to and in connection with the execution, delivery and the issuance of this Note do exist, have happened and have been performed in due time, form and manner as required by law,and that the issuance of this Note is in full compliance with and does not exceed or violate any constitutional or statutory limitation. • Should subsequent but currently unforeseen actions cause this Note to not be classified as a "qualified tax-exempt obligation" pursuant to Section 265(b)(3)(B) of the Code, the interest rate on this Note shall be adjusted to that level necessary to ensure that the anticipated after tax yield contemplated by the Holder at the time of issuance of this Note is received. In the event that the interest on this Note is ever determined to be taxable for purposes of federal or state • income taxation, or in the event that any or all of the interest on this Note is deemed to be included in the gross income of the Holder for federal or state income taxation, or in the event the Holder is unable to deduct any other amounts as a result of purchasing or carrying this Note, or in the event of a change in the alternative minimum tax or in the method of calculating the alternative maximum tax to which the Holder may be subject, or in the event of any action which would otherwise decrease the after tax yield to the Holder, the interest on this Note shall be adjusted to that level necessary to ensure that the anticipated after tax yield contemplated by the Holder at the time of issuance of this Note is received. In no event, however, shall the interest rate on this Note exceed the maximum rate permitted by law. • 2 • • IN WITNESS WHEREOF, the City of Edgewater, Florida has caused this Note to be executed in its name by the manual signature of its Mayor and attested by the manual signature of its City Clerk,and its seal to be impressed hereon, all as of this 23rd day of November, 2010. 7_E4DGEV TE IIIDA rl L. omas, Mayor • ATTEST: + By: W WA --o Bonnie Wenzel,City Clerk • • 3 • SCHEDULEI • PRINCIPAL PAYMENTS SCHEDULE Principal October 1 Payment 2012 S 30,000 • 2013 30,000 2014 30,000 2015 35,000 2016 35,000 2017 35,000 • 2018 35,000 2019 35,000 2020 40,000 2021 40,000 2022 40,000 • 2023 40,000 2024 45,000 2025 45,000 2026 45,000 2027 45,000 • 2028 45,000 2029 50,000 2030 50 000 total • 4 • 3WNOMOa NCEAWN1 $Vf151400 Oau.No0.Fwxlon 31801 P.O.WX4%1o28024961) TT-��//�\X- CASSEL FA.. I, ,BRo FAcsunls.4W.425.&iTl • www beoadandeazuLeom ATTORNEYS AT LAW • November 23, 2010 Mayor and Members of the • City Council of the City of Edgewater, Florida Branch Banking and Trust Company Charlotte,North Carolina • We have served as Bond Counsel to the City of Edgewater, Florida (the "City"), in connection with the issuance by the City of its $750,000 Guaranteed Entitlement Revenue Note, Series 2010, dated November 23, 2010 (the "Note"), payable to Branch Banking and Trust • Company, Charlotte, North Carolina (the `Bank"), to finance the acquisition, construction, equipping and improvement of Fire Station No. 55 located within the City. The Note is being issued pursuant to and under the authority of the Constitution of the State of Florida, Chapter 166, Florida Statutes, and other applicable provisions of law, and Resolution No. 2010-R-20 of the City, adopted November 15, 2010 (the "Resolution'). In such capacity, we have examined • such law and certified proceedings, certifications and other documents as we have deemed necessary to render this opinion. Any capitalized undefined terms used herein shall have the meanings set forth in the Resolution. As to questions of fact material to our opinion, we have relied upon representations of the • City contained in the Resolution and in the certified proceedings and other certifications of public officials and others furnished to us, without undertaking to verify the same by independent investigation. We have not undertaken an independent audit, examination, investigation or inspection of such matters and have relied solely on the facts, estimates and circumstances described in such proceedings and certifications. We have assumed the genuineness of signatures on all documents and instruments, the authenticity of documents • submitted as originals and the conformity to originals of documents submitted as copies. In rendering this opinion, we have examined and relied upon the opinion of even date herewith of Doran Wolfe Ansay & Kundid, City Attorney, as to the due creation and valid existence of the City, the due adoption of the Resolution, the due execution and delivery of the • Note and the compliance by the City with all conditions contained in the Charter and Code of Ordinances of the City precedent to the issuance of the Note. BOCA RATON • DESTIN - FT.LAUDERDALE • MIAMI • ORLANDO • TALLAHASSEE • TAMPA • WEST PALM BEACH 436=1 • Mayor and Members of the City Council of the City of Edgewater, Florida Branch Banking and Trust Company November 23, 2010 • Page 2 The Note and the interest thereon are limited obligations of the City secured solely by the Pledged Revenues. The Note and interest thereon do not constitute a general obligation or indebtedness of the City as "bonds" within the meaning of the Constitution of the State of Florida, and the Holder thereof shall never have the right to compel the exercise of any ad • valorem taxing power of the City or taxation in any form of any property therein for the payment of the principal of or interest on the Note. The Note and interest thereon do not constitute a lien upon the City's property, but constitute a lien only on the Pledged Revenues in the manner provided in the Resolution. • The opinions set forth below are expressly limited to, and we opine only with respect to, the laws of the State of Florida and the federal income tax laws of the United States of America. Based on our examination, we are of the opinion as of the date of delivery and payment for the Note that, under existing law: • 1. The Resolution constitutes a valid and binding obligation of the City enforceable against the City in accordance with its terms. 2. The Note is a valid and binding special obligation of the City enforceable in accordance with its terms, payable from and secured solely by a lien upon and pledge of the • Pledged Revenues,in the manner and to the extent provided in the Resolution. 3. The Resolution creates a valid lien upon the Pledged Revenues for the security of the Note, all in the manner and to the extent provided in the Resolution. • 4. Interest on the Note is excludable from gross income for federal income tax purposes. The opinion set forth in the preceding sentence is subject to the condition that the City complies with all requirements of the Internal Revenue Code of 1986, as amended, (the "Code") that must be satisfied subsequent to the issuance of the Note in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The City has covenanted in the Resolution and the Tax Certificate relating to the Note, included in the • transcript of proceedings thereof, to comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the Note to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Note. 5. The Note is a "qualified tax exempt obligation" within the meaning of Section • 265(b)(3) of the Code. In rendering this opinion, we have relied on the representations of the City in the Resolution and certificates delivered in conjunction with the closing of the Note. 6. The Note is exempt from registration under the Securities Act of 1933, as amended, and the Resolution is exempt from qualification as an indenture under the Trust • Indenture Act of 1939,as amended. It is to be understood that the rights of the Holder of the Note and the enforceability BOCA RATON • DESTIN •FT.LAUDERDALE • MIAMI • ORLANDO • TALLAHASSEE • TAMPA • WEST PALM BEACH �N468W-9BIS • �J6MA%gl • Mayor and Members of the City Council of the City of Edgewater,Florida Branch Banking and Trust Company November 23,2010 �• Page thereof may be subject to the exercise ofjudicial discretion in accordance with general principles of equity, to the valid exercise of the sovereign police powers of the State of Florida and of the constitutional powers of the United States of America and to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or • hereafter enacted. This opinion should not be construed as offering material, an offering circular,prospectus or official statement and is not intended in any way to be a disclosure statement used in connection with the sale or delivery of the Note. In addition, we have not been engaged to and, • therefore, express no opinion as to compliance by the City or the Bank regarding the priority of the lien on the Pledged Revenues created by the Resolution. Further, we express no opinion regarding federal or state tax consequences arising with respect to the Note other than as expressly set forth herein. • Our opinions expressed herein are predicated upon present law, facts and circumstances, and we assume no affirmative obligation to update the opinions expressed herein if such laws, facts or circumstances change after the date hereof. Very truly yours, • BROAD AND CASSEL � A-0-4 0. / • BOCA RATON • DESTIN • IT LAUDERDALE • MIAMI • ORLANDO •TALLAHASSEE • TAMPA • WEST PALM BEACH WHd96F51H13 • OlW9/CWI • Doran Sims Wolfe Ansay, C ROLYN S ANSAY• Attorneys at Law ' RAYm 4 BLAIX AIIQiAEI.CIOCCRETD A PARTNERSHIP OF PROFESSIONAL ASSOCLATIONS/I.r.Cs (1900.19]x) THEOWO R.WO MI(r MAKU w • GLARRY 51AL9 AARON IL A'DLPE REPLY TO Daytona Beach cansay@doranlaw.com November 23, 2010 • Members of the City of Edgewater, Florida City Council • Branch Banking and Trust Company Charlotte,North Carolina Broad and Cassel Orlando,Florida • Re: $750,000 City of Edgewater, Florida Guaranteed Entitlement Revenue Note Series 2010 (the"2010 Note") REVISED Ladies and Gentlemen: i I have acted as counsel to the City of Edgewater, Florida(the"Issuer")in connection with the authorization and delivery of the above-captioned 2010 Note,pursuant to Resolution No. 2010-R-20, duly adopted by the Issuer on November 15, 2010 (the"Resolution"), for the purpose of financing the acquisition, construction, equipping and improvement of Fire Station No. 55 as more particularly • described in the Resolution. Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in the Resolution. I am of the opinion that: 1. The Issuer is a municipal corporation,validly existing under the Constitution and laws of the State of Florida(the`State")and has all requisite power and authority to(a)adopt the Resolution • and to perform its obligations under the Resolution and the 2010 Note; (b) issue, sell, execute and deliver the 201 O Note to the purchaser thereof;(c)secure the 2010 Note in the manner contemplated by the Resolution;and(d)carry out and consummate all other transactions contemplated by the Resolution, and the Issuer has complied or will have complied as of the date hereof with all provisions of applicable law in all matters relating to such transactions. • 2. The Resolution has been duly adopted,and the Resolution and the 2010 Note have been duly executed and delivered by the Issuer; and the Resolution and the 2010 Note are in fill force and • �B—rd reranLoran,a a,y, �•L9»cisNncis• Cw.rya.d l 6 9AeIYt�le-flubbMl ' IMIN'IERNATIONALSPFFDWAYBLM-DAYTONA BEACH,FLORIDA 33114 n,1YTONA BEACH OFFICE: POSTOFFICEBOX15110-DAYTONABEACH,FL32115-(386)25]-1111•FAX(3M)2B4260 WEST PALMB£ACH OFFICE: TRUMP PI nTA OFFICE CENTER•515 S FLAGIER DRIVE•SUr1E200•WEST PALM BEACH,FL 33811•(561)802-1139 • TOLL FREE(W)301-3166•E-M :1.firm@doran1 .cmn•WEBSITE:—A.I.. • November 23,2010 Page 2 of 2 • effect and constitute valid and binding contracts of the Issuer, enforceable in accordance with their respective terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy laws or other laws affecting creditors' rights and to the exercise of judicial discretion. • 3. There are no actions, proceedings or investigations pending or, to the best of my knowledge,threatened against or affecting the Issuer in any court or before any governmental authority or body,arbitration board or tribunal:(a)restraining or enjoining the authorization,execution or delivery of the Resolution or the 2010 Note; (b)affecting in any way the right or authority of the Issuer to (i) • adopt the Resolution and to pledge the Pledged Revenues(as defined in the Resolution),and(ii)pay the 2010 Note or interest thereon; (c) in any manner affecting the proceedings and authority for the authorization or delivery of the 2010 Note; (d) affecting directly or indirectly (i) the validity of the Resolution or the 2010 Note,(ii)any provisions made m authorized for the payment of the 2010 Note, (iii)the existence of the Issuer,or(iv)the title of the present officers of the Issuer and the members of the City Council of Issuer;and(e)none of the proceedings or authority relating to the Resolution or for • the issuance and delivery of the 2010 Note has been repealed,revoked,rescinded or limited in any way since the adoption of the Resolution. 4. The execution and delivery of the Resolution and the 2010 Note and the adoption of the Resolution and compliance by the Issuer with the provisions contained therein,and the consummation • ofthe transactions contemplated thereby do not and will not,to the best of my knowledge,conflict with or constitute on the part of the Issuer a violation of,breach of or default under any agreement,judgment, decree,indenture,note,or other instrument to which the Issuer is now a party or by which the Issuer or any of its property or assets is bound or otherwise subject. • 5. To the best of my knowledge, all approvals,consents, authorizations and orders of any governmental authority or agency havingjurisdiction in any manner which would constitute a condition precedent to the performance of the Issuer of its obligations underthe 2010 Note or the Resolution have been obtained and are in full force and effect. • Notwithstanding the matters set forth in this letter,no opinions or representations are being made by the undersigned with respect to any tax or securities laws or the applicability or impact of such laws on the Resolution,the 2010 Note and any other documents executed by the Issuer in furtherance of the transactions contemplated by such instruments and no person has the right to rely on this opinion in relation to any matters relating to tax or securities laws. • �cerely, A 4-- • Carolyn IAnsay CSA:kl • CERTIFICATE AS TO SIGNATURES,NO LITIGATION-INCUMBENCY AND OTHER MATTERS • The undersigned, Michael L. Thomas, Mayor of the City of Edgewater, Florida (the"Issuer"),Bonnie Wenzel, City Clerk of the Issuer and John McKinney,Finance Director of the Issuer, in connection with the issuance this day by the Issuer of the following described Note: • City of Edgewater, Florida $750,000 Guaranteed Entitlement Revenue Note, Series 2010, consisting of one fully-registered Note dated November 23, 2010, bearing interest at an initial rate equal to 2.77%and maturing on October 1,2030. DO HEREBY CERTIFY to the best of the undersigned's knowledge, after reasonable • investigation,that: 1. The following terms in this Certificate shall have the following meanings (terms not defined • herein shall have the meanings set forth in the Note Resolution): "Bank"means Branch Banking and Trust Company, Charlotte,North Carolina. "Note"means the obligation described above. • "Note Resolution" means Resolution No. 2010-R-20, duly adopted by the Issuer on November 15, 2010. II. • Except as has otherwise been disclosed to the Book,ank, no litigation or other proceedings are pending or, to our knowledge, threatened against the Issuer in any court or other tribunal of competent jurisdiction, State or Federal, in any way (i) restraining or enjoining the issuance, sale, execution or delivery of the Note, or(ii) questioning or affecting the validity of the Note or the Note Resolution, or (iii) questioning or affecting the validity of any of the proceedings for the • authorization, sale, execution,issuance or delivery of the Note. III. The representations and warranties of the Issuer in the Note Resolution are correct as of the date hereof. IV. The Note Resolution has been duly adopted and has not been repealed, revoked, rescinded or altered in any manner. The Pledged Revenues are not as of the date hereof pledged, in whole or • in part in any manner or for any purpose except for the payment of the Note. a;esamo, • • V. The Issuer has complied with all agreements and has satisfied all conditions on its part to be observed or satisfied under the Note Resolution. VI. • The Issuer is not in default, and has not been in default at any time as to principal of and interest on any of its indebtedness. VII. The following is a correct list of the names of the members of the City Council and of the • dates of commencement and expiration of their respective terms of office: OFFICE OFFICER BEGINNING OF EXPIRATION OF TERM TERM Mayor Michael L. Thomas November 2009 November 2013 • Vice Mayor Harriet E.Rhodes November 2009 November 2013 Councilwoman Gig Bennington November 2007 November 2011 Councilman Ted Cooper November 2007 November 2011 • Councilwoman Debra Jean Rogers November 2009 November 2013 VIII. The Note is signed with the manual signatures of the undersigned Mayor and City Clerk of the Issuer. The undersigned Clerk does hereby certify that the signature set forth below of Michael L. Thomas,Mayor of the Issuer,is a true and correct specimen of his signature, and the undersigned • Mayor does hereby certify that the signature set forth below of Bonnie Wenzel, City Clerk of the Issuer, is a true and correct specimen of her signature. John McKinney is the current Finance Director of the Issuer and serves at the pleasure of the City Council. IX. r The execution and delivery of the Note and the adoption of the Note Resolution and compliance by the Issuer with the provisions contained therein, will not, to the best of the undersigned's knowledge conflict with or constitute a breach or default under any judgment,decree, loan agreement, indenture, bond, resolution agreement or instrument to which the Issuer is a party or to which the Issuer or its property or assets is otherwise subject. • X. The seal which has been impressed upon this Certificate is the legally enacted, proper and only official seal of the Issuer and such seal has been imprinted upon said Bond. • • 2 361 < 436S£Tt41 • WITNESS, our hand and seal this 23rd day of November, 2010. • S[GNA 2E OFFICIAL TITLE Michael L.Thomas, Mayor • ,/{� City of Edgewater, Florida l John McKinney Finance Director City of Edgewater, Florida uzymzR.v Bonnie Wenzel • City Clerk City of Edgewater,Florida • (SEAL) • • 3 . JB669 '34 X1.1 • CERTIFICATE REGARDING INTEREST RATE • In accordance with the provisions of Section 215.84(3), Florida Statutes, the undersigned official of the City of Edgewater,Florida,DOES HEREBY CERTIFY as follows with respect to the following described Note(the`Series 2010 Note"): • City of Edgewater, Florida $750,000 Guaranteed Entitlement Revenue Note, Series 2010, consisting of one filly-registered Note dated November 23, 2010, bearing interest at an initial rate equal to 2.77%and maturing on October 1,2030. that as of the date hereof,the rate of interest on the Series 2010 Note does not exceed an average net interest cost rate, computed by adding 300 basis points to The Bond Buyer "20 Bond Index" • published immediately preceding the first day of the calendar month in which the Series 2010 Note was sold. Executed as of this 23rd day of November,2010. • CITY OF EDGEWATER,FLORIDA B0/ • hae1 L. omas, Mayor 4 3 • G36AAM1W • BANK QUALIFIED CERTIFICATE • Broad and Cassel Orlando, Florida Branch Banking and Trust Company • Charlotte,North Carolina The undersigned, Mayor of the City of Edgewater, Florida (the "Issuer"), does hereby certify on behalf of the Issuer in connection with the issuance of its City of Edgewater, Florida $750,000 Guaranteed Entitlement Revenue Note, Series 2010 (the "Series 2010 Note") to Broad and Cassel and to Branch Banking and Trust Company, as follows: • 1. I have reviewed financial information of the Issuer and have determined that the aggregate face amount of all currently outstanding "tax-exempt" bonds or other "tax-exempt" obligations (other than private activity bonds as defined in Section 141(a) of the Internal Revenue Code of 1986, as amended (the "Code")), including the Series 2010 Note, issued by the • Issuer (and any subordinate entities thereof and any issuer of"tax-exempt" debt that issues "on behalf of" the Issuer) during calendar year 2010 does not exceed $30,000,000. Based upon reasonable investigation, it is not reasonably expected that the Issuer (and any subordinate entities thereof and any issuer of"tax exempt" debt that issues `on behalf of the Issuer) will issue in excess of$30,000,000 of tax-exempt debt during calendar year 2010. • 2. Pursuant to Resolution No. 2010-R-20, duly adopted by the Issuer on November 15, 2010, the Issuer has designated the Series 2010 Note as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3)(B)of the Code. EXECUTED as of this 23rd day of November,2010. • CITY OF EDGEWATE LO (SEAL) • - Bv: Micbael L. Thomas, Mayor • CERTIFICATE OF DELIVERY,PAYMENT AND a APPLICATION OF PROCEEDS I, the undersigned Mayor of the City of Edgewater, Florida, (the "Issuer"), DOES HEREBY CERTIFY: • 1. On November 23, 2010, the Issuer delivered to Branch Banking and Trust Company, Charlotte, North Carolina (the "Bank"), the following described obligation of the Issuer: City of Edgewater, Florida $750,000 Guaranteed Entitlement Revenue Note, 0 Series 2010, consisting of one fully-registered Note dated November 23, 2010, bearing interest at an initial rate equal to 2.77% and maturing on October 1, 2030 (the "Series 2010 Note") in return for the receipt of$750,000 from the Bank. All terms used herein in capitalized form • and not otherwise defined herein shall have the same meanings as ascribed to them in Resolution No. 2010-R-20, duly adopted by the Issuer on November 15, 2010. 