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HomeMy WebLinkAbout1999 09 27 Regular Item F COMMISSION AGENDA ITEM F CONSENT INFORMATIONAL PUBLIC HEARING REGULAR XX September 27, 1999 Meeting MGRrv--/DEPT Authorization REQUEST: The City Manager requests the City Commission approve Resolution No. 897 authorizing the awarding the sale of Special Assessment Revenue Bond Anticipation Notes Series 1999 not to exceed $2,500,000 for the Tuscawilla Lighting and Beautification District to Bank of America, N.A., D!i3/A NationsBank, N.A. PURPOSE: The purpose of this Agenda item is to approve Resolution No. 896 authorizing the awarding the sales of Special Assessment Revenue Bond Anticipation Notes, Series 1999 not to exceed $2,500,000 for the funding of improvements within the Tuscawilla Lighting and Beautification District to Bank of America, N.A., D/B/A NationsBank N.A. CONSIDERATIONS: 1. On August 91\ 1999 the Commission approved the Final Resolution creating the Assessment District and Capital Improvement budget. 2. Long term financing is required to pay for the capital improvements. 3. Agenda "E" approves the issuance of 5 year Bond Anticipation Notes to finance improvements. This item (Item "F") authorizes the sale of the BAN'S to Bank of America based upon negotiations conducted by the Financial Advisor and Bond Underwriters. RECOMMENDATION: Recommendation is Commission approval of Resolution No. 897. ATTACHMENTS: Resolution No. 897 COMMISSION ACTION: I RESOLUTION NO. 897 A RESOLUTION OF THE CITY OF WINTER SPRINGS, FLORIDA AWARDING THE SALE OF $2,250,000 CITY OF WINTER SPRINGS, FLORIDA SPECIAL ASSESSMENT REVENUE BOND ANTICIPATION NOTES, SERIES 1999 (TUSCA WILLA LIGHTING AND BEAUTIFICATION DISTRICT) TO BANK OF AMERICA, N.A., D/B/A NATIONSBANK, N.A.; APPOINTING A REGISTRAR AND PAYING AGENT; APPROVING GARDNYR MICHAEL CAPITAL, INC., AS PLACEMENT AGENT; AUTHORIZING THE EXECUTION AND DELIVERY OF ALL DOCUMENTS REQUIRED AS A PREREQUISITE OR PRECONDITION TO ISSUANCE OF THE NOTES; DESIGNATING THE NOTES AS BANK QUALIFIED; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Commission of the City of Winter Springs, Florida (the "Issuer") has, pursuant to its Resolution No. 896 adopted on September 27, 1999 (the "Resolution") authorized the issuance of its not exceeding $2,300,000 Special Assessment Revenue Bond Anticipation Notes, Series .1999 (Tuscawilla Lighting and Beautification District) (the "Notes") to acquire and construct the Project (as defined in the Resolution); and WHEREAS, the Issuer now desires to approve the sale of its Notes in furtherance thereof to appoint a Registrar and Paying Agent and to make certain other determinations concerning the Notes. NOW, THEREFORE, BE IT RESOLVED BY THE CITY OF WINTER SPRINGS, FLORIDA, AS FOLLOWS: Section 1. The sale of $2,250,000 City of Winter Springs, Florida Special Assessment Revenue Bond Anticipation Notes, Series 1999 (Tuscawilla Lighting and Beautification District), to Bank of America, N.A., d/b/a NationsBank, N.A. (the "Purchaser") upon the terms and conditions set forth in the Purchaser's letter dated September 2, 1999 and any other documents attached hereto and incorporated by reference is hereby approved. The City Commission hereby finds that a negotiated sale of the Notes to the Purchaser is in the best interests of the Issuer because of prevailing market conditions, and because the nature of the security for the Notes and the sources of payment of debt service on the Notes. Section 2. The Notes shall be dated their date of delivery to the Purchaser, shall bear interest at the rate, and be subject to certain other terms as set forth in the form of the .Note attached hereto and as otherwise approved by the officers of the Issuer executing the Notes such approval to be conclusively evidenced by such officers execution of the Notes. Section 3. The Notes shall be issued under and secured by the Resolution and shall be executed and delivered by the Mayor, Vice Mayor and attested by the City Clerk or Assistant City Clerk and such execution and delivery shall be conclusive evidence of the approval thereof by such officers. Section 4. the Notes. The City Clerk is hereby appointed to serve as Registrar and Paying Agent for Section 5. Gardnyr Michael Capital, Inc. has assisted the City in the placement of