HomeMy WebLinkAbout2004 05 24 Regular 505
agenda - oak forest
,
COMMISSION AGENDA
ITEM 505
Consent
Information
Public Hearine
Regular X
MGR.V IDept.iUJt'
.
Mav 24. 2004
Meeting
REQUEST:
The City Manager is requesting the Commission to:
. Adopt Resolution No, 2004-17 authorizing (1) extension of the bank loan financing the
Oak Forest assessment projects, and (2) obtaining an additional $80,000 for other projects
in the assessment area.
PURPOSE:
The purpose of this Agenda Item is to amend the original loan agreement with Bank of America to
extend the maturity as was planned in the original financing and obtain an additional $80,000 for
construction projects.
CONSIDERATION:
Interest rates were higher when the original loan was approved. This action will reduce the interest rate
and provide for extension ofthe financing to 2010 as originally planned.
RECOMMENDATIONS:
Approval of Resolution No. 2004-17 and authorize the City Manager, Mayor and staff to take action to
facilitate closing the financing.
ATTACHMENTS:
1. Resolution No. 2004-17
RESOLUTION NO. 2004-17
A RESOLUTION OF THE CITY COMMISSION OF THE
CITY OF WINTER SPRINGS, FLORIDA, ACCEPTING
THE PROPOSAL OF BANK OF AMERICA, N.A., TO
PROVIDE THE CITY WITH A $575,907 LOAN TO (i)
REFINANCE THE CITY'S CAPITAL IMPROVEMENT
REVENUE NOTE, SERIES 2000B, AND (ii) FINANCE THE
COST OF A CAPITAL PROJECT IN AND FOR THE CITY,
CONSISTING OF COMPLETING THE CONSTRUCTION
OF THE OAK FOREST SUBDIVISION WALL;
AUTHORIZING THE EXECUTION AND DELIVERY OF A
LOAN AGREEMENT WITH SAID BANK PURSUANT TO
WmCH THE CITY WILL ISSUE A NOTE TO SECURE
THE REPAYMENT OF SAID LOAN AND WILL PLEDGE
TO THE EXTENT PROVIDED THEREIN CERTAIN
PLEDGED FUNDS TO SECURE THE REPAYMENT OF
SAID NOTE; AUTHORIZING THE ISSUANCE OF A NOTE
IN THE AGGREGATE PRINCIPAL AMOUNT OF $575,907
PURSUANT TO THE LOAN AGREEMENT TO SECURE
THE REPAYMENT OF SAID LOAN; DESIGNATING SAID
NOTE FOR THE EXCEPTION TO THE PROVISIONS
CONTAINED IN THE INTERNAL REVENUE CODE OF
1986 WHICH DENY FINANCIAL INSTITUTIONS ANY
DEDUCTIONS FOR INTEREST EXPENSE ALLOCABLE
TO TAX-EXEMPT OBLIGATIONS; AUTHORIZING THE
EXECUTION AND DELIVERY OF OTHER DOCUMENTS
IN CONNECTION WITH SAID LOAN; AND PROVIDING
AN EFFECTIVE DATE.
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF
WINTER SPRINGS, FLORIDA:
SECTION 1. AUTHORITY FOR THIS RESOLUTION. This Resolution is
adopted pursuant to the provisions of Chapter 166, Part II, Florida Statutes, as amended,
Chapter 72-718, Laws of Florida, Special Acts of 1972, as amended, being the charter of the
City of Winter Springs, Florida and other applicable provisions of law.
SECTION 2. FINDINGS. It is hereby ascertained, determined and declared:
(A) The City of Winter Springs, Florida (the "City"), deems it necessary,
desirable and in the best interests of the City that the City (i) refinance the City's Capital
Improvement Revenue Note, Series 2000B, dated as of June 16, 2000 (the "Prior Note"), and
{OR752004;2}
City of Winter Springs
Resolution 2004-17
Page 1 of 4
(ii) complete the construction of the Oak Forest subdivision wall in accordance with the plans
and specifications on file or to be on file with the City, as the same may be modified from
time to time (the "Project"), all as more particularly described in the Loan Agreement (as
defmed herein).
(B) Bank of America, N,A. (the "Bank") has submitted a proposal to make a
loan (the "Loan") to the City, the proceeds of which will be applied to refinance the Prior
Note and finance the cost of the Project.
(C) The Loan will be secured by the Loan Agreement pursuant to which the
City will issue a note (the "2004A Note") to secure the repayment of the Loan.
(D) The City is advised that due to the present volatility of the market for
municipal debt, it is in the best interest of the City to issue the 2004A Note pursuant to the
Loan Agreement by negotiated sale, allowing the City to issue the 2004A Note at the most
advantageous time, rather than a specified advertised future date, thereby allowing the City to
obtain the best possible price, interest rate and other terms for the 2004A Note and,
accordingly, the City Commission of the City hereby finds and determines that it is in the best
fmancial interest of the City that a negotiated sale of the 2004A Note pursuant to the Loan
Agreement be authorized.
(E) The Loan will be repaid from the Pledged Funds (as defined in the Loan
Agreement) and the other sources provided for in the Loan Agreement. The ad valorem
taxing power of the City will never be necessary or authorized to pay the amounts due on the
Loan.
(F) It is not reasonably anticipated that more than $10,000,000 of tax-
exempt obligations under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended
(the "Code"), will be issued by the City in calendar year 2004.
SECTION 3. AUTHORIZATION OF REFINANCING OF PRIOR NOTE
AND COMPLETION OF PROJECT. The City hereby authorizes the refinancing of the Prior
Note and the construction of the Project.
SECTION 4. ACCEPTANCE OF PROPOSAL. The City hereby accepts the
proposal of the Bank to provide the City with the Loan.
SECTION 5. A UTHORIZA nON OF LOAN AGREEMENT. The Loan and
the repayment of the Loan by the City shall be pursuant to the terms and provisions of the
Loan Agreement. The City hereby authorizes the Mayor or the Deputy Mayor/Commissioner
of the City (the "Mayor") and the City Clerk or any assistant or deputy City Clerk of the City
(the "City Clerk") to execute and deliver on behalf of the City the Loan Agreement by and
between the City and the Bank substantially in the form attached hereto as Attachment A (the
{OR752004;2}
City of Winter Springs
Resolution No. 2004-17
Page 2 of 4
"Loan Agreement"), with such changes, insertions and additions as they may approve, their
execution thereof being evidence of such approval.
SECTION 6. AUTHORIZATION OF 2004A NOTE TO REFINANCE THE
PRIOR NOTE AND TO FINANCE THE COST OF THE PROJECT. The City does hereby
authorize the issuance of the 2004A Note in the aggregate principal amount of $575,907 for
the purpose of providing the City with sufficient funds to (i) refinance the Prior Note, and (ii)
finance the cost of the Project. The Mayor or Deputy Mayor and the City Clerk or any
assistant or deputy City Clerk are hereby authorized to execute, seal and deliver on behalf of
the City the 2004A Note. The 2004A Note shall be issued in the principal amount of
$575,907, shall bear interest at the initial interest rate of % and have a final maturity
date of July 1, 2010. The 2004A Note shall have such other terms, all as set forth in the Loan
Agreement and the 2004A Note authorized herein and executed and delivered in connection
with the Loan.
SECTION 7. DESIGNATION OF 2004A NOTE AS QUALIFIED TAX-
EXEMPT OBLIGATIONS. The City hereby designates the 2004A Note as "qualified tax-
exempt obligations" under Section 265(b)(3) of the Code. This designation is based upon the
findings of the City set forth in Section 2(F) of this Resolution. The City acknowledges that
any action which adversely impacts the status of the 2004A Note as "qualified tax-exempt
obligations" will result in an upward adjustment to the interest rate on the 2004A Note.
SECTION 8. LIMITED OBLIGATION. The obligation of the City to pay the
2004A Note is a limited and special obligation payable solely from the Pledged Funds in the
manner and to the extent set forth in the Loan Agreement and shall not be deemed a pledge of
the faith and credit or taxing power of the City and such obligation shall not create a lien on
any property whatsoever of or situated within the City other than the Pledged Funds.
SECTION 9. GENERAL AUTHORIZATION. The Mayor, Deputy Mayor,
City Manager, City Clerk and Finance Director are authorized to execute and deliver such
documents, instruments and contracts, and are hereby authorized and directed to do all acts
and things required hereby as may be necessary for the full, punctual and complete
performance of all the terms, covenants, provisions and agreements herein contained, or as
otherwise may be necessary or desirable to effectuate the purpose and intent of this Resolution
and the Loan Agreement.
SECTION 10. REPEAL OF INCONSISTENT DOCUMENTS. All
resolutions or parts thereof in conflict herewith are hereby superseded and repealed to the
extent of such conflict.
SECTION 11.
immediately upon its adoption.
EFFECTIVE DATE. This Resolution shall take effect
{OR752004;2}
City of Winter Springs
Resolution No. 2004-17
Page 3 of 4
PASSED, APPROVED AND ADOPTED this 24th day of May, 2004.
CITY OF WINTER SPRINGS, FLORIDA
(OFFICIAL SEAL)
By
Mayor
ATTEST:
City Clerk
Approved as to form:
City Attorney
{OR752004;2}
City of Winter Springs
Resolution No. 2004-17
Page 4 of 4
Attachment A
LOAN AGREEMENT
{OR752004;2}
LOAN AGREEMENT
BETWEEN
CITY OF WINTER SPRINGS, FLORIDA
AND
BANK OF AMERICA, N.A.
Dated as of June 2, 2004
{OR749842;3}
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITION OF TERMS
Section 1.1 Definitions........................................................................ ..1
Section 1.2 Interpretation. ..................................................................... 5
Section 1.3 Titles and Headings............................................................... 6
ARTICLE 2
REPRESENTATIONS, WARRANTIES AND COVENANTS;
SECURITY FOR 2004A NOTE; ADDITIONAL OBLIGATIONS
Section 2.1 Representations by the City. ...................................................6
Section 2.2 General Representations, Warranties and Covenants of the
Section 2.3
Section 2.4
Section 2.5
Section 2.6
Section 2.7
Section 2.8
Section 2.9
Section 2.10
Section 3.1
Section 3.2
Section 3.3
Bank.................................................................................. 8
Making of Loan. .................................................................. 8
Tax Covenants. .................................................................... 8
2004A Note not to be Indebtedness of the City or State. ................9
Security for 2004A Note. ........................................................ 9
Covenant to Budget and Appropriate. .......................................9
Payment Covenant. ............................................................. 10
Financial Covenants. ........................................................... 10
Assessnlents....................................................................... 10
ARTICLE 3
DESCRIPTION OF 2004A NOTE; PAYMENT TERMS;
OPTIONAL PREPAYMENT
Description and Payment Terms of the 2004A Note. ................... 11
Optional Prepayment........................................................... 12
Adjustments to Interest Rates. ............................................... 13
ARTICLE 4
ISSUANCE OF 2004A NOTE
Section 4.1 Issuance of 2004A Note. ....................................................... 16
{OR749842;3}
-1-
Section 4.2
Section 5.1
Section 5.2
Section 6.1
Section 6.2
Section 6.3
Section 6.4
Section 6.5
Section 6.6
Section 6.7
Section 6.8
Section 6.9
Section 6.10
EXHIBIT A
EXHIBIT B
{OR749842;3}
Project Fund. ...................................................................................................................... 18
ARTICLE 5
EVENTS OF DEFAULTS; REMEDIES
Events of Default. .............................................................................................................................. 19
Remedies. .................................................................................................................................. 20
ARTICLE 6
MISCELLANEOUS
Arbitration............................................................................................................................. 20
Amendments, Changes or Modifications to the Agreement........... 21
Counterparts. ...................................................................................................................... 21
Severability.. ...................... ................................................................................................... 21
Term of Agreement. ................................................................... 21
Assignment........................................................................ 21
Notice of Changes in Fact. .................................................... 21
Notices. ............................................................................ 22
Applicable Law. ................................................................. 22
Incorporation by Reference................................................... 22
The Project
Form of 2004A Note
11
LOAN AGREEMENT
This LOAN AGREEMENT (this "Agreement") is made and entered into as of
June 2, 2004, between the City of Winter Springs, a municipality created and existing under
and by virtue of the laws of the State of Florida (the "City"), and Bank of America, N.A., a
national banking association, and its successors and assigns (the "Bank");
WIT N E SSE T H:
WHEREAS, the City is authorized pursuant to Chapter 166, Part II, Florida
Statutes, as amended, and other applicable provisions of law to, among other things,
(a) refinance a note in the current outstanding principal balance of $495,906.86, (b) finance the
cost of certain capital projects in and for the City, consisting of completing the construction of
the Oak Forest subdivision wall, and (c) pledge the funds and credit of the City for payment of
such debts; and
WHEREAS, the Bank is willing to make available to the City, and the City is
willing to enter into, a loan arrangement pursuant to the terms and provisions of this
Agreement in an aggregate principal amount of $ under which the City shall
refinance the Prior Note (as hereinafter defined) and finance the cost of the Project (as
hereinafter defined); and
WHEREAS, the City deems it necessary, desirable and in the best interest of the
City that the City undertake to refinance the Prior Note and to complete the construction of the
Oak Forest subdivision wall (the "Project," as more particularly described in Exhibit A
attached hereto).
NOW, THEREFORE, THIS AGREEMENT WITNESSETH:
That the parties hereto, intending to be legally bound hereby and in
consideration of the mutual covenants hereinafter contained, DO HEREBY AGREE as follows:
ARTICLE 1
DEFINITION OF TERMS
Section 1.1 Definitions.
The terms defined in this Article 1 shall, for all purposes of this Agreement,
have the meanings specified in this Article 1, unless the context clearly otherwise requires.
"Act" shall mean Chapter 166, Part II, Florida Statutes, as amended, Chapter
72-718, Laws of Florida, Special Acts of 1972, as amended, and other applicable provisions of
law.
{OR749842;3}
1
"Additional Amount" shall have the meaning ascribed to such term in Section
3.1(d) hereof.
"Agreement" shall mean this Loan Agreement dated as of June 2, 2004,
between the City and the Bank, and any and all modifications, alterations, amendments and
supplements hereto made in accordance with the provisions hereof.
"Authorized Depository" shall mean the State Board of Administration of
Florida or a bank or trust company which is eligible under the laws of the State to receive
funds of the City.
"Authorized Investments" shall mean any of the following which shall be
authorized from time to time by applicable laws of the State of Florida for deposit or purchase
by the City for the investment of its funds:
(a) Direct obligations of (including obligations issued or held in book entry form
on the books of the Department of the Treasury of the United States of America and stripped
and zero coupon obligations), or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America.
(b) Bonds, debentures or notes or other evidences of indebtedness payable in
cash issued by anyone or a combination of any of the following federal agencies whose
obligations represent the full faith and credit of the United States of America: Export Import
Bank of the United States, Federal Financing Bank, Farmers Home Administration, Federal
Housing Administration, Maritime Administration, Public Housing Authority and Government
National Mortgage Association.
(c) Certificates of deposit properly secured at all times by collateral security
described in either or both of paragraphs (a) and (b) of this definition or in the collateral
provisions of Chapter 280, Florida Statutes, as amended, and issued by commercial banks,
savings and loan associations or mutual savings banks chartered by the State of Florida or the
United States of America, and bank trust receipts issued by commercial banks or trust
companies chartered by the State of Florida or the United States of America upon any
securities described in paragraph (a) of this definition.
(d) The following investments fully insured by the Federal Deposit Insurance
Corporation: (i) certificates of deposit, (ii) savings accounts, (iii) deposit accounts, or (iv)
depository receipts of a bank, savings and loan association or mutual savings bank.
(e) Commercial paper rated in one of the two highest rating categories by at
least two nationally recognized rating agencies or commercial paper backed by a letter of credit
or line of credit rated in one of the two highest rating categories by Moody's Investors Service
and Standard & Poor's.
{OR749842;3}
2
(f) Written repurchase agreements with any bank, savings institution or trust
company which is insured by the Federal Deposit Insurance Corporation, or with any
broker-dealer with retail customers which falls under Securities Investors Protection
Corporation protection, provided that such repurchase agreements are fully secured by
collateral described in (a) above or obligations of any agency or instrumentality of the United
States of America, and provided further that (i) such collateral is held by a bank or trust
company chosen by the City which has no interest in the repurchase agreement during the term
of such repurchase agreement, (ii) such collateral is not subject to liens or claims of third
parties, (iii) such collateral has a market value (determined at least once every 30 days) at least
equal to the amount invested in the repurchase agreement, (iv) the entity holding the collateral
has a perfected first security interest in the collateral for the benefit of the Noteholder, (v) the
agreement shall be for a term not longer than 270 days and (vi) the failure to maintain such
collateral at the level required in (iii) above will require the entity holding the collateral to
liquidate the collateral.
(g) Money market funds rated In the highest rating category by Moody's
Investors Service and Standard & Poor's.
(h) Units of participation in the Local Government Surplus Funds Trust Fund
established pursuant to Chapter 218, Part IV, Florida Statutes, as amended, or any similar
common trust fund which is established pursuant to the law of the State of Florida as a legal
depository of public moneys.
(i) Obligations of state or local government municipal bond issuers that are
rated in one of the two highest rating categories by Moody's Investors Service and Standard &
Poor's.
(j) Such other obligations as shall be permitted to be legal investments of the
City by the laws of the State of Florida.
Rating categories when referred to herein shall be without regard to gradations
within such categories, such as "plus" or "minus."
"Authorized City Officer" for the performance on the behalf of the City of any
act of the City or the execution of any instrument on behalf of the City shall mean any person
authorized by resolution or certificate of the City to perform such act or sign such document.
"Bank" shall mean Bank of America, N. A., and its successors and assigns.
"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,
{OR749842;3}
3
and duly admitted to practice law before the highest court of any state of the United States of
America.
"Business Day" or "business day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions within the State are authorized by law to remain
closed.
"City" shall mean the City of Winter Springs, Florida.
"City Clerk" shall mean the City Clerk of the City and such other person as
may be duly authorized to act on his or her behalf.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
applicable rules and regulations thereto and thereunder.
"Cost" when used in connection with the Project, shall mean the costs of the
Project described in Section 4.1(b) hereof.
"Determination of Taxability" shall mean the circumstance of interest paid or
payable on the 2004A Note becoming includable for federal income tax purposes in the gross
income of the Noteholder as a consequence of any act, omission or event whatsoever and
regardless of whether the same was within 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 2004A Note is
includable in the gross income of the Noteholder; (b) the issuance of any public or private
ruling of the Internal Revenue Service that any interest payable on the 2004A Note is
includable in the gross income of the Noteholder; or (c) receipt by the City or a Noteholder of
an opinion of Bond Counsel that any interest on the 2004A Note has become includable in the
gross income of the Noteholder for federal income tax purposes. For all purposes of this
definition, a Determination of Taxability will be deemed to occur on the date as of which the
interest on the 2004A Note is deemed includable in the gross income of the Noteholder. A
Determination of Taxability shall not occur solely from the fact that such interest is taken into
account in determining adjusted current earnings for the purpose of the alternative minimum
income tax imposed on corporations.
"Fiscal Year" shall mean the period commencing on October 1 of each year and
continuing through the next succeeding September 30, or such other period as may be
prescribed by law.
"Interest Payment Date" shall have the meaning ascribed thereto III Section
3.1(c) hereof.
{OR749842;3}
4
"Mayor" shall mean the Mayor of the City and such other person as may be
duly authorized to act on his or her behalf.
"Non-Ad Valorem Funds" shall mean all legally available funds of the City
derived from any source whatsoever other than ad valorem taxation on real and personal
property, which are legally available to make the payments required herein, but only after
provision has been made by the City for the payment of services and programs which are for
essential public purposes affecting the health, welfare and safety of the inhabitants of the City
or which are legally mandated by applicable law.
"Noteholder" shall mean the Bank as the holder of the 2004A Note, or any
other registered holder of or participant in the 2004A Note.
"Noteholder's Adjusted Cost of Funds" shall mean the fraction (expressed as a
percentage), determined by the Noteholder, the numerator of which is the total interest expense
of the Noteholder for each calendar year and the denominator of which is the total average
adjusted basis of all assets of the Noteholder during the calendar year as determined under
Section 265(b)(2)(B) of the Code or any successor provision thereto.
"Pledged Funds" shall mean (a) the proceeds of the 2004A Note pending the
application thereof and (b) moneys budgeted and appropriated pursuant to Section 2.7 hereof.
"Prior Note" shall mean that certain Capital Improvement Revenue Note, Series
2000B, dated as of June 16, 2000, in the original principal amount of $723,262.00 and having
a current outstanding principal balance of $495,906.86.
"Project" shall refer to the capital projects described generally in Exhibit A
attached hereto, as such Project may be amended from time to time by the City with the prior
written approval of the Bank.
"Project Fund" shall mean the Project fund established pursuant to Section 4.2
hereof.
"Resolution" shall mean the resolution adopted by the City on May 24, 2004,
which among other things authorized the execution and delivery of this Agreement and the
issuance of the 2004A Note.
"State" shall mean the State of Florida.
"Taxable Period" shall have the meaning ascribed to such term in Section 3.1(d)
hereof.
"Tax Certificate" shall have the meaning ascribed to such term in Section 2.4
hereof.
{OR749842;3}
5
"Taxable Rate" shall mean the interest rate on the 2004A Note multiplied by
1.5.
"2004A Note" shall mean the revenue note authorized by the Resolution and
delivered by the City to the N oteholder in accordance with the requirements set forth in Article
4 hereof.
Section 1.2 Interpretation.
Unless the context clearly requires otherwise, words of the 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 defmed
shall have the meanings 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 1.3 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 2
REPRESENTATIONS, WARRANTIES AND COVENANTS;
SECURITY FOR 2004A NOTE; ADDITIONAL OBLIGATIONS
Section 2.1 Representations by the City.
The City represents, warrants and covenants that:
(a) The City is a municipality validly created and existing under the laws of the
State of Florida. Pursuant to the Resolution, the City (i) has duly authorized the execution and
delivery of this Agreement and the performance by the City of all of its obligations hereunder,
and (ii) shall duly authorize the 2004A Note issued hereunder and the performance by the City
of all its obligations relating thereto.
(b) The City has complied with all of the provisions of the Constitution and laws
of the State, and has full power and authority to enter into and consummate all transactions
contemplated by this Agreement or under the 2004A Note, and to perform all of its obligations
hereunder and, to the best knowledge of the City, the transactions contemplated hereby do not
{OR749842;3}
6
conflict with the terms of any statute, order, rule, regulation, judgment, decree, agreement,
instrument or commitment to which the City is a party or by which the City is bound.
(c) The City is duly authorized and entitled to issue the 2004A Note. This
Agreement and, when issued in accordance with the terms of this Agreement, the 2004A Note
will constitute legal, valid and binding obligations of the City enforceable in accordance with
their terms, subject as to enforceability to bankruptcy, insolvency, moratorium, reorganization
or other similar laws affecting creditors' rights generally, or by the exercise of judicial
discretion in accordance with general principles of equity.
