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2003-066 Accepts Wachovia Bank Loan ProposalRESOLUTION 66-2003 A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH, FLORIDA, ACCEPTING THE BANK LOAN PROPOSAL FROM WACHOVIA BANK, NATIONAL ASSOCIATION, FOR A LOAN 1N AMOUNT OF TWO HUNDRED THIRTY THOUSAND ($230,000.00) DOLLARS WITH A FIVE (5) YEAR TERM, WHICH PROPOSAL IS ATTACHED TO THIS RESOLUTION AND MADE PART HEREOF; SAID BANK LOAN TO BE UTILIZED FOR PURCHASE OF EQUIPMENT AND RE-ROOFING OF THE VEHICLE MAINTENANCE BUILDING; AND, PROVIDING FOR AN EFFECTIVE DATE. BE IT RESOLVED BY THE VILLAGE COUNCIL OF NORTH PALM BEACH, FLORIDA: Section 1. The Village Council of the Village of North Palm Beach, Florida, does hereby accept the bank loan proposal from Wachovia Bank, National Association, for a loan in amount of Two Hundred Thirty Thousand ($230,000.00) Dollars with a five (5) year term, which proposal is attached to this resolution and made part hereof. The bank loan is to be utilized for purchase of extrication equipment, an EMS vehicle, ambulance and for re-roofing of the vehicle maintenance building. Section 2. This resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED THIS 11TH DAY OF ECEMBER , 2003. ____. .-~ __ ~.. (Village Seal) MAYOR ~_ ATTES~ ~-- ILLAGE CLERK ~~ ~~~~ resolu[iou\Wachovia-Loan Village of North Palm Beach ~C`~' `'off Bank Loan Proposals Equipment Purchase and Certain Other Item Financing $ 230,000 for Council Action Prepared by: Shaukat Khan Director of Finance October 29, 2003 Table of Contents Request for Council Action .. .. .. .. Summary of Proposals & Staff Recommendation .. Request for Proposal .. .. .. .. .. Mailing List .. .. .. .. .. .. .. Wachovia .. .. .. .. .. .. .. SunTrust .. .. SouthTrust .. .. Koch Financial .. .. .. .. .. .. Florida League of Cities.. .. .. .. .. 2-3 4 .. 10 17 •• •• .. .. 18 - 24 •• •• .. .. 25 - 26 •• •• .. .. 27 - 29 ~~ •• .. .. 30 - 32 VILLAGE OF NORTH PALM BEACH REQUEST FOR COUNCIL ACTION - Date: October 29. 2003 Attachments: Department: Finance Ordinance Resolution Staff Report Subject: $ 230,000 Loan for Equipment 8~. Advisory Board Report Re- Roofing Finance Report Prepared by: Shaukat Khan Director of Finance ,~ Other , Type Action Requested: Approved by: Ordinance Resolution / Formal Vote Other Village Manager: Orientation of Issue: FY 2003 - 2004 Financing for: A. Equipment 1. Extraction Equipment $ 43,000 2. EMS Vehicle 39,000 3. Ambulance 94,000 $176,000 B. Other 1. Re-roof Vehicle Maintenance Building $ 54,000 $230,000 Programmatic or Policy Impact: 1. Request for Proposal was mailed to (14) institutions and received (5) responses 2. Loan Proposal Summary included in this package Fiscal Impact: $230,000 Loan for 5 yr term Issue Budgeted: N!A Funds Available: N/A Budget Transfer: iwti Budget Appropriation: N/A Recommendation: >uncil to discuss the loan proposals from various banks and select one to borrow the money to purchase the ,~.:rtain equipments and re-roofing the vehicle maintenance building. 2 Council Action Workshop: ( )Forward to Regular Agenda ( )Continue to Workshop ( )Other Regular: ( )Approved as recommended ( )Approved with changes ( )Disapproved 1 Other Date: LOAN PROPOSAL SUMMARY s Requested $ 230,000 for 5 Year Term ~ .~ r Variable Rate Out of Bank Fixed Rate Rate % Index/Rate % Pocket Term Comments `1. Wachovia 2.98% 1.85 30 day LIBOR 2,000 5 yr ~ . + 73 BP (30 day LIBOR = 1.12) 2. SunTrust 2.98% ? 5 yr ;3. SouthTrust 3.72% 2.00 67% 30 day LIBOR + 2,500 5 yr 125 BP (30 day LIBOR = 1.12) 4. Koch Financial 4.26% none 5 yr 5. FL League of Cities 4.23% $416 5 yr Offered only equipment financing in the amount of $ 176,000 STAFF RECOMMENDATION: ' Wachovia Bank L Variable Rate 30 day LIBOR + 73 BP 5 Year Term ~. THE VILLAGE OF :~~"~~'°~ _ North Palm Beach ~~, ®~4j tiq Department of Finance ~ 'yPALN~O 4 Village Hall • 501 U.S. Highway 1 North Palm Beach, FL 33408 • (561) 841-3360 • Fax (561) 881-7469 REQUEST FOR PROPOSAL FOR EQUIPMENT PURCHASE A~'~TD CERTAIN OTHER ITEM FINANCING October 8, 2003 The Village of North Palm Beach, Florida (the `Village') seeks financing proposals from qualified financial institutions (the `Institutions') for the following: A. Equipment Department Description Quantity Estimated Unit Price Estimated Total Fire Extraction 1 $ 43,000 $ 43,000 EMS Reserve Vehicle 1 39,000 39,000 EMS Ambulance 1 94,000 94,000 B. Other Vehicle Re-roof Building Maint. $ 54,000 S 54,000 TOTAL Term: 5 year financing Payment: Biannual $230,000 General Information: 1. The Institutions must submit the proposal on the attached Proposal Form. The Institution may provide additional information. 