2. All of the proceeds of the Series 2010 Note are being used to: (i) finance a portion of the cost of acquiring, constructing, equipping and improving Fire House No. 55 (the • "Project'), and (ii) pay certain casts of issuing the Series 2010 Note. No proceeds of the Series 2010 Note are being used for any private business use, nor are proceeds of the Series 2010 Note being loaned directly or indirectly to any entity other than the Issuer. 3. The proceeds of the Series 2010 Note in the amount of $726,500.00 shall be deposited into a project account to be established by the Issuer with the Bank and the remaining • proceeds of the Series 2010 Note in the amount of$23,500 shall be applied to pay certain costs of issuance associated with the issuance of the Series 2010 Note. IN WITNESS WHEREOF, I have hereunto set my hand as of this 23" day of November, 2010. • CITY OF DGEWAT ORIDA r • By: Mc CIL Tho nas, Mayor ATTEST: • By: Bonnie Wenzel, Ci Clerk GBII-0BJBd@13 • 396 NOR1N ORANfE AVFHVE 1806 OuwHW,FLoa103NA321I PO Box 0961(3212-0961) Eu107839.421 FAci1u.10).42583TBPOD QASSEL www bmadnndc=eLcom • ATTORNEYS AT LAW JOSEPH&STANTON,P.A. EMuu jatanma®brwdlodmaebmn November 23, 2010 • VIA FEDERAL EXPRESS • Internal Revenue Service 1973 N. Rulon White Blvd. Ogden, UT 84404 • Re: City of Edgewater, Florida Guaranteed Entitlement Revenue Note, Series 2010 Ladies and Gentlemen: • On behalf of the City of Edgewater, Florida, I have enclosed for filing Form 8038-G for the above-referenced transaction. Please return the attached copy of Form 8038-0 as your stamped acknowledgment to my attention in the enclosed self-addressed envelope. Sincerely, • BROAD AND CASSEL • Jos B. Stanton, JS:dpr Enclosures • BOCA RATON •DESTIN -FT.LAUDERDALE• MIAMI ORLANDO•TALLAHASSEE•TAMPA•WEST PALM BEACH • i91}1119�IN.1 11199m1ai Form 8038-G Information Return for Tax-Exempt Governmental Obligations (Rev.May 2010) t Under Internal Revenue Code section 1491 See separate insouc0ons. go_IUS-0720 De Internal Rel of the Treawry Caution:If the issue a is under$100,000,use Fenn 80 8-GC p i IMemal Revenue Service uric Reporting Authod If Amended Return,check here. o t Issuers name 2 hauers employer ldant6icetlon number City of Edgewater,Florida 596000314 3 Numbe`2 and street(ar P.0 box 9 mail 18nol4elivered to slreeladd—) RwiNSuite 4 Report number(Fw IRS Use OMy) 104 N.Riverside Odvo t s Cog town,w poll dslate,and ZIP coda 6 Date of Isere Etlgewffier,Floridai32132 November 23,2010 ] Name of issue6 CUSIPnumbw City of Edgewater Florida Guamnfeetl Entitlement Revenue Note,Series 2010 N/A 9 NameanE 011e ofbnoer or legal representathe whom the IRS may rail for more Information 10 iekpM1one numberatoRureiwlep&represenbllee Joseph B.Stanton,Bond Counsel (407)839-4200 Type of Issue enter the issue price See instructions and attach schedule 11 Education:................. 11 12 Health and hospital............................................................................................................................... 12 13 Transportation.....................................................................................................................................- 13 14 Public safety.......................................................................................................................................... 14 5]50.000 r 15 Environment(including sewage bands)................................................................................................ 15 16 Housing................................................................................................................................................. 16 17 Utilities.................................................................................................................................................. 17 18 Other. Describe. 1s 19 If obligations are TANS or RANs, checkonlyboi ........_........................................................_.❑ If obligations am BANS,check only box 19b................................................................................... . ❑ 20 If obligations am in the form of a lease or installment sale,check box ............................. ❑ Description of Obligations Complete for the entire issue for which this form is being fled. (a)Final maturity date (b)Issue Price (c)Stated redemption (d)Weighted (e)Yield price al maturity averege maturity 21 October 1,2030 $750,000 $750,000 11.7022 years 2.77020% Uses of Proceeds of Issue(including underwriters' discount) 22 Proceeds used for accrued interest............................................................................................................ 22 23 Issue price of entire issue(enter amount from line 21,column (b))............................................................ 23 8750,000 24 Proceeds used for bond issuance Costs(including underwdtem'disceunt).............. 24 $23,500 25 Proceeds used for credit enhancement.................................................................... 25 NIA 26 Proceeds allocated to reasonably required reserve or replacement fund................. [!�F�_WA 27 Proceeds used to Currently refund prior issues......................................................... N/A 26 Proceeds used to advance refund poor issues......................................................... 28 29 Total(add lines 24 through 28)........................ ................................ ... 29 $23,500 30 Nonrefunding proceeds of the issue(subtract line 29 from line 23 and enteramount hem)....... ............... 30 5725,500 Description of Refunded Bonds(Complete this part only for refunding bonds.) 31 Enter the remaining weighted average maturity of the bands to be currently refunded......................... years 32 Enter the remaining weighted average maturity of the bonds to be advance refunded.......................... years 33 Enter the last date on which the refunded bonds will be called(MM/DDfYYYY)....._..............._.......__. 34 Enter the date(s)the refunded bonds were issued a, (MMIDDNYYY) For Paperwork Reduci AR Nonce,see page S of the Instructions, Cat No,53]]95 Form 803"(Rev.5-2010) RECEIVED W nov 2 6 2010 0 • OGDEN UT COPY Forth 808-a(Rev.5-2010) page 2 KMMMff Miscellaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5).......................... 35 36a Enter the amount of gross proceeds invested orle be irrvesled in a guaranteed investmentcontract (CCI)(see instructions) 38a to Enter the final maturity date of the GIC ► 37 Pooled financings: aProceeds of[his issue that are to be used to make loans to other governmental units............... 37a to If this issue is a loan made from the proceeds of another tax-exempt issue, check box . ❑ and enter the name of the issuer► and the date of the issue ► 38 If the issuer has designated the issue under section 265(b)(3)(B)(i)dlq(small issuer exception),check box 39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate,check box .............................................................................................. . O 40 If the issuer has identified a hedge,check box ......................._...._._............. .._._................_...__...._...............,............._......._..._..._.._._..D Under pounds of perjury,I declare that I have examined this return and accompanying schedules and es ements,anrd to Me best of or,kne"edge and Signature belief.they are true,coned, and complete. I fuller declare that I consent to the IRS's disclosure of the Issuers heroin information,as nv ed sny to and di this return,to the person that l have authorized abore Consent 11/23/2010 10' John McKinney,Fiance Director Signa of lssuer'ese, died representative Date Type or print name and title Paid Preparers Date Check if Preparers SSN or PTIN Preparer's n�"re 1112 3 2 01 0 selfem to ed ❑ s/ Use Only Firm'snanniEIN 59-33B9763 YourslfseM•evployed), 10' Broad and Cassel oddness,and ZIP code Phone no.('07) 40 8394200 Form 8038-G(Rev.5-2010) Page 2 of 2 11 Shipment Receipt FeclEx. Address Information Shipto: Ship from: r INTERNAL REVENUE JOSEPH B.STANTON SERVICE INTERNAL REVENUE BROAD AND CASSEL SERVICE 1973 RULON WHITE 390 N.Orange Avenue BLVD Suite 1400 OLDEN, UT Orlando, FL 84201-1000 32801 US US 4074815252 4078394200 Shipping Information Tracking number:794148362165 41111 Ship date: 11/23/2010 Estimated shipping charges: Package Information Service type:FedEx Express Saver Package type:FedEx Envelope Number of packages: 1 i Total weight: l LBS Declared value:O.00OSD Special Services: Pickup/Drop-off:Use an already scheduled pickup in my location Billing Information Bill transportation to:BROAD&CASSEL-480 40 Your reference: 4369910001/1292 P.O.no.: Invoice no.: Department no.: all Thank you for shipping online wan Fedex ShipManager at fedea.com. Please Nom _ w.�..w.a.,tl a.w erg...°. _ ..�q.�....o..-,e.�.".�a..°s�.".M. oiIh: 1 �.°.:" Is:" �:°„'^ .L°:.°.nnn`e� , b6 o"E,«:G.',r .t°—.e.°.....""... °° ew.o.,...�...>ti°. ="°.mw=..om...=o�..."v.m.,s„°..."".n" sr°im...w” °m,.�i.=�.R..."..°�°.,=wa°.:u..