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HomeMy WebLinkAboutCity of Tamarac Resolution R-2004-092Temp Reso #10407-April 19, 2004 Page 1 1 C] CITY OF TAMARAC, FLORIDA RESOLUTION NO. R-2004- A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF TAMARAC, FLORIDA, AUTHORIZING THE APPROPRIATE OFFICIALS TO ACCEPT A FUNDING AGREEMENT FROM TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY C/O AEGON INSTITUTIONAL MARKETS, INC., (AEGON) FOR THE PROCEEDS AND OTHER MONEYS RELATED TO THE PROJECTS FUNDED BY THE CAPITAL IMPROVEMENT REVENUE BOND SERIES 2004; AUTHORIZING THE APPROPRIATE OFFICIALS TO EXECUTE AN ACKNOWLEDGEMENT OF A FUNDING AGREEMENT; AUTHORIZING THE APPROPRIATE OFFICIALS TO APPLY ANY NON - SUBSTANTIVE CHANGES TO SAID AGREEMENT AND ACKNOWLEDGEMENT; PROVIDING FOR CONFLICTS; PROVIDING FOR SEVERABILITY; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Tamarac, Florida, has approximately $11.1 million in project funds related to the Capital Improvement Revenue Bond Series 2004 (the 2004 Bonds); and WHEREAS, the City desires to invest these funds at the highest possible return while maintaining liquidity and safety of principal; and WHEREAS, the City's investment policy allows the use of a Guaranteed Investment Contract (GIC); and WHEREAS, The City's Financial Advisor, Kirkpatrick Pettis, solicited quotes for a GIC from eight (8) investment providers (hereto attached as Exhibit 1); and Temp Reso #10407-April 19, 2004 Page 2 WHEREAS, Transamerica Occidental Life Insurance Company c/o AEGON Institutional Markets, Inc., (AEGON) quoted the highest rate of return of all respondents at 1.71 %; and WHEREAS, the Director of Finance and the City Manager recommend the City accept a GIC with AEGON in the form of Funding Agreement No. MN01461 N (hereafter referred to as the Agreement and attached hereto as Exhibit 2) and to execute an Acknowledgement of Funding Agreement No. MN01461 N to Transamerica Occidental Life Insurance Company c/o AEGON Institutional Markets, Inc. (hereafter referred to as the Acknowledgement and attached hereto as Exhibit 3) to invest the 2004 Bonds project funds; and WHEREAS, the City's Financial Advisor and Bond Counsel related to the issuance of the 2004 Bonds are currently working with AEGON to ensure the Funding Agreement and Acknowledgment are acceptable by AMBAC, the insurer of the 2004 Bonds, and in compliance with the 2004 Bonds Authorizing Resolution and some further changes of a non -substantive nature may yet need to be applied; and WHEREAS, the City Manager, City Attorney, and Director of Finance will review these changes to ensure they are in the best interest of the City; and WHEREAS, the City Commission of the City deems it to be in the best interest of the citizens and residents of the City to accept the aforementioned Agreement and provide for the execution of the aforementioned Acknowledgement between the City and AEGON (both with such non - substantive changes as may be needed) to invest the 2004 Bonds project funds. 1 I u Temp Reso #10407-April 19, 2004 Page 3 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF TAMARAC, FLORIDA: SECTION 1: The foregoing "WHEREAS" clauses are hereby ratified and confirmed as being true and correct and are hereby made a specific part of this Resolution. SECTION 2: The appropriate City officials are hereby authorized to accept a Guaranteed Investment Contract with Transamerica Occidental Life Insurance Company c/o AEGON in the form of Funding Agreement No. MN01461 N (hereafter referred to as the Agreement and attached hereto as Exhibit 2) to invest the 2004 Bonds project funds. The form of the Agreement is hereby approved, subject to such changes, insertions, and deletions as the City Manager, City Attorney and the Director of Finance of the City executing the Acknowledgement shall approve, execution and delivery to be conclusive evidence of such approval. SECTION 3: The appropriate City officials are hereby authorized to execute an Acknowledgement of Funding Agreement No. MN01461 N to Transamerica Occidental Life Insurance Company c/o AEGON Institutional Markets, Inc. (hereafter referred to as the Acknowledgement and attached hereto as Exhibit 3) to invest the 2004 Bonds project. The form of the Acknowledgement is hereby approved, subject to such changes, insertions, and deletions as the City Manager, City Attorney and the Director of Finance of the City