(d) There are no actions, suits or proceedings pending or, to the best knowledge
of the City, threatened against or affecting the City, at law or in equity, or before or by any
governmental authority, that, if adversely determined, would materially impair the ability of
the City to perform the City's obligations under this Agreement or under the 2004A Note.
(e) The City will furnish to the Bank (i) within 270 days following the end of
each Fiscal Year, a comprehensive annual financial report of the City for such Fiscal Year,
which shall include a balance sheet as of the end of such Fiscal Year, audited without scope
limitations by independent certified public accountants of recognized standing selected by the
City and (ii) by November 15 of each year, the annual budget of the City for the upcoming
Fiscal Year. Reports shall be prepared in accordance with generally accepted accounting
principles. The City acknowledges and agrees that the Bank's ability to monitor and evaluate
the status of the loan is dependent upon the City timely providing the financial information
required herein. Should the City fail to timely provide the financial information, in addition to
all other rights and remedies the Bank has, including declaring the loan to be in default, the
Bank may charge the City, upon ten (10) days prior written notice, a late fee up to 10 basis
points (.1 %) of the outstanding principal balance of the loan, not to be less than $500.00. The
charging and/or payment of such late fee is not a waiver of the City's continuing obligation to
provide the required financial information.
(t) No authorization, consent, approval, license, exemption of or registration or
filing with any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, has been or will be necessary for the valid execution,
delivery and performance by the City of this Agreement, the 2004A Note and the related
documents, except such as have been obtained, given or accomplished and copies of which
have been provided to the Bank.
(g) Except as disclosed in writing to the Bank, the City is not in default in the
payment when due of any indebtedness of the City.
(h) The financial statements of the City for the fiscal year ending September 30,
2003, copies of which have been furnished to the Bank, have been prepared in accordance with
generally accepted accounting principles and present fairly the financial condition of the City
{OR749842;3}
7
as of such date and the results of its operations for the period then ended. Since September 30,
2003, there has been no material adverse change in the financial condition, revenues,
properties or operations of the City.
(i) Any written information, reports and other papers and data prepared by the
City and furnished to the Bank by the City were, at the time the same were so furnished,
complete and correct in all material respects to the extent necessary to give the Bank a true and
accurate knowledge of the subject matter thereof. There is no fact, circumstance or condition
that has not been disclosed to the Bank in writing by the City which materially and adversely
affects or, so far as the City can now foresee, will materially and adversely affect, (i) the
financial condition, revenues, properties or operations of the City or (ii) the validity or
enforceability of, or the authority or ability of the City to perform its obligations under, this
Agreement, the 2004A Note and the related documents.
(j) The obligations of the City under this Agreement and the 2004A Note are
not subject to any law, rule or regulation of the State of Florida prescribing a maximum rate of
interest, except for Sections 159.825(1), 215.84 and 687.03, Florida Statutes, as amended.
(k) The City acknowledges and agrees that its timely and complete compliance
with all of the terms and conditions contained in this Agreement is material consideration for
the loan made hereunder. The City's failure to timely and completely comply with each and
every term and condition contained in this Agreement is, at the Bank's option, an Event of
Default under this Agreement. In addition to all other rights and remedies the Bank has, the
Bank may, in its sole discretion, elect to waive such default or to forbear to exercise its rights
and remedies for such default and may charge the City a fee for agreeing to do so.
(1) The City hereby authorizes the Bank to automatically deduct from any of the
City's accounts with the Bank the amount of any loan payment due hereunder to the extent
there are sufficient Pledged Funds in such accounts. If the funds in the a ccount are insufficient
to cover any payment, the Bank shall not be obligated to advance funds to cover the payment.
At any time and for any reason, the City or the Bank may voluntarily terminate automatic
payments. Please debit account number
Section 2.2 General Representations, Warranties and Covenants of the Bank.
The Bank hereby represents, warrants and agrees that it is a national banking
association authorized to execute and deliver this Agreement and to perform its obligations
hereunder, and such execution and delivery will not constitute a violation of its charter, articles
of incorporation or bylaws.
{OR749842;3}
8
Section 2.3 Making of Loan.
Pursuant to the terms and provisions of this Agreement, the Bank agrees to
make one or more loans to the City for the purpose of refinancing the Prior Note and financing
the cost of the Project.
Section 2.4 Tax Covenants.
(a) The City hereby covenants with the holder of the 2004A Note that in order
to maintain the exclusion from gross income for purposes of federal income taxation of interest
on the 2004A Note, it shall comply with each requirement of the Code applicable to the 2004A
Note. In furtherance of the covenant contained in the preceding sentence, the City agrees to
continually comply with the provisions of the Federal Tax Certificate to be executed by the
City relating to the 2004A Note, as such Certificate may be amended from time to time, as a
source of guidance for achieving compliance with the Code (referred to herein as the "Tax
Certificate") .
(b) The City hereby covenants with the holder of the 2004A Note that it shall
make any and all payments required to be made to the United States Department of the
Treasury in connection with the 2004A Note pursuant to Section 148(t) of the Code.
(c) So long as necessary in order to maintain the exclusion from gross income of
interest on the 2004A Note for federal income tax purposes, the covenants contained in this
Section 2.4 shall survive the payments of the 2004A Note and the interest thereon, including
any payment or defeasance thereof.
(d) The City hereby covenants with the holder of the 2004A Note that it shall
not take or permit any action or fail to take any action which would cause the 2004A Note to
be "arbitrage bonds" within the meaning of Section 148(a) of the Code.
Section 2.5 2004A Note not to be Indebtedness of the City or State.
The 2004A Note, when delivered by the City pursuant to the terms of this
Agreement, shall not be or constitute an indebtedness of the City, the State or any political
subdivision or agency thereof, within the meaning of any constitutional, statutory or charter
limitations of indebtedness, but shall be payable from and secured by a lien upon and pledge of
the Pledged Funds, in the manner and to the extent provided herein. No Noteholder shall ever
have the right to compel the exercise of the ad valorem taxing power of the City or taxation in
any form on any property therein to pay the 2004A Note or the interest thereon. The 2004A
Note is a special and limited obligation payable as to principal and interest from the Pledged
Funds in the manner and to the extent provided herein.
{OR749842;3}
9
Section 2,6 Security for 2004A Note.
The 2004A Note shall be secured by and payable from the Pledged Funds. The
City does hereby irrevocably pledge the Pledged Funds to the payment of the 2004A Note in
accordance with the provisions hereof.
Section 2.7 Covenant to Budget and Appropriate.
(a) Until the 2004A Note is paid or deemed paid pursuant to the provisions of
this Agreement, the City hereby covenants to appropriate in its annual budget, by amendment
if necessary, from Non-Ad Valorem Funds lawfully available in each Fiscal Year of the City in
which principal of or interest on the 2004A Note becomes due and payable, amounts sufficient,
together with other available moneys, to pay the principal of and interest on the 2004A Note,
as the same become due (whether by redemption, at maturity or otherwise). Such covenant
and agreement on the part of the City to budget and appropriate such amounts of Non-Ad
Valorem Funds shall be cumulative to the extent not paid, and shall continue until such Non-
Ad Valorem Funds or other legally available funds in amounts sufficient to make all such
required payments hereunder and under the 2004A Note shall have been budgeted,
appropriated and actually paid. Notwithstanding the foregoing covenant of the City, the City
does not covenant to maintain any services or programs, now provided or maintained by the
City, which generate Non-Ad Valorem Funds. No Noteholder shall have a lien on such Non-
Ad Valorem funds until such time as the City has irrevocably set such funds aside for payment
of debt service on the 2004A Note.
(b) Except as otherwise provided in Section 2.6 hereof, such covenant to budget
and appropriate does not create any lien upon or pledge of such Non-Ad Valorem Funds, nor
does it preclude the City from pledging in the future its Non-Ad Valorem Funds, nor does it
require the City to levy and collect any particular Non-Ad Valorem Funds, nor does it give the
Noteholder a prior claim on the Non-Ad Valorem Funds as opposed to claims of general
creditors of the City. Such covenant to budget and appropriate Non-Ad Valorem Funds is
subject in all respects to the payment of obligations secured by a pledge of such Non-Ad
Valorem Funds heretofore or hereafter entered into (including the payment of debt service on
bonds and other debt instruments). However, the covenant to budget and appropriate in its
general annual budget for the purposes and in the manner stated herein shall have the effect of
making available for the payment of the principal of and interest on the 2004A Note in the
manner described herein Non-Ad Valorem Funds and placing on the City a positive duty to
appropriate and budget, by amendment, if necessary, amounts sufficient to meet its obligations
hereunder; subject, however, in all respects to the restrictions of Section 166.241(3), Florida
Statutes, as amended, which provides that the governing body of each municipality shall make
appropriations for each fiscal year which, in anyone year, shall not exceed the amount to be
received from taxation or other revenue sources; and subject, further, to the payment of
services and programs which are essential public purposes affecting the health, welfare and
safety of the inhabitants of the City or which are legally mandated by applicable law.
{OR749842;3}
10
Section 2.8 Payment Covenant.
The City covenants that it shall duly and punctually pay from the Pledged Funds
the principal of and interest on the 2004A Note at the dates and place and in the manner
provided herein and in the 2004A Note according to the true intent and meaning thereof and all
other amounts due under this Agreement.
Section 2.9 Financial Covenants.
The City covenants that it shall maintain a debt service coverage ratio calculated
annually (as reflected in the City's audited financials) of at least 1.10 to 1.0 based upon the
City's general fund as more particularly described as follows: the sum of the general fund's
total revenues plus operating transfers into the general fund, less the general fund's total
expenditures inclusive of debt service paid from the general fund during the year other than
debt service on the 2004A Note, less operating transfers out from the general fund, plus the
general fund's undesignated/unreserved fund balance, divided by debt service to be paid on the
2004A Note during the year.
Section 2.10 Assessments.
The City covenants in each Fiscal Year to designate to the payment of debt
service due on the Note the first amounts received in each Fiscal Year of the "Debt Service
Amount" of the Annual Improvement Assessments as such terms are defined in Resolution No.
2000-6 of the City as amended and supplemented.
ARTICLE 3
DESCRIPTION OF 2004A NOTE; PAYMENT TERMS;
OPTIONAL PREPAYMENT
Section 3.1 Description and Payment Terms of the 2004A Note.
(a) The City shall, pursuant to authority granted under the Resolution, issue and
deliver the 2004A Note to the Bank, which 2004A Note shall be issued in the principal amount
of FIVE HUNDRED SEVENTY-FIVE THOUSAND NINE HUNDRED AND SEVEN AND
NO/100 DOLLARS ($575,907) in aggregate principal amount. The 2004A Note shall be
designated as "City of Winter Springs, Florida, Capital Improvement Revenue Note, Series
2004A." The text of the 2004A Note shall be substantially in the form attached hereto as
Exhibit B, with such omissions, insertions and variations as may be necessary and desirable to
reflect the terms of the 2004A Note. The provisions of the form of the 2004A Note are hereby
incorporated in this Agreement.
(b) The 2004A Note shall be dated the date of its delivery, shall be in the
principal amount set forth therein and payable as set forth therein and shall bear interest from
{OR749842;3}
11
its date at the rate or rates set forth therein or as the same may be adjusted pursuant to Section
3.3 hereof. The 2004A Note shall be executed in the name of the City by the manual signature
of the Mayor and the official seal of the City shall be affixed thereto and attested by the manual
signature of the City Clerk. In case anyone or more of the officers, who shall have signed or
sealed the 2004A Note, shall cease to be such officer of the City before the 2004A Note so
signed and sealed has been actually delivered, the 2004A Note may nevertheless be delivered
as herein provided and may be issued as if the person who signed or sealed the 2004A Note
had not ceased to hold such office. The 2004A Note may be signed and sealed on behalf of the
City by such person who at the actual time of the execution of the 2004A Note shall hold the
proper office, although at the date the 2004A Note shall actually be delivered, such person may
not have held such office or may have been so authorized.
(c) Interest on the 2004A Note shall be payable on the dates set forth therein
(the "Interest Payment Dates") commencing on the date set forth therein. Principal of the
2004A Note shall be payable at the times and in the manner set forth therein. Interest on the
2004A Note shall be calculated on the basis of a 365/366-day year.
(d) In the event of a Determination of Taxability, the interest rate on the 2004A
Note subject to such Determination of Taxability shall be changed to the Taxable Rate effective
retroactively to the date on which such Determination of Taxability was made. Immediately
upon a Determination of Taxability, the City agrees to pay to any holder of the 2004A Note
subject to such Determination of Taxability the Additional Amount (as defined herein).
"Additional Amount" means (i) the difference between (A) interest on the 2004A Note for the
period commencing on the date on which the interest on the 2004A Note (or portion thereof)
loses its tax-exempt status and ending on the earlier of the date the 2004A Note ceased to be
outstanding or such adjustment is no longer applicable to the 2004A Note (the "Taxable
Period") at a rate per annum equal to the Taxable Rate as adjusted from time to time on the
same dates and in the same manner as the interest rate on the 2004A Note was or would be
adjusted pursuant to the provisions of the 2004A Note, and (B) the aggregate amount of
interest payable on the 2004A Note for the Taxable Period under the provisions of the 2004A
Note without considering the Determination of Taxability, plus (ii) any penalties and interest
paid or payable by the Noteholder to the Internal Revenue Service by reason of such
Determination of Taxability .
(e) All payments of principal of and interest on the 2004A Note shall be payable
in any coin or currency of the United States which, at the time of payment, is legal tender for
the payment of public and private debts and shall be made to the Bank (i) in immediately
available funds, (ii) by delivering to the Bank no later than payment date a check drawn on an
account at any bank that is a member of the Federal Reserve system, or (iii) in such other
manner as the City and the Bank shall agree upon in writing.
{OR749842;3}
12
(t) There will be no Bank fees to maintain the loan and the 2004A Note. The
Bank shall pay for all of its costs relating to servicing the loan and the 2004A Note. The City
agrees to pay the legal fees and costs of Bond Counsel and counsel to the Bank.
Section 3.2 Optional Prepayment.
The City may prepay and redeem the 2004A Note as a whole or in part, at any
time or from time to time, without penalty or premium, by paying to the Noteholder all or part
of the principal amount of the 2004A Note, together with the unpaid interest accrued on the
amount of principal so prepaid to the date of such prepayment. Notwithstanding the
immediately preceding sentence if the funds used to effectuate such prepayment are obtained
from a financial institution other than the Bank, a premium of 1 % of the principal amount of
the 2004A Note shall also be due at the time of prepayment. Each prepayment of the 2004A
Note 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 less than five (5) Business Days prior
thereto specifying the principal amount of the 2004A Note to be prepaid and the date of such
prepayment. Notice having been given as aforesaid, the principal amount of the 2004A Note
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 (a) in case the entire unpaid balance of the principal
of the 2004A Note is to be prepaid, upon presentation and surrender of the 2004A Note at the
office of the City on the date specified for prepayment, and (b) in case only part of the unpaid
balance of principal of the 2004A Note is to be paid, upon presentation of the 2004A Note at
the office of the City for notation thereon of the amount of principal and interest on the 2004A
Note then paid. If on the prepayment date moneys for the payment of the principal amount to
be prepaid, together with interest to the prepayment date on such principal amount, shall have
been paid to the Noteholder as above provided and if notice of prepayment shall have been
given to the Noteholder as above provided, then from and after the prepayment date interest on
such principal amount of the 2004A Note shall cease to accrue. If said moneys shall not have
been so paid on the prepayment date, such principal amount of the 2004A Note shall continue
to bear interest until payment thereof at the rate or rates provided for in this Agreement.
Section 3.3 Adiustments to Interest Rates.
(a) The interest rate on the 2004A Note shall be subject to adjustment as
described in this Section 3.3 from the date of their issuance. The Bank shall promptly notify
the City in writing of any adjustments for the 2004A Note pursuant to this Section 3.3. Such
adjustments shall become effective as of the effective date of the event causing such
adjustment. Adjustments pursuant to this Section 3.3 may be retroactive. The Bank shall
certify to the City in writing the additional amount, if any, due to the Bank as a result of an
adjustment pursuant to this Section 3.23
{OR749842;3}
13
r---
I
(b) Subject to the provisions of Section 3.3(a) above, the interest rate on the
2004A Note shall be adjusted as follows:
(i) Alternative Minimum Tax Where Interest on the 2004A Note is a
Direct Tax Preference Item. If the Noteholder or its holding company pays an
alternative minimum tax in any tax year and the interest on the 2004A Note is a
direct tax preference item under Section 57(a)(5) or any successor provision of
the Code then the interest rate on the 2004A Note for the period during such tax
year in which interest is accruing on the 2004A Note shall be increased during
such accrual period by an amount equal to (A - B) x C where:
(A) A equals the interest rate on the 2004A Note expressed as
a percentage;
(B) B equals the Noteholder's Adjusted Cost of Funds; and
(C) C equals the maximum marginal rate of the alternative
minimum tax expressed as a decimal (currently .20);
(ii) Alternative Minimum Tax Where Interest on the 2004A Note is an
Indirect Tax Preference Item. If the Noteholder or its holding company pays an
alternative minimum tax in any tax year and the interest on the 2004A Note is
not a direct tax preference item under Section 57(a)(5) or any successor
provision of the Code, but is an indirect tax preference item because of the
application of Section 56 (g) or any successor provision of the Code then the
interest rate on the 2004A Note for the period during such tax year in which
interest is accruing on the 2004A Note shall be increased during such accrual
period by an amount equal to (A - B) x C where:
(A) A equals the interest rate on the 2004A Note expressed as
a percentage;
(B) B equals the Noteholder's Adjusted Cost of Funds; and
(C) C equals 75 % of the maximum marginal rate of the
alternative minimum tax expressed as a decimal, or, if the
Code is amended to effectively increase or decrease the
percentage of interest on the 2004A Note which is subject
to such indirect alternative minimum tax, then C shall
equal the percentage of such interest which is effectively
subject to such indirect alternative minimum tax.
(iii) Loss of Federal Income Tax Deduction for State Income Taxes. If
the federal income tax deduction for state income taxes paid on the interest
{OR749842;3}
14
{OR749842;3}
payments received under the 2004A Note during aI?-Y period is reduced because
of any change in the tax laws or regulations and the Noteholder is then subject
to payment of state income tax on the interest on the 2004A Note then the
interest rate on the 2004A Note shall be increased during such period by an
amount equal to A x B x C x D where:
(A) A equals the fraction (expressed as a decimal) of the total
state income tax disallowed as a result of such tax law
change;
(B) B equals the rate of the Florida state income tax
(expressed as a decimal);
(C) C equals the maximum federal corporate tax rate then in
effect for the Noteholder (expressed as a decimal); and
(D) D equals the interest rate on the 2004A Note (expressed as
a percentage).
(iv) Partial Taxability. If the interest payments received under the 2004A
Note during any period become partially taxable to the extent not otherwise
taxable on the date of issuance thereof because of any change in the tax laws or
regulations, then the interest rate on the 2004A Note shall be increased during
such period by an amount equal to (A - B) x C where:
(A) A equals the Taxable Rate (expressed as a percentage);
(B) B equals the interest rate on the 2004A Note (expressed as
a percentage); and
(C) C equals the fraction of the interest rate on the 2004A
Note which has become taxable as the result of such tax
change (expressed as a decimal).
(v) Other Changes in Tax Laws. If the tax laws or regulations are
amended to cause the interest on the 2004A Note to become taxable to the extent
not otherwise taxable on the date of issuance thereof, to be subject to a
minimum tax or an alternative minimum tax or to otherwise decrease the yield
on the 2004A Note to the Noteholder (directly or indirectly, other than a change
described in (i) through (iv) above or because of a Determination of Taxability),
then the interest rate on the 2004A Note shall be adjusted to cause the yield on
the 2004A Note to equal what the yield on the 2004A Note would have been in
the absence of such change or amendment in the tax laws or regulations. If the
tax laws or regulations are amended to increase the yield on the 2004A Note to
15
the Noteholder, then the Bank shall adjust the interest rate on the 2004A Note to
cause the yield on the 2004A Note to equal what the yield on the 2004A Note
would have been in the absence of such change or amendment in the tax laws or
regulations.
(vi) Transfer of Primary Depositorv Accounts. If the City transfers
its primary depository accounts out of the Bank prior to the payment in full of
the 2004A Note, the interest rate on the then outstanding 2004A Note shall be
increased by 1.25 %.
(c) The above adjustments shall be cumulative, but in no event shall the interest
rate on the 2004A Note exceed the maximum rate permitted by law. Interest on the 2004A
Note and all other tax rates and interest rates are expressed as annual rates. However, proper
partial adjustment shall be made if the tax law change is effective after the first day of the
Noteholder's tax year or if interest on the 2004A Note does not accrue for the entire tax year
of the Noteholder. Adjustments which create a circular calculation because the interest rate on
the 2004A Note is affected by the calculation shall be carried out sequentially, increasing the
interest rate on the 2004A Note, until the change on the interest rate on the 2004A Note caused
by the next successive calculation of the adjustment is de minimis. If more than one of
paragraphs numbered (i) through (vi) in Section 3.3(b) apply, then the interest rate on the
2004A Note shall be adjusted in the order in which listed above.
(d) To the extent an adjustment to the interest rate on the 2004A Note is not
effected within three (3) months of the event giving rise to the adjustment, the additional
interest due as a result of such adjustment shall be paid with interest thereon compounded
monthly at the rate which is equal to the interest rate on the 2004A Note; provided, however,
in no event shall such interest rate exceed the maximum rate permitted by law, Subject to the
provisions of Section 3.3(a) hereof, all unpaid amounts determined to be owing as a result of
such calculation shall be due and payable within ten (10) days after delivery of written notice
of the amount of such adjustment, and shall be paid to the Noteholder of record during the
period to which the adjustment relates. This obligation shall survive the payment and
cancellation of the 2004A Note,
(e) In the event the maturity of the 2004A 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 (i) the applicable maximum rate of interest allowed by Sections 215,84 and
159.825(1), Florida Statutes, as amended, or (ii) the non-usurious interest allowed by the laws
of the State of Florida or the United States of America to the extent applicable, as presently in
effect and to the extent 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
{OR749842;3}
16
credited on the principal amount of the 2004A Note unpaid, but such crediting shall not cure or
waive any default under this Agreement.
ARTICLE 4
ISSUANCE OF 2004A NOTE
Section 4,1 Issuance of 2004A Note.