°.... .ac.e.. 40 https://www.fedex.conVshipping/html/en//PrintIFrame.htmi 11/23/2010 TAX CERTIFICATE AS TO ARBITRAGE AND THE PROVISIONS OF SECTIONS 141-150 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED CITY OF EDGEWATER, FLORIDA $750,000 GUARANTEED ENTITLEMENT REVENUE NOTE, SERIES 2010 The undersigned are the Mayor and Finance Director of the City of Edgewater, Florida (the "City"), being duly charged, with others, with the responsibility for issuing the City's $750,000 Guaranteed Entitlement Revenue Note, Series 2010 (the "2010 Note"), and 14EREBY CERTIFY, pursuant to Section 148 of the Internal Revenue Code of 1986, as amended (the "Code") and Sections 1.148-0 through 1.148-11 of the Income Tax Regulations (the "Regulations"), as follows: 1. The 2010 Note is being issued pursuant to the Constitution and laws of the State of Florida, including particularly Chapter 166, Florida Statutes, the Charter of the City, and Resolution No. 2010-R-20 of the City Commission of the City duly adopted on November 15, 2010 (the "Resolution"). Unless otherwise specifically defined, all capitalized terms used in this Certificate shall have the meanings as those set forth in the Resolution. The proceeds of the 2010 Note will be used to finance a portion of the cost of acquiring, constructing, equipping and improving Fire Station No. 55 of the City (the "Project") and to pay certain costs of issuance with respect to the 2010 Note. r 2. On the basis of the facts, estimates and circumstances in existence on the date hereof, we reasonably expect the following with respect to the 2010 Note being issued this day and as to the use of the proceeds thereof: (a) Proceeds of the 2010 Note in the amount of $750,000 (the "Sale Proceeds") are expected to be derived by the City from the sale of the 2010 Note to Branch Banking and Trust Company (the "Bank") and are expected to be needed and fully expended as follows: (i) $726,500 of said proceeds will be deposited into a project account to be established with the Bank and used for the Project; and (ii) $23,500 of said proceeds will be used to pay the costs of issuance of the 2010 Note. (b) The total Sale Proceeds to be received from the sale of the 2010 Note to the Bank do not exceed the amount necessary for the purposes described above. (c) The City does not expect to sell or otherwise dispose of any property comprising a part of the Project prior to the final maturity date of the 2010 Note. 3. The City reasonably expects that at least 85 percent of the spendable proceeds of 2010 Note will be expended on the Project and the costs of issuance described in 2(a) above within 3 years of the date of issuance of the 2010 Note. In addition, not more than 50 percent of • the proceeds of the 2010 Note will be invested in obligations having a substantially guaranteed yield for a period of 4 years or more. W I-036661Y9E 11659ifW1 • 4. Pursuant to the Resolution, the City will apply Pledged Revenues to pay for the payment of, premium, if any and interest on the 2010 Note. The fund or account used by the • City to pay debt service on the 2010 Note(the"Sinking Fund")will be used primarily to achieve a proper matching of the Pledged Revenues and debt service on the 2010 Note within each Fiscal Year and amounts deposited thereto will be depleted at least once a year except for any carryover amount which will not in the aggregate exceed the greater of(A) the earnings on such fund for the immediately preceding fiscal year, or(B)one-twelfth of the debt service on the 2010 • Note for the immediately preceding fiscal year.Moneys in the Sinking Fund shall be used only to pay principal of,premium,if any,and interest on the 2010 Note and for no other purpose. 6. Except as provided in paragraph 4, there are no other funds or accounts • established pursuant to the Resolution or otherwise which we reasonably expected to be used to pay debt service on the 2010 Note, or which are pledged as collateral for the 2010 Note (or subject to a negative pledge) and for which there is a reasonable assurance on the part of the Bank that amounts therein will be available to pay debt service on the 2010 Note if the City encounters financial difficulties. • 7. For purposes of this Certificate, "yield" means that yield which when used in computing the present worth of all payments of principal and interest to be paid on an obligation produces an amount equal to the purchase price of such obligation. The yield on obligations acquired with the proceeds derived from the sale of the 2010 Note and the yield on the 2010 • Note shall be calculated by the use of the same frequency interval of compounding interest. In the case of the 2010 Note, the purchase price is $750,000. The purchase price of the 2010 Note and the interest rate thereon were arrived at as a result of an arms length negotiation between the City and the Bank. The Bank is acquiring the 2010 Note for its own account and is not acting as a broker or other intermediary for the purpose of reselling the 2010 Note to other investors. Any investments acquired with proceeds of the 2010 Note shall be purchased at prevailing market • prices and shall be limited to securities for which there is an established market. In accordance with such meaning of the term yield, the yield on the 2010 Note has been determined to be not less than 2.77018%. 8. No portion of the proceeds of the 2010 Note will be used as a substitute for other • moneys of the City which would otherwise to be used to pay debt service on the 2010 Note and which have been or will be used to acquire directly or indirectly, obligations producing a yield in excess of the yield on the 2010 Note. 9. There are no other obligations of the City that (i) are being sold at substantially the same time as the 2010 Note (within 15 days); (ii) are being sold pursuant to a common plan of financing together with the 2010 Note, and (iii) will be paid out of substantially the same source of funds as the 2010 Note. 10. The City covenants that so long as the 2010 Note remains outstanding, the moneys on deposit in any fund or account maintained in connection with the 2010 Note will not be used in any manner that would cause the 2010 Note to be "arbitrage bonds" within the • meaning of Section 148 of the Code or bonds not described under Section 103(a) of the Code and the applicable regulations promulgated from time to time thereunder. Accordingly, the City shall comply with the guidelines and instructions in the Arbitrage Letter of Instructions from • 2 • Bond Counsel, dated the date hereof, by which the City shall, among other things, pay or cause to be paid to the United States an amount equal to the sum of (i) the excess of the aggregate • amount earned from the investment of"Gross Proceeds" of the 2010 Note from the date of issue over the amount that would have been earned if such amounts had been invested at a yield equal to the yield of the 2010 Note, plus (ii) the income or earnings attributable to the excess amount described in(i). See Exhibit A attached hereto. 11. Neither the City nor any person related to the City has entered or is expected to • enter into any hedging transaction (such as an interest rate swap, cap or collar transaction) with respect to the 2010 Note. 12. The weighted average maturity of the 2010 Note (11.722 years) does not exceed 120 percent of the reasonably expected remaining economic life of the Project (within the • meaning of Section 147(b) of the Code). 13. None of the proceeds of the 2010 Note will be used (directly or indirectly) to acquire any property which, prior to its acquisition, was used (or held for use) by a person other than a state or local governmental unit in connection with an output facility. For purposes of this Certificate, the term "output facility" means electric and gas generation,transmission,and related facilities. 14. None of the proceeds of the 2010 Note will be used (directly or indirectly) to make or finance loans to any person. 15. Not more than 10% of the proceeds of the 2010 Note will be used (directly or indirectly) in a trade or business (or to finance facilities which are used in a trade or business) • carried on by any person other than a governmental unit. Not more than 5% of the proceeds of the 2010 Note will be used (directly or indirectly) in trade or business (or to finance facilities which are used in a trade or business) carried on by any person other than a governmental unit which private business use is not related to any governmental use or is disproportionate to governmental use, all as described in Section 141(b)(3) of the Code ("Unrelated or • Disproportional Use"). For the purpose of this Paragraph, use by a nongovernmental person as a member of the general public shall not be taken into account. 16. Paragraph 15 shall apply only if the payment of 10% or more (5% or more in the case of Unrelated or Disproportional Use) of the principal of or interest on the 2010 Note is (under the terms of such Bond or any underlying arrangement) directly or indirectly secured by any interest in property used or to be used for a private business use or in payments in respect of such property or derived from payments whether or not to the City in respect of property or borrowed money used or to be used for a private business use. 17. The City reasonably expects that the Project will be owned and operated • throughout the term of the 2010 Note in a manner which complies with the requirements set forth in Paragraph 15 above. The City will not change the ownership or use of all or any portion of the Project in a manner that fails to comply with Paragraph 15 above, unless the City receives an opinion of Bond Counsel that such change of ownership or use will not adversely affect the exclusion of interest on the 2010 Note from gross income for federal income tax purposes. r 18. The payment of the principal of, premium, if any, and interest on the 2010 Note is not and will not be guaranteed directly or indirectly by the federal government within the meaning of Section 149(b)of the Code. • 3 • 19. This Certificate is, in part, to serve as a guideline in implementing the requirements of Sections 141 to 150 of the Code. If regulations, rulings, announcements and • notices validly promulgated under the Code contain requirements which differ from those outlined here which must be satisfied for the 2010 Note to be tae-exempt or in order to avoid the imposition of penalties under Section 148 of the Code, pursuant to the covenants contained in the Resolution, the City is obligated to take such steps as are necessary to comply with such requirements. If under those pronouncements, compliance with any of the requirements of this • Certificate is not necessary to maintain the exclusion of interest on the 2010 Note from gross income and alternative minimum taxable