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HomeMy WebLinkAbout2004 02 23 Regular 503 Line of Credit. doc COMMISSION AGENDA ITEM 503 Consent Information Public Hearing Regular X 'J-- MGR. j /Dept. February 23, 2004 Meeting REQUEST: The City Manager requesting approval of Resolution 2004-10 authorizing the Mayor and City Manager to execute a non-revolving line of credit loan agreement to finance municipal projects, not to exceed $2,500,000. PURPOSE: This request is needed to get Commission approval of a resolution authorizing the Mayor and City Manager to execute a line of credit to be used to finance certain municipal projects. CONSIDERATION: On December 8, 2003 the Commission gave consent to issue an RFP for a bank qualified non-revolving line of credit to finance municipal projects. An RFP was sent out and two out of three banks solicited responded (see attached Summary ofRFP Responses). The recommendation 'of our financial advisor, David Moore of The PFM Group, is to accept the proposal of SunTrust Bank, N.A. based on favorable ranking on the following criteria: ./ Lowest overall borrowing cost to the City, ./ Lower legal fees, ./ Their past experience with similar transactions. The proposed Loan Agreement (attached) between SunTrust Bank, N.A. and the City of Winter Springs indicates an available balance not to exceed $2,500,000 with a final maturity date of June 1,2018. The interest rate will be the one month LIBOR rate plus 1.05%, divided by 1.40. The note allows for prepayment without penalty. Resolution #2004-10 is needed to authorize the Mayor to execute and deliver, and the City Clerk to attest, on behalf of the City, the Loan Agreement and Note, attached and to authorize the Mayor, City Manager, City Attorney, City Clerk and City Finance Director to execute and deliver such documents as may be necessary for the full, punctual and complete performance of the terms contained in the agreement. A list ofthe proposed municipal projects is incorporated with the Loan Agreement and shown below: Proiect Parker Property Improvements Expansion of City Hall Expansion of Police Building New Public Works Facility Fire Truck Wincey Property Purchase Amount $100,000.00 600,000.00 100,000.00 600,000.00 300,000.00 200,000.00 Source of Payments Park Impact Fees Public Building Impact Fees Public Building Impact Fees Public Building Impact Fees General Fund Park Impact Fees Initial Draw $1,900,000.00 Other - to be determined 600,000.00 $2,500,000.00 Total Loan FUNDING: N/A RECOMMENDATIONS: Approval of Resolution #2004-l0 ATTACHMENTS: Summary ofRFP Responses provided by David Moore, The PFM Group Resolution #2004-10 Loan Agreement Agenda Item 206 from December 8, 2003 COMMISSION ACTION: ~ :::::: PFM. The PFM Group Public Finandal Management, Inc. PFM Asset Management LLC PFM Advisors Lincoln Plaza Suite 1170 300 S. Orange Avenue Ortando,FL 32801-3470 407 648-2208 407-648-1323 fax www.pfm.com ] anuary 5, 2004 Memorandum To: From: Ron McLemore David Moore Rebecca Peterson Re: $2.s:MM Bank Loan, Series 2004 Summary of RFP Responses In its capacity as the financial advisor to the City of Winter Springs, Florida (the "City"), Public Financial Management, Inc. ("PFM") has revie\ved the proposals received for the City's "Request for Proposals for Capital Improvement Revenue Note, Series 2004 Bank Qualified Non-Revolving Line of Credit & Term Loan." Out of the three banks solicited, proposals were received from Bank of America, N.A. and SunTrust Bank, N.A. A summary of each of the two (2) proposals is below: Bank of America SunTrust Bank Line of Credit Variable Rate 63.7% of l-mo. LIB OR + .90%, (l-mo LIBOR + 1.05%)/1.40%, Formula reset monthly reset monthly @ 12/23LIBOR (1.14125%) @ 1.50% LIBOR 1.63% 1.57% @ 2.00% LIBOR 1.86% 1.82% @ 3.00% LIB OR 2.17% 2,18% 2.81% 2.89% Term Loan Fixed Rate Corresponding variable-to-fixed 7 -year Swap Rate + swap rate on date of conversion. 1.00%)/1.40% Currently = 3.93% Currently = 3.66% Prepayment None if Term Loan kept at a None if Term Loan kept a a variable rate. Subject to Swap variable rate. Subject to Swap termination "penalty" or termination "penalty" or "benefit" subject to interest rates "benefit" subject to interest rates at the time of termination. at the time of termination. Legal Counsel Fees $2,500 $2,000 Onerous Covenants None. Additional parity debt secured by the covenant to budget & appropriate shall be subject to revenue coverage test of l.5x maximum annual debt service. ~ ~PFM' Ron McLemore January 5, 2004 Page 2 Recommendation In a low interest rate environment (i.e. the current environment) the variable rate formula and fixed rate formula for interest provided by SunTrust Bank provide a lower borrowing cost than that of Bank of America. In a high interest rate environment, the variable rate formula provided by Bank of America provides a lower borrowing cost than that of SunTrust Bank, but the fixed rate formula still calculates higher than that of SunTrust Bank. Therefore, PFM recommends the City select SunTrust to provide the $2.5MM Capital Improvement Revenue Note, Series 2004. The proposal that was received from SunTrust Bank, N.A. provides the most favorable proposal to the City based on: . Lowest overall borrowing cost to the City on a variable rate and fixed rate basis, . Lower legal fees, . Their past experience with similar transactions. Once the City has made its final selection for the provider of the Capital Improvement Revenue Note, Series 2004 a commitment letter will be signed and the counsels will begin to prepare documents. If you have any further questions, please contact us at 407-648-2208. RESOLUTION NO. 2004-10 A RESOLUTION OF THE CITY OF WINTER SPRINGS, FLORIDA: (i) AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $2,500,000 OF DEBT TO FINANCE THE COST OF CAPITAL PROJECTS IN AND FOR THE CITY AS MORE SPECIFICALLY DESCRIBED IN THE LOAN AGREEMENT ATTACHED HERETO; (ii) AUTHORIZING THE EXECUTION AND DELIVERY OF SAID LOAN AGREEMENT WITH SUNTRUST BANK PURSUANT TO WHICH THE CITY WILL ISSUE A NOTE TO SECURE THE REPAYMENT OF SAID LOAN; (iii) AUTHORIZING THE CITY'S COVENANT TO BUDGET AND APPROPRIATE SUFFICIENT LEGALLY AVAILABLE NON-AD VALOREM REVENUES AND THE PLEDGING OF LEGALLY AVAILABLE IMPACT FEES TO PAY DEBT SERVICE ON THE NOTE; (iv) AUTHORIZING THE PROPER OFFICIALS OF THE CITY TO DO ANY OTHER ADDITIONAL THINGS DEEMED NECESSARY OR ADVISABLE IN CONNECTION WITH THE EXECUTION OF THE LOAN AGREEMENT, THE NOTE, AND THE SECURITY THEREFOR; (v) RATIFYING AND APPROVING THE EXECUTION OF THE COMMITMENT LETTER WITH SUNTRUST BANK; (vi) DESIGNATING THE NOTE AS A "QUALIFIED TAX-EXEMPT OBLIGATION" UNDER SECTION 265(b)(3)(B) OF THE INTERNAL REVENUE CODE OF 1986; AND (vii) PROVIDING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA, as follows: SECTION 1. FINDINGS AND AUTHORIZATION OF PROJECT. (A) The City of Winter Springs, Florida (the "City"), pursuant to the provisions ofthe Florida Constitution, Chapter 166, Florida Statutes, and any other applicable provisions of law (all ofthe foregoing, collectively, the "Act") is authorized, in accordance with the Act, to borrow money, issue bonds, notes or other obligations to finance the cost of capital expenditures for the City's public purposes; (B) In response to a request for proposal by the City regarding an intended borrowing for City capital projects (the "Project"), SunTrust Bank (the "Bank") has proposed a financing in accordance with the terms of the Bank's commitment of December 23, 2003 attached hereto as Exhibit A (the "Commitment"); (C) In accordance with the Commitment, the Bank is willing to provide the City with a not exceeding $2,500,000 Term Loan maturing June 1,2018 (the "Loan") on the terms set forth {OR712327;2} in the Commitment and documented in the form of Loan Agreement between the City and the Bank attached hereto as Exhibit B (the "Loan Agreement"); (D) The Loan will be secured by the Loan Agreement pursuant to which the City will issue a note (the "Note") to secure the repayment of the Loan; (E) The City hereby accepts the Commitment and the City has determined under Section 218.385, Florida Statutes, that it is in its best interest, taking all pricing facts of the transaction into consideration and given the size of the proposed borrowing, to enter into the Loan Agreement with the Bank; and (F) The Project is a capital project appropriately undertaken by the City under the Act and the City hereby authorizes the Project and the capital expenditures necessary to complete the Project. SECTION 2. AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted pursuant to the provisions of the Act and other applicable provisions of law. SECTION 3. APPROVAL OF LOAN AGREEMENT, NOTE AND COMMITMENT. The City hereby authorizes the Mayor or his designee (collectively the "Mayor") to execute and deliver, and the City Clerk or her designee (collectively, the "City Clerk") to attest, on behalf of the City, the Loan Agreement substantially in the form attached hereto as Exhibit "B" and the Note in the form attached to the Loan Agreement made by the City to the order of Bank, with such changes, insertions, and additions as they may approve, their execution thereof being evidence of such approval. The City further approves and accepts the Commitment. SECTION 4. PAYMENT OF DEBT SERVICE ON NOTE. Pursuant to the Loan Agreement, the City will pledge to the payment of debt service on the Note legally available impact fees in the manner provided in the Loan Agreement. Also pursuant to and subject to the provisions of the Loan Agreement, the City covenants and agrees to appropriate in its annual budget, by amendment, if necessary, from legally available non ad-valorem revenues of the City, and which are lawfully available to pay debt service on the Note, amounts sufficient to pay principal of and interest on the Note as the same shall become due to the extent legally available impact fees are insufficient to pay any such principal and interest. SECTION 5. AUTHORIZATION OF OTHER DOCUMENTS TO EFFECT TRANSACTION. To the extent that other documents, certificates, opinions, or items are needed to effect any of the transactions referenced in this Resolution, the Loan Agreement or the Note and the security therefore, the Mayor, the City Manager, the City Attorney, the City Clerk and the City Finance Director are hereby authorized to execute and deliver such documents, certificates, opinions, or other items and to take such other actions as are necessary for the full, punctual, and complete performance of the covenants, agreements, provisions, and other terms as are contained herein and in the documents included herein by reference. SECTION 6. DESIGNATION OF NOTE AS BANK QUALIFIED. The City designates the Note as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). The City does not reasonably anticipate that the City, any subordinate entities of the City, and issuers of debt the issue "on behalf' of the City, will during the calendar year 2004 issue more than $10,000,000 of {OR712327;2} 2 "tax-exempt" obligations, exclusive of those obligation described in Section 265(b)(3)(C)(ii) of the Code. SECTION 7. PAYING AGENT AND REGISTRAR. The City hereby accepts the duties to serve as Registrar and Paying Agent for the Note. SECTION 8. LIMITED OBLIGA nON. The obligation of the City to repay amounts under the Loan Agreement and the Note are limited and special obligations, payable solely from the sources and in the manner set forth in the Loan Agreement and shall not be deemed a pledge of the faith and credit or taxing power of the City. SECTION 9. EFFECT OF PARTIAL INVALIDITY. If anyone or more provisions of this Resolution, the Loan Agreement or the Note shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not effect any other provision of this Resolution or the Note, but this Resolution, the Loan Agreement and the Note shall be construed and enforced as if such illegal or invalid provision had not been contained therein. The Note and Loan Agreement shall be issued and this Resolution is adopted with the intent that the laws of the State of Florida shall govern their construction. SECTION 10. EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption; provided, however, to the extent that the Loan Agreement, the Note, or any other documents related to the matters set forth herein have been executed prior to the execution date of this Resolution, this Resolution shall be retroactive to the date of execution of such documents. RESOLVED in regular meeting on this 23rd day of February, 2004. CITY OF WINTER SPRINGS, FLORIDA By: Mayor, City of Winter Springs, Florida (SEAL] ATTEST: By: City Clerk of Winter Springs, Florida Approved as to form: City Attorney City of Winter Springs, Florida (OR712327;2} 3 LOAN AGREEMENT Dated as of March 1, 2004 By and Between THE CITY OF WINTER SPRINGS, FLORIDA (the" City") and SUNTRUST BANK (the "Bank") {OR715482;2} TABLE OF CONTENTS (The Table of Contents for this Loan Agreement is for convenience of reference only and is not intended to define, limit or describe the scope or intent of any provisions of this Loan Agreement. ) Page ARTICLE I DEFINITION OF TERMS. ......... .............. ................................................................ 1 Section 1.01. Definitions................................................................................................. 1 Section 1.02. Interpretation............................................................................................. 