the Note and their services on behalf of the City as placement agent are hereby approved. ORL#512380.04 Section 6. The Mayo;, the City Clerk, the City Manager, the City Attorney, the City's Finance Director, Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., as Bond Counsel and First Southwest Company as the City's financial advisor, are hereby authorized and directed to execute any and all certifications or other instruments or documents as required by the Resolution, this Resolution or any other document referred to above or below as a prerequisite or precondition to the issuance of the Notes and any such representation made therein shall be deemed to be made on behalf of the Issuer. All action taken to date by the officers of the Issuer in furtherance of the issuance of the Notes is hereby approved, confirmed and ratified. Section 7. The Issuer designates the Notes as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Intemal Revenue Code of 1986, as amended (the "Code"). The Issuer does not reasonably anticipate that the Issuer, any subordinate entities of the Issuer, and issuers of debt that issue "on behalf' of the Issuer, will during calendar year 1999 issue more than $10,000,000 of "tax-exempt" obligations, exclusive of those obligations described in Section 265(b)(3)(C)(ii) of the Code. Section 8. This Resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED this 27th day of September, 1999. (SEAL) CITY OF WINTER SPRINGS, FLORIDA MyJ#f Attest: k~ - 1\ 'I . ~.L ~ City Clerk . ---- .~ Approved as to form and legal sufficiency: ~ I ~,~ City Attorney ORL#512380.04 ~ )99 WED 11: 10 FAX /. ~~ ~999' 12:~-;R ~I :0N5B~NK DRL ~Al BaDking n.G-8O().01-07 S90 Nwth Ota.ngu A"'1lIIue. Suite 700 Orlando. FL 82801-1640 ~002 487 428 2819 TO 9~--l101 P.02/06 1 NalllonsBank September 2, 1999 Mr. Michael C. Stewart Gardnyr Michael Capital, Inc. 2281 Lee Road, Suite 104 Winter P8l'k, Florida 82789 Dear Mr. Stewart: As we have previously discussed, NatioDsBank, N.A., ("NationsBank") is interested in extending credit to The City of Winter Springs. Enclosed is a Terms Sheet outlining the provisions of a loan. wh.ich NationsBank will consider to make to the City. . , : This letter and the attached term sheet do not cohstitute a commitment on the part of NatioDsBank to make the proposed loan and are mtended as an outline only and do not purport to summarize all of the terms. conditions; CDvenants. representations, warranties and other provisions which would be contained in definitive legal document.ation for the proposed transaction. This proposal is subject to the negotiation, t.o the satisfaction of NationsRank and its counsel, of all of the issues outlined in the term sheet as well as internal credit approval and completion of due diligence by NationsBank. If any issues arise regarding the items outlined in the terms, the resolutions we negotiate may be subject to further NationsBank approval. If you find the proposed terms and conditions generally acceptable, please indicate your mtcrest in pursuing this transaction by contacting me at 407-420-2864. When I receive such an indication from you, I will submit the approval documents to complete the underwriting and due diligence. 8M -1J.~ Mal"k W. lrby Commercial Banking Officer ~/99 WED 11:12 FAX r. . . !:EP 07 1999 08: 12 FR tJ,~NSEANK COMM. E1ANK407 ,~20 2886 TO ge'~101 ,. 141008 P.02/elS TERMSANDCONDDnONS i BORROWQ: The City of Winter Springs (Tuscawilla Lighting & Beautification Dis~ct) J...OAN AMOUNT; Appro,omately $2.400,000 LOAN ~E: Options: 1) 3 year Revolving Line I Bond Anticipation Note 2) 3 year Fixed Rate I 3) S year Fixed Rate TERMS: Option,...;. 1) Interest paid on a semi-annual basis, with all Principal a.nd Accrued Interest pai~ at maturity (3 years from closing date). ; 2) Interest paid on a semi. annual basis, with discretionary Principal reductions allowable, and all Principal ilnd Accroed Interest paid at maturity (3 years from closing date). 3) Interest paid on a semi.annual basis, with discretionary Principal reductions allowable. and all Principal and Accrued Interest paid at maturity (S years from closing date). . tNTERESTRA'B: Options: 1) Three (3) vear Floating Rate!: Floating rate based on 47.00% of NationsBank's Prime Rate, varying from time to time on day of each change in NationsBank's Prime Rate. Based on the current inde}( rate of 8.25%, this would equate to a tax-exempt rate of ~%. 