income (except to the extent of certain adjustments applicable to corporations) or to avoid the imposition of penalties on the City under Section 148 of the Code, the City shall not be obligated to comply with that requirement. The City has been advised to seek the advice of competent counsel with a nationally recognized expertise in matters • affecting exclusion of interest on municipal bonds from gross income in fulfilling its obligations under the Code to take all steps as are necessary to maintain the tax-exempt status of the 2010 Note, 20. To the best of our knowledge, information and belief, the above expectations are reasonable. • IN WITNESS WHEREOF, we have hereunto set our hands this 2P day of November, 2010. ITY � ED � aTORIDA M chael L. tomes, Mayor By: Io t McKinney, Finance Dirdetor • • 4 • EXHIBIT A November 23, 2010 Mayor and City Commission • City of Edgewater, Florida Re: $750,000 City of Edgewater, Florida Guaranteed Entitlement Revenue Note, Series 2010 Ladies and Gentlemen: • This letter instructs you as to certain requirements of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), with respect to the $750,000 City of Edgewater, Florida Guaranteed Entitlement Revenue Note, Series 2010 (the "2010 Note"). Capitalized terms used in this letter, not otherwise defined herein, shall have the same meanings as set forth in the City's Tax Certificate as to Arbitrage and the Provisions of Sections 141-150 of the Internal Revenue Code of 1986,As Amended(the "Tax Certificate")executed on the date hereof. This letter is intended to provide you with general guidance regarding compliance with Section 148(f) of the Code. Because the requirements of the Code are subject to amplification and clarification, you should seek supplements to this letter from time to time to reflect any • additional or different requirements of the Code. In particular, you should be aware that regulations implementing the rebate requirements of Section 148(t) (the "Regulations") have been issued by the United States Treasury Department. These regulations will, by necessity, be subject to continuing interpretation and clarification through future rulings or other announcements of the United States Treasury Department. You should seek further advice of Bond Counsel as to the effect of any such future interpretations before the computation and • payment of any arbitrage rebate. For the purposes of this Letter, (i) any instructions relating to a fund or account shall be deemed to apply only to the portion of such fund or account allocable to the 2010 Note and (ii) any reference to "the date hereof shall be deemed to mean November 23,2010. • Section 1. Tax Covenants. The City has made certain covenants designed to assure that interest with respect to the 2010 Note is and shall remain excluded from gross income for federal income tax purposes. The City has agreed, and by this Letter does hereby covenant, that it will not directly or indirectly use or permit the use of any proceeds of the 2010 Note or any other funds or take or omit to take any action that would cause the 2010 Note to be an "arbitrage bond" • within the meaning of Section 148 of the Code and that would cause interest on the 2010 Note to be included in gross income for federal income tax purposes under the provisions of the Code. You have further agreed by this letter to comply with all other requirements as shall be determined by Bond Counsel (as hereinafter defined) to be necessary or appropriate to assure that interest on the 2010 Note will be excluded from gross income for federal income tax purposes. To that end, the City will comply with all requirements of Section 148 of the Code to • the extent applicable to the 2010 Note. In particular, the City agrees to cause the proceeds of the 2010 Note to be invested in a manner that is consistent with the expectations set forth in the Tax . A-1 Certificate. In the event that at any time the City is of the opinion that for purposes of this Section 1 it is necessary to restrict or to limit the yield on the investment of any moneys held by • the City, the City shall take such action as may be necessary. Section 2. Definitions. Unless the context otherwise requires, in addition to the use of the terms defined in the Tax Certificate, the following capitalized terms have the following meanings: "Adjusted Gross Proceeds" generally means Gross Proceeds, less the sum of(i) amounts held in the Sinking Fund (as defined in the Tax Certificate), and (ii) amounts, if any, held in a reserve account for the 2010 Note. "Available Construction Proceeds" means all Sale Proceeds (as defined in the Tax Certificate) reduced by costs of issuing the 2010 Note financed from 2010 Note proceeds and by • the amount, if any, of Sale Proceeds deposited in a reserve account with respect to the 2010 Note), plus all Investment Proceeds earned or reasonably expected to be earned thereon, plus Investment Proceeds, if any, eamed or reasonably expected to be earned on amounts held, if any, in a reserve account with respect to the 2010 Note before the earlier of two years after the Closing Date or substantial completion of construction of the Project. • 'Bond Counsel' shall mean Broad and Cassel, or other nationally recognized bond counsel. "Closing Date" shall mean November 23, 2010. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the applicable • Treasury Regulations promulgated thereunder. "Computation Date" shall mean any date selected by the City as a computation date pursuant to Section 1.148-3(e)of the Regulations, and the Final Computation Date. "Computation Credit Amount" means an amount, as of each Computation Credit Date, • equal to $1,000. "Computation Credit Date" means the last day of each Note Year during which there are amounts allocated to Gross Proceeds of the 2010 Note that are subject to the rebate requirement of Section 148(f) of the Code,and the Final Computation Date. "Delivery Date" shall mean November 23, 2010. • 'Economic Accrual Method" shall mean the method of computing yield that is based on the compounding of interest at the end of each compounding period (also known as the constant interest method or the actuarial method). "Final Computation Date" shall mean the date that the last bond that is part of the 2010 • Note is discharged. "Gross Proceeds" shall mean with respect to the 2010 Note, any proceeds of the 2010 Note and any funds (other than the proceeds of the 2010 Note) that are a part of a reserve or replacement fund for the issue, which amounts include amounts which are (A) actually or constructively received by the City from the sale of the 2010 Note; (B) treated as transferred • proceeds (as defined in Section 1.I48-9(b) of the Regulations); (C) treated as Replacement Proceeds under Section 1.148-1(c) of the Regulations; (D) invested in a reasonably required reserve or replacement fund (as defined in Section 1.148-2(f) of the Regulations); (E)pledged by • A-2 the City as security for payment of debt service on the 2010 Note; (F) received with respect to obligations acquired with proceeds of the 2010 Note; (G) used to pay debt service on the 2010 • Note; and (H) otherwise received as a result of investing any proceeds of the 2010 Note. The determination of whether an amount is included within this definition shall be made without regard to whether the amount is credited to any fund or account established under the Resolution or (except in the case of an amount described in (E) above) whether the amount is subject to the pledge of such instrument. • "Guaranteed Investment Contract' means any Nonpurpose Investment that has specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate, and also includes any agreement to supply investments on two or more future dates (e.g., a forward supply contract). • "Installment Payment Date" shall mean a Computation Date that is not later than 5 years after the Delivery Date and subsequent Computation Dates which occur no later than 5 years after the immediately preceding Installment Payment Date. "Investment Proceeds" means earnings received from investing and reinvesting Sale Proceeds and from investing and reinvesting such earnings. • "Investment Property" shall mean any security or obligation, any annuity contract or other investment-type property within the meaning of Section 148(b)(2) of the Code. The terns Investment Property shall not include any obligation the interest on which is excluded from gross income (other than a Specified Private Activity Bond within the meaning of Section 57(a)(5)(C) of the Code) and shall not include an obligation that is a one-day certificate of indebtedness • issued by the United States Treasury pursuant to the Demand Deposit State and Local Government Series Program described in 31 CFR,part 344. "Issue Price" shall mean$750,000 with respect to the 2010 Note. "Issue Yield" shall mean the Note Yield unless the 2010 Note are described in Section • 1.148-4(b)(3)or(4) of the Regulations, in which case,the Issue Yield shall be the Note Yield as recomputed in accordance with such provisions of the Regulations. "Nonpurpose Investment" shall mean any Investment Property in which Gross Proceeds are invested, other than any Purpose Investment as defined in Section 1.148-1(b) of the Regulations. • "Nonpurpose Payment' shall, with respect to a Nonpurpose Investment allocated to the 2010 Note, include the following: (1) the amount actually or constructively paid to acquire the Nonpurpose Investment; (2) the Value of an investment not acquired with Grass Proceeds on the date such investment is allocated to the 2010 Note, and (3) any payment of Rebatable Arbitrage to the United States Government not later than the date such amount was required to be paid. In • addition,the Computation Credit Amount shall be treated as a Nonpurpose Payment with respect to the 2010 Note on each Computation Credit Date. "Nonpurpose Receipt" shall mean any receipt or payment with respect to a Nonpurpose Investment allocated to the 2010 Note. For this purpose the term 'receipt' means any amount • actually or constructively received with respect to the investment. In the event a Nonpurpose Investment ceases to be allocated to the 2010 Note other than by reason of a sale or retirement, such Nonpurpose Investment shall be treated as if sold on the date of such cessation for its 0 A-3 • Value. In addition, the Value of each Nonpurpose Investment at the close of business on each Computation Date shall be