(a) The Bank shall not be obligated to make any loan under this Agreement
unless at or prior to the date of issuance of the 2004A Note the City delivers to the Bank the
following items in form and substance acceptable to the Bank:
(i) A certificate of the Mayor, dated as of the date of issuance of the
2004A Note, to the effect that the representations and warranties of the City
contained in Section 2.1 hereof are true and correct as of such date and that
there is currently no Event of Default or event that with notice or lapse of time
or both would become an Event of Default hereunder;
(ii) A fully executed Tax Certificate relating to the 2004A Note;
(iii) A copy of a completed and executed Form 8038-G relating to the
2004A Note to be filed with the Internal Revenue Service;
(iv) An opinion of Bond Counsel in form and substance to the effect that
(A) this Agreement and the 2004A Note have been duly authorized by the City
and are enforceable obligations in accordance with their terms and the
Resolution has been duly adopted and is enforceable in accordance with its
terms (enforceability of such instruments may be subject to standard bankruptcy
exceptions and the like), (B) interest on the 2004A Note shall be excluded from
gross income for federal income tax purposes and shall not be treated as a
preference item for purposes of computing the alternative minimum tax imposed
by the Code (however, the interest on the 2004A Note owned by corporations
may be subject to the federal alternative minimum tax which is based in part on
adjusted current earnings), (C) the 2004A Note is a "qualified tax-exempt
obligation" under Section 265(b)(3)(B) of the Code and (D) the interest on the
2004A Note shall be exempt from present Florida intangible taxes;
(v) A certificate of the Mayor, dated the date of issuance of the 2004A
Note, to the effect that the interest rate on the 2004A Note is in compliance with
the applicable maximum interest rate provisions contained in Sections 215.84
and 159.825(1), Florida Statutes, as amended;
(vi) The fully executed 2004A Note;
{OR749842;3}
17
(vii) An opinion of counsel to the City regarding the due authorization,
validity and enforceability of this Agreement and the 2004A Note and the due
adoption of the Resolution (enforceability may be subject to standard bankruptcy
exceptions and the like); and
(viii) Such additional certificates, instruments and other documents as the
Bank, or its counselor Bond Counsel, or counsel to the City, may deem
necessary or appropriate.
(b) The City shall apply the proceeds of the 2004A Note described in Section
3.1 hereof to pay for the costs of the Prior Note and the Costs of the Project, which Costs shall
include but not be limited to:
(i) The costs of architectural and engineering services related to the
Project, including, without limitation, the costs of preparation of studies,
surveys, reports, tests, plans and specifications;
(ii) The costs of legal, accounting, financial advisory, consulting,
marketing and other special services related to the Project;
(iii) Costs and fees incurred in connection with the issuance of the 2004A
Note;
(iv) Fees and charges incurred in connection with applications to federal,
state and local governmental agencies for any requisite approval or permits
regarding the construction of the Project;
(v) Costs incurred in connection with the acquisition of the sites for the
Project, including any necessary rights-of-way, easements or other interests in
real or personal property;
(vi) Costs incurred in connection with the acqUlsltlon, construction,
improvement or extension of the buildings, structures and facilities comprising
the Project;
(vii) Costs incurred in connection with the acquisition and installation of
any machines, equipment, vehicles, fixtures, appurtenances or personal property
of any kind or nature, which are to comprise a part of the Project;
(viii) Interest on 2004A Note accruing prior to the completion date of the
Project; and
(ix) To the extent permitted by law, other costs and expenses relating to
the Project which are incurred for the purpose of providing for the Project.
{OR749842;3}
18
Section 4.2 Proiect Fund.
The City covenants and agrees to establish a separate fund with an Authorized
Depository to be known as the "City of Winter Springs, Florida, Capital Improvement
Revenue 2004A Note Project Fund." Any proceeds not expended to retire the Prior Note shall
be deposited into the Project Fund. Moneys in the Project Fund shall be used only for
payment of the Cost of the Project and, until applied in payment of any item of the Cost of the
Project in the manner hereinafter provided, shall be held in trust by the City and shall be
subject to a lien and charge in favor of the Noteholder and for the further security of the
Noteholder.
There shall be paid into the Project Fund as provided in the first paragraph of
this section, the proceeds derived from the 2004A Note simultaneously with the delivery of the
2004A Note to the Noteholder, and there may be paid into the Project Fund, at the option of
the City, any moneys received for or in connection with the Project by the City from any other
source.
The City covenants that the construction of the Project will be completed
without delay and in accordance with sound governmental practices. The City shall make
disbursements or payments from the Project Fund to pay the Cost of the Project upon the filing
with the City Clerk of documents and/or certificates signed by an Authorized City Officer
stating with respect to each disbursement or payment to be made: (a) the item number of the
payment, (b) the name and address of the person to whom payment is due, (c) the amount to be
paid, (d) the purpose, by general classification, for which payment is to be made, and (e) that
(i) each obligation, item of cost or expense mentioned therein has been properly incurred, is in
payment of a part of the Cost of the Project and is a proper charge against the Project Fund
and has not been the basis of any previous disbursement or payment, or (ii) each obligation,
item of cost or expense mentioned therein has been paid by the City, is a reimbursement of a
part of the Cost of the Project, is a proper charge against the Project Fund, has not been
theretofore reimbursed to the City or otherwise been the basis of any previous disbursement or
payment and the City is entitled to reimbursement thereof. The City Clerk shall retain all such
documents and/or certificates of the Authorized Issuer Officers for seven (7) years from the
dates of such documents and/or certificates. The City Clerk shall make available the
documents and/or certificates at all reasonable times for inspection by the Noteholder or the
agent or representative of the Noteholder.
The date of completion of the Project shall be determined by the Authorized
City Officer who shall certify such fact in writing to the City. Promptly after the date of the
completion of the Project, and after paying or making provisions for the payment of all unpaid
items of the Cost of the Project, the City shall deposit any balance of moneys remaining in the
Project Fund in such other fund or account of the City as shall be determined by the City,
provided the City has received an opinion of Bond Counsel to the effect that such transfer shall
not adversely affect the exclusion, if any, of interest on the 2004A Note from gross income for
{OR749842;3}
19
federal income tax purposes. The Project Fund shall be continuously secured in the manner by
which the deposit of public funds are authorized to be secured by the laws of the State of
Florida. Moneys on deposit in the Project Fund may be invested and reinvested in Authorized
Investments maturing not later than the date on which the moneys therein will be needed.
Any and all income received by the City from the investment of moneys in the
Project Fund shall be retained in the Project Fund.
All investments shall be valued at cost. Nothing contained in this Agreement
shall prevent any Authorized Investments acquired as investments of or security for funds in
the Project Fund from being issued or held in book-entry form on the books of the Department
of the Treasury of the United States.
ARTICLE 5
EVENTS OF DEFAULTS; REMEDIES
Section 5.1 Events of Default.
An "Event of Default" shall be deemed to have occurred under this Agreement
if:
(a) The City shall fail to make payment of principal or interest then due on the
2004A Note; or
(b) Failure by the City to observe and perform any covenant, condition or
agreement on its part to be observed or performed by it under this Agreement or the
Resolution other than as referred to in clause (a) of this Section, for a period of forty-five (45)
days after written notice specifying such failure and requesting that it be remedied has been
given to the City, unless the Noteholder shall determine in good faith that the delay would
materially impair its likelihood of full repayment; and during such period, the City shall cure
the default or provide to the Noteholder a written plan for curing such default, which may be
accepted or rejected in the Noteholder's discretion; or
(c) There shall occur the dissolution or liquidation of the City, or the filing by
the City of a voluntary petition in bankruptcy, or the commission by the City of any act of
bankruptcy, or adjudication of the City as a bankrupt, or assignment by the City for the benefit
of its creditors, or appointment of a receiver for the City, or the entry by the City into an
agreement of composition with its creditors, or the approval by a court of competent
jurisdiction of a petition applicable to the City in any proceeding for its reorganization
instituted under the provisions of the Federal Bankruptcy Act, as amended, or under any
similar act in any jurisdiction which may now be in effect or hereafter amended; or
{OR749842;3}
20
(d) Any representation or warranty made by the City in connection with the
transactions contemplated hereunder proves to be untrue in any material respect as of the date
made or deemed made; or
(e) Default shall occur in the payment of the principal of or interest on any
obligation of the City for borrowed money, as and when the same shall become due, and which
payment is not subsequently made within ten (10) days after the scheduled payment date,
unless the City shall be contesting its liability therefor in good faith; or
(f) Any judgment in an amount in excess of $1,000,000 shall be entered or filed
against the City and remains unvacated, unpaid, unbonded or unstayed for a period of thirty
(30) days.
Section 5.2 Remedies.
If any such Event of Default shall have occurred, the Noteholder may seek
enforcement of all remedies available to it under law. The holder of the defaulted 2004A Note
may declare the 2004A Note to be immediately due and payable. Any amounts due on the
2004A Note which shall remain unpaid past the scheduled payment dates, shall bear interest at
the lesser of the Taxable Rate or the maximum rate of interest permitted by law until all
amounts then due under the 2004A Note are paid in full. The Bank shall be entitled to its
reasonable costs and expenses (including reasonable fees and expenses of counsel) incurred in
enforcing any of its rights under this Agreement after an Event of Default.
ARTICLE 6
MISCELLANEOUS
Section 6.1 Arbitration.
IN THE EVENT ANY DISPUTE SHOULD ARISE UNDER THIS
AGREEMENT OR ANY OTHER ASPECT OF THE TRANSACTION REFLECTED IN
THIS AGREEMENT BETWEEN THE BANK AND THE CITY, WHETHER OR NOT
SPECIFICALLY RELATING TO THIS AGREEMENT, SAID DISPUTE WILL BE
RESOLVED THROUGH BINDING ARBITRATION IN ORANGE COUNTY, FLORIDA,
IN ACCORDANCE WITH THE RULES OF THE AMERICAN ARBITRATION
ASSOCIA TION.
Section 6.2 Amendments. Changes or Modifications to the Agreement.
This Agreement shall not be amended, changed or modified without the prior
written consent of the Bank and the City.
{OR749842;3}
21
Section 6.3 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 6.4 Severability.
If any clause, provision or section of this Agreement shall be held illegal or
invalid by any court, the invalidity of such provisions or sections shall not affect any other
provisions or sections hereof, and this Agreement shall be construed and enforced to the end
that the transactions contemplated hereby be effected and the obligations contemplated hereby
be enforced, as if such illegal or invalid clause, provision or section had not been contained
herein.
Section 6.5 Term of Agreement.
This Agreement shall be in full force and effect from the date hereof and shall
continue in effect as long as the 2004A Note is outstanding. Notwithstanding the other
provisions set forth herein, to the extent any law or regulation enacted subsequent to the
termination of this Agreement retroactively reduces the Bank's yield on the 2004A Note, the
provisions regarding adjustments to interest rates shall survive the repayment of the 2004A
Note hereunder for a period not to exceed two (2) years after such repayment.
Section 6.6 Assignment.
The Bank acknowledges and agrees that it is treating the transactions
contemplated hereunder as loan transactions and not as the sale and purchase of securities.
The Bank further acknowledges and agrees that it presently intends to hold the 2004A Note
issued hereunder through its respective final maturity date. The Bank may assign the 2004A
Note or its obligations hereunder; provided, however, the Bank shall give the City ten (10)
days prior written notice of any such assignment and, provided further, the Bank shall comply
with all applicable securities laws at the time of such assignment.
Section 6.7 Notice of Changes in Fact.
Promptly after the City becomes aware of the same, the City will notify the
Bank of (a) any change in any material fact or circumstance represented or warranted by the
City in this Agreement or in connection with the issuance of the 2004A Note, and (b) any
default or event which, with notice or lapse of time or both, could become a default under the
Agreement, specifying in each case the nature thereof and what action the City has taken, is
taking and/or proposed to take with respect thereto.
{OR749842;3}
22
Section 6.8 Notices.
Any notices or other communications required or permitted hereunder shall be
sufficiently given if delivered personally or sent registered or certified mail, postage prepaid,
to the City, City of Winter Springs, 1126 East State Road 434, Winter Springs, Florida 32708,
Attention: City Manager, and to the Bank, Bank of America, N.A., 390 N. Orange Avenue,
7th Floor, Orlando, Florida 32801, Attention: Mark W. Irby, or at such other address as shall
be furnished in writing by any such party to the other, and shall be deemed to have been given
as of the date so delivered or deposited in the United States mail.
Section 6.9 Applicable Law.
The substantive laws of the State of Florida shall govern this Agreement.
Section 6.10 Incorporation bv Reference.
All of the terms and obligations of the Resolution are hereby incorporated herein
by reference as if said Resolution was fully set forth in this Agreement.
[Remainder of Page Left Intentionally Blank;
Signature Page Follows]
{OR749842;3}
23
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
as of the date first set forth herein.
CITY OF WINTER SPRINGS, FLORIDA
(OFFICIAL SEAL)
By
Ma r
ATTEST:
By
City Clerk
BANK OF AMERICA, N.A.
By
Title: Authorized Officer
ATTEST:
By
Title: Authorized Officer
{OR749842;3}
24
EXHIBIT A
THE PROJECT
The Project consists of the completion of construction of the Oak Forest
subdivision wall, in and for the City of Winter Springs, Florida, in accordance with the plans
and specifications on file or to be on file with the City.
{OR749842;3}
A-I
EXHIBIT B
Principal
Sum
UNITED STATES OF AMERICA
STATE OF FLORIDA
CITY OF WINTER SPRINGS
CAPITAL IMPROVEMENT REVENUE NOTE, SERIES 2004A
Interest
Rate Date of Issuance Maturity Date
$575.907
%
June 2. 2004
Julv L 2010
The CITY OF WINTER SPRINGS, FLORIDA (the "City"), for value received,
hereby promises to pay, solely from the Pledged Funds described in the within mentioned
Agreement, to the order of BANK OF AMERICA, N. A., or its successors or assigns (the
"Noteholder"), the Principal Sum specified above loaned to the City pursuant to that certain
Loan Agreement by and between Bank: of America, N. A., and the City, dated as of June 2,
2004 (the" Agreement"), and to pay interest on such Principal Sum from the Date of Issuance
specified above or from the most recent date to which interest has been paid at the Interest Rate
per annum specified above (subject to adjustment as hereinafter provided) on June 1 and
December 1 of each year, commencing December 1, 2004, until such Principal Sum shall have
been paid. The Principal Sum hereof shall be due and payable on the maturity date hereof.
Such Principal Sum and interest is payable 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. This Note may not be issued in denominations less than the lesser of $100,000.00 or
the remaining principal amount of the Note.
This Note is authorized to be issued in the principal amount of $507,907 under
the authority of and in full compliance with the Constitution and laws of the State of Florida,
including, particularly, Chapter 166, Part II, Florida Statutes, as amended, the Charter of the
City and other applicable provisions of law, and a resolution duly adopted by the City on May
24, 2004 (the "Resolution"), as such resolution may be amended and supplemented from time
to time, and is subject to all terms and conditions of the Resolution and the Agreement. Any
term used in this Note and not otherwise defined shall have the meaning ascribed to such term
in the Agreement.
This Note is being issued to refinance the Prior Note and to finance the cost of
construction of the Oak Forest subdivision wall, as described in the Agreement and the
Resolution. This Note is payable from the Pledged Funds as described in and in accordance
with the Agreement.
Pursuant to the Agreement, the City has covenanted to appropriate in its annual
budget, by amendment, if necessary, from Non-Ad Valorem Funds lawfully available amounts
sufficient, together with other available moneys, to pay the principal of and interest on this
{OR749842;3 }
B-1
Note, as the same become due (whether by redemption, at maturity or otherwise). Such
covenant and agreement on the part of the City to budget and appropriate such amounts of
Non-Ad Valorem Funds shall be cumulative to the extent not paid, and shall continue until
such Non-Ad Valorem Funds or other legally available funds in amounts sufficient to make all
such required payments under this Note shall have been budgeted, appropriated and actually
paid. Notwithstanding the foregoing, the City has not covenanted to maintain any services or
programs, now provided or maintained by the City, which generate Non-Ad Valorem Funds.
Such covenant and agreement on the part of the City to budget and appropriate such amounts
of Non-Ad Valorem Funds is subject, however, in all respects to certain appropriation
constraints contained in Section 166.241(3), Florida Statutes, as amended, and 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 or which are legally mandated by applicable law.
This Note shall bear interest from its Date of Issuance at the Interest Rate
specified above on the basis of a 365/366-day year. The Interest Rate specified above is
subject to adjustment as provided in Section 3.1(d) of the Agreement in the event of a
Determination of Taxability. In addition, this Note is subject to adjustment in accordance with
the provisions in Section 3.3 of the Agreement. The Noteholder shall provide to the City upon
request such documentation to evidence the amount of interest due on this Note.
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 interest allowed under the
State of Florida as presently in effect. In the event the maturity of this Note is accelerated or
prepaid in accordance with the provisions hereof or of the Agreement, 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 (a) the applicable maximum rate of interest allowed
by Sections 215.84 and 159.825(1), Florida Statutes, as amended, or (b) the nonusurious
interest allowed by the laws of the State of Florida or the United States, to the extent
applicable, 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 this Note.
All payments made by the City hereon shall apply first to accrued interest, and
then to the principal amount then due on this Note.
The City may prepay this Note as a whole or in part, at any time or from time
to time, without premium, by paying to the Noteholder all or part of the Principal Sum of the
Note, together with the unpaid interest accrued on the amount of principal so prepaid to the
date of such prepayment. Each prepayment of this Note shall be made on such date and in
{OR749842;3}
B-2
such principal amount as shall be specified by the City in a written notice delivered to the
Noteholder not less than five (5) Business Days prior thereto. Notice having been given as
aforesaid, the Principal Sum of this Note 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 (a) in case the
entire unpaid balance of the principal of this Note is to be paid, upon presentation and
surrender of this Note at the office of the City, and (b) in case only part of the unpaid balance
of principal of this Note is to be paid, upon presentation of this Note at the office of the City
for notation thereon of the amount of principal and interest on this Note then paid. If on the
prepayment date moneys for the payment of the principal amount to be prepaid on this Note,
together with interest to the prepayment date on such principal amount, shall have been paid to
the Noteholder as above provided and if notice of prepayment shall have been given to the
Noteholder as above provided, then from and after the prepayment date interest on such
principal amount of this Note shall cease to accrue. If said moneys shall not have been so paid
on the prepayment date, such principal amount of this Note shall continue to bear interest until
payment thereof at the rate or rates provided for in the Agreement.
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 of the State of
Florida or any political subdivision or agency thereof, within the meaning of any
constitutional, statutory or charter limitations of indebtedness, but shall be payable solely from
the Pledged Funds, as provided in the Agreement and the Resolution. No Noteholder shall
ever have the right to compel the exercise of the ad valorem taxing power of the City or the
State of Florida, or taxation in any form on any property therein to pay this Note or the interest
thereon.
Upon the occurrence of an Event of Default relating to this Note, the Principal
Sum of this Note may become or be declared due and payable before the maturity date hereof
in the manner, with the effect and subject to the conditions set forth in the Agreement and the
Resolution. The Noteholder shall also have such other remedies as described in the
Agreement.
If this Note shall be declared to be immediately due and payable or any amounts
due on this Note shall remain unpaid past any scheduled payment date, this Note shall bear
interest at the lesser of the Taxable Rate (as defined in the Agreement) or the maximum rate
permitted by law until all amounts then due under this Note are paid in full.
The City hereby waives demand, protest and notice of dishonor.
No obligation under the Agreement or this Note shall be or be deemed to be an
obligation of any member of the City Commission or any officer, employee or agent of the
{OR749842;3}
B-3
City in his or her individual capacity, and none of such persons executing the Agreement or
this Note shall be liable personally thereon or hereon by reason thereof.
It is certified, recited and declared that all acts, conditions and things required to
exist, happen and be performed precedent to and in connection with the execution and delivery
of the Agreement and the issuance of this Note do exist, have happened and have been
performed in due time, form and manner as required by law, and that the issuance of this
Note, together with all other obligations of the City under the Agreement, does not exceed or
violate any constitutional or statutory limitation.
IN WITNESS WHEREOF, the City of Winter Springs, Florida, caused this
Note to be signed by the manual signature of its Mayor and its official seal to be affixed hereto
or imprinted or reproduced hereon, and attested by the manual signature of its City Clerk, and
this Note to be dated the Date of Issuance set forth above.
CITY OF WINTER SPRINGS, FLORIDA
(OFFICIAL SEAL)
By ~7:~
Mayor
ATTEST:
City Clerk
CERTIFICATE OF AUTHENTICATION
This Note is the Note described in the within-mentioned Resolution and Agreement.
Dated: June 2, 2004
City Clerk of Winter Springs, as Registrar
{OR749842;3}
B-4
CITY OF WINTER SPRINGS, FLORIDA
1126 EAST STATE ROAD 434
WINTER SPRINGS, FLORIDA 32708-2799
Telephone (407) 327-1800
DATE: May 21, 2004
TO: Andrea Lorenzo-Lauces, City Clerk
FROM: Michelle Greco, Finance Director '-lU)Y
SUBJECT: Attachment A to R~gu1ar Commission Agenda Item # 505 dated
May 24, 2004
Per our discussion, attached is the revised version of the loan agreement between the City
of Wi1)ter Springs and Bank of America, N.A., which was Attachment A to Regular
Commission Agenda Item #505 for the May 24, 2004 Commission Meeting. The
revisions can be found on pages 1, 6, 8, 12,23,24 and B-1. Please contact me with any
questions. Thank you for your assistance in this matter.
LOAN AGREEMENT
BETWEEN
CITY OF WINTER SPRINGS, FLORIDA
AND
BANK OF AMERICA, N.A.