executing the same shall approve, execution and delivery to be conclusive evidence of such approval. Temp Reso #10407-April 19, 2004 Page 4 SECTION 4: All resolutions or parts of resolutions in conflict herewith are hereby repealed to the extent of such conflict. SECTION 5: If any clause, section, other part or application of this Resolution is held by any court of competent jurisdiction to be unconstitutional or invalid, in part or application, it shall not affect the validity of the remaining portions or applications of this Resolution. SECTION 6: This Resolution shall become effective immediately upon its passage and adoption. PASSED, ADOPTED AND APPROVED this 281" day of April, 2004. ATTEST: ti MARION SW NSON, CMC CITY CLERK I HEREBY CERTIFY that I have approved this RESOLUTION as to form. CITY ATTORNEY E SCHREIBER, MAYOR RECORD OF COMMISSION VOTE: MAYOR SCHREIBER DIST 1: COMM. PORTNER DIST 2: COMM. FLANSBAUM-TALABISCO DIST 3: V/M SULTANOF DIST 4: COMM. ROBERTS 1 C� Agreement No. MNO1461 N ACKNOWLEDGEMENT OF FUNDING AGREEMENT NO. MN01461N City of "I'amarac, Florida Capital Improvement Revenue Bonds Series 2004 The undersigned hereby acknowledges and accepts the terms Of the Funding Agreement No. NINO1461 N issued by Transamerica Occidental Life Insurance. Company. Dated this 29°i day of April, 2004 CITY OF TARAMAC, as Owner Na Joe_Schreiber By �`} - Name ,leffrey L. Miller _._. � - --...........-- Title Ma or Title City Mana =e€ r By Name Dogg J. Newman Title Dire r of Finance 04MICUM BY Nan: -—Mq�on.S�wenson, CMC Title"- City C-ie -t HEREBY'CE Y tha I ave approved s Agreement as to form. By Na Mitchell . Kraft Title City Attorney 04-153323.1 AEGON/Tamarac #762/04/04 152768 v. 4 City of Tamarac, FL AEGON #762 04/04 Transamerica Occidental Life Insurance Company Transamerica Occidental Life Insurance Company (the "Company"), Cedar Rapids, Iowa, a stock company, agrees to make the payments provided for in this Funding Agreement (the "Agreement") in the amounts and to the persons as designated in writing by the Owner, subject to all of the other terms and conditions on this and on the following pages, which subsequent pages are made a part of this Agreement. The Owner may act for and on behalf of any person entitled to receive a payment or payments under this Agreement, and every act done by agreement made with, or notice given to, the Owner shall be binding on all such persons. The Agreement is issued in consideration of the payment by the Owner to the Company of the stipulated Cash Contribution pursuant to the Agreement. The Agreement is delivered in the Jurisdiction as specified on the Schedule Page and shall be construed in accordance with the laws of the Jurisdiction. Signed for Transamerica Occidental Life Insurance Company at its Administrative Office, P. O. Box 35330, Louisville, Kentucky 40232, telephone number 502-560-2825, as of the Effective Date. Signed for Us at Our Home Office. Secretary President FUNDING AGREEMENT FIXED INTEREST RATE NONPARTICIPATING FORM NO. G-MUNIFRUNQ8-0404-FL 152768 v. 4 City of Tamarac, FL AEGON #762 04/04 RN:L 111 =IV-1 OWNER - THE CITY OF TAMARAC, FLORIDA AS ISSUER OF ITS CAPITAL IMPROVEMENT REVENUE BONDS, SERIES 2004 JURISDICTION - FLORIDA AGREEMENT NUMBER - MN01461 N EFFECTIVE DATE - APRIL 29, 2004 INITIAL CASH CONTRIBUTION - $11,045,057.97 MATURITY DATE - OCTOBER 1, 2006 GUARANTEED INTEREST RATE - 1.71% PERIODIC INTEREST PAYMENTS - SEMIANNUALLY ON EACH INTEREST PAYMENT DATE ANTICIPATED WITHDRAWAL SCHEDULE DATE AMOUNT 6/1/2004 $ 152,095.00 7/1 /2004 175,000.00 8/1 /2004 536,100.00 9/1 /2004 1, 339, 000.00 10/1 /2004 1, 325, 650.00 11/1/2004 545,450.00 12/1 /2004 757,450.00 1/1/2005 771,150,00 2/1 /2005 576, 000.00 3/1/2005 716,950.00 4/1 /2005 1,156, 300.00 5/1 /2005 494, 000.00 6/1 /2005 521, 000.00 7/1 /2005 158, 700.00 8/1/2005 539,700.00 9/1/2005 120,800.00 10/1 /2005 31,600.00 11 /1 /2005 31,600.00 12/1/2005 31,600.00 1/1/2006 31,600.00 2/1/2006 31,600.00 3/1/2006 31,600.00 4/1/2006 31,600.00 5/1/2006 31,600.00 6/1/2006 31,600.00 7/1/2006 31,600.00 8/1 /2006 31, 600.00 9/1/2006 32,400.00 10/1/2006 Remaining Balance FORM NO. G-MUNIFRUNQ8-0404-FL 2 152768 v. 4 City of Tamarac, FL AEGON #762 04/04 SCHEDULE PAGE - Continued ADDRESSES: For purposes of Section VII of the Agreement, the Notice Addresses to be used are as follows: Company: Transamerica Occidental Life Insurance Company c/o AEGON