2. The Village intends to cause these transactions to be a "Qualified Tax Exempt Obligation" under Section 265 (b) (3) of the IRS Code of 1993. The Village may provide legal opinion without cost to this effect to the successful Institution. 3. The Village is issuing this Request for Proposals to provide potential Institutions with information, guidelines and rules to prepare and submit a proposal. Institutions must meet ali criteria in this request. 4. The issuance of this Request for Proposals constitutes only an invitation to make a proposal to the Village. The village reserves the right to determine, in its sole discretion, to accept, reject, withdraw and negotiate all or an_y part of the said proposals with or without cause. 5. The Village shall have no liability of any kind to any respondent for any cost or expenses incurred in connection with this Request for Proposal or otherwise. 6. The selection of the Institution shall be based on the proposal that is, in the sole opinion of the Village, is in the best interest of the Village considering, among other factors, the interest rate, terms, amortization and pre-payment features of the proposals. 7. The proposals must have received all necessary internal approval prior to the submission. 8. The following information should be included with each proposal: a. Name and address of the principal office. b. Names, addresses and telephone numbers of primary contact officer. c. Fixed and variable rate of interest for the duration's; state the identifiable index for variable rate and frequency at which the variable rate will be reset and the minimum and maximum range of the interest rate. d. Pre-payment restrictions and penalties, if any; the Village prefers that the loan/obligation be pre-payable in whole or in part at any time during its term. e. Fees and expenses to be paid by the Village, if any, other than annual interest on the outstanding principal balance of the loan. Provide a description and estimated cost of each item including any outside legal fee or administrative cost and cap on the total of such fees and expenses. f. Any other information that may be of value to-the Village in its selection process, including any other financing alternatives. g. Provide copies of all necessary documents such as promissory note, loan agreement, resolution, etc. which the Institution may deem necessary in processing the loan. 6 h. The terms and conditions of the proposal should be for at least 60 days from the date of submission. our (4) copies of each proposal, in one sealed package, addressed to Shaukat Khan, Director of Finance, " marked "Proposal for Equipment Purchase Financing" and should be submitted to the Village of North Palm Beach Finance Department, SO1 U.S. Highway 1, North Palm Beach, Florida 33408, no later than 5:00 p.m. on Friday, October 24, 2003. Proposals submitted or delivered after that time will not be considered. The Village reserves the right to interview Institutions submitting proposals and to conduct background checks of respondents. Should you have any question regarding this Request for Proposal please call me at (S61) 841-3360. Sincerely, J'1 ~~. ~. ~' Y Shaukat Khan Director of Finance 7 PROPOSAL FORM FOR THE VILLAGE OF NORTH PALM BEACH FOR EQUIPMENT PURCHASE and CERTAIN OTHER ITEM FINANCING Name of the Institution: Address: Contact Person: Title: Telephone #: Fax #: OPTIONS A. FIXED RATE Rate: Term: Fixed Rate Indexed To: Index Rate on October 1, 2003: Term: Estimated Annual Payment (in arrears): Additional Information (if any): B. VARIABLE RATE Rate: Term: Variable Rate Indexed To: Index Rate on October 1, 2003: Estimated Annual Payment (in arrears); Additional Information (if any): C. OTHER OPTION (if any Rate: Term: Estimated Annual Payment (in arrears): Additional Information (if any): 1. 