Dated as of June 2, 2004
{OR749842;~
Section 1.1
Section 1.2
Section 1.3
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITION OF TERMS
I>efiIlitiolls. .........................................................................1
Interpretation. ..................................................................... 5
Titles and Headings. .............................................................. 6
ARTICLE 2
REPRESENTATIONS, WARRANTIES AND COVENANTS;
SECURITY FOR 2004A NOTE; ADDITIONAL OBLIGATIONS
Section 2.1
Section 2.2
Section 2.3
Section 2.4
Section 2.5
Section 2.6
Section 2.7
Section 2.8
Section 2.9
Section 2.10
Representations by the City. ...................................................6
General Representations, Warranties and Covenants of the
Bank. 8
Making of Loan. .................................................................. 8
Tax Covenants. .................... ................................................8
2004A Note not to be Indebtedness of the City or State. ................ 9
Security for 2004A Note. ........................................................ 9
Covenant to Budget and Appropriate. ....................................... 9
Payment Covenant. ............................................................. 10
Financial Covenants. ........................................................... 10
Assessments. ......................................... ......... ............... ..... 10
ARTICLE 3
DESCRIPTION OF 2004A NOTE; PAYMENT TERMS;
OPTIONAL PREPAYMENT
Section 3.1 Description and Payment Terms of the 2004A Note. ................... 11
Section 3.2 Optional Prepayment............. .............................................. 12
Section 3.3 Adjustments to Interest Rates. ............................................... 13
ARTICLE 4
ISSUANCE OF 2004A NOTE
Section 4.1 Issuance of 2004A Note. ....................................................... 16
{OR749842;J~J
-1-
Section 4.2
Section 5.1
Section 5.2
Section 6.1
Section 6.2
Section 6.3
Section 6.4
Section 6.5
Section 6.6
Section 6.7
Section 6.8
Section 6.9
Section 6.10
EXHIBIT A
EXHIBIT B
{OR749842;~
Project Fund. .................................................................... 18
ARTICLE 5
EVENTS OF DEF AUL TS; REMEDIES
Events of Default. ............................................................... 19
lleIlleciies. ......................................................................... ~O
ARTICLE 6
MISCELLANEOUS
Arbitration....................... ...... ........................................... 20
Amendments, Changes or Modifications to the Agreement........... 20
Counterparts. .................................................................... 21
Severability. ...................................................................... 21
Term of Agreement. ...................... ...................................... 21
Assignment........................................................................ 21
Notice of Changes in Fact. ...... .......... .................................... 21
Notices. ............................................................................ 22
Applicable Law. ................................................................. 22
Incorporation by Reference.............................................. ~.... 22
The Project
Form of 2004A Note
ii
LOAN AGREEMENT
This LOAN AGREEMENT (this "Agreement") is made and entered into as of
June 2, 2004, between the City of Winter Springs, a municipality created and existing under
and by virtue of the laws of the State of Florida (the "City"), and Bank of America, N.A., a
national banking association, and its successors and assigns (the "Bank");
WIT N E SSE T H:
WHEREAS, the City is authorized pursuant to Chapter 166, Part II, Florida
Statutes, as amended, and other applicable provisions of law to, among other things,
(a) refinance a note in the current outstanding principal balance of $495,906.86, (b) finance the
cost of certain capital projects in and for the City, consisting of completing the construction of
the Oak Forest subdivision wall, and (c) pledge the funds and credit of the City for payment of
such debts; and
WHEREAS, the Bank is willing to make available to the City, and the City is
willing to enter into, a loan arrangement pursuant to the terms and provisions of this
Agreement in an aggregate principal amount on&'i:2~,,:~:.<':...::;..,,::.57S.90'1 under which the City
shall refinance the Prior Note (as hereinafter defined) and finance the cost of the Project (as
hereinafter defined); and
WHEREAS, the City deems it necessary, desirable and in the best interest of the
City that the City undertake to refinance the Prior Note and to complete the construction of the
Oak Forest subdivision wall (the "Project," as more particularly described in Exhibit A
attached hereto).
NOW, THEREFORE, THIS AGREEMENT WITNESSETH:
That the parties hereto, intending to be legally bound hereby and in
consideration of the mutual covenants hereinafter contained, DO HEREBY AGREE as follows:
ARTICLE 1
DEFINITION OF TERMS
Section 1.1 Definitions.
The terms defined in this Article 1 shall, for all purposes of this Agreement,
have the meanings specified in this Article 1, unless the context clearly otherwise requires.
"Act" shall mean Chapter 166, Part II, Florida Statutes, as amended, Chapter
72-718, Laws of Florida, Special Acts of 1972, as amended, and other applicable provisions of
law,
{OR749842;~}
).
1....)' ..
,,'r:-~~j,~'"
"wPy
"Additional Amount" shall have the meaning ascribed to such term in Section
3 .1(d) hereof.
"Agreement" shall mean this Loan Agreement dated as of June 2, 2004,
between the City and the Bank, and any and all modifications, alterations, amendments and
supplements hereto made in accordance with the provisions hereof.
"Authorized Depository" shall mean the State Board of Administration of
Florida or a bank or trust company which is eligible under the laws of the State to receive
funds of the City.
"Authorized Investments" shall mean any of the following which shall be
authorized from time to time by applicable laws of the State of Florida for deposit or purchase
by the City for the investment of its funds:
(a) Direct obligations of (including obligations issued or held in book entry form
on the books of the Department of the Treasury of the United States of America and stripped
and zero coupon obligations), or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America.
(b) Bonds, debentures or notes or other evidences of indebtedness payable in
cash issued by anyone or a combination of any of the following federal agencies whose
obligations represent the full faith and credit of the United States of America: Export Import
Bank of the United States, Federal Financing Bank, Farmers Home Administration, Federal
Housing Administration, Maritime Administration, Public Housing Authority and Government
National Mortgage Association,
(c) Certificates of deposit properly secured at all times by collateral security
described in either or both of paragraphs (a) and (b) of this definition or in the collateral
provisions of Chapter 280, Florida Statutes, as amended, and issued by commercial banks,
savings and loan associations or mutual savings banks chartered by the State of Florida or the
United States of America, and bank trust receipts issued by commercial banks or trust
companies chartered by the State of Florida or the United States of America upon any
securities described in paragraph (a) of this definition.
(d) The following investments fully insured by the Federal Deposit Insurance
Corporation: (i) certificates of deposit, (ii) savings accounts, (iii) deposit accounts, or (iv)
depository receipts of a bank, savings and loan association or mutual savings bank.
(e) Commercial paper rated in one of the two highest rating categories by at
least two nationally recognized rating agencies or commercial paper backed by a letter of credit
or line of credit rated in one of the two highest rating categories by Moody's Investors Service
and Standard & Poor's.
{OR749842;J;U
2
(t) Written repurchase agreements with any bank, savings institution or trust
company which is insured by the Federal Deposit Insurance Corporation, or with any
broker-dealer with retail customers which falls under Securities Investors Protection
Corporation protection, provided that such repurchase agreements are fully secured by
collateral described in (a) above or obligations of any agency or instrumentality of the United
States of America, and provided further that (i) such collateral is held by a bank or trust
company chosen by the City which has no interest in the repurchase agreement during the term
of such repurchase agreement, (ii) such collateral is not subject to liens or claims of third
parties, (iii) such collateral has a market value (determined at least once every 30 days) at least
equal to the amount invested in the repurchase agreement, (iv) the entity holding the collateral
has a perfected first security interest in the collateral for the benefit of the Noteholder, (v) the
agreement shall be for a term not longer than 270 days and (vi) the failure to maintain such
collateral at the level required in (iii) above will require the entity holding the collateral to
liquidate the collateral.
(g) Money market funds rated III the highest rating category by Moody's
Investors Service and Standard & Poor's.
(h) Units of participation in the Local Government Surplus Funds Trust Fund
established pursuant to Chapter 218, Part IV, Florida Statutes, as amended, or any similar
common trust fund which is established pursuant to the law of the State of Florida as a legal
depository of public moneys.
(i) Obligations of state or local government municipal bond issuers that are
rated in one of the two highest rating categories by Moody's Investors Service and Standard &
Poor's.
(j) Such other obligations as shall be permitted to be legal investments of the
City by the laws of the State of Florida.
Rating categories when referred to herein shall be without regard to gradations
within such categories, such as "plus" or "minus."
"Authorized City Officer" for the performance on the behalf of the City of any
act of the City or the execution of any instrument on behalf of the City shall mean any person
authorized by resolution or certificate of the City to perform such act or sign such document.
"Bank" shall mean Bank of America, N ,A., and its successors and assigns.
"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,
{ OR749842;J;i}
3
and duly admitted to practice law before the highest court of any state of the United States of
America.
"Business Day" or "business day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions within the State are authorized by law to remain
closed.
"City" shall mean the City of Winter Springs, Florida.
"City Clerk" shall mean the City Clerk of the City and such other person as
may be duly authorized to act on his or her behalf.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
applicable rules and regulations thereto and thereunder.
"Cost" when used in connection with the Project, shall mean the costs of the
Project described in Section 4.1(b) hereof.
"Determination of Taxability" shall mean the circumstance of interest paid or
payable on the 2004A Note becoming includable for federal income tax purposes. in the gross
income of the Noteholder as a consequence of any act, omission or event whatsoever and
regardless of whether the same was within 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 2004A Note is
includable in the gross income of the Noteholder; (b) the issuance of any public or private
ruling of the Internal Revenue Service that any interest payable on the 2004A Note is
includable in the gross income of the Noteholder; or (c) receipt by the City or a Noteholder of
an opinion of Bond Counsel that any interest on the 2004A Note has become includable in the
gross income of the Noteholder for federal income tax purposes. For all purposes of this
definition, a Determination of Taxability will be deemed to occur on the date as of which the
interest on the 2004A Note is deemed includable in the gross income of the Noteholder. A
Determination of Taxability shall not occur solely from the fact that such interest is taken into
account in determining adjusted current earnings for the purpose of the alternative minimum
income tax imposed on corporations.
"Fiscal Year" shall mean the period commencing on October 1 of each year and
continuing through the next succeeding September 30, or such other period as may be
prescribed by law.
"Interest Payment Date" shall have the meaning ascribed thereto III Section
3 .1(c) hereof.
{OR749842;~
4
"Mayor" shall mean the Mayor of the City and such other person as may be
duly authorized to act on his or her behalf.
"Non-Ad Valorem Funds" shall mean all legally available funds of the City
derived from any source whatsoever other than ad valorem taxation on real and personal
property, which are legally available to make the payments required herein, but only after
provision has been made by the City for the payment of services and programs which are for
essential public purposes affecting the health, welfare and safety of the inhabitants of the City
or which are legally mandated by applicable law,
"Noteholder" shall mean the Bank as the holder of the 2004A Note, or any
other registered holder of or participant in the 2004A Note.
"Noteholder's Adjusted Cost of Funds" shall mean the fraction (expressed as a
percentage), determined by the Noteholder, the numerator of which is the total interest expense
of the Noteholder for each calendar year and the denominator of which is the total average
adjusted basis of all assets of the Noteholder during the calendar year as determined under
Section 265(b )(2)(B) of the Code or any successor provision thereto.
"Pledged Funds" shall mean (a) the proceeds of the 2004A Note pending the
application thereof and (b) moneys budgeted and appropriated pursuant to Section 2.7 hereof.
"Prior Note" shall mean that certain Capital Improvement Revenue Note, Series
2000B, dated as of June 16,2000, in the original principal amount of $723,262.00 and having
a current outstanding principal balance of $495,906.86.
"Project" shall refer to the capital projects described generally in Exhibit A
attached hereto, as such Project may be amended from time to time by the City with the prior
written approval of the Bank..
"Project Fund" shall mean the Project fund established pursuant to Section 4.2
hereof.
"Resolution" shall mean the resolution adopted by the City on May 24, 2004,
which among other things authorized the execution and delivery of this Agreement and the
issuance of the 2004A Note.
"State" shall mean the State of Florida.
"Taxable Period" shall have the meaning ascribed to such term in Section 3.I(d)
hereof.
"Tax Certificate" shall have the meaning ascribed to such term in Section 2.4
hereof.
{OR749842;~
5
"Taxable Rate" shall mean the interest rate on the 2004A Note multiplied by
t[~:';5 :''1 :54.
"2004A Note" shall mean the revenue note authorized by the Resolution and
delivered by the City to the Noteholder in accordance with the requirements set forth in Article
4 hereof.
Section 1.2 Interpretation.
Unless the context clearly requires otherwise, words of the 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 meanings 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 .3 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 2
REPRESENTATIONS, WARRANTIES AND COVENANTS;
SECURITY FOR 2004A NOTE; ADDITIONAL OBLIGATIONS
Section 2.1 Representations by the City.
The City represents, warrants and covenants that:
(a) The City is a municipality validly created and existing under the laws of the
State of Florida. Pursuant to the Resolution, the City (i) has duly authorized the execution and
delivery of this Agreement and the performance by the City of all of its obligations hereunder,
and (ii) shall duly authorize the 2004A Note issued hereunder and the performance by the City
of all its obligations relating thereto.
(b) The City has complied with all of the provisions of the Constitution and laws
of the State, and has full power and authority to enter into and consummate all transactions
contemplated by this Agreement or under the 2004A Note, and to perform all of its obligations
hereunder and, to the best knowledge of the City, the transactions contemplated hereby do not
{OR749842;~
~f!}!6;.:. ,:.,:#,J"
conflict with the terms of any statute, order, rule, regulation, judgment, decree, agreement,
instrument or commitment to which the City is a party or by which the City is bound,
(c) The City is duly authorized and entitled to issue the 2004A Note. This
Agreement and, when issued in accordance with the terms of this Agreement, the 2004A Note
will constitute legal, valid and binding obligations of the City enforceable in accordance with
their terms, subject as to enforceability to bankruptcy, insolvency, moratorium, reorganization
or other similar laws affecting creditors' rights generally, or by the exercise of judicial
discretion in accordance with general principles of equity.
(d) There are no actions, suits or proceedings pending or, to the best knowledge
of the City, threatened against or affecting the City, at law or in equity, or before or by any
governmental authority, that, if adversely determined, would materially impair the ability of
the City to perform the City's obligations under this Agreement or under the 2004A Note.
(e) The City will furnish to the Bank (i) within 270 days following the end of
each Fiscal Year, a comprehensive annual financial report of the City for such Fiscal Year,
which shall include a balance sheet as of the end of such Fiscal Year, audited without scope
limitations by independent certified public accountants of recognized standing selected by the
City and (ii) by November 15 of each year, the annual budget of the City for the upcoming
Fiscal Year. Reports shall be prepared in accordance with generally accepted accounting
principles. The City acknowledges and agrees that the Bank's ability to monitor and evaluate
the status of the loan is dependent upon the City timely providing the financial information
required herein. Should the City fail to timely provide the fmancial information, in addition to
all other rights and remedies the Bank has, including declaring the loan to be in default, the
Bank may charge the City, upon ten (10) days prior written notice, a late fee up to 10 basis
points (.1 %) of the outstanding principal balance of the loan, not to be less than $500.00. The
charging and/or payment of such late fee is not a waiver of the City's continuing obligation to
provide the required financial information.
(t) No authorization, consent, approval, license, exemption of or registration or
filing with any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, has been or will be necessary for the valid execution,
delivery and performance by the City of this Agreement, the 2004A Note and the related
documents, except such as have been obtained, given or accomplished and copies of which
have been provided to the Bank.
(g) Except as disclosed in writing to the Bank, the City is not in default in the
payment when due of any indebtedness of the City.
(h) The financial statements of the City for the fiscal year ending September 30,
2003, copies of which have been furnished to the Bank, have been prepared in accordance with
generally accepted accounting principles and present fairly the financial condition of the City
{OR749842;~
7
as of such date and the results of its operations for the period then ended. Since September 30,
2003, there has been no material adverse change in the financial condition, revenues,
properties or operations of the City.
(i) Any written information, reports and other papers and data prepared by the
City and furnished to the Bank by the City were, at the time the same were so furnished,
complete and correct in all material respects to the extent necessary to give the Bank a true and
accurate knowledge of the subject matter thereof. There is no fact, circumstance or condition
that has not been disclosed to the Bank in writing by the City which materially and adversely
affects or, so far as the City can now foresee, will materially and adversely affect, (i) the
financial condition, revenues, properties or operations of the City or (ii) the validity or
enforceability of, or the authority or ability of the City to perform its obligations under, this
Agreement, the 2004A Note and the related documents.
(j) The obligations of the City under this Agreement and the 2004A Note are
not subject to any law, rule or regulation of the State of Florida prescribing a maximum rate of
interest, except for Sections 159.825(1),215.84 and 687.03, Florida Statutes, as amended.
(k) The City acknowledges and agrees that its timely and complete compliance
with all of the terms and conditions contained in this Agreement is material consideration for
the loan made hereunder. The City's failure to timely and completely comply with each and
every term and condition contained in this Agreement is, at the Bank's option, an Event of
Default under this Agreement. In addition to all other rights and remedies the Bank has, the
Bank may, in its sole discretion, elect to waive such default or to forbear to exercise its rights
and remedies for such default and may charge the City a fee for agreeing to do so.
(1) The City hereby authorizes the Bank to automatically deduct from any of the
City's accounts with the Bank the amount of any loan payment due hereunder to the extent
there are sufficient Pledged Funds in such accounts. If the funds in the account are insufficient
to cover any payment, the Bank shall not be obligated to advance funds to cover the payment.
At any time and for any reason, the City or the Bank may voluntarily terminate automatic
payments. Please debit account number
~;:'iY!tmMWe:,;.eitV''Wilr discharl!e alloutstandinl! orincioal and interest on the Prior
Note on the~ate the 2004A Note is issued.
Section 2.2 General Representations. Warranties and Covenants of the Bank.
The Bank hereby represents, warrants and agrees that it is a national banking
association authorized to execute and deliver this Agreement and to perform its obligations
hereunder, and such execution and delivery will not constitute a violation of its charter, articles
of incorporation or bylaws.
{ OR749842;J;i}
....:8 .~
.~';;..,...: .
s~.!.-'H
Section 2.3 Making of Loan.
Pursuant to the terms and provisions of this Agreement, the Bank agrees to
make one or more loans to the City for the purpose of refinancing the Prior Note and financing
the cost of the Project.
Section 2.4 Tax Covenants.
(a) The City hereby covenants with the holder of the 2004A Note that in order
to maintain the exclusion from gross income for purposes of federal income taxation of interest
on the 2004A Note, it shall comply with each requirement of the Code applicable to the 2004A
Note. In furtherance of the covenant contained in the preceding sentence, the City agrees to
continually comply with the provisions of the Federal Tax Certificate to be executed by the
City relating to the 2004A Note, as such Certificate may be amended from time to time, as a
source of guidance for achieving compliance with the Code (referred to herein as the "Tax
Certificate") .
(b) The City hereby covenants with the holder of the 2004A Note that it shall
make any and all payments required to be made to the United States Department of the
Treasury in connection with the 2004A Note pursuant to Section 148(f) of the Code.
(c) So long as necessary in order to maintain the exclusion from gross income of
interest on the 2004A Note for federal income tax purposes, the covenants contained in this
Section 2.4 shall survive the payments of the 2004A Note and the interest thereon, including
any payment or defeasance thereof.
(d) The City hereby covenants with the holder of the 2004A Note that it shall
not take or permit any action or fail to take any action which would cause the 2004A Note to
be "arbitrage bonds" within the meaning of Section 148(a) of the Code.
Section 2.5 2004A Note not to be Indebtedness of the City or State.
The 2004A Note, when delivered by the City pursuant to the terms of this
Agreement, shall not be or constitute an indebtedness of the City, the State or any political
subdivision or agency thereof, within the meaning of any constitutional, statutory or charter
limitations of indebtedness, but shall be payable from and secured by a lien upon and pledge of
the Pledged Funds, in the manner and to the extent provided herein. No Noteholder shall ever
have the right to compel the exercise of the ad valorem taxing power of the City or taxation in
any form on any property therein to pay the 2004A Note or the interest thereon. The 2004A
Note is a special and limited obligation payable as to principal and interest from the Pledged
Funds in the manner and to the extent provided herein.
{OR749842;~
9
Section 2.6 Security for 2004A Note.
The 2004A Note shall be secured by and payable from the Pledged Funds. The
City does hereby irrevocably pledge the Pledged Funds to the payment of the 2004A Note in
accordance with the provisions hereof.
Section 2.7 Covenant to Budget and Appropriate.
(a) Until the 2004A Note is paid or deemed paid pursuant to the provisions of
this Agreement, the City hereby covenants to appropriate in its annual budget, by amendment
if necessary, from Non-Ad Valorem Funds lawfully available in each Fiscal Year of the City in
which principal of or interest on the 2004A Note becomes due and payable, amounts sufficient,
together with other available moneys, to pay the principal of and interest on the 2004A Note,
as the same become due (whether by redemption, at maturity or otherwise). Such covenant
and agreement on the part of the City to budget and appropriate such amounts of Non-Ad
Valorem Funds shall be cumulative to the extent not paid, and shall continue until such Non-
Ad Valorem Funds or other legally available funds in amounts sufficient to make all such
required payments hereunder and under the 2004A Note shall have been budgeted,
appropriated and actually paid, Notwithstanding the foregoing covenant of the City, the City
does not covenant to maintain any services or programs, now provided or maintained by the
City, which generate Non-Ad Valorem Funds. No Noteholder shall have a lien on such Non-
Ad Valorem funds until such time as the City has irrevocably set such funds aside for payment
of debt service on the 2004A Note.
(b) Except as otherwise provided in Section 2.6 hereof, such covenant to budget
and appropriate does not create any lien upon or pledge of such Non-Ad Valorem Funds, nor
does it preclude the City from pledging in the future its Non-Ad Valorem Funds, nor does it
require the City to levy and collect any particular Non-Ad Valorem Funds, nor does it give the
Noteholder a prior claim on the Non-Ad Valorem Funds as opposed to claims of general
creditors of the City. Such covenant to budget and appropriate Non-Ad Valorem Funds is
subject in all respects to the payment of obligations secured by a pledge of such Non-Ad
Valorem Funds heretofore or hereafter entered into (including the payment of debt service on
bonds and other debt instruments). However, the covenant to budget and appropriate in its
general annual budget for the purposes and in the manner stated herein shall have the effect of
making available for the payment of the principal of and interest on the 2004A Note in the
manner described herein Non-Ad Valorem Funds and placing on the City a positive duty to
appropriate and budget, by amendment, if necessary, amounts sufficient to meet its obligations
hereunder; subject, however, in all respects to the restrictions of Section 166.241 (3), Florida
Statutes, as amended, which provides that the governing body of each municipality shall make
appropriations for each fiscal year which, in anyone year, shall not exceed the amount to be
received from taxation or other revenue sources; and subject, further, to the payment of
services and programs which are essential public purposes affecting the health, welfare and
safety of the inhabitants of the City or which are legally mandated by applicable law,
{OR749842;Ji}
10
Section 2.8 Payment Covenant,
The City covenants that it shall duly and punctually pay from the Pledged Funds
the principal of and interest on the 2004A Note at the dates and place and in the manner
provided herein and in the 2004A Note according to the true intent and meaning thereof and all
other amounts due under this Agreement.
Section 2.9 Financial Covenants.
The City covenants that it shall maintain a debt service coverage ratio calculated
annually (as reflected in the City's audited financials) of at least 1.10 to 1.0 based upon the
City's general fund as more particularly described as follows: the sum of the general fund's
total revenues plus operating transfers into the general fund, less the general fund's total
expenditures inclusive of debt service paid from the general fund during the year other than
debt service on the 2004A Note, less operating transfers out from the general fund, plus the
general fund's undesignated/unreserved fund balance, divided by debt service to be paid on the
2004A Note during the year.
Section 2.10 Assessments.
The City covenants in each Fiscal Year to designate to the payment of debt
service due on the Note the first amounts received in each Fiscal Year of the "Debt Service
Amount" of the Annual Improvement Assessments as such terms are defined in Resolution No,
2000-6 of the City as amended and supplemented.
ARTICLE 3
DESCRIPTION OF 2004A NOTE; PAYMENT TERMS;
OPTIONAL PREPAYMENT
Section 3.1 Description and Payment Terms of the 2004A Note.
(a) The City shall, pursuant to authority granted under the Resolution, issue and
deliver the 2004A Note to the Bank, which 2004A Note shall be issued in the principal amount
of FIVE HUNDRED SEVENTY-FIVE THOUSAND NINE HUNDRED AND SEVEN AND
NO/100 DOLLARS ($575,907) in aggregate principal amount. The 2004A Note shall be
designated as "City of Winter Springs, Florida, Capital Improvement Revenue Note, Series
2004A." The text of the 2004A Note shall be substantially in the form attached hereto as
Exhibit B, with such omissions, insertions and variations as may be necessary and desirable to
reflect the terms of the 2004A Note. The provisions of the form of the 2004A Note are hereby
incorporated in this Agreement.