Institutional Markets, Inc P.O. Box 35330 400 West Market Street Louisville, Kentucky 40232 ATTN: AEGON Institutional Markets, Inc. Operations Company Wire Transfer Instructions: M&TBank One M & T Plaza Buffalo, NY 14203 ABA Number: 022-000-046 DDA#: 89539642 Account Name: AEGON Institutional Markets, Inc. FFC: "MN01461 N" and "City of Tamarac, FL/Series 2004" Amount: $11,045,057.97 Financial Advisor: Kirkpatrick, Pettis, Smith, Polian Inc. Suite 155 3504 Lake Lynda Drive Orlando, FL 32817 ATTN: Mr. Carlos Pereda SECTION I -DEFINITIONS Owner City of Tamarac 7525 NW 88th Avenue Tamarac, FL 33321 ATTN: Director of Finance Rond InsijrPr Ambac Assurance Corporation One State Street Plaza New York, NY 10004 ATTN: Ms. Susanne Amodeo Owner Wire Transfer Instructions: Routing 063000021 Account# 2090001028714 Account Name: City of Tamarac Concentration Account ATTN: Ms. Pamela Ramkalawan Wachovia Bank, N.A. Ph: (954)596-6900 Fx: (954) 596-6908 E-mail: Pamela.Ramkalawan@wachovia.com 1.01 "Agreement Balance" means, on any date, the Principal Balance on such date plus all accrued but unpaid Interest on the Principal Balance to such date. 1.02 `Bond Fund" means the Construction Fund created pursuant to Section 4.03 of the Resolution. 1.03 "Bonds" means the Owner's $9,500,000 Capital Improvement Revenue Bonds, Series 2004, issued pursuant to the Resolution. 1.04 "Business Day" means any day other than a Saturday, Sunday or other day on which commercial banks are required or authorized to be closed in New York, New York; Louisville, Kentucky or Tamarac, Florida. 1.05 "Cash Contribution" shall mean the principal amount deposited from time to time by the Owner with the Company pursuant to Subsection 3.01. FORM NO. G-MUNIFRUNQ8-0404-FL 152768 v. 4 City of Tamarac, FL AFGON #762 04/04 SECTION I — DEFINITIONS - Continued 1.06 "Deposit Fund" means the fund by that name established with the Company pursuant to Subsection 2.01 hereof. 1.07 "Downgrade Event" means the reduction of the rating assigned to the Company's claims -paying ability by S&P or Moody's below "AK or °Aa3", respectively. 1.08 "Executive Officer of the Company" means the President or any Vice President of the Company. 1.09 "Initial Deposit Date" means the Effective Date as shown on the Schedule Page. 1.10 "Interest" means the interest earned on the Principal Balance, calculated in accordance with Subsection 3.02. 1.11 "Interest Calculation Basis" means a 360-day year consisting of twelve (12) 30-day months 1.12 "Interest Payment Date" means the Business Day immediately preceding each April 1 and October 1, commencing the Business Day immediately preceding October 1, 2004. 1.13 "Moody's" means Moody's Investors Service, Inc. 1.14 "Notice Address" means the address(es) shown on the Schedule Page or any such other address(es) as any party may specify to the other parties shown on the Schedule Page by at least two (2) Business Days' prior written notice given in accordance with Subsection 7.04. 1.15 "Principal Balance" means the sum of all Cash Contributions plus all Interest reinvested in the Deposit Fund as described in Subsection 3.02 less the Withdrawn Amount. 1.16 "Resolution" means, collectively, (a) the City Resolution No. R-2004-63 adopted on March 24, 2004 by the Owner and (b) the City Resolution No. R-2004-64 adopted on March 24, 2004 by the Owner, including such amendments and modifications thereto which are not adverse to the rights and obligations of the Company under this Agreement. 1.17 "S&P" means Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc. 1.18 "Termination Date" means the earlier of (a) the Maturity Date, (b) the date of withdrawal of the Agreement Balance, (c) the date on which the Bonds are no longer outstanding under the Resolution and (d) the date of earlier termination as permitted by this Agreement. 1.19 "Withdrawn Amount" means the aggregate amount withdrawn by the Owner under this Agreement, exclusive of Interest. FORM NO. G-MUNIFRUN08-0404-FL 4 152768 v. 4 City of Tamarac, FL AEGON #762 04/04 SECTION II — DEPOSIT FUND 2.01 Deposit Fund. The Company shall establish the Deposit Fund on the Initial Deposit Date. 2.02 Nonparticipating. The Agreement is issued as a nonparticipating agreement, and it will not share in the surplus or earnings of the Company. 