2. 3. 4. S. COST The Village will be responsible for the following out-of-pocket fees or costs: TTFMC AMOUNT 8 OTHER INFORMATION IF ANY 1. -- 2. 3. 4. 5. INFORMATION & DOCUMENTATION (Village) The Village is responsible to provide the following documentation and information to process the closing of the loan: 1. 2. 3. 4. 5. INFORMATION & DOCUMENTATION (Institution) The Institution is providing the following documents and forms that are necessary to process the loan: 1. 2. 3. 4. 5. This proposal expires (date): (Prefer at least 60 days) Attest: Signature: Proposal: Signature: Name: Title: Date: Name: Title: Date: 9 Mailing List for $230,000 Equipment and Certain Other Item Financing SunTrust ~~ttn: John W. Winn ~O1 S. Flagler Drive, 2"d Floor West Palm Beach, FL 33401 Bank Atlantic Attn: Government Loan Officer 660 U.S. Highway 1 North Palm Beach, FL 33408 1-800-741-1700 Enterprise National Bank of Palm Beach Attn: Robert Camerlinck 11811 U.S. Highway 1 North Palm Beach, FL 33408 First Southern Bank 801 U.S. Highway 1 North Palm Beach, FL 33408 776-1600 Bank of America Attn: Vanessa C. Graham 625 N. Flagler Drive, 10`~ Floor West Palm Beach, FL 33401 SunTrust Attn: Martha C. Arias Mail Code: 0-01049 200 S. Orange Blvd. Orlando, FL 32801 Florida League of Cities Lease Purchase Division Attn: Carol Whitaker PO Box 1757 Tallahassee, FL 32302-1757 Wachovia Bank Government Service Group Attn: Paul Vincent 303 Banyan Blvd West Palm Beach, FL 33401 Fidelity Federal Attn: Melissa Tyner 205 Datura Street West Palm Beach, FL 33401-5679 SouthTrust Bank Attn: David Peters 1700 Palm Beach Lakes Blvd, Ste 600 West Palm Beach, FL 33401 Palm Beach National Bank & Trust Co. Attn: Stephanie Dantos 2000 PGA Blvd, Ste 5500 North Palm Beach, FL 33408 Republic Security Bank Attn: Branch Manager 701 U.S. Highway 1 North Palm Beach, FL 33408 American Equipment Leasing Attn: Lloyd Spaldins 540 Upland Ave Reading, PA 19611-1970 Koch Financial Attn: Jeffrey Ray 7500 College Blvd, 5'h Floor Overland Park, KS 66210 ]0 T October 23, 2003 Mr. Shaukat Khan Finance Director Village of North Palm Beach 501 US Highway #1 North Palm Beach, Florida 33408 Dear Mr. Khan: Wachovia Bank, National Association (the "Bank") is pleased to submit the Commitment described below to the Village of North Palm Beach, FL ("Village") subject to the following terms and conditions. Borrower: The Village of North Palm Beach, FL ("Village") Amount: 5230,000 Facility: Term Loan Purpose: To finance the purchase of various Public Safety vehicles and building maintenance. Term: Five Years from closing. Beginning six months from date of closing the Village will commence a repayment schedule of ten (10) equal semi-annual payments of principal and interest, each payable in arrears. Interest on the outstanding balance of the loan will be calculated on a 30/360 day basis. Security: The Loans will be secured by a parity lien on both the Utility Taxes and Franchise Fees (the "Pledged Revenues"1. Interest Rate: NOTE: The Village must indicate closing date and interest rate option selected at the time of acceptance. Bank Qualified Fixed Rate: 2.98%* Variable: One-Month LIBOR plus 73 basis points adjusted Village of North Palm Beach Commitment Letter ]0-2003.DOC _.----°°~~-• monthly. LIBOR is that rate as shown on the Telerate System, page 3750. Initial and resets will be based on LIBOR two business days prior to closing and resets. * The above fixed rate is an indication fixed rate based on current market conditions and subject to change. The Bank will set the rate three business days prior to closing at the then prevailing rate. However, should the City notify Wachovia Bank, National Association by 5:OOpm on October 27, 2003 that it is the loan provider subject to formal award by City's council, the rate option selected can be held until closing. Prepayment: Should the Village prepay during the life of the loan, the Village may incur a breakage fee as outlined in the attached Exhibit "A". Conditions The Village by official action, shall approve entering into this commitment and the loan facility described herein; and shall cause any borrowing under this facility to be designated as a "Qualified Obligation" pursuant to Section 265(b)(3)(B) Internal Revenue Code of 1 986, as amended. Should subsequent but currently unforeseen events cause any borrowing under this facility to be determined to be a "non-qualified" obligation pursuant to Section 2651b)(3)(B), Internal Revenue Code of 1986, as amended, the Bank shall adjust the interest rate on any outstandings hereunder so that it shall receive the same after tax yield equivalent contemplated as of the time of this commitment. 