2) Three (3) year Fixed Rate*: rev 1196 ~/99 WED 11:12 FAX sSP 07 1999 08:13 FR ~~SBANK COMM.BRNK407 420 2B86 TO 95;~01 The intereSt rate will be fixed at ~% of the yield on the Oetobe! 2. 2002 U. S. Treasury Bond (5.86% yield) as quoted in the wall Street Journal at that time (On September 3. 1999 this rate would equate to ~%). 3) Five (5) veal: Fixed Rate~ The interest rate will be fixed at 69.22% of the yield on the November 4,2004 U. S. Trea5ury Bon.d (6.14% yield) as quoted in the Wall Street Journal at that time (On September 3. 1999 this rate would equate to 4.25%). . Note: These rate options are dependlmt on the loan being a qualified taX-exempt obligation under Section 265 (b) (3) of the Internal Revenue Code of \986 and all necessary datum' t effect. If tax-e,c.empt statuS of the Borrower or loan is revoked, the loan will become immediately due and payable unless the Bank exercises its option to hold the commitment at the taxable rate- The interest rate shall be adjusted for any negative tax consequences in the manner set faIth in the Bank's "standard gross" up provision. . COLLATERAL: The subject loan to be secured by a Id priority lien oj- the portion of non-ad valorem assessment revenues placed on tbe tax. roll and dedicated to capital. PREPAYMENT: No prepa.yment penalties shall be imposed provided that prepayment on the note is made from special assessments, other operating revenue sources and/or bond proceeds. If prepayment occurs from another institution. a prepayment penalty of 1 % of the total amount outstanding 00 the note shall be assessed. USE OF PROCEEDS: To consnuct improvement to entranceways, medians and street signage within the Tuscawilla Lighting & Beautification District. REPRESENTA lIONS AND W ~TIES: TQY 7/96 ~vvo P.03/05 js/99 WED 11: 13 FAX . SEP 07 1999 00: 13 FR "* ONSBRNK COMM. BANI<407 420 2686 TO ~e21a1 @OlO . P.04/135 JM7-(~/6-( , ~/O- ( Customary, Including confinnation of legal stilms and tax~free sta.tus and authority; execution, delivery and perfonnance of loan dqcument9 do not violate law or existing agreements; no litigation except as disclosed to Bank; ownership of property; payment of J taxes; no material adverse change in financial condition or operations since S~embex i/ 30.1998; principal place of business; compliance with environmental laws and continuation of representations and warranties. . FINANCIAL COVENANTS: The loan documentation will contain the fonowing financial covenants: 1. In the event that any exCeSS fimd. are Collected from the special .ssessment, / Borrower agrees to apply tbese amounts to the loan. AFFIRMATIVE COyj:NANTS: Customary, including delivery of financial statements, reports and other information requested by Bank; maintenance of insurance; continuation of business and maintenance of existence; compliance with laws; payment of taXes; maintenance of property and notice of environmental claims. REPORTING REOUIREMENts.: 1. Annually, within two hundred ten (210r days following the end of tbe Borrower's fiscal year) financial statements including a balance sheet and income statement prepared on a an audited basis by an independent cenified public accountant, including statements of financial ccndition, cash flows and changes in equity. / j 2. Annually, by November 15th of each year, a copy of the Annual budget for the upcoming year for the City of Winter Springs. pOCUMENTS: The obligation of the Borrower hereunder shall be evidenced by a Promissory Note, Loan Agreement and such other documents and assurances as the Bank may request from Borrower and its officers in order to make the Loan in a form satisfactory to the Bank and its counsel. xm: Subject to the completion of a Y2K credit risk assessment acceptable to the Bank. CONDITIONS FOR CLOSING: rev 7196 /~!l!.9 WED 11: 13 FAX 'iEP Iil? 1999 "", 13 FR &NSBONK Ciln'I.lliN<4Iil?! 42li1 2886 TO .,8, " ' .' ,. ~Oll P.0S/0S 1. Borrower shall submit to NationsBank an op~ion of Borrower's counsel as to legal entity, authority to execute documents and ?x-ii'ee status of interest and that the indebtedness constitutes a qualified tax c~e~pt obUgation within the meaning of Section 265 (b) (3) of the Internal Revenue C9de of 1986. i 2. All documents pertaining to the closing shin be prepared by the City of Winter Spring's counsel and reviewed and approved by NationsBank's counsel. Foley &:. Lardner. The fees to review the documents, shall not exceed $1,750 and shall be incurred by the Borrower. BANK CONTACTS: Marlsa Carnevale-Henderson Vice President I Client Manager Phone: 407-420-2799 Fax: 401-420-2886 I Mark w. Irby Credit Products Officer I Phone: 407-420-2864 Fax! 407-420-2886 Address for both: NationsBank. 