2.03 Nature of Deposit Fund. With respect to the Deposit Fund created pursuant to this Section, the Company shall be the sole owner of the assets in the Deposit Fund, shall have the sole right to control, manage or administer such assets; and may commingle the assets in its possession pursuant to the Agreement with its other assets. SECTION III - DEPOSITS AND WITHDRAWALS 3.01 Cash Contributions. On the Initial Deposit Date, the Owner shall deliver to the Company amounts on deposit in the Bond Fund as the Initial Cash Contribution and the Company shall accept such amounts and credit the same to the Deposit Fund. 3.02 Interest. Interest on the Principal Balance shall accrue at the Guaranteed Interest Rate, as shown on the Schedule Page, on the daily outstanding Principal Balance calculated in accordance with the Interest Calculation Basis commencing with and including the Initial Deposit Date and ending with and excluding the Termination Date. Accrued Interest shall be deposited to the Deposit Fund on each Interest Payment Date and thereafter shall constitute part of the Principal Balance. 3.03 Withdrawal. The Owner may withdraw all or any portion of the Principal Balance to the extent permitted under this Section by delivery of two (2) Business Days' prior written notice to the Company in the form of Exhibit A hereto specifying the portion of the Principal Balance to be withdrawn on the withdrawal date specified in such notice. The Owner hereby represents and warrants that it reasonably anticipates that the Principal Balance will be withdrawn in accordance with the procedures set forth herein on the dates and in the amounts set forth in the schedule on the Schedule Page hereto. Withdrawals may be made only for the purposes specified in the Resolution and such withdrawals shall be made prior to the utilization of any other source of funds for such purposes. Withdrawals may not be made for reinvestment purposes. The Company shall not be obligated to permit (i) more than four (4) withdrawals per month hereunder pursuant to this Section, (ii) a withdrawal in an amount less than $1,000 or (iii) any withdrawal without first receiving written notice in the form of Exhibit A hereto in accordance with the terms of this Subsection 3.03. 3.04 Failure of Owner. If at any time during the term of this Agreement the Owner (a) shall fail to make the Cash Contribution required by Subsection 3.01, (b) shall make a Cash Contribution that is not required or permitted by Subsection 3.01 or (c) shall make a withdrawal other than as permitted under Subsection 3.03, Subsection 5.02 or Subsection 6.02, which causes the Company to break its deposit or other funding arrangements, the Owner shall promptly pay to the Company an amount equal to the penalties, losses, costs, expenses, damages and other charges as are incurred by the Company as a result of the Company's breaking such deposit or other funding arrangements. A certificate as to the amount of such penalties, losses, costs, expenses, damages or other charges submitted by the Company to the Owner shall be conclusive absent manifest error as to the amount thereof. Such certificate shall set forth the calculation of such amount in reasonable detail. 3.05 Method of Payment. All amounts paid by one party to another hereunder shall be remitted in lawful currency of the United States of America by wire transfer of immediately available funds pursuant to written wire transfer instructions of the receiving party or such other instructions as shall have been specified by such party in a notice given pursuant to Subsection 7.04. FORM NO. G-MUNIFRUNQ8-0404-FL 152768 v. 4 City of Tamarac, FL AEGON #762 04104 SECTION III — DEPOSITS AND WITHDRAWALS - Continued 3.06 Payments on Non -Business Day. Any payment due hereunder on a day which is not a Business Day shall be paid on the next succeeding Business Day. SECTION IV - REPRESENTATIONS, WARRANTIES AND COVENANTS 4.01 Representations of the Company. The Company represents and warrants that (a) the performance of its obligations under this Agreement will not violate any federal or state law or any order, decree, license, permit or the like which is applicable to it and will not cause any default by it under any other agreement to which it is a party, the result of which will have a material adverse effect on the Company's financial condition or upon its ability to perform its obligations hereunder and (b) the obligation of the Company to repay the Agreement Balance in accordance with this Agreement constitutes an absolute and unconditional obligation of the Company. 