2. In the event that the interest on any drawing under this Commitment 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 any drawing under this Commitment is deemed to be included in the gross income of the Bank for federal or state income taxation, or in the event the Bank is unable to deduct any other amounts as a result of purchasing or carrying any borrowings resultant from the Commitment, or in the event of a change in the marginal tax rate applicable to corporations or the alternative minimum tax rate or in the method prescribed by federal income tax laws for calculating the alternative minimum tax to which the Bank may be subject, or in the event of any action which would otherwise decrease the after tax or taxable equivalent yield to the Bank, the interest on this Commitment shall be subject to a full gross up modification, as determined by the Bank and its counsel. In no event, however, shall the interest rate on this Commitment exceed the maximum rate permitted by law. 3. Additional Bonds Test: The Village may not issue any additional senior lien debt secured by the Pledged Revenues. The Village may not issue any additional parity _ debt secured by the Pledged Revenues unless the historic (for each of the last two years), Pledged Revenues cover maximum annual debt service on all existing and Village of North Palm Beach Commitment Letter 10-2003.DOC 12 prospective debt by 1.50x. 4. Debt Service Coverage Ratio: The Village's Pledged Revenues must cover annual debt service on all debt secured by the Pledged Revenues by 1.50x at all times. 5. For purposes of calculating maximum annual debt service or annual debt service, all variable rate borrowings secured by the Pledged Revenues shall be assumed to bear interest at the higher of 6% per annum or the actual interest rate borne by the variable rate debt for the month preceding the date of the calculation. 6. Legal opinions relating to this facility shall be in such form and content as are acceptable to the Bank and its counsel. The financing will require atax-exempt legal opinion from the Village's Bond Counsel. All costs relating to the preparation of documents and to otherwise complete this transaction shall be paid for by the Village. Bank counsel fees shall not exceed $2,000 to prepare all legal documents associated with this transaction. Documents shall be available for review at least 5 business days prior to closing. 7. On an ongoing basis, the Village agrees that it shall deliver to the Bank printed copies of, when available, or within 180 days of each fiscal year end, whichever is sooner, a Comprehensive Annual Financial Report, a Current Year Operating Budget as soon as it is completed and a Capital Improvement Plan and any other such information as reasonably requested by Bank. 8. This Commitment shall remain in full force and effect through 3:00 p.m., local time, November 21, 2003, at which time, if not accepted by execution of the acceptance clause below and mailed to the Bank at its 1950 West Hillsboro Blvd., Deerfield Beach, Florida 33442, office to my attention, this Commitment shall expire and shall not be enforceable by either the Bank or the Village unless extended by the Bank in writing. Unless extended by the Bank in writing, this facility must close on or prior to November 21, 2003 after which this commitment shall expire. 9. If the Bank chooses to waive any covenant, paragraph, or provision of this Commitment, or if any covenant, paragraph, or provision of this Commitment is construed by a court of competent jurisdiction to be invalid, it shall not affect the applicability, validity or enforceability of the remaining covenants, paragraphs or provisions. i 0. The preceding terms and conditions are not exhaustive. Any final commitment may include other covenants, terms and closing conditions as are customarily required by the Bank for similar transactions including but not limited to a Cross Default with like secured debt, Default Rate, Events of Default, and Acceleration upon Default. This Commitment Letter shall not survive closing. 