taken into account as a Nonpurpose Receipt as of such date, and each • refund of Rebatable Arbitrage pursuant to Section 1.148-3(i) of the Regulations shall be treated as a Nonpurpose Receipt. "Note Year" shall mean the one year period that ends at the close of business on the day in the calendar year that is selected by the City. The first and last Note Years may be short periods. • "Note Yield" shall mean that discount rate that, when used in computing the present value on the Delivery Date of all unconditionally payable payments of principal, interest and retirement price paid and to be paid on the 2010 Note, produces an amount equal to the present value on the Delivery Date,using the same discount rate,of the aggregate Issue Price of the 2010 Note. Yield is computed under the Economic Accrual Method using any consistently applied compounding interval of not more than one year. Short first and last compounding intervals may be used. Other reasonable, standard financial conventions, such as the 30 days per month/360 days per year convention, may be used in computing yield but must be consistently applied. The yield on the 2010 Note has been computed in this manner to be not less than 2.77018%. • "Rebatable Arbitrage" shall mean as of any Computation Date the excess of the future value of all Nonpurpose Receipts with respect to the 2010 Note over the future value of all Nonpurpose Payments with respect to the 2010 Note. The future value of a Nonpurpose Payment or a Nonpurpose Receipt as of any Computation Date is determined using the Economic Accrual Method and equals the value of that payment or receipt when it is paid or received (or treated as • paid or received), plus interest assumed to be earned and compounded over the period at a rate equal to the Issue Yield, using the same compounding interval and financial conventions used in computing that yield. "Retirement Price" shall mean, with respect to a bond, the amount paid in connection with the retirement or redemption of the 2010 Note. • "Value" means value as determined under Section 1.148-5(d) of the Regulations for investments. Section 3. Rebate Requirement. (a) Pursuant to this Letter there shall be established a fund separate from any • other fund established and maintained under the Resolution designated the Rebate Fund (the 'Rebate Fund"). The City shall administer or cause to be administered the Rebate Fund and invest any amounts held therein in Nonpurpose Investments. Moneys shall not be transferred from the Rebate Fund except as provided in this Section 3. (b) Unless the Spending Exception to Rebate described in Appendix I to this • letter is applicable to the Gross Proceeds of the 2010 Note, the City specifically covenants that it will pay or cause to be paid to the United States Government the following amounts: (1) No later than 60 days after each Installment Payment Date, an amount which, when added to the future value of all previous rebate payments • made with respect to the 2010 Note, equals at least 90 percent of the Rebatable Arbitrage calculated as of each such Installment Payment Date; and A-4 (2) No later than 60 days after the Final Computation Date, an amount which, when added to the future value of all previous rebate payments made with • respect to the 2010 Note, equals 100 percent of the Rebatable Arbitrage as of the Final Computation Date. (c) Any payment of Rebatable Arbitrage made within the 60-day period described in Section 3(b)(1) and (2) above may be treated as paid on the Installment • Payment Date or Final computation date to which it relates. (d) On or before 55 days following each Installment Payment Date and the Final Computation Date, the City shall determine the amount of Rebatable Arbitrage to be paid to the United States Government as required by Section 3(b) of this Letter. Upon • making this determination, the City shall take the following actions: (1) If the amount of Rebatable Arbitrage is calculated to be positive, deposit the required amount of Rebatable Arbitrage to the Rebate Fund; (2) If the amount of Rebatable Arbitrage is calculated to be negative and money is being held in the Rebate Fund, transfer from the Rebate Fund the • amount on deposit in such fund; and (3) On or before 60 days following the Installment Payment Date or Final Computation Date, pay the amount described in Section 3(b) of this Letter to the United States Government at the Internal Revenue Service Center, Ogden, Utah 84201. Payment shall be accompanied by Form 8038-T. A rebate payment is • paid when it is filed with the Internal Revenue Service at the above location. (e) The City shall keep proper books of record and accounts containing complete and correct entries of all transactions relating to the receipt, investment, disbursement,allocation and application of the money related to the 2010 Note, including • money derived from, pledged to, or to be used to make payments on the 2010 Note. Such records shall specify the account or fund to which each investment (or portion thereof) held by the City is to be allocated and shall set forth, in the case of each investment security, (a) its purchase price; (b) nominal rate of interest; (c) the amount of accrued interest purchased (included in the purchase price); (d) the par or face amount; (e) maturity date; (f) the amount of original issue discount or premium (if any); (g) the type r of Investment Property; (h) the frequency of periodic payments; (i) the period of compounding; 0) the yield to maturity; (k) date of disposition; (1) amount realized on disposition (including accrued interest); and (m) market price data sufficient to establish the fair market value of any Nonpurpose investment as of any Computation Date, and as of the date such Nonpurpose Investment becomes allocable to, or ceases to be allocable • to, Gross Proceeds of the 2010 Note. Section 4. Prohibited Investments and Dispositions. (a) No Investment Property shall be acquired with Gross Proceeds for an amount(including transaction costs) in excess of the fair market value of such Investment • Property. No Investment Property shall be sold or otherwise disposed of for an amount (including transaction costs) less than the fair market value of the Investment Property. 0 A-5 • (b) For purposes of subsection 4(a), the fair market value of any Investment Property for which there is an established market shall be determined as provided in • subsection 4(c). Except as otherwise provided in subsections 4(e) and (f), any market especially established to provide Investment Property to an issuer of governmental obligations shall not be treated as an established market. (c) The fair market value of any Investment Property for which there is an established market is the price at which a willing buyer would purchase the investment • from a willing seller in a bona Ede, arm's-length transaction. Fair market value is generally determined on the date on which a contract to purchase or sell the Investment Property becomes binding (i.e., the trade date rather than the settlement date). If a United States Treasury obligation is acquired directly from or disposed of directly to the United States Treasury, such acquisition or disposition shall be treated as establishing a market • for the obligation and as establishing the fair market value of the obligation. (d) Except to the extent provided in subsections (e) and (f), any Investment Property for which there is not an established market shall be rebuttably presumed to be acquired or disposed of for a price that is not equal to its fair market value. • (e) In the case of a certificate of deposit that has a fixed interest rate, a fixed payment schedule, and a substantial penalty for early withdrawal, the purchase price of such a certificate of deposit is treated as its fair market value on its purchase date if the yield on the certificate of deposit is not less than (l) the yield on reasonably comparable direct obligations of the United States; and (2) the highest yield that is published or • posted by the provider to be currently available from the provider on reasonably comparable certificates of deposit offered to the public. (f) The purchase price of a Guaranteed Investment Contract is treated as its fair market value on the purchase date if the City complies with the competitive bidding procedures set forth in Section 1.148-5(d)(6)(iii) of the Regulations. • Section 5. Accounting for Gross Proceeds. In order to perform the calculations required by the Code and the Regulations, it is necessary to track the investment and expenditure of all Gross Proceeds. To that end, the City must adopt a reasonable and consistently applied method of accounting for all Gross Proceeds. Section 6. Administrative Costs of Investments. • (a) Except as otherwise provided in this Section, an allocation of Gross Proceeds of the 2010 Note to a payment or receipt on a Nonpurpose Investment is not adjusted to take into account any costs or expenses paid, directly or indirectly, to purchase, carry, sell or retire the Nonpurpose Investment (administrative costs). Thus, • administrative costs generally do not increase the payments for, or reduce the receipts from,Nonpurpose Investments. (b) In determining payments and receipts on Nonpurpose Investments, Qualified Administrative Costs are taken into account by increasing payments for, or reducing the receipts from, the Nonpurpose Investments. Qualified Administrative Costs • are reasonable, direct administrative costs, other than carrying costs, such as separately stated brokerage or selling commissions, but not legal and accounting fees, recordkeeping, custody, and similar costs. General overhead costs and similar indirect • A-6 • costs of the City such as employee salaries and office expenses and costs associated with computing Rebatable Arbitrage are not Qualified Administrative Costs (c) Qualified Administrative Costs include all reasonable administrative costs, without regard to the limitation on indirect costs stated in subsection (b) above, incurred by: (i) A publicly offered regulated investment company (as defined in • Section 67(c)(2)(B)of the Code); and (ii) A commingled fund in which the City and any related parties do not own more than 10 percent of the beneficial interest in the fund. (d) For a Guaranteed Investment Contract, a broker's commission paid on behalf of either the City or the provider is not a Qualified Administrative Cost to the extent that the commission exceeds