5 Section 1.03. Titles and Headings ......... ..................... ...... ............. .............. .................... 5 ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE PARTIES ....................... 5 Section 2.01. Representations and Warranties of City. The City represents and warrants to the Bank: as follows: .........................................................................................5 Section 2.02. Representations and Warranties of Bank .................................................. 6 ARTICLE III THE NOTE ............... .............. ............................. ........................................ ... ....... 6 Section 3.01. Purpose and Use ........................................................................................ 6 Section 3.02. The Note.................................................................................................... 6 Section 3.03. Adjustments to Note Rate.......................................................................... 7 Section 3.04. Compliance with Section 215.84............................................................... 7 Section 3.05. Conditions Precedent to Issuance of Note................................................. 7 Section 3.06. Registration of Transfer; Assignment of Rights ofBank:.......................... 9 Section 3.07. Ownership ofthe Note.......................................................................... ..... 9 Section 3.08. Use of Proceeds of Note Permitted Under Applicable Law.................... 10 Section 3.09. Authentication......................................................................................... 10 ARTICLE IV COVENANTS OF THE CITy............................................................................ 10 Section 4.01. Performance of Covenants......................... ........................ .......... ........... 10 Section 4.02. Payment of Note ...................................... ...................... .......................... 10 Section 4.03. Covenant to Budget and Appropriate ...................................................... 10 Section 4.04. Tax Covenant............................ ............................................................... 11 Section 4.05. Budget and Other Financial Information................................................. 12 Section 4.06. Compliance with Laws and Regulations ................................................. 12 Section 4.07 . Anti-Dilution Test......................................... ........... ............................... 12 Section 4.08. Application of Proceeds of Note ............................................................. 12 ARTICLE V EVENTS OF DEFAULT AND REMEDIES ........................................................ 13 Section 5.01. Events of Default .................................................................... ............. .... 13 Section 5.02. Exercise of Remedies.................................... .......................................... 14 Section 5.03. Remedies Not Exclusive................................................ .......................... 14 Section 5.04. Waivers, Etc............................................................................................ 14 ARTICLE VI MISCELLANEOUS PROVISIONS ................................................ .................... l5 Section 6.01. Covenants of City, Etc.; Successors ........................................................ 15 Section 6.02. Term of Agreement......................... .................. ......................... ............. 15 {OR715482;2} Section 6.03. Notice of Changes in Fact ....................................... ................................ 15 Section 6.04. Amendments and Supplements ...............................................................15 Section 6.05. Notices..................................................................................................... 15 Section 6.06. Benefits Exclusive.................................. ...................... ........................... 16 Section 6.07. Severability .............................. ................................. .............. '" .............. 16 Section 6.08. Payments Due on Saturdays, Sundays and Holidays .............................. l6 Section 6.09. Counterparts ................................................................. ............... ......... ... 16 Section 6.10. Applicable Law........................................ ...... ......................................... 16 Section 6.11. No Personal Liability............................................................................... l7 Section 6.12. Defeasance............................................................................................... 17 Section 6.13. Incorporation by Reference ..................................................................... 17 Exhibit A Form of Note....................................................................................................... A-I {OR715482;2} 11 LOAN AGREEMENT THIS LOAN AGREEMENT (the "Agreement"), made and entered into this 1st day of March, 2004, by and between THE CITY OF WINTER SPRINGS, FLORIDA (the "City"), a municipal corporation of the State of Florida and its successors and assigns, and SUNTRUST BANK, a Georgia banking corporation authorized to do business in Florida, and its successors (the "Bank"). WIT N E SSE T H: WHEREAS, capitalized terms used in these recitals and not othelWise defined shall have the meanings specified in Article I of this Agreement; WHEREAS, the City, pursuant to the provisions of the Florida Constitution, Chapter 166, Florida Statutes and any other applicable provisions of law (all of the foregoing, collectively, the "Act"), and Resolution No. 2004-10, adopted by the City on February 23, 2004, is authorized to borrow money, issue bonds, notes or other obligations to finance the costs of capital expenditures for the City's public purpose; and WHEREAS, in response to a request for proposal by the City regarding an intended borrowing for City owned and operated capital projects (the "Project"), and related costs of issuance, the Bank submitted its commitment, dated December 23, 2003, to the City (the "Commitment"); and WHEREAS, the City has accepted the Commitment and the Bank is willing to purchase the City's Note (as hereinafter defined), but only upon the terms and conditions of this Agreement; NOW, THEREFORE, the parties hereto agree as follows: ARTICLE I DEFINITION OF TERMS Section 1.01. Definitions. Capitalized terms used in this Agreement and not othelWise defined shall have the respective meanings as follows: "Act" shall have the meaning assigned to that term in the recitals hereof. "Advance" shall mean the principal amount of each payment in the minimum amount of $100,000 made by the Bank to or on the order of the City pursuant to a request for an Advance made by the City. "Agreement" shall mean this Loan Agreement and all modifications, alterations, amendments and supplements hereto made in accordance with the provisions hereof. "Available Balance" shall mean $2,500,000, reduced by the aggregate amount of Advances previously made to the Issuer. {OR715482;2} "Bank" shall mean SunTrust Bank, and its successors. "Bond Counsel" shall mean, Akerman Senterfitt, Orlando, Florida, or any other attorney at law or firm of attorneys of nationally recognized standing in matters pertaining to the federal tax exemption of interest on obligations issued by states and political subdivisions. "Business Day" shall mean any day other than a Saturday, a Sunday, or a day on which banks in Orlando, Florida are authorized or required to be closed. "City" shall mean the City of Winter Springs, Florida, a municipal corporation. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and the applicable rules and regulations promulgated thereunder. "Debt Service" means principal and interest, and other debt-related costs, due in connection with the Note, as applicable, and any and all subordinate debt and any other liabilities of the City for borrowed money. "Default Rate" shall mean twelve percent (12%) provided such rate shall not exceed the highest rate of interest allowed by applicable law. "Designated Revenues" shall mean legally available non-ad valorem revenues of the City budgeted and appropriated in accordance with Section 4.03 hereof and legally available impact fees from all or any portion of the Project. "Determination of Taxability" shall mean, with respect to the Note, the circumstance that shall be deemed to have occurred if interest paid or payable on the Note becomes 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 or beyond the control of the City. A Determination of Taxability will be deemed to have occurred upon (a) the receipt by the City 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 the Note is includable in the gross income of the Noteholder; or (b) the issuance of any public or private ruling of the Internal Revenue Service that any interest payable on the Note is includable in the gross income of a Noteholder. For all purposes of this definition, a Determination of Taxability will be deemed to occur on the date as of which the interest on the Note is deemed includable in the gross income of the Noteholder. A Determination of Taxability shall not occur in the event such interest is taken into account in determining adjusted current earnings for the purpose of the alternative minimum tax imposed on corporations. In the case of (a) and (b) above, no Determination of Taxability shall be deemed to occur unless the City has been given timely written notice that such a determination has been made by the Internal Revenue Service and an opportunity to participate in and seek, at its own expense, a final administrative deternlination or determination by a court of competent jurisdiction (from which no further right of appeal exists) as to the existence of such event of taxability; provided that the City, at its own expense, delivers to the Bank an opinion of Bond Counsel acceptable to the Bank to the effect that such appeal or action for judicial or administrative review is not without merit and there is a reasonable possibility that the judgment, order, ruling or decision {OR715482;2} 2 from which such appeal or action for judicial or administrative review is taken will be reversed, vacated or otherwise set aside. "Event of Default" shall mean an Event of Default as defined in Section 5.01 of this Agreement. "Federal Securities" shall mean: 1. Cash 2. U.S. Treasury Certificates, Notes and Bonds (including State and Local Government Series - "SLGs") 3. Direct obligations of the Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities. 4. Resolution Funding Corp. (REFCORP). Only the interest component of REFCORP strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form are acceptable. 5. Pre-refunded municipal bonds rated "Aaa" by Moody's Investors Service ("Moody's") and "AAA" by Standard & Poor's Ratings Group ("S&P"). If, however, the issue is only rated by S&P, then the pre-refunded bonds must have been pre-refunded with cash, direct U.S. or U.S. guaranteed obligations, or AAA rated pre-refunded municipals to satisfy this condition. 6. Obligations issued by the following agencies which are backed by the full faith and credit of the U.S.: a. U.S. Export-Import Bank (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership b. Farmers Home Administration (FmHA) Certificates of beneficial ownership c. Federal Financing Bank d. General Services Administration Participation certificates e. U.S. Maritime Administration Guaranteed Title XI financing {OR715482;2} 3 f. u.s. Department of Housing and Urban Development (RUD) Project Notes Local Authority Bonds New Communities Debentures - U.S. government guaranteed debentures and U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds "Final Maturity Date" shall mean the date on which all principal and all unpaid interest accrued on the Note shall be due and payable in full, which date shall be, if not sooner due to acceleration or prepayment, June 1,2018. "Fiscal Year" shall mean the 12-month period commencing October 1 of each year and ending on the succeeding September 30, or such other 12-month period as the City may designate as its "fiscal year" as permitted by law. "Index Rate" shall mean the one month LIBOR Rate, as published in the Wall Street Journal (the "Index Rate") on the first calendar day of each month on which such rate is published. Such rate shall become effective as of the first calendar day of such month. "LIBOR Rate" shall mean the London Interbank Offered Rate offered by a specified group of London banks for U.S. dollar deposits of a stated maturity. "Loan" shall refer to an amount equal to the outstanding and unpaid principal of the Note, together with unpaid interest which has accrued, in the initial aggregate principal amount of not exceeding $2,500,000 granted by the Bank of the City pursuant to and in accordance with this Agreement. "Maximum Corporate Tax Rate" shall mean (a) on the date of issuance of the Note, 35% and (b) thereafter, the maximum marginal rate of income tax imposed on corporations under Section 11 of the Code. "Note" shall mean the Note issued by the City under this Agreement. "Note Rate" shall mean the Tax Exempt Rate, as modified by any Adjustments (as defined in Section 3.03 hereof), or, if applicable, the Taxable Rate. The Note Rate shall be calculated on the basis of a 360-day year of 12, 30-day months. "Noteholder" shall mean the Bank as the holder of the Note and any subsequent registered holder ofthe Note. "Project" shall mean the construction and acquisition of various City owned and operated capital projects. "Resolution" shall mean Resolution No. 2004-10, adopted at a meeting of the City Common on February 23, 2004 which, among other things, authorized and confirmed the borrowing of the Loan and execution and delivery of this Agreement and the issuance of the Note. {OR715482;2} 4 "Taxable Rate" shall mean the Prime Rate less 0.5% pr annum based upon a 360-day year based upon 12, 3D-day months, or (if lower only) the maximum interest rate permitted by applicable law. "Tax Exempt Rate" shall mean the Index Rate, plus 1.05% divided by 1.40. Section 1.02. Interpretation. Unless the context clearly requires otherwise, words of masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa. Any capitalized terms used in this Agreement not herein defined shall have the meaning ascribed to such terms in the Resolution. This Agreement and all the terms and provisions hereof shall be construed to effectuate the purpose set forth herein and to sustain the validity hereof. Section 1.03. Titles and Headings. The titles and headings of the Articles and Sections of this Agreement, which have been inserted for convenience of reference only and are not to be considered a part hereof, shall not in any way modify or restrict any of the terms and provisions hereof, and shall not be considered or given any effect in construing this Agreement or any provision hereof or in ascertaining intent, if any question of intent should arise. ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE PARTIES Section 2.01. Representations and Warranties of City. The City represents and warrants to the Bank as follows: (a) Existence. The City is a municipal corporation of the State of Florida, duly created and validly existing under the laws of the State of Florida, with full power to enter into this Agreement, to perform its obligations hereunder and to issue and deliver the Note to the Banle The making, execution and performance of this Agreement on the part of the City and the issuance and delivery of the Note have been duly authorized by all necessary action on the part of the City and will not violate or conflict with the Act, or any agreement, indenture or other instrument by which the City or any of its material properties is bound. (b) Validity. Etc. This Agreement, the Note and the Resolution are or will be valid and binding obligations of the City enforceable against the City in accordance with their respective terms, except to the extent that enforceability may be subject to valid bankruptcy, insolvency, financial emergency, reorganization, moratorium or similar laws relating to or from time to time affecting the enforcement of creditors' rights and except to the extent that the availability of certain remedies may be precluded by general principles of equity. (c) No Financial Material Adverse Change. No financial material adverse change has occurred in the City since the last audited financial statement was prepared. (d) Powers of City. The City has the legal power and authority to covenant to budget and appropriate the Designated Revenues as described herein. {OR715482;2} 5 Section 2.02. Representations and Warranties of Bank. The Bank represents and warrants to the City as follows: (a) Existence. The Bank is a Georgia banking corporation, authorized to do business in the State of Florida, with full power to enter into this Agreement, to perform its obligations hereunder and to make the Loan. The performance of this Agreement on the part of the Bank and the making of the Loan have been duly authorized by all necessary action on the part of the Bank and will not violate or conflict with applicable law or any material agreement, indenture or other instrument by which the Bank or any of its material properties is bound. (b) Validitv. This Agreement is a valid and binding obligation of the Bank enforceable against the Bank in accordance with its terms, except to the extent that enforceability may be subject to valid bankruptcy, insolvency, financial emergency, reorganization, moratorium or similar laws relating to or from time to time affecting the enforcement of creditors' rights (and specifically creditors' rights as the same relate to banks) and except to the extent that the availability of certain remedies may be precluded by general principles of equity. (c) Knowledge and Experience. The Bank (i) has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of making the Loan and investing in the Note, (ii) has received and reviewed such financial information concerning the City as it has needed in order to fairly evaluate the merits and risks of making the Loan and investing in the Note; (iii) is an "accredited investor" as such term is defined in Regulation D to the Securities Act of 1933; and (iv) is purchasing the Note as an investment for its own account and not with a view toward resale to the public. The Bank will not transfer the Note except to other banks affiliated with Sun Trust Bank or any subsidiary thereof. ARTICLE III THE NOTE Section 3.01. Purpose and Use. On the date of this Agreement, the Bank shall make available to the City the Loan in the principal amount of not exceeding Two Million Five Hundred Thousand Dollars ($2,500,000). The proceeds available under this Agreement shall be used to finance components of the Project. Section 3.02. The Note. The Note shall be substantially in the form set forth as Exhibit "A" to this Agreement. The general terms of the Note shall be as follows: (a) Amount of Note. The aggregate principal amount of the Note is expressly limited to not exceeding Two Million Five Hundred Thousand Dollars ($2,500,000). (b) Interest. The Note shall bear interest at the Note Rate. Upon the occurrence of one or more of the events specified in Section 3.03 of this Agreement, the Note Rate shall be adjusted as therein provided. Interest on the Note shall be computed on the basis of 12, 30-day months and a 360-day year. (c) Prepayments. The Note shall be subject to prepayment at the option of the City, in whole or in part, from any legally available monies at a prepayment price of 100% of the {OR715482;2} 6 principal amount to be redeemed, plus accrued interest to the prepayment date. Each prepayment shall be made on such date and in such principal amount as shall be specified by the City in a written notice delivered to the Noteholder not more than fifteen (15) and not less than five (5) days prior to the specified prepayment date. Any prepayments shall be applied to the sums last maturing under the Note. Section 3.03. Adjustments to Note Rate. The Note Rate shall be subject to adjustment by the Bank as hereinafter described. If a Determination of Taxability occurs the interest rate on the Note shall be adjusted to the Taxable Rate. If because of the enactment of any amendments to existing law, the effect of which would adversely affect the Bank's after-tax yield, then the Bank shall have the right to adjust the Note Rate in order to maintain the same after-tax yield as if such events had not occurred. If the Note shall not be "a qualified tax exempt obligation" as defined in Section 265(b )(3) of the Code, then the Bank shall have the right to adjust the Note Rate to maintain the same yield as if such event had not occurred. Any adjustments in this Section 3.03 shall survive payment of the Note until such time as the federal statute of limitations under which the interest on the Note could be declared taxable under the Code shall have expired. For so long as the Note is owned by the Bank, the Note Rate set forth above assumes a maximum corporate tax rate of 35%. In the event of a change in the maximum corporate tax rate applicable to the Bank, so long as the Note is owned by the Bank, or its successors, the Bank shall have the right to adjust such Note Rate in order to maintain the same after-tax yield. Section 3.04. Compliance with Section 215.84. The City represents, warrants, and covenants that the Note Rate, as currently calculated in accordance with Section 215.84, Florida Statutes, is in compliance with Section 215.84, Florida Statutes. Section 3.05. Conditions Precedent to Issuance of Note. Prior to or simultaneously with the delivery of the Note by the City, there shall be filed with the Bank the following, each in form and substance reasonably acceptable to the Bank: (a) an opinion of counsel to the City substantially to the effect that (i) the Resolution has been duly adopted and this Agreement and the Note has been duly authorized, executed and delivered by the City and each constitutes a valid, binding and enforceable agreement of the City in accordance with their respective terms, except to the extent that the enforceability of the rights and remedies set forth herein may be limited by bankruptcy, insolvency, financial emergency or other laws affecting creditors' rights generally or by usual equity principles; (ii) the City's execution, delivery and performance of this Agreement and execution and issuance of the Note are not subject to any authorization, consent, approval or review of any governmental body, public officer or regulatory authority not heretofore obtained or effected, and no taxes are payable in connection therewith; (iii) the execution, issuance and delivery of the Note has been duly and validly authorized by the City, and the Note constitutes a valid and binding special obligation of the City enforceable in accordance with its terms; (iv) the City (A) is a municipal corporation duly organized and validly existing under the laws of the State of Florida, and (B) has power and authority to adopt the Resolution, to execute and deliver this Agreement, to execute and deliver the Note, and to consummate the transactions contemplated by such instruments; (v) the execution, delivery and performance of the Note and this Agreement, and compliance with the terms thereof and hereof, under the circumstances contemplated hereby, do {OR715482;2} 7 not and will not in any material respect conflict with, or constitute on the part of the City a breach or default under, any indenture, mortgage, deed of trust, agreement or other instrument to which the City or to which its properties are subject or conflict with, violate or result in a breach of any existing law, administrative rule or regulation, judgment, court order or consent decree to which the City or its properties are subject; (vi) to the best of such counsel's knowledge, there is no claim, action, suit, proceeding, inquiry, investigation, litigation or other proceeding, at law or in equity, pending or threatened in any court or other tribunal, state or federal (W) restraining or enjoining, or seeking to restrain or enjoin, the issuance, sale, execution or delivery of the Note, (X) in any way questioning or affecting the validity or enforceability of any provision of this Agreement, the Note, or the Resolution, (Y) in any way questioning or affecting the validity of any of the proceedings or authority for the authorization, sale, execution or delivery of the Note, or of any provision made or authorized for the payment thereof, or (2) questioning or affecting the organization or existence of the City or the right of any of its officers to their respective offices; (vii) the City has the legal power to make the capital improvements that comprise the Project and to pay associated costs of issuance, to covenant to budget and appropriate the legally available non-ad valorem revenues of the City and to grant a lien on the Designated Revenues as described herein and in the Resolution; and (viii) all conditions contained in the ordinances and resolutions ofthe City precedent to the issuance of the Note have been complied with. (b) an opinion of Bond Counsel (who may rely on opinion of Counsel to the City), stating that such counsel is of the opinion that: (i) this Loan Agreement constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its terms; (ii) the Note is a valid and binding special obligation of the City enforceable in accordance with its terms, payable solely from the sources provided therefor in this Loan Agreement; (iii) assuming compliance by the City with certain covenants relating to requirements contained in the Code (a) interest on the Note is excluded from gross income for purposes of federal income taxation, and (b) interest on the Note is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, with respect to corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on such corporations, (iv) the Note is exempt from intangible taxes imposed pursuant to Chapter 199, Florida Statutes, and that (v) the Note is a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) ofthe Code. (c) a copy of a completed and executed Form 8038-G to be filed with the Internal Revenue Service by the City; and (d) such other documents as the Bank reasonably may request (including, without limitation, appropriate executed Florida Division of Bond Finance forms). When the documents and items mentioned in clauses (a) through (d), inclusive, of this Section shall have been filed with the Bank, and when the Note shall have been executed as required by this Agreement, and all conditions of the Resolution have been met, the City shall deliver the Note to or upon the order of the Bank, but only against the City's receipt of the principal amount of the Note. {OR715482;2} 8 Section 3.06. Registration of Transfer; Assignment of Rights of Bank. The City shall keep at the office of the City Clerk in the City's