11. The Village represents and agrees that all information provided to the Bank is correct and complete. No material adverse change may occur in, nor may any Village of North Palm Beach Commitment Letter 10-2003.DOC 13 adverse circumstance be discovered as to, the financial condition of the Village prior to closing. The Bank's obligations under this Commitment are conditioned on the fulfillment to the Bank's sole satisfaction of each term and condition referenced by this Commitment. 1 2. This Commitment supersedes all prior Commitments and proposals with respect to this transaction, whether written or oral, including any previous loan proposals made by the Bank or anyone acting within its authorization. No modification shall be valid unless in writing and signed by an authorized Officer of the Bank. This Commitment is not assignable and no entity other than the Village shall be entitled to rely on this Commitment. Wachovia Bank, National Association appreciates the opportunity to submit this Commitment to you and looks forward to your favorable response. Should you have any questions, please do not hesitate to contact me at (954) 596-6901 . Best Regards, WACHOVIA BANK, NATIONAL ASSOCIATION _____ -- e~ V~~ Paul Vincent Vice-President ACCEPTANCE The above Commitment is hereby accepted on the terms and conditions outlined therein by authority of the Governing Board of the Village: Fixed Rate: Variable Rate: Closing Date: By: Date: Its: V illaee of North Palm Beach Commitment Letter 10-2003.DOC 1 ~ EXHIBIT "A" In addition to principal, interest and any other amounts due under this Note, Borrower shall on demand pay to Bank any "Breakage Fee" due hereunder for each Break Event. "Break Event" means any voluntary or mandatory prepayment or acceleration, in whole or in part, of principal of this Note occurring prior to the date _ such principal would, but for that prepayment or acceleration, have become due ("Scheduled Due Date"). For each date on which a Break Event occurs ("Break Date"), a Breakage Fee shall be due only if the rate under "A" below exceeds the rate under "B" below and shall be determined as follows: Breakage Fee =the Present Value of IlA-BIxC- + LIBOR Breakage, where: A = The rate per annum equal tc the sum of (i; the bond equivalent yield (bid side) of the U.S. Treasur;~ security with a maturity closest to the Maturity Date as reported by the Wall Street Journal for other published sourcel on the date the Interest Rate of this Note was set ("Lock in Date"), plus (ii) the corresponding swap spread of Bank on the Lock in Date for a fixed rate payor to pay Bank the fixed rate side of an interest rate swap of that maturity, plus (iii) .25%. B = A rate per annum equal to the sum of (il the bond equivalent yield (bid side) of the U.S. Treasury security with a maturity closest to the Maturity Date as reported by the Wall Street Journal (or other published source) on the Break Date, plus (iil the corresponding swap spread that Bank determines another swap dealer would quote to Bank on the Break Date for paying to Bank the fixed rate side of an interest rate swap of the maturity. C = The sum of the products of (il each Affected Principal Amount for each Affected Principal Period, times (ii) the number of days in that Affected Principal Period divided by 360 (if this Note uses the Actual/360 Computation) or the actual number of days in the year (if this Note uses the Actual/Actual Computationl. "Affected Piincipa/ Amount" for an Affected Principal Period is the principal amount of this Note scheduled to be outstanding during that Affected Principal Period determined as of the relevant Break Date before giving effect to the Break Event on that Break Date, and for any prepayment, multiplying each such principal amount times the Prepayment Fraction. "Affected Principa/ Period" is each period from and including a Scheduled Due Date to but excluding the next succeeding Scheduled Due Date, provided