the amount set forth in Section 1.148-5(e)(iii) of the Regulations. Section 7. Records: Bond Counsel Opinion. (a) The City shall retain all records with respect to the calculations and • instructions required by this Letter for at least 6 years after the date on which the last of the principal of and interest on the 2010 Note has been paid, whether upon maturity, redemption or acceleration thereof. (b) Notwithstanding any provisions of this Letter, if the City shall be provided an opinion of Bond Counsel that any specified action required under this Letter is no longer required or that some further or different action is required to maintain or assure the exclusion from federal gross income of interest with respect to the 2010 Note, the City may conclusively rely on such opinion in complying with the requirements of this Letter. [Remainder of page intentionally left blank] A-7 • • Section 8. Survival of Defeasance. Notwithstanding anything in this Letter to the contrary, the obligation of the City to remit the Rebate Requirement to the United States Department of the Treasury and to comply with all other requirements contained in this Letter must survive the defeasance or payment of the 2010 Note. Very truly yours, • BROAD AND CASSEL Received and acknowledged: WEDE 0 A yor • Dated: November 23,2010 • • A-8 • Appendix I • Spending Exceptions to Rebate (a) Generally. All, or certain discrete portions, of an issue are treated as meeting the Rebate Requirement of Section 148(f) of the Code if the spending exception set forth in this Appendix is satisfied. Use of the spending exception is not mandatory. An issuer may apply the • Rebate Requirement to an issue that otherwise satisfies the spending exception. (b) Bona fide debt service fund exception. To the extent that the provisions of Section 4 of the Tax Certificate are satisfied during each Note Yew, no rebate calculations are required to be made in respect of amounts in the Sinking Fund. • (c) Eighteen-month expenditure exception. In general, no rebate calculations will be required with respect to Adjusted Gross Proceeds if at least 15% of expected Adjusted Gross Proceeds actually are spent within six months after the Closing Date, at least 60% of expected Adjusted Gross Proceeds actually are spent within twelve months after the Closing Date, and 100% of actual Adjusted Gross Proceeds actually are spent within eighteen months after the • Closing Date. The requirement that 100% of actual Adjusted Gross Proceeds be spent within eighteen months after the Closing Date will be met if at least 95% of Adjusted Gross Proceeds is spent within eighteen months and the remainder is held as a reasonable retainage,as permitted by contracts with the Authority's contractors, and such remainder is spent within thirty months after the Closing Date. r (d) Two-year construction expenditures exception. In general, no rebate calculations will be required with respect to Adjusted Gross Proceeds if at least 75% of Available Construction Proceeds will be expended for construction expenditures with respect to the Project. For this purpose, construction expenditures include costs of reconstruction and rehabilitation, but do not include costs of acquiring any interest in land or other existing real or • personal property. In general, no rebate calculations will be required in respect of Available Construction Proceeds if Available Construction Proceeds in fact are spent at least as quickly as follows: 10% within six months after the Closing Date • 45%within twelve months after the Closing Date 75%within eighteen months after the Closing Date 100%within twenty-four months after the Closing Date The requirement that 100% of Available Construction Proceeds be spent within twenty-four months after the Closing Date will be met if at least 95% of Available Construction Proceeds is r spent within twenty-four months and the remainder is held as a reasonable retainage, as permitted by contracts with the City's contractors, and such remainder is spent within thirty months after the Closing Date. I-1 CERTIFICATE AS TO PUBLIC MEETINGS ' We, the undersigned members of the City Council of the City of Edgewater, Florida(the "City Council'), recognizing that the purchasers of its not to exceed $750,000 City of Edgewater, Florida Guaranteed Entitlement Revenue Note, Series 2010 (the "2010 Note") will have purchased said 2010 Note in reliance upon this Certificate, DO HEREBY CERTIFY, individually and collectively, that we have no personal knowledge that any two or more • members of the City Council, meeting together, reached any prior conclusion as to whether the actions taken by the City Council, with respect to said 2010 Note, the security therefor and the application of the proceeds thereof, should or should not be taken by the City Council or should or should not be recommended as an action to be taken or not to be taken by the City Council, except at public meetings of the City Council held after due notice to the public was given in the • ordinary manner required by law and custom of the City Council. IN WITNESS WHEREOF, we have hereunto affixed o o 'al . tures this 15th day of November,2010. • By Name: Mich4 L. Thomas, Mayor By: Name: amet E. des,Councilwoman • By: Name: ig' s uungton, C Oman y: C Name: Ted Cooper,Councilman • By: 92Iddl Ao Name: Debra Jabn Roge Councilwoman • • ae�aasm.rsss.i • asss9mmi • RECEIPT FOR SERIES 2010 NOTE RECEIPT IS HEREBY ACKNOWLEDGED of the following described obligation of the City of Edgewater,Florida: City of Edgewater, Florida $750,000 Guaranteed Entitlement Revenue Note, Series 2010, consisting of one fully-registered Note dated November 23, 2010, bearing interest at an initial rate equal to 2.77%and maturing on October 1, 2030. Dated this 23rd day of November,2010. BRANCH RANKING AND TRUST COMPANY By: Name: David Pierce L�Q_ Its: Banking Officer • 40 No oauwrcrsassr.i LV amla a • DISCLOSURE LETTER • The undersigned, as purchaser, proposes to negotiate with the City of Edgewater, Florida (the "Issuer") for the purchase of its Guaranteed Entitlement Revenue Note, Series 2010 (the "Note") in the principal amount of not to exceed $750,000. Prior to the award of the Note, the following information is hereby furnished to the Issuer: • 1. Set forth is an itemized list of the nature and estimated amounts of expenses to be incurred for services rendered to us (the 'Bank") in connection with the issuance of the Note (such fees and expenses to be paid by the Issuer): • Bank and Bank's Counsel (Edward Cohen) Fees-- $2,500 2. (a) No other fee,bonus or other compensation is estimated to be paid by the Bank in connection with the issuance of the Note to any person not regularly employed or retained by the Bank (including any "finder" as defined in Section 218.386(1)(a), Florida Statutes), other than the expenses to be incurred with respect to Bank's Counsel, as described in paragraph (1) • above. (b) No person has entered into an understanding with the Bank, or to the knowledge of the Bank, with the Issuer, for any paid or promised compensation or valuable consideration, directly or indirectly, expressly or implied, to act solely as an intermediary between the Issuer and the Bank or to exercise or attempt to exercise any influence to effect any transaction in the purchase of the Note. 3. The amount of the underwriting spread expected to be realized by the Bank is$0. 4. The management fee to be charged by the Bank is$0. • 5. Truth-in-Bonding Statement: The Note is being issued primarily to finance the acquisition, construction, equipping and improvement of a fire station to be located in the City of Edgewater. • Unless earlier redeemed, the Note is expected to be repaid at the end of twenty(20) years. Using the initial interest rate of 2.77% as the interest rate applicable to the Note over its term, total interest paid over the life of the Note is estimated to be $243,113.67. The Note will be payable solely from Pledged Revenues of the Issuer under and as r described in its Resolution No. 2010-R-20 adopted by the Issuer on November 15, 2010 (the 'Resolution"). See the Resolution for a definition of Pledged Revenues. Based on the above assumptions, issuance of the Note is estimated to result in a maximum of$54,002.50 of Pledged Revenues of the Issuer not being available to finance the services of the Issuer in any one year during the life of the Note. • 4emraan.eesxi nsssr000z • 6. The name and address of the Bank is as follows: • Branch Banking and Trust Company 5130 Parkway Plaza Blvd., Building No. 9 Charlotte,NC 28217 IN WITNESS WHEREOF, the undersigned has executed this Disclosure Statement on • behalf of the Bank this 23rd day of November, 2010. BRANCH BANKING AND TRUST COMP • By: Name: avid Pierce Its: Banking Officer • Y • 2 40 xsuezosesc.i 9165£'MO3 • PURCHASER'S CERTIFICATE • - This is to certify that Branch Banking and Trust Company (the "Purchaser") has not required the City of Edgewater, Florida (the "Issuer") to deliver any offering document and has conducted its own investigation, to the extent it deems satisfactory or sufficient, into matters relating to business affairs or conditions (either financial or otherwise) of the Issuer in connection with the issuance of its Guaranteed Entitlement Revenue Note, Series 2010 dated • November 23, 2010, in an aggregate principal amount of the not to exceed $750,000 (the "Note"), and no inference should be drawn that the Purchaser, in the acceptance of said Note, is relying on Bond Counsel or Counsel to the Issuer as to any such matters other than the legal opinion rendered by Bond Counsel, Broad and Cassel, and by Issuer's Counsel, Doran, Wolfe, Ansay & Kundid, P.A. Any capitalized undefined terms used herein not otherwise defined shall • have the meaning set forth in Resolution No. 2010-R-20, adopted by the City Council of the Issuer on November 15, 2010 (the "Resolution"). We acknowledge and understand that the Resolution is not being qualified under the Trust Indenture Act of 1939,as amended (the "1939 Act"), and is not being registered in reliance upon the exemption from registration under Section 3(a)(2) of the Securities Act of 1933, 40 Section 517.051(1), Florida Statutes, and/or Section 517.061(7), Florida Statutes, and that neither the Issuer, Bond Counsel nor Issuer's Counsel shall have any obligation to effect any such registration or qualification. We are not acting as a broker or other intermediary, and are purchasing the Note as an rt investment for our own account and not with a present view to a resale or other distribution to the public. We understand that the Note may not be transferred except to a bank, savings association, insurance company or other "accredited investor" as such term is defined in the Securities Act of 1933,as amended, and Regulation D thereunder. 