(b) The 2004A Note shall be dated the date of its delivery, shall be in the
principal amount set forth therein and payable as set forth therein and shall bear interest from
{OR749842;~
11
its date at the rate or rates set forth therein or as the same may be adjusted pursuant to Section
3.3 hereof. The 2004A Note shall be executed in the name of the City by the manual signature
of the Mayor and the official seal of the City shall be affixed thereto and attested by the manual
signature of the City Clerk. In case anyone or more of the officers, who shall have signed or
sealed the 2004A Note, shall cease to be such officer of the City before the 2004A Note so
signed and sealed has been actually delivered, the 2004A Note may nevertheless be delivered
as herein provided and may be issued as if the person who signed or sealed the 2004A Note
had not ceased to hold such office. The 2004A Note may be signed and sealed on behalf of the
City by such person who at the actual time of the execution of the 2004A Note shall hold the
proper office, although at the date the 2004A Note shall actually be delivered, such person may
not have held such office or may have been so authorized.
(c) Interest on the 2004A Note shall be payable on the dates set forth therein
(the "Interest Payment Dates") commencing on the date set forth therein. Principal of the
2004A Note shall be payable at the times and in the manner set forth therein. Interest on the
2004A Note shall be calculated on the basis of a 365/366-day year.
(d) In the event of a Determination of Taxability, the interest rate on the 2004A
Note subject to such Determination of Taxability shall be changed to the Taxable Rate effective
retroactively to the date on which such Determination of Taxability was made. Immediately
upon a Determination of Taxability, the City agrees to pay to any holder of the 2004A Note
subject to such Determination of Taxability the Additional Amount (as defined herein).
"Additional Amount" means (i) the difference between (A) interest on the 2004A Note for the
period commencing on the date on which the .interest on the 2004A Note (or portion thereof)
loses its tax-exempt status and ending on the earlier of the date the 2004A Note ceased to be
outstanding or such adjustment is no longer applicable to the 2004A Note (the "Taxable
Period") at a rate per annum equal to the Taxable Rate as adjusted from time to time on the
same dates and in the same manner as the interest rate on the 2004A Note was or would be
adjusted pursuant to the provisions of the 2004A Note, and (B) the aggregate amount of
interest payable on the 2004A Note for the Taxable Period under the provisions of the 2004A
Note without considering the Determination of Taxability, plus (ii) any penalties and interest
paid or payable by the Noteholder to the Internal Revenue Service by reason of such
Determination of Taxability. fmfiis;~nF6VisiCih shall survive the reoavrnent of the Note until the
federaL statute ,of limitation aoolicable to a Determination of Taxability shall.have exoired. If
the 2004A Note has matured. any Additional Amount shall be oaid to the former Noteholder(s)
within thirtv (30) davs after written demand.
(e) All payments of principal of and interest on the 2004A Note shall be payable
in any coin or currency of the United States which, at the time of payment, is legal tender for
the payment of public and private debts and shall be made to the Bank: (i) in immediately
available funds, (ii) by delivering to the Bank: no later than payment date a check drawn on an
account at any bank that is a member of the Federal Reserve system, or (iii) in such other
manner as the City and the Bank: shall agree upon in writing,
{OR749842;~
.,.
,. i l~h~~
.. .~.llK2"Js~,. ..'
r<.~rHl' '
(t) There will be no Bank fees to maintain the loan and the 2004A Note. The
Bank shall pay for all of its costs relating to servicing the loan and the 2004A Note. The City
agrees to pay the legal fees and costs of Bond Counsel and counsel to the Bank.
Section 3,2 Optional Prepayment.
The City may prepay and redeem the 2004A Note as a whole or in part, at any
time or from time to time, without penalty or premium, by paying to the Noteholder all or part
of the principal amount of the 2004A Note, together with the unpaid interest accrued on the
amount of principal so prepaid to the date of such prepayment. Notwithstanding the
immediately preceding sentence if the funds used to effectuate such prepayment are obtained
from a financial institution other than the Bank, a premium of 1 % of the principal amount of
the 2004A Note shall also be due at the time of prepayment. Each prepayment of the 2004A
Note 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 less than five (5) Business Days prior
thereto specifying the principal amount of the 2004A Note to be prepaid and the date of such
prepayment. Notice having been given as aforesaid, the principal amount of the 2004A Note
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 (a) in case the entire unpaid balance of the principal
of the 2004A Note is to be prepaid, upon presentation and surrender of the 2004A Note at the
office of the City on the date specified for prepayment, and (b) in case only part of the unpaid
balance of principal of the 2004A Note is to be paid, upon presentation of the 2004A Note at
the office of the City for notation thereon of the amount of principal and interest on the 2004A
Note then paid. If on the prepayment date moneys for the payment of the principal amount to
be prepaid, together with interest to the prepayment date on such principal amount, shall have
been paid to the Noteholder as above provided and if notice of prepayment shall have been
given to the Noteholder as above provided, then from and after the prepayment date interest on
such principal amount of the 2004A Note shall cease to accrue. If said moneys shall not have
been so paid on the prepayment date, such principal amount of the 2004A Note shall continue
to bear interest until payment thereof at the rate or rates provided for in this Agreement.
Section 3.3 Adjustments to Interest Rates.
(a) The interest rate on the 2004A Note shall be subject to adjustment as
described in this Section 3.3 from the date of their issuance. The Bank shall promptly notify
the City in writing of any adjustments for the 2004A Note pursuant to this Section 3.3. Such
adjustments shall become effective as of the effective date of the event causing such
adjustment. Adjustments pursuant to this Section 3.3 may be retroactive. The Bank shall
certify to the City in writing the additional amount, if any, due to the Bank as a result of an
adjustment pursuant to this Section 3.23
{OR749842;J;U
13
(b) Subject to the provisions of Section 3.3(a) above, the interest rate on the
2004A Note shall be adjusted as follows:
(i) Alternative Minimum Tax Where Interest on the 2004A Note is a
Direct Tax Preference Item. If the Noteholder or its holding company pays an
alternative minimum tax in any tax year and the interest on the 2004A Note is a
direct tax preference item under Section 57(a)(5) or any successor provision of
the Code then the interest rate on the 2004A Note for the period during such tax
year in which interest is accruing on the 2004A Note shall be increased during
such accrual period by an amount equal to (A - B) x C where:
(A) A equals the interest rate on the 2004A Note expressed as
a percentage;
(B) B equals the Noteholder's Adjusted Cost of Funds; and
(C) C equals the maximum marginal rate of the alternative
minimum tax expressed as a decimal (currently .20);
(ii) Alternative Minimum Tax Where Interest on the 2004A Note is an
Indirect Tax Preference Item. If the Noteholder or its holding company pays an
alternative minimum tax in any tax year and the interest on the 2004A Note is
not a direct tax preference item under Section 57(a)(5) or any successor
provision of the Code, but is an indirect tax preference item because of the
application of Section 56(g) or any successor provision of the Code then the
interest rate on the 2004A Note for the period during such tax year in which
interest is accruing on the 2004A Note shall be increased during such accrual
period by an amount equal to (A - B) x C where:
(A) A equals the interest rate on the 2004A Note expressed as
a percentage;
(B) B equals the Noteholder's Adjusted Cost of Funds; and
(C) C equals 75 % of the maximum marginal rate of the
alternative minimum tax expressed as a decimal, or, if the
Code is amended to effectively increase or decrease the
percentage of interest on the 2004A Note which is subject
to such indirect alternative minimum tax, then C shall
equal the percentage of such interest which is effectively
subject to such indirect alternative minimum tax.
(iii) Loss of Federal Income Tax Deduction for State Income Taxes. If
the federal income tax deduction for state income taxes paid on the interest
{OR749842;~
14
{OR749842;~
payments received under the 2004A Note during any period is reduced because
of any change in the tax laws or regulations and the Noteholder is then subject
to payment of state income tax on the interest on the 2004A Note then the
interest rate on the 2004A Note shall be increased during such period by an
amount equal to A x B x C x D where:
(A) A equals the fraction (expressed as a decimal) of the total
state income tax disallowed as a result of such tax law
change;
(B) B equals the rate of the Florida state Income tax
(expressed as a decimal);
(C) C equals the maximum federal corporate tax rate then in
effect for the Noteholder (expressed as a decimal); and
(D) D equals the interest rate on the 2004A Note (expressed as
a percentage).
(iv) Partial Taxability. If the interest payments received under the 2004A
Note during any period become partially taxable to the extent not otherwise
taxable on the date of issuance thereof because of any change in the tax laws or
regulations, then the interest rate on the 2004A Note shall be increased during
such period by an amount equal to (A - B) x C where:
(A) A equals the Taxable Rate (expressed as a percentage);
(B) B equals the interest rate on the 2004A Note (expressed as
a percentage); and
(C) C equals the fraction of the interest rate on the 2004A
Note which has become taxable as the result of such tax
change (expressed as a decimal).
(v) Other Changes in Tax Laws. If the tax laws or regulations are
amended to cause the interest on the 2004A Note to become taxable to the extent
not otherwise taxable on the date of issuance thereof, to be subject to a
minimum tax or an alternative minimum tax or to otherwise decrease the yield
on the 2004A Note to the Noteholder (directly or indirectly, other than a change
described in (i) through (iv) above or because of a Determination of Taxability),
then the interest rate on the 2004A Note shall be adjusted to cause the yield on
the 2004A Note to equal what the yield on the 2004A Note would have been in
the absence of such change or amendment in the tax laws or regulations. If the
tax laws or regulations are amended to increase the yield on the 2004A Note to
15
the Noteholder, then the Bank shall adjust the interest rate on the 2004A Note to
cause the yield on the 2004A Note to equal what the yield on the 2004A Note
would have been in the absence of such change or amendment in the tax laws or
regulations.
(vi) Transfer of Primary Depository Accounts. If the City transfers
its primary depository accounts out of the Bank prior to the payment in full of
the 2004A Note, the interest rate on the then outstanding 2004A Note shall be
increased by 1 .25 % .
(c) The above adjustments shall be cumulative, but in no event shall the interest
rate on the 2004A Note exceed the maximum rate permitted by law. Interest on the 2004A
Note and all other tax rates and interest rates are expressed as annual rates. However, proper
partial adjustment shall be made if the tax law change is effective after the first day of the
Noteholder's tax year or if interest on the 2004A Note does not accrue for the entire tax year
of the Noteholder. Adjustments which create a circular calculation because the interest rate on
the 2004A Note is affected by the calculation shall be carried out sequentially, increasing the
interest rate on the 2004A Note, until the change on the interest rate on the 2004A Note caused
by the next successive calculation of the adjustment is de minimis. If more than one of
paragraphs numbered (i) through (vi) in Section 3.3(b) apply, then the interest rate on the
2004A Note shall be adjusted in the order in which listed above.
(d) To the extent an adjustment to the interest rate on the 2004A Note is not
effected within three (3) months of the event giving rise to the adjustment, the additional
interest due as a result of such adjustment shall be paid with interest thereon compounded
monthly at the rate which is equal to the interest rate on the 2004A Note; provided, however,
in no event shall such interest rate exceed the maximum rate permitted by law. Subject to the
provisions of Section 3.3(a) hereof, all unpaid amounts determined to be owing as a result of
such calculation shall be due and payable within ten (10) days after delivery of written notice
of the amount of such adjustment, and shall be paid to the Noteholder of record during the
period to which the adjustment relates. This obligation shall survive the payment and
cancellation of the 2004A Note.
(e) In the event the maturity of the 2004A 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 (i) the applicable maximum rate of interest allowed by Sections 215.84 and
159.825(1), Florida Statutes, as amended, or (ii) the non-usurious interest allowed by the laws
of the State of Florida or the United States of America to the extent applicable, as presently in
effect and to the extent 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
{OR749842;J;U
16
credited on the principal amount of the 2004A Note unpaid, but such crediting shall not cure or
waive any default under this Agreement.
ARTICLE 4
ISSUANCE OF 2004A NOTE
Section 4.1 Issuance of 2004A Note.
(a) The Bank shall not be obligated to make any loan under this Agreement
unless at or prior to the date of issuance of the 2004A Note the City delivers to the Bank the
following items in form and substance acceptable to the Bank:
(i) A certificate of the Mayor, dated as of the date of issuance of the
2004A Note, to the effect that the representations and warranties of the City
contained in Section 2.1 hereof are true and correct as of such date and that
there is currently no Event of Default or event that with notice or lapse of time
or both would become an Event of Default hereunder;
(ii) A fully executed Tax Certificate relating to the 2004A Note;
(iii) A copy of a completed and executed Form 8038-G relating to the
2004A Note to be filed with the Internal Revenue Service;
(iv) An opinion of Bond Counsel in form and substance to the effect that
(A) this Agreement and the 2004A Note have been duly authorized by the City
and are enforceable obligations in accordance with their terms and the
Resolution has been duly adopted and is enforceable in accordance with its
terms (enforceability of such instruments may be subject to standard bankruptcy
exceptions and the like), (B) interest on the 2004A Note shall be excluded from
gross income for federal income tax purposes and shall not be treated as a
preference item for purposes of computing the alternative minimum tax imposed
by the Code (however, the interest on the 2004A Note owned by corporations
may be subject to the federal alternative minimum tax which is based in part on
adjusted current earnings), (C) the 2004A Note is a "qualified tax-exempt
obligation" under Section 265(b)(3)(B) of the Code and (D) the interest on the
2004A Note shall be exempt from present Florida intangible taxes;
(v) A certificate of the Mayor, dated the date of issuance of the 2004A
Note, to the effect that the interest rate on the 2004A Note is in compliance with
the applicable maximum interest rate provisions contained in Sections 215.84
and 159,825(1), Florida Statutes, as amended;
(vi) The fully executed 2004A Note;
{OR749842;~
17
(vii) An opinion of counsel to the City regarding the due authorization,
validity and enforceability of this Agreement and the 2004A Note and the due
adoption of the Resolution (enforceability may be subject to standard bankruptcy
exceptions and the like); and
(viii) Such additional certificates, instruments and other documents as the
Bank, or its counselor Bond Counsel, or counsel to the City, may deem
necessary or appropriate.
(b) The City shall apply the proceeds of the 2004A Note described in Section
3.1 hereof to pay for the costs of the Prior Note and the Costs of the Project, which Costs shall
include but not be limited to:
(i) The costs of architectural and engineering services related to the
Project, including, without limitation, the costs .of preparation of studies,
surveys, reports, tests, plans and specifications;
(ii) The costs of legal, accounting, financial advisory, consulting,
marketing and other special services related to the Project;
(iii) Costs and fees incurred in connection with the issuance of the 2004A
Note;
(iv) Fees and charges incurred in connection with applications to federal,
state and local governmental agencies for any requisite approval or permits
regarding the construction of the Project;
(v) Costs incurred in connection with the acquisition of the sites for the
Project, including any necessary rights-of-way, easements or other interests in
real or personal property;
(vi) Costs incurred in connection with the acqUISItion, construction,
improvement or extension of the buildings, structures and facilities comprising
the Project;
(vii) Costs incurred in connection with the acquisition and installation of
any machines, equipment, vehicles, fixtures, appurtenances or personal property
of any kind or nature, which are to comprise a part of the Project;
(viii) Interest on 2004A Note accruing prior to the completion date of the
Project; and
(ix) To the extent permitted by law, other costs and expenses relating to
the Project which are incurred for the purpose of providing for the Project.
{OR749842;~
18
Section 4.2 Proiect Fund.
The City covenants and agrees to establish a separate fund with an Authorized
Depository to be known as the "City of Winter Springs, Florida, Capital Improvement
Revenue 2004A Note Project Fund." Any proceeds not expended to retire the Prior Note shall
be deposited into the Project Fund. Moneys in the Project Fund shall be used only for
payment of the Cost of the Project and, until applied in payment of any item of the Cost of the
Project in the manner hereinafter provided, shall be held in trust by the City and shall be
subject to a lien and charge in favor of the Noteholder and for the further security of the
Noteholder.
There shall be paid into the Project Fund as provided in the first paragraph of
this section, the proceeds derived from the 2004A Note simultaneously with the delivery of the
2004A Note to the Noteholder, and there may be paid into the Project Fund, at the option of
the City, any moneys received for or in connection with the Project by the City from any other
source.
The City covenants that the construction of the Project will be completed
without delay and in accordance with sound governmental practices. The City shall make
disbursements or payments from the Project Fund to pay the Cost of the Project upon the filing
with the City Clerk of documents and/or certificates signed by an Authorized City Officer
stating with respect to each disbursement or payment to be made: (a) the item number of the
payment, (b) the name and address of the person to whom payment is due, (c) the amount to be
paid, (d) the purpose, by general classification, for which payment is to be made, and (e) that
(i) each obligation, item of cost or expense mentioned therein has been properly incurred, is in
payment of a part of the Cost of the Project and is a proper charge against the Project Fund
and has not been the basis of any previous disbursement or payment, or (ii) each obligation,
item of cost or expense mentioned therein has been paid by the City, is a reimbursement of a
part of the Cost of the Project, is a proper charge against the Project Fund, has not been
theretofore reimbursed to the City or otherwise been the basis of any previous disbursement or
payment and the City is entitled to reimbursement thereof. The City Clerk shall retain all such
documents and/or certificates of the Authorized Issuer Officers for seven (7) years from the
dates of such documents and/or certificates. The City Clerk shall make available the
documents and/or certificates at all reasonable times for inspection by the Noteholder or the
agent or representative of the Noteholder.
The date of completion of the Project shall be determined by the Authorized
City Officer who shall certify such fact in writing to the City, Promptly after the date of the
completion of the Project, and after paying or making provisions for the payment of all unpaid
items of the Cost of the Project, the City shall deposit any balance of moneys remaining in the
Project Fund in such other fund or account of the City as shall be determined by the City,
provided the City has received an opinion of Bond Counsel to the effect that such transfer shall
not adversely affect the exclusion, if any, of interest on the 2004A Note from gross income for
{OR749842;J1}
19
federal income tax purposes. The Project Fund shall be continuously secured in the manner by
which the deposit of public funds are authorized to be secured by the laws of the State of
Florida. Moneys on deposit in the Project Fund may be invested and reinvested in Authorized
Investments maturing not later than the date on which the moneys therein will be needed.
Any and all income received by the City from the investment of moneys in the
Project Fund shall be retained in the Project Fund.
All investments shall be valued at cost. Nothing contained in this Agreement
shall prevent any Authorized Investments acquired as investments of or security for funds in
the Project Fund from being issued or held in book-entry form on the books of the Department
of the Treasury of the United States.
ARTICLE 5
EVENTS OF DEFAULTS; REMEDIES
Section 5.1 Events of Default.
An "Event of Default" shall be deemed to have occurred under this Agreement
if:
(a) The City shall fail to make payment of principal or interest then due on the
2004A Note; or
(b) Failure by the City to observe and perform any covenant, condition or
agreement on its part to be observed or performed by it under this Agreement or the
Resolution other than as referred to in clause (a) of this Section, for a period of forty-five (45)
days after written notice specifying such failure and requesting that it be remedied has been
given to the City, unless the Noteholder shall determine in good faith that the delay would
materially impair its likelihood of full repayment; and during such period, the City shall cure
the default or provide to the Noteholder a written plan for curing such default, which may be
accepted or rejected in the Noteholder's discretion; or
(c) There shall occur the dissolution or liquidation of the City, or the filing by
the City of a voluntary petition in bankruptcy, or the commission by the City of any act of
bankruptcy, or adjudication of the City as a bankrupt, or assignment by the City for the benefit
of its creditors, or appointment of a receiver for the City, or the entry by the City into an
agreement of composition with its creditors, or the approval by a court of competent
jurisdiction of a petition applicable to the City in any proceeding for its reorganization
instituted under the provisions of the Federal Bankruptcy Act, as amended, or under any
similar act in any jurisdiction which may now be in effect or hereafter amended; or
{OR749842;~
20
(d) Any representation or warranty made by the City in connection with the
transactions contemplated hereunder proves to be untrue in any material respect as of the date
made or deemed made; or
(e) Default shall occur in the payment of the principal of or interest on any
obligation of the City for borrowed money, as and when the same shall become due, and which
payment is not subsequently made within. ten (10) days after the scheduled payment date,
unless the City shall be contesting its liability therefor in good faith; or
(f) Any judgment in an amount in excess of $1,000,000 shall be entered or filed
against the City and remains unvacated, unpaid, unbonded or unstayed for a period of thirty
(30) days.
Section 5.2 Remedies,
If any such Event of Default shall have occurred, the Noteholder may seek
enforcement of all remedies available to it under law. The holder of the defaulted 2004A Note
may declare the 2004A Note to be immediately due and payable. Any amounts due on the
2004A Note which shall remain unpaid past the scheduled payment dates, shall bear interest at
the lesser of the Taxable Rate or the maximum rate of interest permitted by law until all
amounts then due under the 2004A Note are paid in full. The Bank shall be entitled to its
reasonable costs and expenses (including reasonable fees and expenses of counsel) incurred in
enforcing any of its rights under this Agreement after an Event of Default.
ARTICLE 6
MISCELLANEOUS
Section 6.1 Arbitration.
IN THE EVENT ANY DISPUTE SHOULD ARISE UNDER THIS
AGREEMENT OR ANY OTHER ASPECT OF THE TRANSACTION REFLECTED IN
THIS AGREEMENT BETWEEN THE BANK AND THE CITY, WHETHER OR NOT
SPECIFICALLY RELATING TO THIS AGREEMENT, SAID DISPUTE WILL BE
RESOLVED THROUGH BINDING ARBITRATION IN ORANGE COUNTY, FLORIDA,
IN ACCORDANCE WITH THE RULES OF THE AMERICAN ARBITRA TION
ASSOCIATION.
Section 6.2 Amendments. Changes or Modifications to the Agreement.
This Agreement shall not be amended, changed or modified without the prior
written consent of the Bank and the City.
{OR749842;Ji}
21
Section 6.3 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 6.4 Severability.
If any clause, provision or section of this Agreement shall be held illegal or
invalid by any court, the invalidity of such provisions or sections shall not affect any other
provisions or sections hereof, and this Agreement shall be construed and enforced to the end
that the transactions contemplated hereby be effected and the obligations contemplated hereby
be enforced, as if such illegal or invalid clause, provision or section had not been contained
herein.
Section 6.5 Term of Agreement.
This Agreement shall be in full force and effect from the date hereof and shall
continue in effect as long as the 2004A Note is outstanding. Notwithstanding the other
provisions set forth herein, to the extent any law or regulation enacted subsequent to the
termination of this Agreement retroactively reduces the Bank's yield on the 2004A Note, the
provisions regarding adjustments to interest rates shall survive the repayment of the 2004A
Note hereunder for a period not to exceed two (2) years after such repayment.
Section 6,6 Assignment.
The Bank acknowledges and agrees that it is treating the transactions
contemplated hereunder as loan transactions and not as the sale and purchase of securities.