records the registration of the Note and the registration of transfers of the Note as provided in this Agreement. Subject to the restriction set forth in the fourth paragraph of this Section, the transfer of the Note may be registered only upon the books kept for the registration of the Note and registration of transfer thereof upon surrender thereof to the City together with an assignment duly executed by the Bank or its attorney or legal representative in the form of the assignment set forth on the form of the Note attached as Exhibit A to this Agreement; provided, however, that the Note may be transferred only in whole and not in part. In the case of any such registration of transfer, the City shall execute and deliver in exchange for the Note a new Note registered in the name of the transferee. In all cases in which the Note shall be transferred hereunder, the City shall execute and deliver at the earliest practicable time a new Note in accordance with the provisions of this Agreement. The City may make a charge for every such registration of transfer of a Note sufficient to reimburse it for any tax or other governmental charges required to be paid with respect to such registration of transfer, but no other charge shall be made for registering the transfer hereinabove granted. The Note shall be issued in fully registered form and shall be payable in any coin or currency of the United States. The registration of transfer of the Note on the registration books of the City shall be deemed to effect a transfer of the rights and obligations of the Bank under this Agreement to the transferee. Thereafter, such transferee shall be deemed to be the Bank under this Agreement and shall be bound by all provisions of this Agreement that are binding upon the Bank. The City and the transferor shall execute and record such instruments and take such other actions as the City and such transferee may reasonably request in order to confirm that such transferee has succeeded to the capacity of Bank under this Agreement and the Note. In the event any Note is mutilated, lost, stolen, or destroyed, the City shall execute a new Note of like date and denomination as that mutilated, lost, stolen or destroyed, provided that, in the case of any mutilated Note, such mutilated Note shall first be surrendered to the City, and in the case of any lost, stolen, or destroyed Note, there first shall be furnished to the City evidence of such loss, theft or destruction together with an indemnity satisfactory to it. Nothing in this Agreement or in the Note shall be construed to prohibit the Bank from granting a participation or participations in the Note to any other bank or banks affiliated with SunTrust Bank or any subsidiary thereof. No such bank participant shall, however, be a registered holder of the Note or any portion thereof. Section 3.07. Ownership of the Note. The person in whose name the Note is registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the Note shall be made only to the registered owner thereof or such owner's legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon the Note, and interest thereon, to the extent of the sum or sums so paid. The registered owner of the Note is hereby granted power to transfer absolute title thereof by assignment thereof to a bona fide purchaser for value (present or antecedent) without notice of prior defenses or equities or claims of ownership enforceable against such owner's assignor or any person in the chain of title and before the maturity of the Note; provided, however, that the {OR715482;2} 9 Note may be transferred only in whole and not in part and provided further, that no transfer shall be permitted absent the City's (and the Bank's) receipt of a letter in form and substance similar to the one delivered by the Bank pursuant to Section 218.385, Florida Statutes from such proposed transferee. Every prior registered owner of the Note shall be deemed to have waived and renounced all of such owner's equities or rights therein in favor of every such bona fide purchaser, and every such bona fide purchaser shall acquire absolute title thereto and to all rights represented thereby. Section 3.08. Use of Proceeds of Note Permitted Under Applicable Law. The City represents, warrants and covenants that the proceeds of the Note will be used solely for the Project and costs of issuance of the Note, and that such use is permitted by applicable law. Section 3.09. Authentication. Until the Note shall have endorsed thereon a certificate of authentication substantially in the form set forth in Exhibit A, duly executed by the manual signature of the Registrar and authenticating agent, it shall not be entitled to any benefit or security under this Loan Agreement. The Note shall not be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly adopted by the Registrar, and such certificate of the Registrar upon the Note shall be conclusive evidence that such Note has been duly authenticated and delivered under this Loan Agreement. ARTICLE IV COVENANTS OF THE CITY Section 4.01. Performance of Covenants. The City covenants that it will perform faithfully at all times its covenants, undertakings and agreements contained in this Agreement and the Note or in any proceedings of the City relating to the Loan. Section 4.02. Payment of Note. (a) The City covenants that it will promptly pay the principal of and interest on the Note at the place, on the dates and in the manner provided herein and in the Note, in accordance with the terms thereof. Pursuant to Section 4.03 hereof, the City hereby irrevocably pledges (until repayment) the Designated Revenues as security for the repayment of the Note. (b) The Note will be a special obligation of the City secured solely by the Designated Revenues and is payable from the Designated Revenues and as provided in Section 4.03 hereof. The Note will not constitute a general debt, liability or obligation of the City or the State of Florida or any political subdivision thereof within the meaning of any constitutional or statutory provision. Neither the faith and credit nor the taxing power of the City or of the State of Florida or any political subdivision thereof is pledged to the payment of the principal of or interest on the Note and the Noteholder shall never have the right to compel any exercise of any ad valorem taxing power of the City or of the State of Florida or any political subdivision thereof, directly or indirectly to enforce such payment. The Note shall not constitute a lien upon any property of the City except upon the Designated Revenues. Section 4.03. Covenant to Budget and Appropriate. Until the Note is paid or deemed paid pursuant to the provisions of this Agreement, subject to the next paragraph, the City {OR715482;2} 10 covenants and agrees to appropriate in its annual budget, by amendment, if necessary, from legally available non ad-valorem revenues of the City in each fiscal year and which are lawfully available to pay debt service on the Note, amounts sufficient to pay principal of and interest on the Note as the same shall become due. Such covenant and agreement on the part of the City to budget and appropriate such amounts of legally available non-ad valorem revenues shall be cumulative to the extent not paid, and shall continue until such non-ad valorem revenues or other legally available funds in amounts sufficient to make all such required payments shall have been budgeted, appropriated and actually paid. No lien upon or pledge of such non-ad valorem revenues shall be in effect until such moneys are budgeted and appropriated. The City further acknowledges and agrees that the obligations of the City to include the amount of any deficiency in payments in each of its annual budgets and to pay such deficiencies from legally available non-ad valorem revenues may be enforced in a court of competent jurisdiction in accordance with the remedies set forth herein. Such covenant to budget and appropriate does not create any lien upon or pledge of such non-ad valorem revenues, nor does it preclude the City from pledging in the future its non-ad valorem revenues, except as set forth in Section 4.07 hereof, nor does it require the City to levy and collect any particular non- ad valorem revenues, nor does it give the holders of the Note a prior claim on the non-ad valorem revenues as opposed to claims of general creditors of the City. Such covenant to budget and appropriate legally available non-ad valorem revenues is subject in all respects to the prior payment of obligations secured by a pledge of such non-ad valorem revenues heretofore or hereafter entered into (including the payment of debt service on bonds and other debt instruments). Anything in this Agreement to the contrary notwithstanding, it is understood and agreed that all obligations of the City hereunder shall be payable from the portion of legally available non-ad valorem revenues budgeted and appropriated as provided for hereunder and nothing herein shall be deemed to pledge ad valorem tax revenues or to permit or constitute a mortgage or lien upon any assets owned by the City and no holder of the Note nor any other person, may compel the levy of ad valorem taxes on real or personal property within the boundaries of the City. Notwithstanding any provisions of this Agreement or the Note to the contrary, the City shall never be obligated to maintain or continue any of the activities of the City which generate user service charges, regulatory fees or any non-ad valorem revenues. Neither this Agreement nor the obligations of the City under the Resolution shall be construed as a pledge of or a lien on all or any non-ad valorem revenues of the City other than the Designated Revenues, but shall be payable solely as provided herein and is subject in all respects to the provisions of Section 166.241, Florida Statutes, and is subject, further, to the payment of services and programs which are for essential public purposes affecting the health, welfare and safety of the inhabitants of the City. Section 4.04. Tax Covenant. The City covenants to the purchasers of the Note provided for in this Agreement that the City will not make any use of the proceeds of the Note at any time during the respective terms of such Note which, if such use had been reasonably expected on the date the Note was issued, would have caused such Note to be an "arbitrage bond" within the meaning of the Code. The City will comply with the requirements of the Code and any valid and applicable rules and regulations promulgated thereunder necessary to insure the exclusion of interest on the Note from the gross income of the holders thereof for purposes of federal income taxation. {OR715482;2} 11 Section 4.05. Budget and Other Financial Information. The City shall: (a) Within 210 days following the end of each Fiscal Year of the City, provide the Noteholder with a copy of the City's audited financial statements for the preceding Fiscal Year specifically breaking out the Designated Revenues; and (b) Provide the Noteholder with a copy of its resolution adopting its annual budget within 30 days of the adoption of the same, a completed budget book upon the completion of the same, and such other financial information regarding the City as the Noteholder may reasonably request. Section 4.06. Compliance with Laws and Regulations. The City shall maintain compliance with all federal, state and local laws and regulations regarding the acquisition, construction and maintenance of the Project. Section 4.07. Anti-Dilution Test. The City shall not issue debt secured by or payable from non-ad valorem revenues of the City (excluding revenues in enterprise funds) unless the maximum annual debt service coverage for both the existing and proposed debt exceed 1.50: 1.0. For the purposes of this calculation, the debt service coverage formula for purposes of this covenant shall be calculated as follows: [Total General Fund Revenues - Outstanding General Obligations Annual Debt Service - Ad Valorem Revenues (General Fund)] - [General Government Expenditures (General Fund) + Public Safety Expenditures (General Fund) - Ad Valorem Revenues (General Fund)] divided by maximum annual debt service for both the Outstanding debt of the City secured by or payable from non-ad valorem revenues (excluding debt secured by revenues in enterprise funds) and the proposed debt. Section 4.08. Application of Proceeds of Note. At the time of delivery of the Note herein authorized, proceeds from the sale of the Note shall be used to finance the Project and associated costs of issuance (including but not limited to legal and financial advisory fees and expenses) in accordance with the provisions of the next paragraph. The funds and accounts created and established by this Agreement shall constitute trust funds for the purpose provided herein for such funds. All such funds, except as hereinafter provided, shall be continuously secured in the same manner as municipal deposits of funds are required to be secured by the laws of the State of Florida. Moneys on deposit to the credit of all funds and account created hereunder may be invested pursuant to applicable law and the City's investment policy and shall mature not later than the dates on which such moneys shall be needed to make payments in the manner herein provided. The securities so purchased as an investment of funds shall be deemed at all times to be a part of the account from which the said investment was withdrawn, and the interest accruing thereon and any profit realized therefrom shall