4.02 Covenants of the Company. The Company covenants and agrees to send each month a written report to the Owner and the Financial Advisor with respect to the Agreement Balance. Such reports shall provide (a) the name of the Owner and the Bonds, (b) the Principal Balance the Owner has invested with the Company as of the end of the preceding month, including any Cash Contributions or withdrawals during the preceding month and (c) the amounts and dates of Interest accrued and Interest paid or deposited by the Company during the preceding month. 4.03 Representations and Warranties of the Owner. The Owner represents and warrants to the Company that (a) all monies that the Owner invests with the Company pursuant to this Agreement shall be derived from amounts held under the Resolution in the Bond Fund, (b) the Owner is authorized by the Resolution to enter into this Agreement and to make all investments on the terms hereof, (c) to the best of its knowledge, the performance of the Owner's obligations hereunder will not result in a breach or violation of or cause a default under any provision of any law, regulation, order, license, decree, judgment, indenture, contract or agreement binding upon the Owner or its assets and (d) the person or persons identified by written notice to the Company as the authorized representative(s) of the Owner are duly authorized to act on behalf of the Owner and a specimen of their respective signatures follows their respective names. The Owner may from time to time designate other persons authorized to act hereunder on its behalf by delivery of a written notice to the Company in the manner described in Subsection 7.04 which identifies the name and title of the authorized representative and contains the specimen signature of such person. 4.04 Covenants of the Owner. The Owner hereby covenants and agrees as follows: (a) Information Regarding the Company. The Owner shall not, nor will it permit any other person to, include in any offering circular, information memorandum or other description of the Bonds any information relating to the Company without the Company's prior written consent; (b) Notice to Company of Refunding. The Owner shall immediately notify the Company in writing as soon as any action is taken to effect a partial or complete refunding of the Bonds or a defeasance of the Bonds. (c) Regarding the Bond Documents. The Owner shall observe, perform and fulfill each of its covenants and other obligations in the Bond Documents to which it is a party. (d) Additional Information. The Owner hereby covenants and agrees to promptly provide such information respecting the Bonds, the Resolution, the Project (as defined in the Resolution), the trust fund established under the Resolution and such other information related to the Bonds as the Company may, from time to time, reasonably request. Such information may include, without limitation the Owner's reasonable expectations as to the time and amount of future withdrawals from the Bond Fund. FORM NO. G-MUNIFRUNQ8-0404-FL 152768 v. 4 City of Tamarac, FL AEGON #762 04/04 SECTION V - DEFAULTS AND REMEDIES 5.01 Default. The occurrence of each of the following events shall constitute a default (each a "Default") hereunder: (a) the Company shall fail to pay the Principal Balance or Interest as required under this Agreement which continues for one (1) Business Day after the Company's receipt of written notice of such failure, (b) the Company shall initiate, or there shall be initiated against the Company, any bankruptcy, receivership, or other insolvency proceeding, which, if instituted against the Company, is not dismissed within ninety (90) days or the Company shall make a general assignment for the benefit of its creditors, (c) any representation or warranty made by the Company in this Agreement proves to have been false or misleading in any material respect when made; or (d) the Company shall fail to perform any of its covenants under the Agreement (other than those described in (a) above) which continues for thirty (30) days after the Company's receipt of written notice of such failure. 