The Bank further acknowledges and agrees that it presently intends to hold the 2004A Note
issued hereunder through its respective final maturity date. The Bank: may assign the 2004A
Note or its obligations hereunder; provided, however; the Bank: shall give the City ten (10)
days prior written notice of any such assignment and, provided further, the Bank shall comply
with all applicable securities laws at the time of such assignment.
Section 6.7 Notice of Changes in Fact.
Promptly after the City becomes aware of the same, the City will notify the
Bank of (a) any change in any material fact or circumstance represented or warranted by the
City in this Agreement or in connection with the issuance of the 2004A Note, and (b) any
default or event which, with notice or lapse of time or both, could become a default under the
Agreement, specifying in each case the nature thereof and what action the City has taken, is
taking and/or proposed to take with respect thereto.
{OR749842;J1}
22
Section 6.8 Notices.
Any notices or other communications required or permitted hereunder shall be
sufficiently given if delivered personally or sent registered or certified mail, postage prepaid,
to the City, City of Winter Springs, 1126 East State Road 434, Winter Springs, Florida 32708,
Attention: City Manager, and to the Bank, Bank of America, N.A., 390 N. Orange Avenue,
7th Floor, Orlando, Florida 32801, Attention: Mark W. Irby ;~.with>ia'coDv toBank of America.
N"A., 9000 Southside Blvd.. Attn: Notice Desk. Buildinl! 100. Jacksonville. FL 32256. or at
such other address as shall be furnished in writing by any such party to the other, and shall be
deemed to have been given as of the date so delivered or deposited in the United States mail.
Section 6.9 Applicable Law.
The substantive laws of the State of Florida shall govern this Agreement.
Section 6.10 Incorporation bv Reference.
All of the terms and obligations of the Resolution are hereby incorporated herein
by reference as if said Resolution was fully set forth in this Agreement.
[Remainder of Page Left Intentionally Blank;
Signature Page Follows]
{OR749842;~
EXHIBIT B
Principal
Sum
UNITED STATES OF AMERICA
STATE OF FLORIDA
CITY OF WINTER SPRINGS
CAPITAL IMPROVEMENT REVENUE NOTE, SERIES 2004A
Interest
Rate Date of Issuance Maturity Date
$575,907
%
June 2, 2004
July 1, 2010
The CITY OF WINTER SPRINGS, FLORIDA (the "City"), for value received,
hereby promises to pay, solely from the Pledged Funds described in the within mentioned
Agreement, to the order of BANK OF AMERICA, N. A., or its successors or assigns (the
"Noteholder"), the Principal Sum specified above loaned to the City pursuant to that certain
Loan Agreement by and between Bank of America, N. A., and the City, dated as of June 2,
2004 (the "Agreement"), and to pay interest on such Principal Sum from the Date of Issuance
specified above or from the most recent date to which interest has been paid at the Interest Rate
per annum specified above (subject to adjustment as hereinafter provided) on June 1 and
December 1 of each year, commencing December 1, 2004, until such Principal Sum shall have
been paid. The Principal Sum hereof shall be due and payable on the maturity date hereof.
Such Principal Sum and interest is payable 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. This Note may not be issued in denominations less than the lesser of $100,000.00 or
the remaining principal amount of the Note.
This Note is authorized to be issued in the principal amount of{f$5(Y7';907575;907 "
under the authority of and in full compliance with the Constitution and laws of the State of
Florida, including, particularly, Chapter 166, Part II, Florida Statutes, as amended, the
Charter of the City and other applicable provisions of law, and a resolution duly adopted by
the City on May 24, 2004 (the "Resolution"), as such resolution may be amended and
supplemented from time to time, and is subject to all terms and conditions of the Resolution
and the Agreement. Any term used in this Note and not otherwise defmed shall have the
meaning ascribed to such term in the Agreement.
This Note is being issued to refinance the Prior Note and to finance the cost of
construction of the Oak Forest subdivision wall, as described in the Agreement and the
Resolution. This Note is payable from the Pledged Funds as described in and in accordance
with the Agreement.
Pursuant to the Agreement, the City has covenanted to appropriate in its annual
budget, by amendment, if necessary, from Non-Ad Valorem Funds lawfully available amounts
sufficient, together with other available moneys, to pay the principal of and interest on this
{OR749842;;J.~J
.,', .: 't:~(~i~.~'
<".~t,JI"i,l-
'~S~~/lfJJ!:r- .
Note, as the same become due (whether by redemption, at maturity or otherwise). Such
covenant and agreement on the part of the City to budget and appropriate such amounts of
Non-Ad Valorem Funds shall be cumulative to the extent not paid, and shall continue until
such Non-Ad Valorem Funds or other legally available funds in amounts sufficient to make all
such required payments under this Note shall have been budgeted, appropriated and actually
paid. Notwithstanding the foregoing, the City has not covenanted to maintain any services or
programs, now provided or maintained by the City, which generate Non-Ad Valorem Funds.
Such covenant and agreement on the part of the City to budget and appropriate such amounts
of Non-Ad Valorem Funds is subject, however, in all respects to certain appropriation
constraints contained in Section 166.241(3), Florida Statutes, as amended, and 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 or which are legally mandated by applicable law.
This Note shall bear interest from its Date of Issuance at the Interest Rate
specified above on the basis of a 365/366-day year. The Interest Rate specified above is
subject to adjustment as provided in Section 3.1(d) of the Agreement in the event of a
Determination of Taxability. In addition, this Note is subject to adjustment in accordance with
the provisions in Section 3.3 of the Agreement. The Noteholder shall provide to the City upon
request such documentation to evidence the amount of interest due on this Note.
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 interest allowed under the
State of Florida as presently in effect. In the event the maturity of this Note is accelerated or
prepaid in accordance with the provisions hereof or of the Agreement, 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 (a) the applicable maximum rate of interest allowed
by Sections 215.84 and 159.825(1), Florida Statutes, as amended, or (b) the nonusurious
interest allowed by the laws of the State of Florida or the United States, to the extent
applicable, 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 this Note.
All payments made by the City hereon shall apply first to accrued interest, and
then to the principal amount then due on this Note.
The City may prepay this Note as a whole or in part, at any time or from time
to time, without premium, by paying to the Noteholder all or part of the Principal Sum of the
Note, together with the unpaid interest accrued on the amount of principal so prepaid to the
date of such prepayment. Each prepayment of this Note shall be made on such date and in
{OR749842;J.~J
B-2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
as of the date first set forth herein.
CITY OF WINTER SPRINGS, FLORIDA
(OFFICIAL SEAL)
BY~)~
or
ATTEST:
By
City Clerk
BANK OF AMERICA, N.A.
By
Title: Authorized Officer
"~;TTEST:By . ..
." Title: Authorized Officer
{OR749842;Ji}
~?4' ~..,.
>oJ .t..ji;;;rJf.''i)~
EXIDBIT A
THE PROJECT
The Project consists of the completion of construction of the Oak Forest
subdivision wall, in and for the City of Winter Springs, Florida, in accordance with the plans
and specifications on file or to be on file with the City.
{OR749842;J.;!,}
A-I
City in his or her individual capacity, and none of such persons executing the Agreement or
this Note shall be liable personally thereon or hereon by reason thereof.
It is certified, recited and declared that all acts, conditions and things required to
exist, happen and be performed precedent to and in connection with the execution and delivery
of the Agreement and the issuance of this Note do exist, have happened and have been
performed in due time, form and manner as required by law, and that the issuance of this
Note, together with all other obligations of the City under the Agreement, does not exceed or
violate any constitutional or statutory limitation.
IN WITNESS WHEREOF, the City of Winter Springs, Florida, caused this
Note to be signed by the manual signature of its Mayor and its official seal to be affixed hereto
or imprinted or reproduced hereon, and attested by the manual signature of its City Clerk, and
this Note to be dated the Date ofIssuance set forth above.
CITY OF WINTER SPRINGS, FLORIDA
(OFFICIAL SEAL)
By ~7:~
Ma
ATTEST:
City Clerk
CERTIFICATE OF AUTHENTICATION
This Note is the Note described in the within-mentioned Resolution and Agreement.
Dated: June 2, 2004
City Clerk of Winter Springs, as Registrar
{OR749842;J.;!,}
B-4
such principal amount as shall be specified by the City in a written notice delivered to the
Noteholder not less than five (5) Business Days prior thereto. Notice having been given as
aforesaid, the Principal Sum of this Note stated in such notice or the whole thereof, as the case
may be, shall become due and payable on the prepayment date slated 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 (a) in case the
entire unpaid balance of the principal of this Note is to be paid, upon presentation and
surrender of this Note at the office of the City, and (b) in case only part of the unpaid balance
of principal of this Note is to be paid, upon presentation of this Note at the office of the City
for notation thereon of the amount of principal and interest on this Note then paid. If on the
prepayment date moneys for the payment of the principal amount to be prepaid on this Note,
together with interest to the prepayment date on such principal amount, shall have been paid to
the Noteholder as above provided and if notice of prepayment shall have been given to the
Noteholder as above provided, then from and after the prepayment date interest on such
principal amount of this Note shall cease to accrue. If said moneys shall not have been so paid
on the prepayment date, such principal amount of this Note shall continue to bear interest until
payment thereof at the rate or rates provided for in the Agreement.
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 of the State of
Florida or any political subdivision or agency thereof, within the meaning of any
constitutional, statutory or charter limitations of indebtedness, but shall be payable solely from
the Pledged Funds, as provided in the Agreement and the Resolution. No Noteholder shall
ever have the right to compel the exercise of the ad valorem taxing power of the City or the
State of Florida, or taxation in any form on any property therein to pay this Note or the interest
thereon.
Upon the occurrence of an Event of Default relating to this Note, the Principal
Sum of this Note may become or be declared due and payable before the maturity date hereof
in the manner, with the effect and subject to the conditions set forth in the Agreement and the
Resolution. The Noteholder shall also have such other remedies as described in the
Agreement.
If this Note shall be declared to be immediately due and payable or any amounts
due on this Note shall remain unpaid past any scheduled payment date, this Note shall bear
interest at the lesser of the Taxable Rate (as defined in the Agreement) or the maximum rate
permitted by law until all amounts then due under this Note are paid in full.
The City hereby waives demand, protest and notice of dishonor.
No obligation under the Agreement or this Note shall be or be deemed to be an
obligation of any member of the City Commission or any officer, employee or agent of the
{OR749842;J.~J
B-3
Redline #749842 v. 4 to v. 5 (5/24/04)
LOAN AGREEMENT
BETWEEN
CITY OF WINTER SPRINGS, FLORIDA
. ,
AND
BANK OF AMERICA, N .A.
Dated as of June 2, 2004
{OR754499; 1}
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITION OF TERMS
Section 1.1 Definitions.... .... .... ..... . ... .. . .. ..... .. ... ...... ... . .. ... . ....... ... .. .... ...... 1
Section 1.2 Interpretation................................. .....................................5
Section 1.3 Titles and Headings... ..... ................. ................ ................ .......6
ARTICLE 2
REPRESENTATIONS, WARRANTIES AND COVENANTS;
SECURITY FOR 2004A NOTE; ADDITIONAL OBLIGATIONS
Section 2.1
Section 2.2
Section 2.3
Section 2.4
Section 2.5
Section 2.6
Section 2.7
Section 2.8
Section 2.9
Section 2.10
Section 3.1
Section 3.2
Section 3.3
Representations by the City. ....... ...................................... ......6
General Representations, Warranties and Covenants of the
Bank. 8
Making of Loan. . ..... .................... ........................................8
Tax Covenants. ........ .... ........................................................ 8
2004A Note not to be Indebtedness of the City or State. ................?
Security for 2004A Note. ........................................................ 9
Covenant to Budget and Appropriate. .......................................9
Payment Covenant. ................... ...... .................................... 10
Financial Covenants. ........ ............... .................................... 10
Assessments............. ............... ........................................... 10
ARTICLE 3
DESCRIPTION OF 2004A NOTE; PAYMENT TERMS;
OPTIONAL PREPAYMENT
Description and Payment Terms of the 2004A Note. ...................11
Optional Prepayment.. .................................... ..................... 12
Adjustments to Interest Rates................................................ 13
ARTICLE 4
ISSUANCE OF 2004A NOTE
Section 4.1 Issuance of 2004A Note. ........................................ ~.............. 16
{OR754499;1}
-1-
Section 4.2
Section 5.1
Section 5.2
Section 6.1
Section 6.2
Section 6.3
Section 6.4
Section 6.5
Section 6.6
Section 6.7
Section 6.8
Section 6.9
Section 6.10
EXHIBIT A
EXHIBIT B
{OR754499;1}
Project Fund. .. ..... .... ... .... ...... 11'11.1 I' I... II' 11.1. ....... I... ... I' 1..1. II 18
ARTICLE 5
EVENTS OF DEFAULTS; REMEDIES
Events of Default. .................... ............ I........... 1........1.. I...... 19
Remedies. ......................................................................... 20
ARTICLE 6
MISCELLANEOUS
Arbitration.... ...... ........ ........ ........ I...... I' .............. ............... 20
Amendments, Changes or Modifications to the Agreement........... 20
Counterparts. .... .... ......... ...... .... .... .... .... ...... .......... ........ ..... 21
Severability. ....... I' ....... .....1......... I" ........ ..... ................ I...... 21
Term of Agreement. ........... ........ ..... .... ........ ................... ..... 21
Assignment........................................................................ 21
Notice of Changes in Fact. .... ....... ........... ....... .................. ..... 21
Notices. ... ........ .............................. ...... ... ............ ........... ... 22
Applicable Law. . ................ ......... ....................................... 22
Incorporation by Refe~ence... ..... ....... ........ ....................... ..... 22
The Project
Form of 2004A Note
11
LOAN AGREEMENT
This LOAN AGREEMENT (this "Agreement") is made and entered into as of
June 2, 2004, between the City of Winter Springs, a municipality created and existing under
and by virtue of the laws of the State of Florida (the "City"), and Bank of America, N.A., a
national banking association, and its successors and assigns (the "Bank");
WIT N E SSE T H:
WHEREAS, the City is authorized pursuant to Chapter 166, Part II, Florida
Statutes, as amended, and other applicable provisions of law to, among other things,
(a) refinance a note in the current outstanding principal balance of $495,906.86,debt of the
~ (b) fmance the cost of certain capital projects in and for the City, consisting of
completing the construction of the Oak fur6st subdivision 'Nall, and (c) pledge th@certain
funds and credit of the City for payment of such debts; and
WHEREAS, the Bank is willing to make available to the City, and the City is
willing to enter into, a loan arrangement pursuant to the terms and provisions of this
Agreement in an aggregate principal amount of $575,907 under which the City shall refmance
the Prior Note (as hereinafter defmed) and finance the cost of the Project (as hereinafter
defined); and
WHEREAS, the City deems it necessary, desirable and in the best interest of the
City that the City undertake to refmance the Prior Note and to complete the construction of the
Oak Forest subdivision wall (the "Project," as more particularly described in Exhibit .'\
attached hereto).
NOW, THEREFORE, THIS AGREEMENT WITNESSETH:
That the parties hereto, intending to be legally bound hereby and in
consideration of the mutual covenants hereinafter contained, DO HEREBY AGREE as follows:
ARTICLE 1
DEFINITION OF TERMS
Section 1.1 Definitions.
The terms defmed in this Article 1 shall, for all purposes of this Agreement,
have the meanings specified in this Article 1, unless the context clearly otherwise requires.
"Act" shall mean Chapter 166, Part II, Florida Statutes, as amended, Chapter
72-718, Laws of Florida, Special Acts of 1972, as amended, and other "applicable provisions of
law.
{OR754499;1}
I
"Additional Amount" shall have the meaning ascribed to such term in Section
3 .1(d) hereof.
"Agreement" shall mean this Loan Agreement dated as of June 2, 2004,
between the City and the Bank, and any and all modifications, alterations, amendments and
supplements hereto made in accordance with the provisions hereof.
"Authorized Depository" shall mean the State Board of Administration of
Florida or a bank or trust company which is eligible under the laws of the State to receive
funds of the City.
"Authorized Investments" shall mean any of the following which shall be
authorized from time to time by applicable laws of the State of Florida for deposit or purchase
by the City for the investment of its funds:
(a) Direct obligations of (including obligations issued or held in book entry fonn
on the books of the Department of the Treasury of the United States of America and stripped
and zero coupon obligations), or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America.
(b) Bonds, debentures or notes or other evidences of indebtedness payable in"
cash issued by anyone or a combination of any of the following federal agencies whose
obligations represent the full faith and credit of the United States of America: Export Import
Bank of the United States, Federal Financing Bank, Farmers Home Administration, Federal
Housing Administration, Maritime Administration, Public Housing Authority and Government
National Mortgage Association.
(c) Certificates of deposit properly secured at all times by collateral 'security
described in either or both of paragraphs (a) and (b) of this definition or in the collateral
provisions of Chapter 280, Florida Statutes, as amended, and issued by commercial banks,
savings and loan associations or mutual savings banks chartered by the State of Florida or the
United States of America, and bank trust receipts issued by commercial banks or trust
companies chartered by the State of Florida or the United States of America upon any
securities described in paragraph (a) of this defmition.
(d) The following investments fully insured by the Federal Deposit Insurance
Corporation: (i) certificates of deposit, (ii) savings accounts, (iii) deposit accounts, or (iv)
depository receipts of a bank, savings and loan association or mutual savings bank.
(e) Commercial paper rated in one of the two highest rating categories by at
least two nationally recognized rating agencies or commercial paper backed by a letter of credit
or line of credit rated in one of the two highest rating categories by Moody's Investors Service
and Standard & Poor's.
{OR754499;1}
2
(f) Written repurchase agreements with any bank, savings institution or trust
company which is insured by the Federal Deposit Insurance Corporation, or with any
broker-dealer with retail customers which falls under Securities Investors Protection
Corporation protection, provided that such repurchase agreements are fully secured by
collateral described in (a) above or obligations of any agency or instrumentality of the United
States of America, and provided further that (i) such collateral is held by a bank or trust
company chosen by the City which has no interest in the repurchase agreement during the term
of such repurchase agreement, (ii) such collateral is not subject to liens or Claims of third
parties, (iii) such collateral has a market value (determined at least once every 30 days) at least
equal to the amount invested in the repurchase agreement, (iv) the entity holding the collateral
has a perfected first security interest in the collateral for the benefit of the Noteholder, (v) the
agreement shall be for a term not longer than 270 days and (vi) the failure to maintain such
collateral at the level required in (iii) above will require the entity holding the collateral to
liquidate the colhiteral.
(g) Money market funds rated in the highest rating category by Moody's
Investors Service and Standard & Poor's.
(h) Units of participation in the Local Government Surplus Funds Trust Fund
established pursuant to Chapter 218, Part IV, Florida Statutes, as amended, or any similar
common trust fund which is established pursuant to the law of the State of Florida as a legal
depository of public moneys.
(i) Obligations of state or local government municipal bond issuers that are
rated in one of the two highest rating categories by Moody's Investors Service and Standard &
Poor's.
0) Such other obligations as shall be permitted to be legal investments of the
City by the laws of the State of Florida.
Rating categories when referred to herein shall be without regard to gradations
within such categories, such as "plus" or "minus."
"Authorized City Officer" for the performance on the behalf of the City of any
act of the City or the execution of any instrument on behalf of the City shall mean any person
authorized by resolution or certificate of the City to perform such act or sign such document.
"Bank" shall mean Bank of America, N .A., and its successors and assigns.
"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,
{OR754499;1}
3
and duly admitted to practice law before the highest court of any state of the United States of
America.
"Business Day" or "business day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions within the State are authorized by law to remain
closed.
"City" shall mean the City of Winter Springs, Florida.
"City Clerk" shall mean the City Clerk of the City and such other person as
may be duly authorized to act on his or her behalf.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
applicable rules and regulations thereto and thereunder.
"Cost" when used in connection with the Project, shall mean the costs of the
Project described in Section 4.1(b) hereof.
"Determination of Taxability" shall mean the circumstance of interest paid or
payable on the 2004A Note becoming includable for federal income tax purposes in the gross
income of the Noteholder as a consequence of any act, omission or event whatsoever and
regardless of whether the same was within 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 2004A Note is
includable in the gross income of the Noteholder; (b) the issuance of any public or. private
ruling of the Internal Revenue Service that any interest. payable on the 2004A Note is
includable in the gross income of the Noteholder; or (c) receipt by the City or a Noteholder of
an opinion of Bond Counsel that any interest on the 2004A Note has become includable in the
gross income of the Noteholder for federal income tax purposes. For all purposes of this
definition, a Determination of Taxability will be deemed to occur on the date as of which the
interest on the 2004A Note is deemed includable in the gross income of the Noteholder. A
Determination of Taxability shall not occur solely from the fact that such interest is taken into
account in determining adjusted current earnings for the purpose of the alternative minimum
income tax imposed on corporations.
" Fiscal Year" shall mean the period commencing on October 1 of each year and
contmumg through the next succeeding September 30, or such other period as may be
prescribed by law.
"Interest Payment Date" shall have the meaning ascribed thereto in Section
3.1(c) hereof.
{OR754499;1}
4
"Mayor" shall mean the Mayor of the City and such other person as may be
duly authorized to act on his or her behalf.
"Non-Ad Valorem Funds" shall mean all legally available funds of the City
derived from any source whatsoever other than ad valorem taxation on real and personal
property, which are legally available to make the payments required herein, but only after
provision has been made by the City for the payment of services and programs which are for
essential public purposes affecting the health, welfare and safety of the inhabitants of the City
or which are legally mandated by applicable law.
"Noteholder" shall mean the Bank as the holder of the 2004A Note, or any
other registered holder of or participant in the 2004A Note.
"Noteholder's Adjusted Cost of Funds" shall mean the fraction (expressed as a
percentage), determined by the Noteholder, the numerator of which is the total interest expense
of the Noteholder for each calendar year and the denominator of which is the total average
adjusted basis of all assets of the Noteholder during the calendar year as determined under
Section 265(b )(2)(B) of the Code or any successor provision thereto.
"Pledged Funds" shall mean (a) the proceeds of the 2004A Note pending the
application thereof and (b) moneys budgeted and appropriated pursuant to Section 2.7 hereof.
"Prior Note" shall mean that certain Capital Improvement Revenue Note, Series
2000B, dated as of June 16,2000, in the original principal amount of $723,262.00 and having
a current outstanding principal balance of $495,906.86.
"Project" shall refer to the capital projects described generally in Exhibit A
attached hereto, as such Project may be amended fromtime to time by the City with the prior
written approval of the Bank.
"Project Fund" shall mean the Project fund established pursuant to Section 4.2
hereof.
"Resolution" shall mean the resolution adopted by the City on May 24, 2004,
which among other things authorized the execution and delivery of this Agreement and the
issuance of the 2004A Note.
"State" shall mean the State of Florida.
"Taxable Period" shall have the meaning ascribed to such term in Section 3.1(d)
hereof.
"Tax Certificate" shall have the meaning ascribed to such term in Section 2.4
hereof.