be credited to such fund or account, except as expressly provided herein, and any loss resulting from such investment shall likewise be charged to said fund or account. {OR715482;2} l2 ARTICLE V EVENTS OF DEFAULT AND REMEDIES Section 5.01. Events of Default. Each of the following is hereby declared an "Event of Default: " (a) payment of the principal of the Note shall not be made when the same shall become due and payable; (b) payment of any installment of interest on the Note shall not be made when the same shall become due and payable; or (c) the City shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Note or in this Agreement and such default shall continue for 30 days after written notice shall have been given to the City by the Noteholder specifying such default and requiring the same to be remedied; provided, however, that if, in the reasonable judgment of the Noteholder, the City shall proceed to take such curative action which, if begun and prosecuted with due diligence, cannot be completed within a period of 30 days, then such period shall be increased to such extent as shall be necessary to enable the City to diligently complete such curative action; or (d) the City defaults in the due and punctual payment of any other obligation or evidence of indebtedness which is secured in whole or in part by a pledge of or payable from the Designated Revenues or that is a general obligation of the City; or (e) any representation or warranty of the City contained in this Agreement or in any certificate or other closing document executed and delivered by the City in connection with the closing of this Loan shall prove to have been untrue in any material respect when executed and delivered, thereby adversely impairing the security for the Note; or (f) any proceedings are instituted with the consent or acquiescence of the City, for the purpose of effecting a compromise between the City and its creditors or for the purpose of adjusting the claims of such creditors, pursuant to any federal or state statute now or hereinafter enacted; or (g) the City admits in writing its inability to pay its debts generally as they become due, or files a petition in bankruptcy or makes an assignment for the benefit of its creditors, declares a financial emergency or consents to the appointment of a receiver or trustee for itself or shall file a petition or answer seeking reorganization or any arrangement under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any state thereof; or (h) the City is adjudged insolvent by a court of competent jurisdiction or is adjudged bankrupt on a petition of bankruptcy filed against the City, or an order, judgment or decree is entered by any court of competent jurisdiction appointing, without the consent of the City, a receiver or trustee of the City or of the whole or any part of its property and any of the aforesaid {OR715482;2} 13 adjudications, orders, judgments or decrees shall not be vacated or set aside or stayed within 60 days from the date of entry thereof; or (i) if, under the provisions of any law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the City or of the whole or any substantial part of its property and such custody or control shall not be terminated within 90 days from the date of assumption of such custody or control. Section 5.02. Exercise of Remedies. Upon the occurrence and during the continuance of an Event of Default, a Noteholder may, by a notice in writing to the City, declare the principal of a Note (if not then due and payable) to be immediately due and payable, and upon such declaration, the same shall be immediately due and payable, anything contained in a Note or this Agreement to the contrary notwithstanding. Upon the occurrence and during the continuance of an Event of Default, a Noteholder may proceed to protect and enforce its rights under the laws of the State of Florida or under this Agreement by such suits, actions or special proceedings in equity or at law, or by proceedings in the office of any board or officer having jurisdiction, either for the specific performance of any covenant or agreement contained herein or in aid or execution of any power herein granted or for the enforcement of any proper legal or equitable remedy, as a Noteholder shall deem most effective to protect and enforce such rights. Without limiting the generality of the foregoing, the Noteholder shall have the right to bring a mandamus action to require the City to perform its obligations under Article IV of this Agreement. In the enforcement of any remedy under this Agreement, to the extent permitted by law, a Noteholder shall be entitled to sue for, enforce payment of and receive any and all amounts then or during any default becoming, and at any time remaining, due from the City for principal, interest or otherwise under any of the provisions of this Agreement or of a Note then unpaid, within interest on overdue payments of principal and interest (to the extent permitted by law) at the Default Rate, together with any and all costs and expenses of collection and of all proceedings hereunder and under the Note (including, without limitation, reasonable legal fees in all proceedings, including administrative, appellate and bankruptcy proceedings), but payable from the Designated Revenues, without prejudice to any other right or remedy of the Noteholder, and to recover and enforce any judgment or decree against the City, but solely as provided herein and in a Note, for any portion of such amounts remaining unpaid and interest, costs, and expenses as above provided, and to collect (but from the Designated Revenues) in any manner provided by law, the moneys adjudged or decreed to be payable. Section 5.03. Remedies Not Exclusive. No remedy herein conferred upon or reserved to a Noteholder is intended to be exclusive of any other remedy or remedies herein provided, and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder. Section 5.04. Waivers, Etc. No delay or omission of a Noteholder to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or any acquiescence therein; and every power and remedy given by this Agreement to a Noteholder may be exercised from time to time and as often as may be deemed expedient. {OR715482;2} 14 A Noteholder may waive any default which in its opinion shall have been remedied before the entry of final judgment or decree in any suit, action or proceeding instituted by it under the provisions of this Agreement or before the completion of the enforcement of any other remedy under this Agreement, but no such waiver shall be effective unless in writing and no such waiver shall extend to or affect any other existing or any subsequent default or defaults or impair any rights or remedies consequent thereon. ARTICLE VI MISCELLANEOUS PROVISIONS Section 6.01. Covenants of City, Etc.; Successors. All of the covenants, stipulations, obligations and agreements contained in this Agreement shall be deemed to be covenants, stipulations, obligations and agreements of the City to the full extent authorized or permitted by law, and all such covenants, stipulations, obligations and agreements shall be binding upon the successor or successors thereof from time to time, and upon any officer, board, commission, authority, agency or instrumentality to whom or to which any power or duty affecting such covenants, stipulations, obligations and agreements shall be transferred by or in accordance with law. Section 6.02. Term of Agreement. This Agreement shall be in full force and effect from the date hereof until the Note and all other sums payable to the Bank hereunder have been paid in full and shall survive the termination of this Agreement in relation to those provisions that deal with retroactive cost increases for the Bank in relation to the tax exempt status of the Note. Section 6.03. Notice of Changes in Fact. Promptly after the City becomes aware of the same, the City will notify the Bank of (a) any changes in any material fact or circumstance represented or warranted by the City in this Agreement or in connection with the issuance of the Note, and (b) any default under this Agreement, specifying in each case the nature thereof and what action the City has taken, is taking and/or proposes to take with respect thereto. Section 6.04. Amendments and Supplements. This Agreement may be amended or supplemented from time to time only by a writing duly executed by each of the City and the Noteholders. Section 6.05. Notices. Any notice, demand, direction, request or other instrument authorized or required by this Agreement to be given to or filed with the City or the Bank, shall be deemed to have been sufficiently given or filed for all purposes of this Agreement if and when sent by certified mail, return receipt requested: (a) As to the City: City of Winter Springs, Florida 510 N. Baker Street Winter Springs, Florida 32757 Attention: Office of the Clerk {OR715482;2} 15 (b) As to the Banle SunTrust Bank 200 S. Orange Avenue 10lh Floor, Mail Code II 00 Orlando, FL 32801 Attention: Leif Chase Either party may, by notice sent to the other, designate a different or additional address to which notices under this Agreement are to be sent. Section 6.06. Benefits Exclusive. Except as herein otherwise provided, nothing in this Agreement, expressed or implied, is intended or shall be construed to confer upon any person, firm or corporation, other than the City and the Noteholder, any right, remedy or claim, legal or equitable, under or by reason of this Agreement or any provision hereof, this Agreement and all its provisions being intended to be and being for the sole and exclusive benefit of the City and the Noteholder. Section 6.07. Severability. In case anyone or more of the provlSlons of this Agreement, any amendment or supplement hereto or of the Note shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Agreement, any amendment or supplement hereto or the Note, but this Agreement, any amendment or supplement hereto and the Note shall be construed and enforced at the time as if such illegal or invalid provisions had not been contained therein, nor shall such illegality or invalidity or any application thereof affect any legal and valid application thereof from time to time. In case any covenant, stipulation, obligation or agreement contained in the Note or in this Agreement shall for any reason be held to be in violation of law, then such covenant, stipulation, obligation, or agreement shall be deemed to be the covenant, stipulation, obligation or agreement of the City to the full extent from time to time permitted by law. Section 6.08. Payments Due on Saturdays, Sundays and Holidays. In any case where the date of maturity of interest on or principal of the Note or the date fixed for prepayment of the Note shall be a Saturday, Sunday or a day on which the Bank is required, or authorized or not prohibited, by law (including executive orders) to close and is closed, then payment of such interest or principal shall be made on the next succeeding day on which the Bank is open for business with the same force and effect as if paid on the date of maturity or the date fixed for prepayment, and no interest on any such principal amount shall accrue for the period after such date of maturity or such date fixed for prepayment. Section 6.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered, shall be an original; but such counterparts shall together constitute but one and the same Agreement, and, in making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart. Section 6.10. Applicable Law. This Agreement shall be governed exclusively by and construed in accordance with the applicable laws of the State of Florida. (OR715482;2} 16 Section 6.11. No Personal Liability. Notwithstanding anything to the contrary contained herein or in the Note, or in any other instrument or document executed by or on behalf of the City in connection herewith, no stipulation, covenant, agreement or obligation of any present or future member of the City Council, officer, employee or agent of the City, officer, employee or agent of a successor to the City, in any such person's individual capacity, and no such person, in his or her individual capacity, shall be liable personally for any breach or non- observance of or for any failure to perform, fulfill or comply with any such stipulations, covenants, agreements or obligations, nor shall any recourse be had for the payment of the principal of or interest on the Note or for any claim based thereon or on any such stipulation, covenant, agreement or obligation, against any such person, in his or her individual capacity, either directly or through the City or any successor to the City, under any rule or law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise and all such liability of any such person, in his or her individual capacity, is hereby expressly waived and released. Section 6.12. Defeasance. If at any time the City shall have paid, or have made provision for the payment of, the principal and interest on the Note and which may not be immediately prepayable, then, in that event, the pledge of and lien on the Designated Revenues and on the other moneys created hereunder and the covenant to budget and appropriate legally available non-ad valorem revenues of the City in favor of the Noteholder shall no longer be in effect with respect to that Note. For purposes of the preceding sentence, the deposit of cash or Federal Securities in irrevocable trust with a banking institution or trust company, for the sole benefit of the