5.02 Default Remedies. During the continuance of any Default, (a) the Owner shall notify Ambac Assurance Corporation (the "Bond Insurer") of the occurrence of a Default within five (5) Business Days of such occurrence and (b) the Owner, at the direction of the Bond Insurer, shall have the right to proceed directly against the Company to secure any remedy available at law or in equity. In the event of a Default described in Subsection 5.01(b), the Agreement Balance shall automatically become immediately due and payable. During the continuance of any other Default, the Owner may, at the direction of the Bond Insurer, terminate this Agreement and declare the Agreement Balance to be immediately due and payable by delivery of written notice to the Company and the Company shall pay the Agreement Balance to the Owner in the manner provided in Subsection 7.01. SECTION VI - DOWNGRADE OF THE COMPANY 6.01 Notice of Downgrade. If a Downgrade Event shall occur during the term of this Agreement, the Company shall provide written notice of the Downgrade Event to the Owner and the Bond Insurer within five (5) Business Days of the Company's receipt of written notice of the Downgrade Event. 6.02 Actions following Downgrade. Following a Downgrade Event and the Company's receipt of the Owner's written request to take action under this Subsection, the Company shall have the right, to the extent permitted by law, to do any of the following: (a) Assign this Agreement to an Eligible Provider (as defined below) requiring the lowest payment from the Company. If the Company elects this course of action, the Company may solicit bids from financial institutions whose debt rating or claims paying ability is rated at least "AA" and °Aa3" by S&P and Moody's, respectively (each an "Eligible Provider"). The Company may send such solicitation to as many Eligible Providers as the Company shall choose; provided, at least three (3) Eligible Providers solicited shall be approved by the Owner and the Bond Insurer, such approval not to be unreasonably withheld; (b) Collateralize the Company's remaining obligations under this Agreement pursuant to a repurchase agreement or other collateral arrangement with (i) direct obligations of, and obligations on which the full faith and timely payment of principal and interest is unconditionally guaranteed by, the full faith and credit of the United States, at 104% of the Agreement Balance, (ii) senior debt and/or mortgage -backed obligations of GNMA, FNMA or FHLMC, at 105% of the Agreement Balance or (iii) government - sponsored agencies backed by the full faith and credit of the United States and approved by the Bond Insurer, at 105% of the Agreement Balance (i, ii, and iii are collectively referred to herein as "Permitted Collateral"); FORM NO. G-MUNIFRUNQ8-0404-FL 152768 v. 4 City of Tamarac, FL AEGON #762 04/04 SECTION VI — DOWNGRADE OF THE COMPANY - Continued (c) Enter into a new funding agreement with the Owner upon the same terms and conditions (with appropriate changes in terminology) as are set forth herein and which agreement is fully guaranteed by a financial guaranty insurance policy issued by an entity with a rating of "AA-" by S&P and "Aa3" by Moody's and approved by the Bond Insurer, such approval not to be unreasonable withheld; or (d) Take any other action mutually agreed to by the Owner and the Company. If within ten (10) Business Days after the Company's receipt of a written request from the Owner to take some action as described in (a), (b), (c) or (d) of this Subsection, the Company has not taken such action, then the Owner, at the direction of the Bond Insurer, shall thereafter have the right, but not the obligation, upon seven (7) days' prior written notice to the Company to terminate this Agreement. If the Owner does not exercise its right to take action in accordance with this Subsection within sixty (60) days after the receipt of the notice from the Company described in Subsection 6.01, such right shall be deemed waived and shall terminate. If the Company's rating falls below "A-" by S&P or "A3" by Moody's (a "Secondary Downgrade Event"), the Company shall post additional Permitted Collateral. If the Company does not take such action within ten (10) Business Days after the occurrence of the Secondary Downgrade Event, the Owner, at the direction of the Bond Insurer, may terminate this Contract without penalty. SECTION VII - MISCELLANEOUS PROVISIONS 7.01 Termination, This Agreement shall terminate on the Termination Date. At such time the Agreement Balance shall be paid to the Owner in the manner described in Subsection 3.05. 