390 N. Orange Avenue Orlando, FL 32801 EXPIRATION DATE: These terms shall expire on September 30, 1999 if not agreed upon by Borrower at that time. . rev 7 f96 No. R-1 $2,250,000 UNITED STATES OF AMERICA ST ATE OF FLORIDA COUNTY OF SEMINOLE CITY OF WINTER SPRINGS SPECIAL ASSESSMENT REVENUE BOND ANTICIPATION NOTE, SERIES 1999 (TUSCA WILLA LIGHTING AND BEAUTIFICATION DISTRICT) MATURITY DATE: September 30,2004 INTEREST RATE: DATED DATE: October 1, 1999 Registered Owner:' Bank of America, N.A. d/b/a NationsBank, N.A. Principal Amount: TWO MILLION TWO HUNDRED FIFTY THOUSAND AND NO/I00 DOLLARS KNOW ALL MEN BY THESE PRESENTS that the City of Winter Springs, Florida (hereinafter called the "Issuer") for value received, hereby promises to pay to the order of the Registered Owner identified above or registered assigns, as herein provided, on the Maturity Date identified above, upon the presentation and surrender hereof at the office of the City Clerk of the Issuer, solely from the revenues hereinafter mentioned, the Principal Amount identified above in any coin or currency of the United States of America which on the date of payment thereof is legal tender for the payment of public and private debts, and to pay, solely from said sources, to the Registered Owner hereof by check or draft or wire transfer transmitted to the Registered Owner at his address as it appears on the registration books of the Issuer as it appears on the 15th day of the calendar month preceding the applicable interest payment date, interest on said Principal Amount at the Interest Rate per annum (computed on the basis of a 360-day year of twelve 30-day months) identified above (subject to adjustment as hereinafter provided) on each April 1 and October 1 commencing April 1, 2000 from the interest payment date next preceding the date of registration and authentication of this Note, unless this Note is registered and authenticated as of an interest payment date, in which case it shall bear interest from said interest payment date, or unless this Note is registered and authenticated prior to Aprill, 2000, in which event this Note shall bear interest from October 1, 1999. In the event of a Determination of Taxability (as hereinafter defined), the interest rate on this Note shall be changed to the Taxable Rate (as hereinafter defined) effective retroactively to the date on which such Determination of Taxability was made. Immediately upon a Determination of Taxability, the Issuer agrees to pay to the holder of this Note the Additional Amount (as defined herein). "Additional Amount" means (i) the difference between (A) interest on this Note for the period commencing on the date on which the interest on this Note (or portion thereof) loses its tax- exempt status and ending on the earlier of the date such Note ceased to be Outstanding or such adjustment is no longer applicable to such Note (the "Taxable Period") at a rate per annum equal to the Taxable Rate as adjusted from time to time on the same dates and in the same manner as the interest on this Note was or would be otherwise paid, and (B) the aggregate amount of interest payable on this Note for the Taxable Period without considering the Determination of Taxability, plus (ii) any penalties and interest paid or payable by such Noteholder to the Internal Revenue Service be reason of such Determination of Taxability. "Determination of Taxability" shall mean the circumstance of interest paid or payable on this Note becoming includable for federal income tax purposes in the gross income of the Noteholder as a consequence of any act, omission or event whatsoever and regardless of whether the same was within I or beyond the control of the Issuer. A Determination of Taxability will be deemed to have occurred upon (a) the receipt by the Issuer or a Noteholder of an