Noteholder, in an aggregate principal amount which, together with interest to accrue thereon, will be sufficient to make timely payment of the principal of and interest to accrue thereon shall be considered "provision for the payment." Nothing herein shall be deemed to require the City to repay the outstanding Note prior to maturity or to impair the City's discretion in determining whether or not to exercise any option for prepayment. If the conditions set forth in this Section 6.12 have been satisfied, all moneys held in any fund or account created hereby that are in excess of the amounts required to payor make provision for payment of the principal and interest on the Note may be withdrawn and used by the City for any lawful purpose. Section 6.13. Incorporation by Reference. All of the terms and obligations of the Resolution and the Exhibits hereto are hereby incorporated herein by reference as if all of the foregoing were fully set forth in this Agreement. All recitals appearing at the beginning of this Agreement are hereby incorporated herein by reference. {OR715482;2} 17 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first set forth herein. (SEAL) "CITY" CITY OF WINTER SPRINGS, FLORIDA By: Mayor ATTEST: By: Clerk of the City of Winter Springs, Florida "BANK" SUNTRUST BANK By: Title: Assistant Vice President {OR715482;2} 18 EXHIBIT A FORM OF NOTE ANY HOLDER SHALL, PRIOR TO BECOMING A HOLDER, EXECUTE A PURCHASER'S CERTIFICATE IN THE FORM ATTACHED HERETO CERTIFYING, AMONG OTHER THINGS, THAT SUCH HOLDER IS AN "ACCREDITED INVESTOR" AS SUCH TERM IS DEFINED IN THE SECURITIES ACT OF 1933, AS AMENDED, AND REGULATION D THEREUNDER. CITY OF WINTER SPRINGS, FLORIDA CAPIT AL IMPROVEMENT REVENUE NOTE, SERIES 2004 Principal Sum Maturity Date Note Rate Date of Issuance Not Exceeding $2,500,000 June 1,2018 Adjustable, as March 1,2004 described below The CITY OF WINTER SPRINGS, FLORIDA (the "City"), for value received, hereby promises to pay, solely from the Designated Revenues described in the within mentioned Agreement, to the order of SUNTRUST BANK, a Georgia banking corporation, or its assigns (the "Holder"), at 200 South Orange Avenue, Orlando, Florida 32801, or at such other place as the Holder may from time to time designate in writing, the Outstanding Principal Sum stated above, together with interest thereon as hereinafter provided until the Maturity Date stated above or the date the principal amount of this Note is paid in the manner hereinafter set forth in any coin or currency of the United States of America which, at the time of payment, is legal tender for the payment of public and private debts, which payments shall be made to the Holder hereof by check mailed to the Holder at the address designated in writing by the Holder for purposes of payment or by bank wire or bank transfer as such Holder may specify in writing to the City or otherwise as the City and the Holder may agree. All capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Agreement (hereinafter defined). This Note shall mature as reflected on Exhibit A hereto. Interest on this Note shall be calculated and shall accrue at the Note Rate only on the Outstanding Principal Balance of the Note (with respect to each Advance, from the date of such Advance) and shall be payable on each Interest Payment Date form the most recent date to which interest has been paid, or from the Closing Date in the case of the first interest payment date, in arrears, commencing June 1, 2004. Commencing with the Interest Payment Date of June 1, 2007 and on each Interest Payment Date thereafter, the Issuer will pay payments of principal on this Note, in addition to payments of interest, in accordance with the schedule attached hereto as Exhibit A, which schedule is based on the assumption that Advances in the aggregate amount of $2,500,00 have been made to the Issuer, without regard to the amount of Advances actually made. The Note Rate may be adjusted in accordance with Sections 3.03 of that certain Loan Agreement by and between the Holder and the City, dated as of March 1,2004 (the "Agreement"). {OR715482;2} Exhibit A-I The Holder shall provide to the City such documentation to evidence any adjustment to the Note Rate and the calculations made in connection therewith. Upon the occurrence of any Determination of Taxability, as defined in the Agreement, this Note shall bear interest (from the date when such Determination of Taxability is deemed to have occurred) at the Taxable Rate, as defined in the Agreement. Following the occurrence and during the continuance of any Event of Default, as defined in the Agreement, this Note shall bear interest at the Default Rate, as defined in the Agreement. Interest on this Note shall be computed on the basis of a 360 day year of l2, 30-day months. The Note may be prepaid by the City in whole or in part at any time in such manner as shall be determined by the City from any legally available monies as a prepayment price of 100% of the principal amount to be redeemed, plus accrued interest to the prepayment date. Each prepayment shall be made on such date and in such principal amount as shall be specified by the City in a written notice delivered to the Holder not more than fifteen (15) and not less than five (5) days prior to the specified prepayment date. Any prepayments shall be applied to the sums last maturing hereunder. Notice having been given as aforesaid, the principal amount stated in such notice or the whole thereof, as the case may be, shall become due and payable on the prepayment date stated in such notice, together with interest accrued and unpaid to the prepayment date on the principal amount then being paid; and the amount of principal and interest then due and payable shall be paid (i) in case the entire unpaid balance of the principal of this Note is to be paid, upon presentation and surrender of this Note to the office of the Holder at 200 South Orange Avenue, Orlando, Florida, and (ii) in case only part of the unpaid balance of principal of this Note is to be paid, upon presentation of such Note at the office of the Holder at 200 South Orange Avenue, Orlando, Florida, for notation thereon of the amount of principal and interest on this Note then paid. If, on the prepayment date, funds for the payment of the principal amount to be prepaid, together with interest to the prepayment date on such principal amount, shall have been given to the Holder, as above provided, then from and after the prepayment date interest on such principal amount of this Note shall cease to accrue. .If said funds shall not have been so paid on the prepayment date, the principal amount of this Note shall continue to bear interest until payment thereof at the rate provided for herein. Any prepayments shall be applied to the sums last maturing hereunder. All payments made by the City hereon shall apply first to accrued interest, then to other charges due the Holder, and the balance thereof shall apply to the principal amount then due on this Note. This Note is authorized to be issued in the outstanding aggregate principal amount equal to the Principal Sum under the authority of and in full compliance with the Constitution and statutes of the State of Florida, including, particularly, Chapter 166, Florida Statutes, and other applicable provisions of law, the City's Resolution No. 2004-10 effective February 23, 2004 (the "Resolution"), and is subject to all terms and conditions of the Agreement and the Resolution. Any term used in this Note and not otherwise defined shall have the meaning ascribed to such term in the Resolution or the Agreement, as the case may be. {OR715482;2} Exhibit A-2 Notwithstanding any provision in this Note to the contrary, in no event shall the interest contracted for, charged or received in connection with this Note (including any other costs or considerations that constitute interest under the laws of the State of Florida which are contracted for, charged or received) exceed the maximum rate of nonsurious interest allowed under the State of Florida as presently in effect and to the extent an increase is allowable by such laws, but in no event shall any amount ever be paid or payable by the City greater than the amount contracted for herein. In the event the maturity of this Note is accelerated or prepaid in accordance with the provisions hereof, 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 that permitted by Section 215.84(3), Florida Statutes, as presently in effect and to the extent an 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 Agreement or Resolution. THIS NOTE, WHEN DELIVERED BY THE CITY PURSUANT TO THE TERMS OF THE AGREEMENT AND THE RESOLUTION, SHALL NOT BE OR CONSTITUTE AN INDEBTEDNESS OF THE CITY OR THE STATE OF FLORIDA (THE "STATE"), WITHIN THE MEANING OF ANY CONSTITUTIONAL, STATUTORY OR CHARTER LIMITATIONS OF INDEBTEDNESS, BUT SHALL BE PAY ABLE SOLELY FROM THE DESIGNATED REVENUES, AS PROVIDED IN THE AGREEMENT AND THE RESOLUTION. THE HOLDER SHALL NEVER HAVE THE RIGHT TO COMPEL THE EXERCISE OF THE AD VALOREM TAXING POWER OF THE CITY OR THE STATE, OR TAXATION IN ANY FORM OF ANY PROPERTY THEREIN TO PAY THIS NOTE OR THE INTEREST THEREON. Upon the occurrence of an Event of Default the principal of this Note may become or be declared due and payable before the Maturity Date in the manner, with the effect and subject to the conditions set forth in the Agreement and Resolution. The Holder shall also have such other remedies as described in the Agreement. The City hereby waives presentment, demand, protest and notice of dishonor. This Note is governed and controlled by the Agreement and reference is hereby made thereto regarding interest rate adjustments, acceleration, and other matters. [Remainder of Page Intentionally Left Blank] {OR715482;2} Exhibit A-3 IN WITNESS WHEREOF, the City has caused this Note to be signed by its Mayor, either manually or with facsimile signature, and the seal of the City to be affixed hereto or imprinted or reproduced hereon, and attested by the Clerk of the City, either manually or with facsimile signature, and this Note to be dated the Date oflssuance set forth above. CITY OF WINTER SPRINGS, FLORIDA (SEAL) By: Mayor ATTEST: By: City Clerk {OR715482;2} Exhibit A-4 FORM OF CERTIFICATE OF AUTHENTICATION Date of Authentication: This Note is being delivered pursuant to the within mentioned Agreement. CITY OF WINTER SPRINGS, FLORIDA as Registrar By: Its: City Clerk {OR715482;2} Exhibit A-5 ASSIGNMENT FOR V ALUE RECEIVED the undersigned sells, assIgns and transfers unto (please print or typewrite name, address and tax identification number of assignee) the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints Attorney to transfer the within Note on the books kept for registration thereof, with full power of substitution in the premises. Name of Note holder: By: {OR715482;2} Exhibit A-6 PURCHASER'S CERTIFICATE [DATE] City of Winter Springs, Florida (the "City") Ladies and Gentlemen: The undersigned, as purchaser of the City of Winter Springs, Florida Capital Improvement Revenue Note, Series 2004 (the "Note") dated February 24, 2004, consisting of one typewritten Note, hereby certifies that: A. We are aware: (i) that investment in the Note involves various risks; (ii) that the Note is not a general obligation of the City; and (iii) that the principal or premium, if any, and interest on the Note is payable solely from the Designated Revenues as specified in the Loan Agreement securing the Note. B. We have been afforded access to all information we have requested in making our decision to purchase the Note and have had sufficient opportunity to discuss the business of the City and the Designated Revenues with its officers, employees and others. We do not require any further information or data incident to our purchase of the Note. C. In purchasing the Note, we have relied solely upon our own investigation, examination, and evaluation of the City, the Designated Revenues and other relevant matters. D. We have knowledge and experience in financial and business matters and are capable of evaluating the merits and risks of our investment in the Note and have determined that we can bear the economic risk of our investment in the Note. E. We acknowledge the understanding that the Note has not been registered under the Securities Act of 1933, as amended or Chapter 517, Florida Statutes, and that the Loan Agreement has not being qualified under the Trust Indenture Act of 1939, as amended, and that the City shall have no obligation to effect any such registration or qualification. We also acknowledge that we are an "accredited investor" within the meaning of Chapter 5l7, Florida Statutes and Regulation D ofthe 1933 Act. {OR715482;2} Exhibit A-7 F. We are not acting as a bond house, broker or other intermediary, and are purchasing the Note as an investment for our own account and not with a present view to a resale or other distribution to the public. Signed as of the _ day of ,200_. By: Title: {OR715482;2} Exhibit A-8 120803_COMM_Regular__R.F.P.Page 1 of2 COMMISSION AGENDA ITEM 206 Consent X Information Public Hearin2 Re2ular December 8. 2003 Meeting MGR. frv /Dept. REQUEST: City Manager requesting the Commission to approve issuance of a R.F.P. for a bank qualified non-revolving line of credit to finance municipal projects not to exceed $2,500,000. PURPOSE: This request is needed to get Commission approval for acquiring financing for small municipal projects though a bank qualified non revolving line of credit in the alternative to other financing instruments. CONSIDERATIONS: The City needs short and intermediate term financing to finance projects with 3 to 5 year payouts. A bank qualified non-revolving letter of credit is the ideal financial instrument in this situation because: . 