7.02 Role of the Company and Owner. It is expressly understood and agreed that in performing its obligations neither the Company nor any of its directors, officers, employees or agents is acting as a fiduciary or agent of the Owner, the holders of the Bonds or any other party, and neither the Company nor any of its directors, officers, employees or agents shall be liable or responsible for: (a) the payment of any amounts owing on or with respect to the Bonds; (b) the use or application by the Owner of any monies payable to the Owner hereunder; (c) any acts or omissions of the Owner under or with respect to the Bonds or the Resolution; (d) the validity or enforceability of the Bonds or the Resolution; (e) the tax treatment of interest paid on the Bonds or (f) the Owner's performance of its obligations under the Agreement, the Resolution, the Bonds or any other agreement or instrument relating to the Bonds or their issuance (collectively, the "Bond Documents"). Without limiting the foregoing, regardless of whether the Company has reviewed the Bond Documents or is generally familiar with the terms of documents of a similar type, the Company shall have no duty to comply with the terms of any Bond Document (other than to perform its obligations hereunder) or to ascertain whether the Owner is in compliance therewith. The Owner recognizes that the Company may have other business relationships with the Owner and with other entities or persons party to any of the Bond Documents, The Owner shall maintain complete and accurate records identifying the Agreement Balance. 7.03 Survival. All warranties and representations made by the Owner or the Company in this Agreement or in any of the instruments or documents delivered pursuant to this Agreement regardless of any investigation made shall be considered to have been relied upon by the other party hereto and shall survive the delivery of any instruments or documents. FORM NO. G-MUNIFRUNQ8-0404-FL 8 152768 v. 4 City of Tamarac, FL AEGON #762 04/04 SECTION VII—MISCELLANEOUS PROVISIONS - Continued 7.04 Notices. Any notices or other communications to be given under the Agreement shall be given to the party to which it is directed at its Notice Address, in writing by personal service; by registered or certified mail; postage prepaid; by facsimile transmission, wire, mailgram or telegram; or by courier service or messenger. Such notices shall be effective upon actual receipt. 7.05 Statement of Benefits. The Company may issue to the Owner for delivery to each person to whom periodic cash payments are to be made pursuant to the directions of the Owner a statement describing the benefits to be provided under this Agreement. 7.06 Information to be Furnished. The Owner shall furnish such information in such form and at such time as the Company may reasonably require with respect to any payment to be made under this Agreement, and, notwithstanding any provisions of the Agreement to the contrary, it shall not be obligated or required to make such payment until it has received such information in such form. The Company may rely upon the information so received, and shall not be liable with respect to any omission or inaccuracy contained therein, 7.07 Responsibility of the Company. The Company may rely on the Owner's directive and shall not be liable in any way or to any person or persons because of its failure to question or challenge a direction of the Owner. 7.08 Amendment of Agreement. The terms and conditions of this Agreement may be amended, modified or supplemented at any time or times by written agreement between the Company and the Owner with the consent of the Bond Insurer. Such amendment, modification or supplement shall not be valid unless made in writing and signed by an Executive Officer of the Company. 7.09 Construction of Agreement. Any index and section or subsection titles of the Agreement are inserted for convenience of reference. They constitute no part of the Agreement and are not to be considered in the construction thereof. 