original or a copy of an Internal Revenue Service Technical Advice Memorandum or Statutory Notice of Deficiency which holds that any interest payable on this Note is includable in the gross income of such Noteholder; (b) the issuance of any public or private ruling of the Internal Revenue Service that any interest payable on this Note is includable in the gross income of the Noteholder; or (c) receipt by the Issuer or a Noteholder of an opinion of Bond Counsel acceptable to the Issuer and the Noteholder that any interest on this Note has become includable in the gross income of such Noteholder for federal income tax purposes. For all purposes of this definition, a Determination of Taxability will be deemed to occur on the date as of which the interest on this Note is deemed includable in the gross income of the Noteholder. A Determination of Taxability shall not occur solely from the fact that such interest is taken into account in determining adjusted current earnings for the purpose of the alternative minimum income tax imposed on corporations. "Taxable Rate" means the interest rate on this Note multiplied by 1.5. (a) The interest rate on this Note shall also be subject to adjustment as described below. The holder of this Note shall promptly notify the Issuer in writing of any such adjustments. Such adjustments shall become effective as of the effective date of the event causing such adjustment. Such adjustments may be retroactive. The Noteholder shall certify to the Issuer in writing the additional amount, if any, due to the Noteholder as a result of such an adjustment. (b) The interest rate on this Note shall be adjusted as follows: (i) Alternative Minimum Tax Where Interest on this Note is a Direct Tax Preference Item. If the Noteholder or its holding company pays an alternative minimum tax in any tax year and the interest on this Note is a direct tax preference item under Section 57(a)(5) or any successor provision of the Code then the interest rate on this Note for the period during such tax year in which interest is accruing on this Note shall be increased during such accrual period by an amount equal to (A - B) x C where: (A) A equals the interest rate on this Note expressed as a percentage; (B) B equals the Noteholders's Adjusted Cost of Funds; and (C) C equals the maximum marginal rate of the alternative minimum tax expressed as a decimal (currently .20). Noteholder's Adjusted Cost of Funds shall mean the fraction (expressed as a percentage), determined by the Noteholder, the numerator of which is the total interest expense of the Noteholder for each calendar year and the denominator of which is the total average adjusted bases of all assets of the Noteholder during the calendar year as determined under Section 265(b )(2)(B) of the Code or any successor provision thereto. (ii) Alternative Minimum Tax Where Interest on this Note is an Indirect Tax Preference Item. If the Noteholder or its holding company pays an alternative minimum tax in any year and the interest on this Note is not a direct tax preference item under Section 57(a)(5) or any successor provision of the Code, but is an indirect tax preference item because of the application of Section 56(g) or any successor provision of the Code then the interest rate on this Note for the period during such tax year in which interest is accruing on this Note shall be increased during such accrual period by an amount equal to (A - B) x C where: 2 (A) A equals the interest rate on this Note expressed as a percentage; (B) B equals the Noteholder's Adjusted Cost of Funds; and (C) C equals 75% of the maximum marginal rate of the alternative minimum tax expressed as a decimal, or, if the Code is amended to effectively increase or decrease the percentage of interest on this Note which is subject to such indirect alternative minimum tax, then C shall equal the percentage of such interest which is effectively subject to such indirect alternative minimum tax. (iii) Loss of Federal Income Tax Deduction for State Income Taxes. If the federal income tax deduction for state income taxes paid on the interest payments received under this Note during any period is reduced because of any change in the tax laws or regulations and the Noteholder is then subject to payment of state income tax on the interest