1. It is very inexpensive to issue. 2. It has low interest rates. 3. It is very flexible. 4. It is very safe. Separate Commission resolutions are required to authorize utilizing the line of credit for each project. 120803_ COMM_Regular_ _ R.F.P. Projects that we anticipate financing with the line of credit are: Parker property improvements Expansion of City Hall Expansion of Police Building New Public Works Facility Fire Truck Replacement 100,000 600,000 100,000 600,000 300.000 1,700,000 FUNDING: The source of funding for these projects are as follows: Parker property improvements Expansion of City Hall Expansion of Police Building New Public Works Facility Fire Truck Park Impact Fees Public Building Impact Fees Police Impact Fees Public Building Impact Fees General Fund RECOMMENDATIONS: It is recommended that the City Commission authorize the City Manager to issue an R.F.P. for a bank qualified variable rate line of credit not to exceed $2,500,000 and to return the results of the R.F.P. to the Commission for approval ATTACHMENTS: (A) November 24,2003 letter of David Moore and R.F.P. COMMISSION ACTION: 2 The PFM Group Pub/lc financial Management, Inc. PFM Asset Management LLC PFM Advlscn Lincoln Plaza Suite 1170 300 S. Orange Avenue Orlando, FL 32801-3470 407 648-2208 407-648-1323 fax www.p1m.com November 24, 2003 Memorandum Th: ~nMWm~~a~~~ Ci~ ofWlOter Springs From: David Moore Rebecca Peterson CC: Louise Frangoul, Finance Director Re: RFP for Line of Credit At the request of the City ofWlOter Springs (the "City''), Public Financial Management, Inc. ("PFM''), in its capacity as financial advisor to the City, has prepared a draft of a Request for Proposals for a Bank Qualified N on-Revolving.line Of Credit ("LOC'') & Term Loan. The LOC will be structured to allow the City to take monthly draws and prepay at any time before it converts to a Term Loan with a fifteen-year amortization (2018). Interest on the LOC will be paid semi-annually on June 1 and December 1 and will be calculated at a bank-qualified variable rate. Upon conversion of the LOC to a Term Loan, the City will have the option to keep the obligation in a variable rate mode or switch the obligation into a fixed rate mode. Interest on the Term Loan will be paid semi-annually on J nne 1 and December 1 and amortize the principal balance of the loan annually on June 1. The structure of the LOC will provide the City with the flexibility to add projects via Resolution throughout the draw period. The City's alternatives to using an LOC to fund these projects are as follows: . Alte(nanve: 1. Regular bond issue 2. A number of successive bank loans 3. Pooled loan progtam (League of Cities, Florida Municipal Loan Council, etc.) ReMon for using LOC VS. Alte(native: . Higher costs of issuance. . Would require multiple, successive loans to achieve the same flexibility to add projects. . Limited to interest rate mode, timing, amortization and prepayment options dictated by program. All of the above listed alternatives can be optimal with the appropriate circumstances. However, since the amount of the financings are expected to be very small and the City prefers the flexibility to add projects at will and prepay at any time without penalty, the most cost effective option is a bank-qualified llne of credit. Enclosed with this memo is the RFP. Should you have any questions, please do not hesitate to contact us at 407-648-2208. CITY OF WINTER SPRINGS, FLORIDA REQUEST FOR PROPOSALS FOR CAPITAL IMPROVEMENT REVENUE NOTE, SElUES 2004 BANK QUALIFIED NON-REVOLVING LINE OF CREDIT & TERM LOAN December 10,2003 TABLE OF CONTENTS Page 1. Introduction A. Obj ective .. .....,... ................. ...... ....... ............ .... ............... ........ ............... m......1 B. Bidding Instructions 1. Sealed B ids......n...... ..... .... ....... ...... ...................... ............... ....... ...... ...m ...2 2. Bid Response................. ................ ........ ...... ............... ............... ...... .........2 3. Questions, Additional Information......................................m..................2 4 . Tentative Schedule.. ......... ...... ............... ....... ................ ............................3 C. Security for LaC and Term Loanm...............................................................3 D. Structure of the Financing...... ....... '" ..................... ... .... ..................................3 B. Provi sos................................... ...................... ................ .................................4 IT. Evaluation of Proposals - Criteria..............................................................mm....4 ITL Instructions to Proposers ............ ....... ............... .... ................... ............................6 IV. Other Information..................... .......... ...... ...................................... ......................7 REQUEST FOR PROPOSALS CITY OF WINTER SPRINGS, FLORIDA CAPITAL IMPROVEMENT REVENUE NOTE, SERIES 2004 BANK QUALIFIED NON-REVOLVING LINE OF CREDIT & TERM LOAN I. Introduction The City of Winter Springs, Florida (the "City") was originally incorporated in 1959 under the name of the Village of North Orlando and became the City of Winter Springs in 1972. The City is located in southern Seminole County in central Florida. Adjacent municipalities are Longwood, Casselberry and Oviedo. The City's estimated 2002 population was 32,000. The City is served by a City Commission - City Manager fonn of government consisting of a Mayor, five commissioners and a City Manager. The Mayor and City Commissioners are elected for four- year terms. The Mayor votes on matters coming before the City Commission only if needed to break a tie vote among the other City Commissioners. The City Manager is appointed by the City Commission. A. Objective The objective of this Request for Proposals (the "RFP") is to identify the institution that can provide the City of Winter Springs, Florida (the "City") with a $2,500,000 variable rate line of credit (the "LOC") that will provide for conversion to a term loan in the form of a revenue note (the "Term Loan") at the lowest overall borrowing cost without prepayment penalty and pursuant to certain conditions. The financing will be a private placement and the City is not preparing any disclosure information. The LOC and subsequent Term Loan will be secured by the impact fees of the Project, as well as a covenant by the City to appropriate in its annual budget an amount from Non-Ad Valorem Funds to pay the principal and interest on this Note. The City plans to draw upon the LOC in multiple increments over the period of two (2) years ("Draw Period") to fund certain capital projects set forth in the City's capital plan (the "Project"). During the Draw Period on the LOC, the City will pay interest only on a semiannual basis on each June 1 and December 1 following the date of the first draw on the LOC. Upon the conclusion of the Draw Period the City plans to convert all or a portion of the LOC to a Term Loan (the "Conversion Date"). The Term Loan will bear interest at a fixed or variable rate (to be selected by the City at the time of conversion) and will mature no later than June 1,2018. The principal of the Term Loan will be paid annually on June 1 commencing the first June 1 at least 12 months after the Conversion Date. Interest on the Tenn Loan will be paid semi-annually on June 1 and December 1 immediately following the Conversion Date. The debt service payments on the Term Loan will be structured to produce level annual debt service. B. Bidding Instructions 1. Sealed Bids Four (4) copies of the response to this RFP shall be submitted on or before 2:00 p.m. EST on December 19, 2003 at the following addresses: Louise Frangoul (2 copies) Finance Director City of Winter Springs 1126 E. State Road 434 Winter Springs, FL 32708 (407) 327-5960 phone (407) 327-4753 fax David Moore (2 copies) Senior Managing Consultant Public Financial Management, Inc. 300 South Orange Avenue, Suite 1170 Orlando, FL 32801 (407) 648-2208 phone (407) 648-1323 fax The City reserves the right to reject any and all proposals, to waive any informality or irregularities in any proposal received or take any other such action that may be deemed to be in the best interest of the City. 2. Bid Response Each bid should address all pertinent areas and be specific. Any conditions should be clearly stated. The failure to disclose substantive tenus, conditions and covenants may be considered cause for the proposer's proposal to be rejected by the City. The City shall not accept any proposals with reserve requirements or other restrictions to revenues or requirements to maintain minimum balances in any bank account. 3. Questions. Additionallnfonnation Contact with personnel and Board members of the City other than the Finance Director or the designated representative regarding this Request for Proposals will be grounds for elimination from the selection process. The City shall not 2 be responsible for oral interpretations given by any employee or" its representative. The City will not be liable for any expenses incurred in connection with the preparation of a response to this RFP. The proposer shall examine all proposal documents and shall judge all matters relating to the adequacy of such documents. Any inquiries, suggestions or requests c~nceming clarification or solicitation for additional information shall be submitted in writing to the City's Financial Advisor: PUblic Financial Management, Inc. 300 S. Orange Avenue, Suite 1170, Orlando, FL 32801 or fax the same to (407) 648- 1323. Public Financial Management, Inc. will be reviewing the bids and will recommend the proposer that bids the lowest overall borrowing cost and" most favorable terms. 4. Tentative Schedule The City will attempt to adhere to the following schedule: December 10, 2003 December 19, 2003 January 12,2004 January 13, 2004 RFP Issued Written responses due Selection of Provider I Adopt Financing Resolution and Award to Provider Closing The City reserves the right to alter scheduled dates if necessary. C. Security for LOC and Term Loan Amounts due under the LOC and Term Loan will be exclusively secured by the impact fees of the Project, as well as a covenant by the City to appropriate in its annual budget an amount from Non-Ad Valorem Funds to pay the principal and interest on this Note as will be stated by the resolution adopted on January 12,2004. D. Structure of the Financing Line of Credit: 1. Amount: $2,500,000 2. Rate: Bank-qualified variable rate based on a spread to a nationally recognized index. 3. Draws: Draw period of two (2) years. The City may make draws on the LOC no more frequently than once per month. Draw requests must be funded via wire transfer (at no cost) within five (5) business days of the request. 3 4. Repayment Terms: Interest on the outstanding balance of the LOC will be paid semiannually based upon a 30/360~day basis and will be paid on each June 1 and December 1. 5. Principal Prepayment: The LOC can be prepaid in full or in part at any time without penalty. Term Loan: 1. At the City's discretion, on the first day of any month, the City may elect to convert all or a portion of the outstanding balance of the LOC to a Term Loan. The interest rate on the Term Loan will be fixed or variable (to be decided by the City at the time of conversion) based on a predefmed spread to a nationally recognized index. The interest rate will be a bank-qualified, tax-exempt rate. The rate quoted may not exceed the maximum rate permitted under Florida Statute 215.84. 2. Repayment Terms: Interest payments on the outstanding principal balance of the Term Loan will be calculated on a 30/360-day basis and will be paid semiannually on June 1 and December 1, of each year. The principal amount of the Term Loan will be payable annually on June I and, upon conversion, shall be structured to produce substantially level annual debt service payments each year through the final maturity of the Term Loan. Final maturity of the Term Loan is June 1,2018. 3. Prepayment Terms: The City is requesting the fixed interest rate to be bid on the basis of the following two options of prepayment terms: a.) The Term Loan is subject to prepayment (without penalty) in whole or in part at any time. This structure is required. b.)The Term Loan is subject to prepayment by the City with a prepayment penalty (please outline prepayment terms). This structure is optional. E. Provisos The City will not accept proposals with terms and conditions different than those included in this RFP. II. EVALUATION OF PROPOSALS - CRITERIA Proposals will be evaluated on the basis of cost and compliance with the proposed structure and terms of the Term Loan as outlined in this RFP. The City will select the proposal that meets its overall goals and objectives and that provides the lowest overall borrowing cost to 4 the City. Aside from the lowest overall borrowing cost and the requirements listed in Section A below, additional criteria for selection will include the following: . Quality of past perfonnance, . Financial strength, . Ability to meet time requirements, . Cost, . Qualifications of personnel, and . Corporate qualifications. A. Proposal Format In order to assist the City in reviewing proposals, each proposal shall be prepared utilizing the following fonnat and headings: 1.. Contact Information: State the legal name of the fmancial institution or firm, current principal business address, contact person, telephone and facsimile numbers. 