7.10 Assignment - Securities Act Registration. This Agreement has not been registered under the Securities Act of 1933 (the "Act"). No resale, transfer, pledge or other assignment shall be effective without the consent of the Company; however, the Company hereby acknowledges that amounts held for the credit of the Bond Fund are subject to a pledge and lien in favor of the Owners of the Bonds. In case of an assignment or pledge as collateral for a bona fide loan, the Company will not withhold consent unless it has reason to question the bona fide nature of the loan. The Company will not consent to any resale, transfer or other assignment unless the Company has been furnished with an opinion of counsel, in form and substance satisfactory to the Company, to the effect that registration under the Act has been effected, or that such transaction is exempt from the registration requirements of the Act. Notwithstanding the foregoing, the rights and obligations of the Owner hereunder shall be transferred to any successor owner appointed under the Resolution without first obtaining the consent of the Company or furnishing the opinion of counsel referenced above. Upon the appointment of such a successor, the Owner and the successor owner shall provide written notice of such appointment to the Company. 7.11 Entire Agreement. The entire Agreement is made up of the Agreement, including riders, endorsements, attachments, or signed administrative agreements. 7.12 Incontestability. The Company cannot contest this Agreement, except with respect to the Representations and Warranties made in Section IV. 7.13 Notices for Withdrawals. The Owner hereby agrees to provide notice to the Company of its intention to make a withdrawal pursuant to Subsection 3.03 in the form of Exhibit A hereto. FORM NO. G-MUNIFRUNQS-0404-FL 152768 v. 4 City of Tamarac, FL AEGON #762 04/04 SECTION Vil - MISCELLANEOUS PROVISIONS — Continued 7.14 Regarding the Owner. The Owner has entered into the Agreement in accordance with the provisions of the Resolution and the representations and warranties of the Owner herein are made pursuant to such direction. The Owner may act through its officers, agents, employees and attorneys. The Owner shall be entitled to conclusively rely upon any certificate, notice, direction or other document delivered to it hereunder by the Company as provided herein as to the truth, accuracy and validity thereof. The Owner represents that the Agreement constitutes a Permitted Investment (as defined in the Resolution) under this Agreement and applicable state law. FORM NO. G-MUNIFRUNQ8-0404-FL 10 152768 v. 4 City of Tamarac, FL AEGON #762 04/04 EXHIBIT A FORM OF WITHDRAWAL NOTICE [DATE] Transamerica Occidental Life Insurance Company c/o AEGON Institutional Markets, Inc. Post Office Box 35330 400 West Market Street Louisville, KY 40232 Attention: Ms. Tracie Meyer — (502) 560-2932 (voice), (502) 560-4344 (fax) Re: Transamerica Occidental Life Insurance Company Agreement Number MN01461 N between Transamerica Occidental Life Insurance Company (the "Company") and the City of Tamarac, as issuer of the Bonds (the "Owner") Dear Ms. Meyer: The Owner hereby requests the Company to make a cash payment equal to all or a portion of the Principal Balance held under the Agreement in the Amount and on the Date specified below: Amount: $ Date: [Owner - check as appropriate] This cash payment is requested pursuant to: Subsection 3.03 of the Agreement, Subsection 5.02 of the Agreement due to the occurrence of a Default and this notice constitutes the termination notice referenced in that Subsection; or Subsection 6.02 of the Agreement due to the downgrade of the Company and this notice constitutes the termination notice referenced in that Subsection. 152768 v. 4 City of Tamarac, FL AEGON #762 04/04 The Owner hereby represents and warrants that the cash payment hereby requested is permitted under the Agreement, will be used only for purposes specified in the Resolution and will not be used for reinvestment purposes. Capitalized terms used herein and not defined shall have the meanings given to such terms in the Agreement. NOTE: The Owner shall deliver this Form of Withdrawal Notice (the "Withdrawal Notice") two (2) Business Days prior to the Date specified above. The Company is not obligated to accept more than four (4) withdrawals per month or a withdrawal in an amount less than $1,000. The amount hereby requested shall be sent to the following account of the Owner: Routing 063000021 Account# 2090001028714 Account Name: City of Tamarac Concentration Account ATTN: Ms. Pamela Ramkalawan Wachovia Bank, N.A. Ph: (954) 596-6900 Fx: (954) 596-6908 E-mail: Pamela, Ramkalawan@wachovia.com Sincerely, CITY OF TA MARAC By Name �C KE�t ►'� Title e rTFt rn�•��►G�.K