that the first such period shall begin on and includes the Break Date. "L/BOR Breakage" is any additional loss, cost or expense that Bank may incur with respect to any hedge for the fixed rate of this Note based on the difference between the London interbank offered rate (for U.S. dollar deposits of the relevant maturity) available in the London interbank market at the beginning of the interest period in which the Break Date occurs and that which is available in that market on the Break Date. "Maturity Date" is the date on which the final payment of principal of this Note would, but for any Break Event, have become due. "Prepayment Fraction" is a fraction equal to the principal amount being prepaid over the principal amount of this Note outstanding immediately prior to that prepayment on the Break Date. "Present Value" is determined as of the Break Date using "B" above as the discount rate. In addition, a Break Event shall be deemed to occur hereunder if, on any date ("Borrowing Date") after the date hereof but prior to any acceleration of this Note, any advance of principal under this Note is scheduled to be made and that advance fails to be made on that Borrowing Date (whether due to Borrower's default, Borrower's failure to borrow, the termination of any loan commitment, any unsatisfied condition precedent, or otherwisel, in which case that Borrowing Date shall be a Break Date, the Affected Principal Amount for that Break Event shall be based on the amount of the failed advance, and the Borrower shall on demand pay to the Bank any Breakage Fee due hereunder for that Break Event. Breakage Fees are payable as liquidated damages, are a reasonable pre-estimate of the losses, costs and expenses Bank would incur in the event of any prepayment or acceleration of this Note, are not a penalty, will not require claim for, or proof of, actual damages, and Bank's determination thereof shall be conclusive and binding in the absence of manifest error. For any Break Event hereunder, the foregoing Breakage Fee provisions supersede any breakage "~ compensation agreement that Borrower and Bank may have executed with respect to this Note. Village of North Palm Beach Commitment Letter ]0-2003.DOC IS PROPOSAL FORA FOR _ THE VILLAGE OF NORTH PALM BEACH FOR EQUIPMENT PURCHASE and CERTAIN OTHER ITEiV1 FINANCING Name of the Institution: _ L1ar~v; a Rank N _ ~ _ Address: -1~~ C _ Ai i ~ t ra 1 i an Ave West Palm Beach FL 33401 Contact Person: paid ~'lnC'.Pnr Title: UIC.P PrP~idPnt Telephone#: 561-659-2362 Fax #: 561-650=2367 OPTIONS A. FIXED RATE Rate: 2.98% Term: 5years Fixed Rate Indexed To: NA Index Rate on October 1, 2003: NA Term: NA Estimated Annual Payment (in arrears): $50,142. ~~ Additional Information (if any): F~Pd rare G,i.1.,11 hP hP~d „nr; 1 rlncing 1f ~.?~~~,,,~.; ~ ; c nnrl f; Pd~~ aWaY~ h;u-lase cif 1=iussingss on ~rrober 27, 2003 B. VARIABLE RATE Rate: 1.85% Term: 5 years Variable Rate Indexed To: ~~ d~~, T TRnR + 7~ has_is~nints Index Rate on October 1, 2003: 1 .121 °~ Estimated Annual Payment (in arrears): X46 X000.00 nl us accrued ; nrPrP~r .Additional Information (if any): Wi rh vari ahl P rare ~ rruc t„r_P rho r; ncipal will bP dtiP in ernial annual installment. C OTHER OPTION (if any) Rate: N.A. Estimated Annual.Payznent (in arrears):- Additional Information,.(if any): COST The Village will be responsible for the following out-of-pocket fees or costs: ....ITEMS Al'~10U~1T 1. Bank Counsel_,Fees $2,000.00 2. 3. Y. 5. Term: 16 OTHER INFORMATION IF .ANY 1. Please see attached letter _ 2. 3. 4. 5. INFORMATION & DOCUMENTATION (Village) The Village is responsible to provide the following documentation and information to process the closing of the loan: 1. Please see attached letter 2. 3. 4. 5. INFORMATION & DOCUMENTATION (Institution) The Institution is providing the following documents and forms that are necessary to process the loan: I. P1 PacP cPr~ attarhArl lr~t~~~ 2. 3. 4. 5. This proposal expires (date): 1 /24/2003 (Prefer at least 60 davs) Attest: Signature: ~~~ ~ ~~ ~~ - '~ /. ,, ~ ~ _ ~ ~, rj ' Pro(ptosarl: L Signature: !~c~,~,t,~ 1' ~ ~.~~ tai( Name: F~ ; ~aL~eth n~~Pr Name: Paul F. Vincent Title: Vice President Title: Vice President Date: 10/24/2003 Date: 10/24/2003 17