{OR754499;1}
5
"Taxable Rate" shall mean the interest rate on the 2004A Note multiplied by
1.54.
"2004A Note" shall mean the revenue note authorized by the Resolution and
delivered by the City to the Noteholder in accordance with the requirements set forth in Article
4 hereof.
Section 1 .2 Interpretation.
Unless the context clearly requires otherwise, words of the 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 meanings 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 1.3 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 2
REPRESENTATIONS, WARRANTIES AND COVENANTS;
SECURITY FOR 2004A NOTE; ADDITIONAL OBUGA TIONS
Section 2.1 Representations bv the City.
The City represents, warrants and covenants that:
(a) The City is a municipality validly created and existing under the laws of the
State of Florida. Pursuant to the Resolution, the City (i) has duly authorized the execution and
delivery of this Agreement and the performance by the City of all of its obligations hereunder,
and (ii) shallhas duly authorizeauthorized the 2004A Note issued hereunder and the
performance by the City of all its obligations relating thereto.
(b) The City has complied with all of the provisions of the Constitution and laws
of the State, and has full power and authority to enter into and consummate all transactions
contemplated by this Agreement or under the 2004A Note, and to perform all of its obligations
hereunder and, to the best knowledge of the City, the transactions contemplated hereby do not
{OR754499;1}
6
conflict with the terms of any statute, order, rule, regulation, judgment, decree, agreement,
instrument or commitment to which the City is a party or by which the City is bound.
(c) The City is duly authorized and entitled to issue the 2004A Note. This
Agreement and, when issued in accordance with the terms of this Agreement, the 2004A Note
will constitute legal, valid and binding obligations of the City enforceable in accordance with
their terms, subject as to enforceability to bankruptcy, insolvency, moratorium, reorganization
or other similar laws affecting creditors' rights generally, or by the exercise of judicial
discretion in accordance with general principles of equity.
(d) There are no actions, suits or proceedings pending or, to the best knowledge
of the City, threatened against or affecting the City, at law or in equity, or before or by any
governmental authority, that, if adversely determined, would materially impair the ability of
the City to perform the City's obligations under this Agreement or under the 2004A Note.
(e) The City will furnish to the Bank (i) within 270 days following the end of
each Fiscal Year, a comprehensive annual fmancial report of the City for such Fiscal Year, -
which shall include a balance sheet as of the end of such Fiscal Year, audited without scope
limitations by independent certified public accountants of recognized standing selected by the
City and (ii) by November 15 of each year, the annual budget of the City for the upcoming
Fiscal Year. ReportsSuch reoorts shall be prepared in accordance with generally accepted
accounting principles. The City acknowledges and agrees that the BaDk's ability to monitor
and evaluate the status of the loan is dependent upon the City timely providing the" fmancial
information required herein. Should the City fail to timely provide the financial information,
in addition to all other rights and remedies the Bank has, including declaring the loan to be in
default, the Bank may charge the City, upon ten (10) days prior written notice, a late fee up to
10 basis points (.1 %) of the outstanding principal balance of the loan, not to be less than
$500.00. The charging and/or payment of such late fee is not a waiver of the City's
continuing obligation to provide the required financial information.
(t) No authorization, consent, approval, license, exemption of or registration or
filing with any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, has been or will be necessary for the valid execution,
delivery and performance by the City of this Agreement, the 2004A Note and the related
documents, except such as have been obtained, given or accomplished and copies of which
have been provided to the Bank.
(g) Except as disclosed in writing to the Bank, the City is not in default in the
payment when due of any indebtedness of the City.
(h) The fmancial statements of the City for the fiscal year ending September 30,
2003, copies of which have been furnished to the Bank, have been prepared in accordance with
generally accepted accounting principles and present fairly the financial condition of the City
{OR754499;1 }
7
as of such date and the results of its operations for the period then ended. Since September 30,
2003 , there has been no material adverse change in the financial condition, revenues,
properties or operations of the City.
(i) Any written information, reports and other papers and data prepared by the
City and furnished to the Bank by the City were, at the time the same were so furnished,
complete and correct in all material respects to the extent .necessary to give the Bank a true and
accurate knowledge of the subject matter thereof. There is no fact, circumstance or condition
that has not been disclosed to the Bank in writing by the City which materially and adversely
affects or, so far as the City can now foresee, will materially and adversely affect, (i) the
financial condition, revenues, properties or operations of the City or (ii) the validity or
enforceability of, or the authority or ability of the City to perform its obligations under, this
Agreement, the 2004A Note and the related documents.
0) The obligations of the City under this Agreement and the 2004A Note are
not subject to any law, rule or regulation of the State of Florida prescribing a maximum rate of
interest, except for Sections 159.825(1),215.84 and 687.03, Florida Statutes, as amended.
(k) The City acknowledges and agrees that its timely and complete compliance
with all of the terms and conditions contained in this Agreement is material consideration for
the loan made hereunder. The City's failure to timely and completely comply with each and
every term and condition contained in this Agreement is, at the Bank's option, an Event of
Default under this Agreement. In addition to all other rights and remedies the Bank has, the
Bank may, in its sole discretion, elect to waive such default or to forbear to exercise its rights
and remedies for such default and may charge the City a fee for agreeing to do so.
(1) The City hereby authorizes the Bank to automatically deduct from any of the
City's accounts with the Bank the amount of any loan payment due hereunder to the extent
there are sufficient Pledged Funds in such accounts. If the funds in the account are insufficient
to cover any payment, the Bank shall not be obligated to advance funds to cover the payment.
At any time and for any reason, the City or the Bank may voluntarily terminate automatic
payments. Please debit account number for such oavrnents.
(m) The City will discharge all outstanding principal and interest on the Prior
Note on the date the 2004A Note is issued.
Section 2.2 General Representations, Warranties and Covenants ofthe Bank.
The Bank hereby represents, warrants and agrees that it is a national banking
association authorized to execute and deliver this Agreement and to perform its obligations
hereunder, and such execution and delivery will not constitute a violation of its charter, articles
of incorporation or bylaws.
{OR754499;1}
8
Section 2.3 Making of Loan.
Pursuant to the terms and provisions of this Agreement, the Bank agrees to
make one or more loans to the City for the purpose of refinancing the Prior Note and financing
the cost of the Project.
Section 2.4 Tax Covenants.
(a) The City hereby covenants with the holder of the 2004A Note that in order
to maintain the exclusion from gross income for purposes of federal income taxation of interest
on the 2004A Note, it shall comply with each requirement of the Code applicable to the 2004A
Note. In furtherance of the covenant contained in the preceding sentence, the City agrees to
continually comply with the provisions of the Federal Tax Certificate to be e{(ecuted by the
City relating to the 2004A Note, as such Certificate may be amended from time to time, as a
source of guidance for achieving compliance with the Code (referred to herein as the "Tax
Certificate") .
(b) The City hereby covenants with the holder of the 2004A Note that it shall
make any and all payments required to be made to the United States Department of the
Treasury in connection with the 2004A Note pursuant to Section 148(f) of the Code.
(c) So long as necessary in order to maintain the exclusion from gross income of
interest on the 2004A Note for federal income tax purposes, the covenants contained in this
Section 2.4 shall survive the payments of the 2004A Note and the interest thereon, including
any payment or defeasance thereof.
(d) The City hereby covenants with the holder of the 2004A Note that it shall
not take or permit any action or fail to take any action which would cause the 2004A Note to
be "arbitrage bonds" within the meaning of Section 148(a) of the Code.
Section 2.5 2004A Note not to be Indebtedness of the Citv or State.
The 2004A Note, when delivered by the City pursuant to the terms of this
Agreement, shall not be or constitute an indebtedness of the City, the State or any political
subdivision or agency thereof, within the meaning of any constitutional, statutory or charter
limitations of indebtedness, but shall be payable from and secured by a lien upon and pledge of
the Pledged Funds, in the manner and to the extent provided herein. No Noteholder shall ever
have the right to compel the exercise of the ad valorem taxing power of the City or taxation in
any form on any property therein to pay the 2004A Note or the interest thereon. The 2004A
Note is a special and limited obligation payable as to principal and interest from the Pledged
Funds in the manner and to the extent provided herein.
{OR754499;1}
9
Section 2.6 Security for 2004A Note.
The 2004A Note shall be secured by and payable from the Pledged Funds. The
City does hereby irrevocably pledge the Pledged Funds to the payment of the 2004A Note in
accordance with the provisions hereof.
Section 2.7 Covenant to Budget and Appropriate.
(a) Until the 2004A Note is paid or deemed paid pursuant to the provisions of
this Agreement, the City hereby covenants to appropriate in its annual budget, by amendment
if necessary, from Non-Ad Valorem Funds lawfully available in each Fiscal Year of the City in
which principal of or interest on the 2004A Note becomes due and payable, amounts sufficient,
together with other available moneys, to pay the principal of and interest on the 2004A Note,
as the same become due (whether by redemption, at maturity or otherwise). Such covenant
and agreement on the part of the City to budget and appropriate such amounts of Non-Ad
Valorem Funds shall be cumulative to the extent not paid, and shall continue until such Non-
Ad Valorem Funds or other legally available funds in amounts sufficient to make all such
required payments hereunder and under the 2004A Note shall have been budgeted,
appropriated and actually paid. Notwithstanding the foregoing covenant of the City, the City
does not covenant to maintain any services or programs, now provided or maintained by the
City, which generate Non-Ad Valorem Funds. No Noteholder shall have a lien on such Non-
Ad Valorem .fuBG&Funds until such time as the City has irrevocably set such funds aside for'
payment of debt service on the 2004A Note.
(b) Except as otherwise provided in Section 2.6 hereotherein, such covenant to
budget and appropriate does not create any lien upon or pledge of such Non-Ad Valorem.
Funds, nor does it preclude the City from pledging in the future its Non-Ad Valorem Funds,
nor does it require the City to levy and collect any particular Non-Ad Valorem Funds, nor
does it give the Noteholder a prior claim on the Non-Ad Valorem Funds as opposed to claims
of general creditors of the City. Such covenant to budget and appropriate Non-Ad Valorem
Funds is subject in all respects to the payment of obligations secured by a pledge of such Non-
Ad Valorem Funds heretofore or hereafter entered into (including the payment of debt service
on bonds and other debt instruments). However, the covenant to budget and appropriate in its
general annual budget for the purposes and in the manner stated herein shall have the effect of
making available for the payment of the principal of and interest on the 2004A Note in the
manner described herein Non-Ad Valorem Funds and placing on the City a positive duty to
appropriate and budget, by amendment, if necessary, amounts sufficient to meet its obligations
hereunder; subject, however, in all respects to the restrictions of Section 166.241(3), Florida
Statutes, as amended, which provides that the governing body of each municipality shall make
appropriations for each fiscal year which, in anyone year, shall not exceed" the amount to be
received from taxation or other revenue sources; and subject, further, to the payment of
services and programs which are essential public purposes affecting the health, welfare and
safety of the inhabitants of the City or which are legally mandated by applicable law.
{OR754499;1}
10
Section 2.8 Payment Covenant.
The City covenants that it shall duly and punctually pay from the Pledged Funds
the principal of and interest on the 2004A Note at the dates and place and in the manner
provided herein and in the 2004A Note according to the true intent and meaning thereof and all
other amounts due under this Agreement.
Section 2.9 Financial Covenants.
The City covenants that it shall maintain a debt service coverage ratio calculated
annually (as reflected in the City's audited financials) of at least 1.10 to 1.0 based upon the
City's general fund as more particularly described as follows: the sum of the general fund's
total revenues plus operating transfers into the general fund, less the general fund's total
expenditures inclusive of debt service paid from the general fund during the year other than
debt service on the 2004A Note, less operating transfers out from the general fund, plus the
general fund's undesignated/unreserved fund balance, divided by debt service to be paid on the
2004A Note during the year.
Section 2.10 Assessments.
The City covenants in each Fiscal Year to designate to the payment of debt
service due on the 2004A Note the first amounts received in each Fiscal Year of the "Debt
Service Amount" of the Annual Improvement Assessments as such terms are defined in
Resolution No. 2000-6 of the City as amended and supplemented.
ARTICLE 3
DESCRIPTION OF 2004A NOTE; PAYMENT TERMS;
OPTIONAL PREPAYMENT
Section 3.1 Description and Pavrnent Terms of the 2004A Note.
(a) The City shall, pursuant to authority granted under the Resolution, issue and
deliver the 2004A Note to the Bank, which 2004A Note shall be issued in the principal amount
of FIVE HUNDRED SEVENTY-FIVE THOUSAND NINE HUNDRED AND" SEVEN AND
NO/IOO DOLLARS ($575,907) in aggregate principal amount. The 2004A Note shall be
designated as "City of Winter Springs, Florida, Capital Improvement Revenue Note, Series
2004A." The text of the 2004A Note shall be substantially in the form attached hereto as
Exhibit B, with such omissions, insertions and variations as may be necessary and desirable to
reflect the terms of the 2004A Note. The provisions of the form of the 2004A Note are hereby
incorporated in this Agreement.
(b) The 2004A Note shall be dated the date of its delivery, shall be in the
principal amount set forth therein and payable as set forth therein and shall bear interest from
{OR754499;1}
11
its date at the rate or rates set forth therein or as the same may be adjusted pursuant to Section
3.3 hereof. The 2004A Note shall be executed in the name of the City by the manual signature
of the Mayor and the official seal of the City shall be affixed thereto and attested by the manual
signature of the City Clerk. In case anyone or more of the officers, who shall have signed or
sealed the 2004A Note, shall cease to be such officer of the City before the 2004A Note so
signed and sealed has been actually delivered, the 2004A Note may nevertheless be delivered
as herein provided and may be issued as if the person who signed or sealed the 2004A Note
had not ceased to hold such office. The 2004A Note may be signed and sealed on behalf of the
City by such person who at the actual time of the execution of the 2004A Note shall hold the
proper office, although at the date the 2004A Note shall actually be delivered, such person may
not have held such office or may have been so authorized.
(c) Interest on the 2004A Note shall be payable on the dates set forth therein
(the "Interest Payment Dates") commencing on the date set forth therein. Principal of the
2004A Note shall be payable at the times and in the manner set forth therein. Interest on the
2004A Note shall be calculated on the basis of a 365/366-day year.
(d) In the event of a Determination of Taxability, the interest rate on the 2004A
Note subject to such Determination of Taxability shall be changed to the Taxable Rate effective
retroactively to the date on which such Determination of Taxability was made. Immediately
upon a Determination of Taxability, the City agrees to pay to any holder of the 2004A Note
subject to such Determination of Taxability the Additional Amount (as defined herein).
"Additional Amount" means (i) the difference between (A) interest on the 2004A Note for the
period commencing on the date on which the interest on the 2004A Note (or portion thereot)
loses its tax-exempt status and ending on the earlier of the date the 2004A Note ceased to be
outstanding or such adjustment is no longer applicable to the 2004A Note (the "Taxable
Period") at a rate per annum equal to the Taxable Rate as adjusted from time to time on the
same dates and in the same manner as the interest rate on the 2004A Note was or would be
adjusted pursuant to the provisions of the 2004A Note, and (B) the aggregate amount of
interest payable on the 2004A Note for the Taxable Period under the provisions of the 2004A
Note without considering the Determination of Taxability, plus (ii) any penalties and interest
paid or payable by the Noteholder to the Internal Revenue Service by reason of such
Determination of Taxability. This provision shall survive the repayment of the Note until the
federal statute of limitation applicable to a Determination of Taxability shall have expired. If
the 2004A Note has matured, any Additional Amount shall be paid to the former Noteholder(s)
within thirty (30) days after written demand.
(e) All payments of principal of and interest on the 2004A Note shall be payable
in any coin or currency of the United States which, at the time of payment, is legal tender for
the payment of public and private debts and shall be made to the Bank (i) in immediately
available funds, (ii) by delivering to the Bank no later than payment date a check drawn on an
account at any bank that is a member of the Federal Reserve system, or (iii) in such other
manner as the City and the Bank shall agree upon in writing.
{OR754499;1}
12
(f) There will be no Bank fees to maintain the loan and the 2004A Note. The
Bank shall pay for all of its costs relating to servicing the loan and the 2004A Note. The City
agrees to pay the legal fees and costs of Bond Counsel and counsel to the Bank. The fees and
costs of counsel to the Bank shall not exceed $2.500.00.
Section 3.2 Optional Prepayment.
The City may prepay and redeem the 2004A Note as a whole or in part, at any
time or from time to time, without penalty or premium, by paying to the Noteholder all or part
of the principal amount of the 2004A Note, together with the unpaid interest accrued on the
amount of principal so prepaid to the date of such prepayment. Notwithstanding the
immediately preceding sentence if the funds used to effectuate such prepayment are obtained
from a financial institution other than the Bank, tapremium of 1 % of the principal amount of
the 2004A Note shall also be due at the time of prepayment. Each prepayment of the 2004A
Note 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 less than five (5) Business Days prior
thereto specifying the principal amount of the 2004A Note to be prepaid and the date of such
prepayment. Notice having been given as aforesaid, the principal amount of the 2004A Note
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 (a) in case the entire unpaid balance of the principal
of the 2004A Note is to be prepaid, upon presentation and .surrender of the 2004A Note at the
office of the City on the date specified for prepayment, and (b) in case only part of the unpaid
balance of principal of the 2004A Note is to be paid, upon presentation of the 2004A Note at
the office of the City for notation thereon of the amount of principal and interest on the 2004A
Note then paid. If on the prepayment date moneys for the payment of the principal amount to
be prepaid, together with interest to the prepayment date on such principal amount, shall have
been paid. to the Noteholder as above provided and if notice of prepayment shall have been
given to the Noteholder as above provided. then from and after the prepayment date interest on
such principal amount of the 2004A Note shall cease to accrue. If said moneys shall not have
been so paid on the prepayment date. such principal amount of the 2004A Note shall continue
to bear interest until payment thereof at the rate or rates provided for in this Agreement.
Section 3.3 Adjustments to Interest Rates.
(a) The interest rate on the 2004A Note shall be subject to adjustment as
described in this Section 3.3 -from the date of .theHits. issuance. The Bank shall promptly notify
the City in writing of any adjustments for the 2004A Not~ pursuant to this Section 3.3. Such
adjustments shall become effective as of the effective date of the event causing such
adjustment. Adjustments pursuant to this Section 3.3 may be retroactive. The Bank shall
certify to the City in writing the additional amount, if any. due to the Bank as a result of an
adjustment pursuant to this Section ~3 .3 .
{OR754499;1}
13
(b) Subject to the provisions of Section 3.3(a) above, the interest rate on the
2004A Note shall be adjusted as follows:
(i) Alternative Minimum Tax Where Interest on the 2004A Note is a
Direct Tax Preference Item. If the Noteholder or its holding company pays an
alternative minimum tax in any tax year and the interest on the 2004A Note is a
direct tax preference item under Section 57(a}(5) or any successor provision of
the Code then the interest rate on the 2004A Note for the period during such tax
year in which interest is accruing on the 2004A Note shall be increased during
such accrual period by an amount equal to (A - B) x C where:
(A) A equals the interest rate on the 2004A Note expressed as
a percentage;
(B) B equals the Noteholder's Adjusted Cost of Funds; and
(C) C equals the maximum marginal rate of the alternative
minimum tax expressed as a decimal (currently .20);
(ll) Alternative Minimum Tax Where Interest on the 2004A Note is an
Indirect Tax Preference Item. If the Noteholder or its holding company pays an
alternative minimum tax in any tax year and the interest on the 2004A Note is
not a direct tax preference item under Section 57(a)(5) or any successor
provision of the Code, but is an indirect tax preference item because of the
application of Section 56(g) or any succesSor provision of the Code then the
interest rate on the 2004A Note for the period during such tax year in which
interest is accruing on the 2004A Note shall be increased during such accrual'
period by an amount equal to (A - B) x C where:
(A) A equals the interest rate on the 2004A Note expressed as
a percentage;
(B) B equals the Noteholder's Adjusted Cost of Funds; and
(C) C equals 75 % of the maximum marginal rate of the
alternative minimum tax expressed as a decimal, or, if the
Code is amended to effectively increase or decrease the
percentage of interest on the 2004A Note which is subject
to such indirect alternative minimum tax, then C shall
equal the percentage of such interest which is effectively
subject to such indirect alternative minimum tax.
(iii) Loss of Federal Income Tax Deduction for State Income Taxes. If
the federal income tax deduction for state income taxes paid on the int~rest
{OR754499;1}
14
{OR754499;1}
payments received under the 2004A Note during any period is reduced because
of any change in the tax laws or regulations and the Noteholder is then subject
to payment of state income tax on the interest on the 2004A Note then the
interest rate on the 2004A Note shall be increased during such period by an
amount equal to A x B x C x D where:
(A) A equals the fraction (expressed as a decimal) of the total
state income tax disallowed as a result of such tax law
change;
(B) B equals the rate of the Florida state income tax
(expressed as a decimal);
(C) C equals the maximum federal corporate tax rate then in
effect for the Noteholder (expressed as a decimal); and
(D) D equals the interest rate on the 2004A Note (expressed as
a percentage).
(iv) Partial Taxability. If the interest payments received under the 2004A
Note during any period become partially taxable to the extent not otherwise
taxable on the date of issuance thereof because of any change in the tax laws or
regulations, then the interest.rate on the 2004A Note shall be increased during
such period by an amount equal to (A - B) x C where:
(A) A equals the Taxable Rate (expressed as a percentage);
(B) B equals the interest rate on the 2004A Note (expressed as
a percentage); and
(C) C equals the fraction of the interest rate on the 2004A
Note which has become taxable as the result of such tax
change (expressed as a decimal).
(v) Other Changes in Tax Laws. If the tax laws or regulations are
amended to cause the interest on the 2004A Note to become taxable to the extent
not otherwise taxable on the date of issuance thereof, to be subject to a
minimum tax or an alternative minimum tax or to otherwise decrease the yield
on the 2004A Note to the Noteholder (directly or indirectly, other than a change
described in (i) through (iv) above or because of a Determination of Taxability),
then the interest rate on the 2004A Note shall be adjusted to cause the yield on
the 2004A Note to equal what the yield on the 2004A Note would have been in
the absence of such change or amendment in the tax laws or regulations. If the
tax laws or regulations are amended to increase the yield on the 2004A Note to
15
the Noteholder, then the Bank shall adjust the interest rate on the 2004A Note to
cause the yield on the 2004A Note to equal what the yield on the 2004A Note
would have been in the absence of such change or amendment in the tax laws or
regulations.
(vi) Transfer of Primary Depository Accounts. If the City transfers
its primary depository accounts out of the Bank prior to the payment in full of
the 2004A Note, the interest rate on the then outstanding 2004A Note shall be
increased by 1 .25 % .