40 We are a bank as contemplated by Section 517.061(7), Florida Statutes. We are not purchasing the Note for the direct or indirect promotion of any scheme or enterprise with the intent of violating or evading any provision of Chapter 517, Florida Statutes. DATED this 23`"of November, 2010. W BRANCH BANKING AND TRUST COMP By: /lo r Name: avid fierce Its: Banking Officer r NHi]I6-0I W.1 I1fi49/W]I Bond Finance - Local Bond Monitoring: Notice of Sale Confumation Page 1 of 1 • STATE OF FLORIDA - DIVISION OF BOND FINANCE LOCAL BOND MONITORING NOTICE OF SALE STATUS • Notice of Sale submission successful. SUBMIT DATE: 11/12/2010 • BOND ISSUE $750,000 City of Edgewater, Florida Guaranteed NAPE: Entitlement Revenue Note, Series 2010 SALE DATE: 11/23/2010 CLOSING DATE: 11/23/2010 • Print this page • • • r • https://bondissue.sbafla.com/nosconfirm.aspx?bondname=$750,000 City o... 11/18/2010 w G a L N1 w N 5 Y 2 O � M FL` Z t Y O u Z 0 V m N J q Q V V G O � w V O Q � Z Y w � LL w 3 Z Yma O „ s m � LL � „ O a z o U > 3 � N O � N N N Q V � M N � V cq J W LL r d O 0 d 9 CJ N U 11 G N 3 N N o c a paG s Bond Finance - Local Bond Monitoring: Print Fonn Page 1 of 5 r NAME OF GOVERNMENTAL UNIT City of Edgewater, Florida MAILING ADDRESS OF GOVERNMENTAL UNIT OR ITS MANAGER Address(t) 104 N. Riverside Drive Address(2) city Edgewater State FL Zip 32132 COUNT(IES)UN WHICH GOVERNMENTAL UNIT HAS RJUSDIMON Volusla TYPE OF ISSUER • City IS THE ISSUER A COMMUNITY DEVELOPMENT DISIRICIT - ISSUE NAME AMOUNT INTERESTqe2 IELD CALCULATI Guaranteed Entitlement $750,000.00 Arbitrag770 w Revenue Note, Series 2010 Yield AMOUNT AUTHORIZED $750,000.00 DATED DATE(M.M/DD/YYYV) 11/23/2010 SALE DATE(MM/DD/"YY) 11/23/2010 DELIVERY DATE(MM/DD/YYYY) 11/23/2010 LEGAL AUTHORITY FOR ISSUANCE Chapter 166, Part II TUTS OF ISSUE Revenue IS THIS A PRIVATE AUTIvrrY BOND(PAB)? Did This Issue Receive a PAB Allocation? Amount of Allocation $0.00 SPECIFIC IlEVENUES(S)PLEDGED Primary Guaranteed Entitlement Secondary Other r PURPOSE(S)OF THE ISSUE Primary r https://bondissue.sbafla.com/print.aspx 11/23/2010 Bond Finance - Local Bond Monitoring: Print Form Page 2 of 5 10 Public Safety Secondary Other Is THIS A REFUNDING ISSUE? REFUNDED DEBT HAS BEEN r _ DID THE REFUNDING ISSUE CONTAIN NEW MONEY? APPROXIMATELY WHAT PERCENTAGE OF PROCEEDS Is NEW MONEY? TYPE OF SALE Negotiated Private Placement INSURANCE/ENHANCEMENTS No Credit Enhancement RATING(S) w Moody's NR S&P NR Fitch NR Other DEBT SERVICE SCHEDULE PROVIDED BY • E-mail OPTIONAL REDEMPITON PROVISIONS PROVIDED BY E-mail PROVIDE TME NAME AND ADDRESS OF THE SENIOR MANAGING UNDERWRITER OR SOLE PURCHASER Underwriter Branch Banking and Trust Company Address(') 5130 Parkway Plaza Blvd. Address(2) Building No. 9 city Charlotte State NC r Zip 28217 CO-Underwriter None Address(]) Address(2) City State Zip PROVIDE THE NAME(S)AND ADDREss(ES)OF ANY ATTORNEY OR FINANCIAL CONSULTANT WHO ADVISED THE UNIT OF LOCAL GOVERNMENT WITH RESPECT TO THE BOND ISSUE. BondCDBnsei Broad and Cassel 10 https://bondissue.sbafla.com/print.aspx 11/23/2010 Bond Finance - Local Bond Monitoring: Print Form Page 3 of 5 Address(]) 390 N. Orange Avenue Address(2) Suite 1400 city Orlando State FL Zip 32801 CO-Bond Counsel None Address(l) Address(2) city Stare Zip Financial Advisor/Consultant First Southwest Co. Address(l) 20 North Orange Avenue fill Address(2) Suite 1209 city Orlando State FL Zip 32801 CO-Financial Advisor/Consultant None r Address(]) Address(2) City State Zip Other Professionals Doran Wolfe Ansay & Kundid Attorneys at Law 0 Address(l) 444 Seabreeze Blvd. Address(2) Suite 800 city Daytona Beach State FL Zip 32118 + PAYING AGENT Clerk of the Issuer REGISTRAR Clerk of the Issuer Y BF2004-A AND BF2004-B NOTE: The following items are required to be completed in full for all bond issues except those sold pursuant to Section 154 Part IB,Sections 159 Parts 11,111,or V;or Section 243 Part I,Florida Statutes. HAS ANY FEE,BONUS,OR GRATUITY BEEN PAM BY ANY UNDERWRITER OR FINANCIAL CONSULTANT,IN CONNECTION WITH THE BOND ISSUE,TO ANY PERSON NOT REGULARLY EMPLOYED OR ENGAGED BY SUCH UNDERWRITER OR CONSULTANT?IF YES,PLEASE PROVIDE THE FOLLOWING INFORMATION WITH RESPECT 0 TO EACH SUCH UNDERWRITER OR CONSULTANT. HAVE ANY OTHER FEES BEEN PAID BY THE UNIT OF LOCAL GOVERNMENT WITH RESPECT IV THE BOND ISSUE,INCLUDING ANY FEE PAM TO ATTORNEYS OF FINANCIAL CONSULTANTS?IF YES,PLE4SE PROVIDE THE TOTAL FEES PAID TO APPLICABLE PARTICIPANTS. Total Bond Counsel Fees Paid $7,500.00 Total Financial Advisor Fees Paid $10,000.00 r https://bondissue.sbafla.com/prinLmpx 1123/2010 Bond Finance -Local Bond Monitoring: Print Form Page 4 of 5 of Other Fees Paid COMPANY NAME FEE PAID SERVICE PROVIDED OR FUNCTION SERVED • Doran Wolfe Ansay & Kundid Attorney at Law $2,500.00 Issuer's Counsel Edwards Cohen $2,300.00 Bank Counsel FILING OF THIS FORM HAS BEEN AUTHORIZED BY THE OFFICIAL OF THE ISSUER IDENTIFIED BELOW Name r John McKinney Title Governmental Officer primarily responsible for coordinating issuance of the bonds FEES CHARGED BY UNDERWRITER Management Fee(Per Thousand Par Value) 0 Private Placement Fee $0.00 10 UNDERWRITERS EXPECTED GROSS SPREAD(PER THOUSAND PAR VALUE) 0 FOR ADDITIONAL INFORMATION,THE DIVISION OF BOND FINANCE SHOULD CONTACT: Name Joseph B. Stanton r Title P.A. Phone 407-839-4200 Company Broad and Cassel Address(l) 390 N. Orange Avenue Address(2) Suite 1400 city Orlando State FL Zip 32801 INFORMATION RELATING TO PARTY COMPLETING THIS FORK(IF DIFFERENT FROM ABOVE) Name Title Phone Company Address(]) Address(2) City State Zip In order to better serve local governments,the Division of Bond Finance will remind issuers as thein deadlines approach for filing continuing disclosure information required by SEC Rule 15c2-12,based on the following information: IF THE ISSUER IS REQUIRED TO PROVIDE CONTINUING DISCLOSURE INFORMATION IN ACCORDANCE WITH SEC . RULE 15C2-12,DD YOU WANT THE DIVISION OF BOND FINANCE TO REMIND YOU OF YOUR FILING DEADLINE? ON WHAT DATE IS THE CONTIWHNG DISCLOSURE INFORMATION REQUIRED TO BE FILED?(MM/DD) it https://bondissue.sbafla.corn/print.aspx 11/23/2010 Bond Finance - Local Bond Monitoring: Print Form Page 5 of 5 r PROVIDE THE FOLLOWING INFORMATION REGARDING THE PERSON(S)RESPONSIBLE FOR FILING CONTINUING DISCLOSURE INFORMATION REQUmEDBY SEC RtaR 15C2-12.AND THE CONTINUING DISCLOSURE AGREEMENT(INCLUDING OTHER OBLIGATED PARTIES,IF APPROPRIATE). Name Title Phone Company Address(1) Address(2) City State Zip Fax Email • • 40 d https://bondissue.sbafla.com/print.aspx 11/23/2010 Sweets Page 1 of 1 Deisy Reyes From: Deisy Reyes Sent: Tuesday, November 23, 2010 4:57 PM To: 'Williams_Sharon' Subject: City of Edgewater, Florida Guaranteed Entitlement Revenue Note, Series 2010 Attachments: Copy of Executed Guaranteed Entitlement Revenue Note, Series 2010.pdf Ms. Williams, Attached please find a copy of the Guarantee Entitlement Revenue Note for the above-referenced transaction. The Bond Information Form was submitted successfully on 11/23/2010. Please contact me if you need anything else. Thank you, Deisy Reyes Deisy Reyes PUBLIC FINANCE CLERK • 390 NORTH ORANGE AVENUE SUITE 1400 ORLANDO,FIL 32801-4961 TELEPHONE:(407)839-4200 BROAD n n CASSEL FACSIMILE:(407)425-8377 1 y�r ,1. DIRECT LINE:(407)4815252 E-MAIL:dpreyes@broadandcassel.com www.broa d andcassel,com 11/23/2010 FirstSouthwestJ* Vlemoratidum Aflalns(agtal Company 1 20 Nath Orange Ave. Suite 1209 Mark P.Galvin Orlardp,FL 32801 Senior Vice Presided 407.426.9611 Direct madcgalvm@flrnsw.can 407.426.7835 Fax Date: November 22,2010 To: Distribution List Subject: $750,000 City of Edgewater, Florida-Guaranteed Entitlement Revenue Note, Series 2010 - This memorandum will outline information for the closing of the above referenced issue and summarizes the money transfers necessary for closing. Unless otherwise noted, all funds will be delivered in Federal Funds. 1. PRE-CLOSING 1 Date: Monday,November 22,2010 Time: 11:00 am Place: City of Edgewater 104 N.Riverside Drive Edgewater,PL 32132 Jon McKinney,Finance Director (386)424-2400 ext 11301 H. CLOSING Data: Tuesday,November 23,2010 Dl. DELIVERY AND AUTHENTICATION OF THE NOTE 10 Broad&Cassel ("Bond Counsel') will prepare one bond for$750,000; the Note will be in the name of Branch Banking and Trust Company ("BB&T). The Note bears interest at an initial rate of 2.77% per annum. IV. SETTLEMENTS The Note Proceeds transfer from BB&T is as follows: Total Pm Amount $ 750,000.00 Less: Bank Underwriting and Counsel Fee (2.500 00) Total Transfer Amount S 747SIaLIN1 The Note Proceeds will be applied as follows: Total Project Fund Deposit $726,500.00 Plus: Cost of Issuance& Miscellaneous 21.000 00 + •EWWta Buds Uwe hag&C.1F 4$2,500 V. INTERNAL TRANSFER OF NOTE PROCEEDS On Tuesday, November 23, 2010 and after all note documents have been executed BB&T will internally transfer funds in the amount of$726,500.00 to be held in a Project Fund on behalf of the q City of Edgewater. VI. TRANSFER OF COST OF ISSUANCE Also on Tuesday,November 23,2010,BB&T will wire transfer one Fed Funds wire of$21,000.00 to the City for cost associated with the issuance of the Now. Note that these costs of issuance are net of . BB&T's underwriting and counsel fees totaling$2,500.00 Wire instructions are as follows: L Transfer of Funds from BB&T to the City of Edgewater for Cost of Issuance: Amount: $21,000.00 To: Wachovia Bank,N.A. Jacksonville, FL Routing/Transit No.: 063000021 Account No.: 2631600073626 + Beneficiary Name: City of Edgewater 104 N.Riverside Drive Edgewater, FL Re: Guaranteed Entitlement Revenue Note,Series 2010 VII. RECEIPT OF FUNDS AND CLOSING Upon confirmation of the receipt of the above wire transfers, execution, and delivery of all closing documents and legal opinions, Bond Counsel shall contact the City and release the Now to BB&T and the financing will then be closed. 2 I VIII. POST-CLOSING Upon successful closing, the City will disburse funds to pay issuance costs, excluding bank underwriting and counsel fee,associated with the issuance and delivery of the Note. Approved and Accepted by: • City of Edgy ter,Fbr a Jo tan C.McKinney Finance Director 1p W • 3 •