2. Interest Rate: LOC - Identify the index and state a spread to said index for the bank-qualified variable rate to be used on the LOC. Provide this interest rate on a current basis and on a ten (10) year historical basis (i.e. 10-yr average of index with applied spread). Proposer's mus/provide the historical database on which the interest rate is based in an Excel spreadsheet file emailed to moored@pfin.com prior to the proposal's due date/time. Term Loan - Identify the index and state the spread to said index to be used to set the fixed rate or variable rate on the Tenn Loan upon the Conversion Date. The City will have the option to choose a fixed rate Term Loan or a variable rate Term Loan. Proposers must provide interest rates for each of the Prepayment Options identified in Section I (D) above. Provide a five-year history for each index. Provide these fixed and variable rates on a current basis and on a ten (10) year historical basis (Le. 10-yr average of index with applied spread). Proposer's must provide the historical database on which the interest rate is based in an Excel spreadsheet file em ailed to moored@pfm.com prior to the proposal's due date/time. Such rates mus/ be presented in two ways: First, show the rate available the day prior to the RFP due date (December 18,2003). Second, clearly identify the methodology for determining the interest rates at the time of conversion for the Term Loan. For example, the rate may be expressed as a percentage of the yield for the U.S. Government Treasury obligation having a maturity closest to, but not shorter than, the fmal maturity (or weighted average maturity) of the Term Loan. Provide the basis for the interest rate calculations and provide a detailed example of sueh calculations. 5 3. Fees and Expenses: Describe in detail all fees and expenses for which the City will be responsible. The amounts stated in the proposal shall represent the maximum amounts payable to the proposer by the City. All fees and expenses in excess of those stated in the proposal shall be the sole responsibility of the proposer and will not be paid or reimbursed by the City. The City's bond counsel, Akerman Senterfitt, P.A. will prepare all documents and will render an opinion regarding the tax-exemption of the LOC and the Term Loan. 4. Prepayment Provisions: If the proposer's prepayment provisions are different than those outlined, above please specify. 5. Conditions: Provide a listing of all conditions, terms or restrictions, other than those specified in this RFP, which would be included in your commitment to provide the Term Loan. ill. INSTRUCTIONS TO PROPOSERS A. Proposers shall thoroughly examine and be familiar with the bid specifications. Failure of any proposer to receive or examine this document shall in no way relieve any proposer of obligations pertaining to this bid or the subsequent contract. B. Any changes or modifications to the bid specifications can result in the rejection of the bid as not being responsive to this RFP. C. The responsibility for delivering the proposal to the City on or before the specified date and time will be solely and strictly the responsibility of the proposer. The City will in no way be responsible for delays caused by the United States Post Office or a delay caused by any other occurrence. D. The response deadline shall be strictly observed. Under no circumstances will a proposal delivered after the time specified be considered. Such proposals will be returned to the proposer unopened. E. Proposers will not be allowed to withdraw or modify their bids for a period of ninety (90) days after the opening time and date. F. The City reserves the right to reject the bid of any proposer who has previously failed in the proper performance of a contract or to deliver on time other contracts similar in nature, or who is not in a position to perform properly under this contract. G. The City reserves the right to inspect all facilities of the proposer in order to make a determination as to their capabilities. 6 H. Federai, state, COWlty and local laws, ordinances, rules and regulations that in any manner affect the items covered herein apply. Lack of knowledge by the proposer will in no way be a cause for relief from responsibility.. 1. No successful proposer may assign any portion of the contractual agreement between the parties without prior written authorization by the City. J. Changes to the RFP may be made by and at the sole discretion of the City. K. Public Entity Crimes Form - Each proposer shall complete the Public Entity Crimes Form and shall submit the same with the proposal. The City considers the failure of the proposer to submit this document to be a major irregularity and may be cause for rejection of the proposal. 1. Warranties - The proposer, in submission of its proposal, warrants to the City that it will comply with all applicable federal, state and local laws, regulations and orders in providing the services under the proposed documents. M. Collusion _ The Proposer, by affixing its signature to this proposal, certifies that its proposal is made without previous understanding, agreement, or connection either with any previous firms or corporations offering a Proposal for the same items, or with the City. The proposer also certifies that its proposal is in all respects fair, without outside control, collusion, fraud or otherwise illegal action. IV. OTHER JNFORMATION A. The City reserves the right to accept or reject any and all bids for any reason deemed appropriate by the City, to waive any irregularities or informalities in any bid or in the bidding, and to accept or reject any items or combination of items. The award will be to the institution whose response complies with all of the requirements set forth in this RFP and whose bid, in the sole opinion of the City, is best taking into consideration all aspects of the proposer's response. B. In the event that the successful proposer does not execute a contract within a timeframe acceptable to the City, the City may give notice of intent to award the bid to the next most qualified proposer or to call for new bids and may proceed to act accordingly. 7 ,. RESOLUTION NUMBER 2004-10 A RESOLUTION OF THE CITY OF WINTER SPRINGS, FLORIDA: (i) AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $2,500,000 OF DEBT TO FINANCE THE COST OF CAPiTAL PROJECTS IN AND FOR THE CITY AS MORE SPECIFICALLY DESCRIBED IN THE LOAN AGREEMENT ATTACHED HERETO; (ii) AUTHORIZING THE EXECUTION AND DELIVERY OF SAID LOAN AGREEMENT WITH SUNTRUST BANK PURSUANT TO WHICH THE CITY WILL ISSUE A NOTE TO SECURE THE REPAYMENT OF SAID LOAN; (iii) AUTHORIZING THE CITY'S COVENANT TO BUDGET AND APPROPRIATE SUFFICIENT LEGALLY AVAILABLE NON-AD VALOREM REVENUES AND THE PLEDGING OF LEGALL Y AVAILABLE IMPACT FEES TO PAY DEBT SERVICE ON THE NOTE; (iv) AUTHORIZING THE PROPER OFFICIALS OF THE CITY TO DO ANY OTHER ADDITIONAL THINGS DEEMED NECESSARY OR ADVISABLE IN CONNECTION WITH THE EXECUTION OF THE LOAN AGREEMENT, THE NOTE, AND THE SECURITY THEREFOR; (v) RATIFYING AND APPROVING THE EXECUTION OF THE COMMITMENT LETTER WITH SUNTRUST BANK; (vi) DESIGNATING THE NOTE AS A "QUALIFIED TAX-EXEMPT OBLIGATION" UNDER SECTION 265(b)(3)(B) OF THE INTERNAL REVENUE CODE OF 1986; AND (vii) PROVIDING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA, as follows: SECTION 1. FINDINGS AND AUTHORIZATION OF PROJECT. (A) The City of Winter Springs, Florida (the "City"), pursuant to the provisions of the Florida Constitution, Chapter l66, Florida Statutes, and any other applicable provisions of law (all of the foregoing, collectively, the "Act") is authorized, in accordance with the Act, to borrow money, issue bonds, notes or other obligations to finance the cost of capital expenditures for the City's public purposes; (B) In response to a request for proposal by the City regarding an intended borrowing for City capital projects (the "Project"), SunTrust Bank (the "Bank") has proposed a financing in accordance with the terms of the Bank's commitment of December 23, 2003 attached hereto as Exhibit A (the "Commitment"); (C) In accordance with the Commitment, the Bank is willing to provide the City with a not exceeding $2,500,000 Term Loan maturing June 1,2018 (the "Loan") on the terms set forth in the Commitment and documented in the form of Loan Agreement between the City and the Bank attached hereto as Exhibit B (the "Loan Agreement"); (D) The Loan will be secured by the Loan Agreement pursuant to which the City will issue a note (the "Note") to secure the repayment of the Loan; (E) The City hereby accepts the Commitment and the City has determined under Section 218.385, Florida Statutes, that it is in its best interest, taking all pricing facts of the transaction into consideration and given the size of the proposed borrowing, to enter into the Loan Agreement with the Bank; and (F) The Project is a capital project appropriately undertaken by the City under the Act and the City hereby authorizes the Project and the capital expenditures necessary to complete the Project. SECTION 2. AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted pursuant to the provisions of the Act and other applicable provisions of law. SECTION 3. APPROVAL OF LOAN AGREEMENT, NOTE AND COMMITMENT. The City hereby authorizes the Mayor or his designee (collectively the "Mayor") to execute and deliver, and the City Clerk or her designee (collectively, the "City Clerk") to attest, on behalf of the City, the Loan Agreement substantially in the form attached hereto as Exhibit "B" and the Note in the form attached to the Loan Agreement made by the City to the order of Bank, with such changes, insertions, and additions as they may approve, their execution thereof being evidence of such approval. The City further approves and accepts the Commitment. SECTION 4. PAYMENT OF DEBT SERVICE ON NOTE. Pursuant to the Loan Agreement, the City will pledge to the payment of debt service on the Note legally available impact fees in the manner provided in the Loan Agreement. Also pursuant to and subject to the provisions of the Loan Agreement, the City covenants and agrees to appropriate in its annual budget, by amendment, if necessary, from legally available non ad-valorem revenues of the City, and which are lawfully available to pay debt service on the Note, amounts sufficient to pay principal of and interest on the Note as the same shall become due to the extent legally available impact fees are insufficient to pay any such principal and interest. SECTION 5. AUTHORIZATION OF OTHER DOCUMENTS TO EFFECT TRANSACTION. To the extent that other documents, certificates, opinions, or items are needed to effect any of the transactions referenced in this Resolution, the Loan Agreement or the Note and the security therefore, the Mayor, the City Manager, the City Attorney, the City Clerk and the City Finance Director are hereby authorized to execute and deliver such documents, certificates, opinions, or other items and to take such other actions as are necessary for the full, punctual, and complete performance of the covenants, agreements, provisions, and other terms as are contained herein and in the documents included herein by reference. City of Winter Springs Resolution Number 2004-] 0 Page 2 of3 i SECTION 6. DESIGNA TION OF NOTE AS BANK QUALIFIED. The City designates the Note as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). The City does not reasonably anticipate that the City, any subordinate entities of the City, and issuers of debt the issue "on behalf' of the City, will during the calendar year 2004 issue more than $l 0,000,000 of "tax-exempt" obligations, exclusive of those obligation described in Section 265(b)(3)(C)(ii) of the Code. SECTION 7. PAYING AGENT AND REGISTRAR. The City hereby accepts the duties to serve as Registrar and Paying Agent for the Note. SECTION 8. LIMITED OBLIGATION. The obligation of the City to repay amounts under the Loan Agreement and the Note are limited and special obligations, payable solely from the sources and in the manner set forth in the Loan Agreement and shall not be deemed a pledge of the faith and credit or taxing power of the City. SECTION 9. EFFECT OF PARTIAL INY ALIDITY. If anyone or more provisions of this Resolution, the Loan Agreement or the Note shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not effect any other provision of this Resolution or the Note, but this Resolution, the Loan Agreement and the Note shall be construed and enforced as if such illegal or invalid provision had not been contained therein. The Note and Loan Agreement shall be issued and this Resolution is adopted with the intent that the laws of the State of Florida shall govern their construction. SECTION lO. EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption; provided, however, to the extent that the Loan Agreement, the Note, or any other documents related to the matters set forth herein have been executed prior to the execution date of this Resolution, this Resolution shall be retroactive to the date of execution of such documents. RESOLVED in regular meeting on this 23rd day of February, 2004. " By: NTER SPRING-5, FLORIDA' . fI4urf,. '. May r City of Winter Springs, Florida inter Springs, Florida ity Attorney City of Winter Springs, Florida City of Winter Springs Resolution Number 2004-10 Page 3 of3