on this Note then the interest rate on this Note shall be increased during such period by an amount equal to A x B x C x D where: (A) A equals the fraction (expressed as a decimal) of the total state income tax disallowed as a result of such tax law change; (B) B equals the rate of the applicable state income tax (expressed as a decimal); (C) C equals the maximum federal corporate tax rate then in effect for the Noteholder (expressed as a decimal); and (D) D equals the interest rate on this Note (expressed as a percentage). (iv) Partial Taxability. If the interest payments received under this Note during any period become partially taxable to the extent not otherwise taxable on the date of issuance thereof because of any change in the tax laws or regulations, then the interest rate on this Note shall be increased during such period by an amount equal to (A - B) x C where: (A) A equals the Taxable Rate (expressed as a percentage); (B) B equals the interest rate on this Note (expressed as a percentage); (C) C equals the fraction of the interest rate on. this Note which has become taxable as the result of such tax change (expressed as a decimal). (v) Other Changes in Tax Laws. If the tax laws or regulations are amended to cause the interest on this Note to become taxable to the extent not otherwise taxable on the date of issuance thereof, to be subject to a minimum tax or an alternative minimum tax or to otherwise decrease the yield on this Note to the Noteholder (directly or indirectly, other than a change described in (i) through (iv) above or because of a Determination of Taxability), then the interest rate on this Note shall be adjusted to cause the yield on this Note to equal what the yield on this Note would have been in the absence of such change or amendment in the tax laws or regulations. If the tax laws or regulations are amended to increase the yield on this Note to the Noteholder, then the Noteholder shall adjust the interest rate on this Note to cause the yield on this Note to equal what the yield on this Note would have been in the absence of such change or amendment in the tax laws or regulations. 3 (c) The above adjustments shall be cumulative, but in no event shall the interest rate on this Note exceed the maximum rate permitted by law. Interest on this Note and all other tax rates and interest rates are expressed as annual rates. However, proper partial adjustment shall be made if the tax law change is effective after the first day of the Noteholder's tax year or if interest on this Note does not accrue for the entire tax year of the Noteholder. Adjustments which create a circular calculation because the interest rate on this Note is affected by the calculation shall be carried out sequentially, increasing the interest rate on this Note accordingly in each successive rate on this Note, until the change on the interest rate on this Note caused by the next successive calculation of the adjustment is de minimis. If more than one of paragraphs numbered (i) through (v) above applies, then the interest rate on this Note shall be adjusted in the order in which listed above. . Notwithstandin~ the other provisions set forth herein, to the extent any law or regulation enacted subsequent to the repayment of this Note retroactively reduces the Noteholder's yield on this Note, the provisions regarding adjustments to interest rates shall survive the repayment on this Note for a period not to exceed two (2) years after such repayment. (d) To the extent an adjustment to the interest rate on this Note is not effected within three (3) months of the event giving rise to the adjustment, the additional interest due as a result of such adjustment shall be paid with interest thereon compounded monthly at the rate which is equal to the interest rate on this Note; provided, however, in no event shall such interest rate exceed the maximum rate permitted by law. Subject to the provisions of (a) hereof, all unpaid amounts determined to be owing as a result of such calculation shall be due and payable within ten (10) days after delivery of written notice of the amount of such adjustment, and shall be paid to the Noteholder of record during the period to which the adjustment relates. This obligation shall survive the payment and cancellation of this Note. (e) The Issuer hereby covenants to pay any additional payments due to the Noteholder pursuant to the provisions hereof from legally available funds of the Issuer derived from any source whatever which are legally available to make the payments required herein. Such covenant and agreement on the part of the Issuer to make such payments shall be cumulative to the extent not paid and shall continue until legally available funds in amounts sufficient to make all required payments hereunder shall have been actually paid. (f) In the event the maturity of this Note is accelerated or prepaid in accordance with the provisions of the Resolution, then such amounts that constitute payments of interest, together with any costs or considerations which constitute interest under the laws of the State of Florida, may never exceed an amount which would result in payment of interest at a rate in excess of (i) the applicable maximum rate of interest allowed by Sections 215.84 and 159.825(4), Florida Statutes, as amended, or (ii) the nonusurious interest allowed by the laws of the State of Florida or the United States of America to the extent applicable, as presently in effect and to the extent such increase is allowable by such laws; and excess interest, if any, shall be cancelled automatically as of the date of such acceleration, or, if theretofore paid, shall be credited on the principal amount of this Note unpaid, but such crediting shall not cure or waive any default under the Resolution, as hereinafter defined. The Issuer acknowledges and agrees that its timely and complete compliance with all of the terms and conditions contained in this Note is material consideration for the loan made hereunder. The Issuer's failure to timely and completely comply with each and every term and condition contained in this Note is, at the Noteholder's. option, an event of default under this Note. In addition to all other rights and remedies tNoteholder has, the Noteholder may, in its sole discretion, elect to waive such default or to forbear to exercise its rights and remedies for such default and may charge the Issuer a fee for agreeing to do so. 4 This Note is one of an authorized issue of Notes in the aggregate principal amount of $2,250,000 of like date, tenor and effect, issued to acquire, construct and erect certain capital improvements within the Tuscawilla Lighting and Beautification District located within the jurisdiction of the Issuer, all in full compliance with the Constitution and Statutes of the State of Florida, including particularly Chapter 166, Part II, Florida Statutes, Section 215.431, Florida Statutes, the Charter of the Issuer, and Resolution No. 895 duly adopted by the Issuer on September 27, 1999 (the "Bond Resolution") and Resolution No. 896 duly adopted by the Issuer on September 27, 1999, as supplemented (hereinafter collectively called the "Resolution") and is subject to all the terms and conditions of such Resolution. All capitalized undefined terms used herein shall have the meaning set forth in the Resolution. Pursuant to the Bond Resolution the Issuer has authorized the issuance of not exceeding $2,500,000 of its Special Assessment Revenue Bonds, Series 1999 (Tuscawilla Lighting and Beautification District) (the "Bonds"). The Notes are being issued in anticipation of the receipt by the Issuer of the proceeds from the sale of the Bonds. This Note is payable solely from and secured by a lien upon and pledge of the Pledged Revenues (as defined in the Resolution) including the proceeds derived from the sale of the Bonds or such other bonds as the Issuer has covenanted to in good faith endeavor to issue, if the terms, limitations and conditions for the issuance of the Bonds provided for in the Bond Resolution cannot be met immediately preceding the date of proposed issuance of the Bonds. The Noteholder, in its sole discretion in the event of a Determination of Taxability or upon the happening of an event which the Noteholder reasonably believes adversely affects its lien on the Pledged Revenues, shall have the option to tender this Note in its entirety to the Issuer and the Issuer shall have the obligation to purchase this Note upon such tender at the price of par plus accrued interest to the purchase date. To exercise this option, the Noteholder shall give written notice to the City Manager at least sixty (60) days in advance of the date of such tender. This Note is subject to redemption in whole or in part on October 1 of each year from amounts on deposit in the Redemption Account at the redemption price of par plus the unpaid interest accrued in the amount of principal so prepaid to the date of such prepayment The Issuer may prepay and redeem this Note as a whole or in part, at any time or from time to time, without penalty or premium (unless such redemption is effected with proceeds of a borrowing from a financial institution in which event such prepayment shall be with a premium of one percent (1 %) of the principal amount redeemed), by paying to the Noteholder all or part of the principal amount of this Note, together with the unpaid interest accrued on the amount of principal so prepaid to the date of such prepayment. 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 Owner of this Note that such Noteowner 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. It is further agreed between the Issuer and the Owner of this Note that this Note and the indebtedness evidenced hereby shall not constitute a lien or on any property of or in the Issuer, but shall constitute a lien only on the Pledged Revenues including the proceeds derived from the sale of the Bonds or such other bonds as the Issuer has covenanted to in good faith endeavor to issue, if the terms, limitations and conditions for the issuance of the Bonds provided for in the Bond Resolution 5 cannot be met immediately preceding the date of proposed issuance of the Bonds all in the manner provided in the Resolution. Neither the members of the City Commission of the Issuer nor any person executing this Note shall be liable personally hereon or be subject liability or accountability by reason of the issuance hereof. It is certified that this Note is authorized by and is issued in conformity with the requirements of the Constitution and Statutes of the State of Florida. This Note is and has all the qualities and incidents of a negotiable instrument under the laws of the State of Florida, but may be transferred by the Noteowner hereof in person or by his attorney or legal representative at the office of the Registrar but only in the manner and subject to the conditions provided in the Resolution and upon surrender and cancellation of this Note. This Note shall not be valid or become obligatory for any purpose or be entitled to any benefit or security under the Resolution until it shall have been authenticated by the execution by the Registrar of the certificate of authentication endorsed hereon. IN WITNESS WHEREOF, the City of Winter Springs, Florida, has issued this Note and has caused the same to be signed by its Mayor, and countersigned and attested to by its City Clerk (the signatures of the Mayor, and the City Clerk being authorized to be facsimiles of such officers' signatures), and its seal or facsimile thereof to be affixed, impressed, imprinted, lithographed or reproduced hereon, all as of the 1st day of October, 1999. CITY OF WINTER SPRINGS, FLORIDA (SEAL) Mayor ATTESTED AND COUNTERSIGNED: City Clerk 6 CERTIFICATE OF AUTHENTICATION This Note is one of the Notes issued under the provisions of the within mentioned Resolution. Date of Authentication: CITY OF WINTER SPRINGS, FLORIDA, Registrar, as Authenticating Agent By: City Clerk 7 ASSIGNMENT AND TRANSFER For value received the undersigned hereby sells, assigns and transfers unto (Please insert Social Security or other identifying number of transferee) _ the attached Note of the City of Winter Springs, Florida, and does hereby constitute and appoint , attorney, to transfer the said Note on the books kept for Registration thereof, with full power of substitution in the premises. Date NOTICE: No transfer will be registered and no new Notes will be issued in the name of the Transferee, unless the signature to this assignment corresponds with the name as it appears upon the face of the within Note in every particular, without alteration or enlargement or any change whatever and the Social Security or Federal Employer Identification Number of the Transferee is supplied. Signature Guaranteed by (member firm ofthe New York Stock Exchange or a commercial bank or a trust company.) By: Title: 8