(c) The above adjustments shall be cumulative, but in no event shall the interest
rate on the 2004A Note exceed the maximum rate permitted by law. Interest on the 2004A
Note and all other tax rates and interest rates are expressed as annual rates. However, proper
partial adjustment shall be made if the tax law change is effective after the first day of the
Noteholder's tax year or if interest on the 2004A Note does not accrue for the entire tax year
of the Noteholder. Adjustments which create a circular calculation because the interest rate on
the 2004A Note is affected by the calculation shall be carried out sequentially, increasing the
interest rate on the 2004A Note, until the change on the interest rate on the 2004A Note caused
by the next successive calculation of the adjustment is de minimis. If more than one of
paragraphs numbered (i) through (vi) in Section 3.3(b) apply, then the interest rate on the
2004A Note shall be adjusted in the order in which listed above.
(d) To the extent an adjustment to the interest rate on the 2004A Note is not
effected within three (3) months of the event giving rise to the adjustment, the additional
interest due as a result of such adjustment shall be paid with interest thereon compounded
monthly at the rate which is equal to the interest rate on the 2004A Note; provided, however,
in no event shall such interest rate exceed the maximum rate permitted by law. Subject to the
provisions of Section 3.3(a) hereof, all unpaid amounts determined to be owing as a result of
such calculation shall be due and payable within ten (10) days after delivery of written notice
of the amount of such adjustment, and shall be paid to the Noteholder of record during the
period to which the adjustment relates. This obligation shall survive the payment and
cancellation of the 2004A Note.
(e) In the event the maturity of the 2004A 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 (i) the applicable maximum rate of interest allowed by Sections 215.84 and
159.825(1), Florida Statutes, as amended, or (ii) the non-usurious interest allowed by the laws
of the State of Florida or the United States of America to the extent applicable, as presently in
effect and to the extent an increase is allowable 'by sllch laws; and excess interest, if any, shall
be cancelled automatically as of the date of such acceleration, or, if theretofore paid, shall be
{OR754499;1}
16
credited on the principal amount of the 2004A Note unpaid, but such crediting shall not cure or
waive any default under this Agreement.
ARTICLE 4
ISSUANCE OF 2004A NOTE
Section 4.1 Issuance of 2004A Note.
(a) The Bank shall not be obligated to make any loan under this Agreement
unless at or prior to the date of issuance of the 2004A Note the City delivers to the Bank the
following items in form and substance acceptable to the Bank:
(i) A certificate of the Mayor, dated as of the date of issuance of the
2004A Note, to the effect that the representations and warranties of the City
contained in Section 2.1 hereof are true and correct as of such date and that
there is currently no Event of Default or event that with notice or lapse of time
or both would become an Event of Default hereunder;
(H) A fully executed Tax Certificate relating to the 2004A Note;
(Hi) A copy of a completed and executed Form 8038-G relating to the
2004A Note to be filed with the Internal Revenue Service; .
(iv) An opinion of Bond Counsel in form and substance to the effect that
(A) this Agreement and the 2004A Note have been duly authorized by the City
and are enforceable obligations in accordance with their terms and the
Resolution has been duly adopted and is enforceable in accordance with its
terms (enforceability of such instruments may be subject to standard bankruptcy
exceptions and the like), (B) interest on the 2004A Note shall be excluded from
gross income for federal income tax purposes and shall not be treated as a
preference item for purposes of computing the alternative minimum tax imposed
by the Code (however, the interest on the 2004A Note owned by corporations
may be subject to the federal alternative minimum tax which is based in part on
adjusted current earnings), (C) the 2004A Note is a "qualified tax-exempt
obligation" under Section 265(b)(3)(B) of the Code and (D) the interest on the
2004A Note shall be exempt from present Florida intangible taxes;
(v) A certificate of the Mayor, dated the date of issuance of the 2004A
Note, to the effect that the interest rate on the 2004A Note is in compliance with
the applicable maximum interest rate provisions contained in Sections 215.84
and 159.825(1), Florida.8tatutes, as amended;
(vi) The fully executed 2004A Note;
{OR754499;1}
17
(vii) An opinion of counsel to the City regarding the due authorization,
validity and enforceability of this Agreement and the 2004A Note and the due
adoption of the Resolution (enforceability may be subject to standard bankruptcy
exceptions and the like); and
(viii) Such additional certificates, instruments and other documents as the
Bank, or its counselor Bond Counsel, oc counsel to the City, may deem
necessary or appropriate.
(b) The City shall apply the proceeds of the 2004A Note described in Section
3.1 hereof to pay for the costs of the Prior Note and the Costs of the Project, which Costs m
the Proiect shall include but not be limited to:
(i) The costs of architectural and engineering services related to the
Project, including, without limitation, the cosm.. of preparation of studies,
surveys, reports, tests, plans and specifications;
(ii) The costs of legal, accounting, financial advisory, consulting,
marketing and other special services related to the Project;
(iii) Costs and fees incurred in connection with the issuance of the 2004A
Note;
(iv) Fees and charges incurred in connection with applications to federal,
state and local governmental agencies for any requisite approval or permits
regarding the construction of the Project; .
(v) Costs incurred in connection with the acquisition of the sites for the
Project, including any necessary rights-of-way, easements or other interests in
real or personal property;
(vi) Costs incurred in connection with the acquisition; construction,
improvement oc extension of the buildings, structures and facilities comprising
the Project;
(vii) Costs incurred in connection with the acquisition and installation of
any machines, equipment, vehicles, fixtures, appurtenances or personal property
. of any kind or nature, which are to comprise a part of the Project;
(viii) Interest on 2004A Note accruing prior to the completion date of the
Project; and
(ix) To the extent permitted by law, other costs and expenses relating to
the Project which are incucred for the purpose of providing for the Project.
{OR754499;1 }
18
Section 4.2 Proiect Fund.
The City covenants and agrees to establish a separate fund with an Authorized
Depository to be known as the "City of Winter Springs, Florida, Capital Improvement
Revenue 2004A Note Project Fund." Any proceeds not expended to retire the Prior Note shall
be deposited into the Project Fund. Moneys in the Project Fund shall be used only for
paynient of the Cost of the Project and, until applied in payment of any item of the Cost of the
Project in the manner hereinafter provided, shall be held in trust by the City and shall be
subject to a lien and charge in favor of the Noteholder and for the further security of the
Noteholder.
There shall be paid into the Project Fund as provided in the first paragraph of
this section, the proceeds derived from the 2004.A. Note simultaneously with the delivery of the
2004.A~ Note to the Noteholder, and there may be paid into the Project Fund, at the option of
the City , any moneys received for or in connection with the Project by the City from any other
source.
The City covenants that the construction of the Project will be completed
without delay and in accordance with sound governmental practices. The City shall make
disbursements or payments from the Project Fund to pay the Cost of the Project upon the filing
with the City Clerk of documents and/or certificates signed by an Authorized City Officer
stating with respect to each disbursement or payment to be made: (a) the item. number of the
payment, (b) the name and address of the person to whom payment is due, ( c) the amount to be
paid, (d) the purpose, by general classification, for which payment is to be made, and (e) that
(i) each obligation, item of cost or expense mentioned therein has been properly incurreq, is in .
payment of a part of the Cost of the Project and is a proper charge against the Project Fund
and has not been the basis of any previous disbursement or payment, or (ii) each obligation,
item of cost or expense mentioned therein has been paid by the City, is a reimbursement of a
part of the Cost of the Project, is a proper charge against the Project Fund, has not been
theretofore reimbursed to the City or otherwise been the basis of any previous disbursement or
payment and the City is entitled to reimbursement thereof. The City Clerk shall retain all such
documents and/or certificates of the Authorized Is&a0fCitv Officers for seven (7) years from
the dates of such documents and/or certificates. The City Clerk shall make available the
documents and/or certificates at all reasonable times for inspection by the Noteholder or the
agent or representative of the Noteholder.
The date of completion of the Project shall be determined by the Authorized
City Officer who shall certify such fact in writing to the City. Promptly after the date of the
completion of the Project, and after paying or making provisions for the payment of all unpaid
items of the Cost of the Project, the City shall deposit any balance of moneys remaining in the
Project Fund in such other fund or account of the City as shall be determined by the City,
provided the City has received an opinion of Bond Counsel to the effect that such transfer shall
not adversely affect the exclusion, if any, of interest on the 2004A Note from gross income for
{OR754499;1}
19
federal income tax purposes. The Project Fund shall be continuously secured in the manner by
which the deposit of public funds are authorized to be secured by the laws of the State of
Florida. Moneys on deposit in the Project Fund may be invested and reinvested in Authorized
Investments maturing not later than the date on which the moneys therein will be needed.
..
Any and all income received by the City from the investment of moneys in the
Project Fund shall be retained in the Project Fund.
All investments shall be valued at cost. Nothing contained in this Agreement
shall prevent any Authorized Investments acquired as investments of or security for funds in
the Project Fund from being issued or held in book-entry form on the books of the Department
of the Treasury of the United States.
ARTICLE 5
EVENTS OF DEFAULTS; REMEDIES
Section 5 .1 Events of Default.
An "Event of Default" shall be deemed to have occurred under this Agreement
if:
(a) The City shall fail to make payment of principal or interest then due onthe
2004A Note; or
(b) Failure by the City to observe and perform any covenant, condition or
agreement on its part to be observed or performed by it under this Agreement or the
Resolution other than as referred to in clause (a) of this Section, for a period of forty-five (45)
days after written notice specifying such failure and requesting that it be remedied has been
given to the City, unless the Noteholder shall determine in good faith that the delay would
materially impair its likelihood of full repayment; and during such period, the City shall cure
the default or provide to the Noteholder a written plan for curing such default, which may be
accepted or rejected in the Noteholder's discretion; or
(c) There shall occur the dissolution or liquidation of the City, or the flling by
the City of a voluntary petition in bankruptcy, or the commission by the City of any act of
bankruptcy, or adjudication of the City as a bankrupt, or assignment by the City for the benefit
of its creditors, or appointment of a receiver for the City, or the entry by the City into an
agreement of composition with its creditors, or the approval by a court of competent
jurisdiction of a petition applicable to the City in any proceeding for its reorganization
instituted under the provisions of the Federal Bankruptcy Act, as amended, or under any
similar act in any jurisdiction which may now be in effect or hereafter amended; or
{OR754499;1}
20
(d) Any representation or warranty made by the City in connection with the
transactions contemplated hereunder proves to be untrue in any material respect as of the date
made or deemed made; or
(e) Default shall occur in the payment of the principal of or interest on any
obligation of the City for borrowed money, as and when the same shall become due, and which
payment is not subsequently made within ten (10) days after the scheduled payment date,
unless the City shall be contesting its liability therefor in good faith; or
(f) Any judgment in an amount in excess of $1,000,000 shall be entered or flIed
against the City and remains unvacated, unpaid, unbonded or unstayed for a period of thirty
(30) days.
Section 5.2 Remedies.
If any such Event of Default shall have occurred, the Noteholder may seek
enforcement of all remedies available to it under law. The holder of the defaulted 2004A Note
may declare the 2004A Note to be immediately due and payable. Any amounts due on the
2004A Note which shall remain unpaid past the scheduled payment dates, shall bear interest at
the lesser of the Taxable Rate or the maximum rate of interest permitted by law until all
amounts then due under the 2004A Note are paid in full. The Bank shall be entitled to its
reasonable costs and expenses (including reasonable fees and expenses of counsel) incurred in
enforcing any of its rights under this Agreement after an Event of Default.
ARTICLE 6
MISCELLANEOUS
Section 6.1 Arbitration.
IN THE EVENT ANY DISPUTE SHOULD ARISE UNDER THIS
AGREEMENT OR ANY OTHER ASPECT OF THE TRANSACTION REFLECTED IN
THIS AGREEMENT BETWEEN THE BANK AND THE CITY, WHETHER OR NOT
SPECIFICALLY RELA TING TO THIS AGREEMENT, SAID DISPUTE WILL BE
RESOLVED THROUGH BINDING ARBITRATION IN ORANGE COUNTY, FLORIDA,
IN ACCORDANCE WITH THE RULES OF THE AMERICAN ARBITRATION
ASSOCIATION.
Section 6.2 Amendments. Changes or Modifications to the Agreement.
This Agreement shall not be amended, changed or modified without the prior
written consent of the Bank and the City.
{OR754499;1}
21
Section 6.3 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 6.4 Severability.
If any clause, provision or section of this Agreement shall be held illegal or
invalid by any court, the invalidity of such provisions or sections shall not affect any other
provisions or sections hereof, and this Agreement shall be construed and enforced to the end
that the transactions contemplated hereby be effected and the obligations contemplated hereby
be enforced, as if such illegal or invalid clause, provision or section had not been contained
herein.
Section 6.5 Term of Agreement.
This Agreement shall be in full force and effect from the date hereof and shall
continue in effect as long as the 2004A Note is outstanding. Notwithstanding the other
provisions set forth herein, to the extent any law or regulation enacted subsequent to the
termination of this Agreement retroactively reduces the Bank's yield on the 2004A Note, the
provisions regarding adjustments to interest rates shall survive the repayment of the 2004A
Note hereunder for a period not to exceed two (2) years after such repayment.
Section 6.6 Assignment.
The Bank acknowledges and agrees that it is treating the transactions
contemplated hereunder as loan transactions and not as the sale and purchase of securities.
The Bank further acknowledges and agrees. that it presently intends to hold the 2004A Note
issued hereunder through its respective fmal maturity date. The Bank may assign the 2004A
Note or its obligations hereunder; provided, however, the Bank shall give the City ten (10)
days prior written notice of any such assignment and, provided further, the Bank shall comply
with all applicable securities laws at the time of such assignment.
Section 6.7 Notice of Changes in Fact.
Promptly after the City becomes aware of the same, the City will notify the
Bank of (a) any change in any material fact or circumstance represented or warranted by the
City in this Agreement or in connection with the issuance of the 2004A Note, and (b) any.
default or event which, with notice or lapse of time or both, could become a default under the
Agreement, specifying in each case the nature thereof and what action the City has taken, is
taking and/or proposed to take with respect thereto.
{OR754499;1}
22
Section 6.8 Notices.
Any notices or other communications required or permitted hereunder shall be
sufficiently given if delivered personally or sent registered or certified mail, postage prepaid,
to the City, City of Winter Springs, 1126 East State Road 434, Winter Springs, Florida 32708,
Attention: City Manager, and to the Bank, Bank of America, N.A., 390 N. Orange Avenue,
7th Floor, Orlando, Florida 32801, Attention: Mark W. Irby, with a copy to Bank of America,
N.A., 9000 Souths ide Blvd., Attn: Notice Desk, Building 100, Jacksonville, FL 32256, or at
such other address as shall be furnished in writing by any such party to the other, and shall be
deemed to have been given as of the date so delivered or deposited in the United States mail.
Section 6.9 Avplicable Law.
The substantive laws of the State of Florida shall govern this Agreement.
Section 6.10 Incorporation bv Reference.
All of the terms and obligations of the Resolution are hereby incorporated herein
by reference as if said Resolution was fully set forth in this Agreement.
[Remainder of Page Left Intentionally Blank;
Signature Page Follows]
{OR754499;1}
23
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first set forth herein.
CITY OF WINTER SPRINGS, FLORIDA
(OFFICIAL SEAL)
By
Mayor
ATTEST:
By
City Clerk
BANK OF AMERICA, N.A.
By
Title: Authorized Officer
{OR754499;1}
24
EXIDBIT A
THE PROJECT
The Project consists of the completion of construction of the Oak Forest
subdivision wall, in and for the City of Winter Springs, Florida, in accordance with the plans
and specifications on file or to be on file with the City.
{OR754499;\ }
A-I
EXHIBIT B
Principal
Sum
UNITED STATES OF AMERICA
STATE OF FLORIDA
CITY OF WINTER SPRINGS
CAPITAL IMPROVEMENT REVENUE NOTE, SERIES 2004A
Interest
Rate Date of Issuance Maturity Date
$575.907
%
June 2. 2004
Julv 1. 2010
The CITY OF WINTER SPRINGS, FLORIDA (the "City"), for value received,
hereby promises to pay, solely from the Pledged Funds described in the within mentioned
Agreement, to the order of BANK OF AMERICA, N. A., or its successors or assigns (the
"Noteholder"), the Principal Sum specified above loaned to the City pursuant to that certain
Loan Agreement by and between Bank of America, N. A., and the City, dated as of June 2,
2004 (the "Agreement"), and to pay interest on such Principal Sum from the Date of Issuance
specified above or from the most recent date to which interest has been paid at the Interest Rate
per annum specified above (subject to adjustment as hereinafter provided) on June 1 and
December I of each year, commencing December 1,2004, until such Principal Sum shall have
been paid. The Principal Sum hereof shall be due and payable on the maturity date hereof.
Such Principal Sum and interest is payable 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. This Note may not be issued in denominations less than the lesser of $100,000.00 or
the remaining principal amount of the Note.
This Note is authorized to be issued in the principal amount of $575,907 under
the authority of and in full compliance with the Constitution and laws of the State of Florida,
including, particularly, Chapter 166, Part II, Florida Statutes, as amended, the Charter of the
City and other applicable provisions of law, and a resolution duly adopted by the City on May
24, 2004 (the "Resolution"), as such resolution may be amended and supplemented from time
to time, and is subject to all terms and conditions of the Resolution and the Agreement. Any
term used in this Note and not otherwise defined shall have the meaning ascribed to such term
in the Agreement.
This Note is being issued to refinance the Prior Note and to finance the cost of
comoletinlZ the construction of the Oak Forest subdivision wall, as described in the Agreement
and the Resolution. This Note is payable from the Pledged Funds as described in and in
accordance with the Agreement.
Pursuant to the Agreement, the City has covenanted to appropriate in its annual
budget, by amendment, if necessary, from Non-Ad Valorem Funds lawfully available amounts
sufficient, together with other available moneys, to pay the principal of and interest on this
{OR754499;1}
B-1
v n
Note, as the same become due (whether by redemption, at maturity or otherwise). Such
covenant and agreement on the part of the City to budget and appropriate such amounts of
Non-Ad Valorem Funds shall be cumulative to the extent not paid, and shall continue until
such Non-Ad Valorem Funds or other legally available funds in amounts sufficient to make all
such required payments under this Note shall have been budgeted, appropriated and actually
paid. Notwithstanding the foregoing, the City has not covenanted to maintain any services or
programs, now provided or maintained by the City, which generate Non-Ad Valorem Funds.
Such covenant and agreement on the part of the City to budget and appropriate such amounts
of Non-Ad Valorem Funds is subject, however, in all respects to certain appropriation
constraints contained in Section 166.241(3), Florida Statutes, as amended, and 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 or which are legally mandated by applicable law.
This Note shall bear interest from its Date of Issuance at the Interest Rate
specified above on the basis of a 365/366-day year. The Interest Rate specified above is
subject to adjustment as provided in Section 3.1(d) of the Agreement in the event of a
Determination of Taxability. In addition, this Note is subject to adjustment in accordance with
the provisions in Section 3.3 of the Agreement. The Noteholder shall provide to the City upon
request such documentation to evidence the amount of interest due on this Note.
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 interest allowed under the
laws of the State of Florida as presently in effect. In the event the maturity of this Note is
accelerated or prepaid in accordance with the provisions hereof or of the Agreement, 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 (a) the applicable maximum rate of
interest allowed by Sections 215.84 and 159.825(1), Florida Statutes, as amended, or (b) the
nonusuriousnon-usurious interest allowed by the laws of the State of Florida or the United
States, to the extent applicable, as presently in effect and to the extent an increase is allo'Nable
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 this Note.
All payments made by the City hereon shall apply first to accrued interest, and
then to the principal amount then due on this Note.
The City may prepay this Note as a whole or in part, at any time or from time
to time, without premium (exceot as otherwise orovided in the Al!:reemenO, by paying to the
Noteholder all or part of the Principal Sum of the Note, together with the unpaid interest
accrued on the amount of principal so prepaid to the date of such prepayment. Each
{OR754499;1}
B-2
. ,
prepayment of this Note 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 less than five (5)
Business Days prior thereto. Notice having been given as aforesaid, the Principal Sum of this
Note 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 (a) in case the entire unpaid balance of the
principal of this Note is to be paid, upon presentation and surrender of this Note at the office
of the City, and (b) in case only part of the unpaid balance of principal of this Note is to be
paid, upon presentation of this Note at the office of the City for notation thereon of the amount
of principal and interest on this Note then paid. If on the prepayment date moneys for the
payment of the principal amount to be prepaid on this Note, together with interest to the
prepayment date on such principal amount, shall have been paid to the Noteholder as above
provided and if notice of prepayment shall have been given to the Noteholder as above
provided, then from and after the prepayment date interest on such principal amount of this
Note shall cease to accrue. If said moneys shall not have been so paid on the prepayment date,
such principal amount of this Note shall continue to bear interest until payment thereof at the
rate or rates provided for in the Agreement.
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 of the State of
Florida or any political subdivision or agency thereof, within the meaning of any.
constitutional, statutory or charter limitations of indebtedness, but shall be payable solely from
the Pledged Funds, as provided in the Agreement and the Resolution. No Noteholder shall
ever have the right to compel the exercise of the ad valorem taxing power of the City or the
State of Florida, or taxation in any form on any property therein to pay this Note or the interest
thereon.
Upon the occurrence of an Event of Default relating to this Note, the Principal
Sum of this Note may become or be declared due and payable before the maturity date hereof
in the manner, with the effect and subject to the conditions set forth in the Agreement and' the
Resolution. The Noteholder shall also have such other remedies as described in the
Agreement.
If this Note shall be declared to be immediately due and payable or any amounts
due on this Note shall remain unpaid past any scheduled payment date, this Note shall bear
interest at the lesser of the Taxable Rate (as' defmed in the Agreement) or the maximum rate
permitted by law until all amounts then due under this Note are paid in full.
The City hereby waives demand, protest and notice of dishonor.
No obligation under the Agreement or this Note shall be or be deemed to be an
obligation of any member of the City Commission or any officer, employee or agent of the
{OR754499;1 }
B-3
., .JlI 'f
City in his or her individual capacity, and none of such persons executing the Agreement or
this Note shall be liable personally thereon or hereon by reason thereof.
It is certified, recited and declared that all acts, conditions and things required to
exist, happen and be performed precedent to and in connection with the execution and delivery
of the Agreement and the issuance of this Note do exist, have happened and have been
performed in due time, form and manner as required by law, and that the issuance of this
Note, together with all other obligations of the City under the Agreement, does not exceed or
violate any constitutional or statutory limitation.
IN WITNESS WHEREOF, the City of Winter Springs, Florida, caused this
Note to be signed by the manual signature of its Mayor and its official seal to be affixed hereto
or imprinted or reproduced hereon, and attested by the manual signature of its City Clerk, and
this Note to be dated the Date of Issuance set forth above.
CITY OF WINTER SPRINGS, FLORIDA
(OFFICIAL SEAL)
By
Mayor
ATTEST:
City Clerk
CERTIFICATE OF AUTHENTICATION
This Note is the Note described in the within-mentioned Resolution and Agreement.
Dated: June 2, 2004
City Clerk of Winter Springs, as Registrar
{OR754499;\ }
B-4
t . ':t..
Redline #749842 v. 4 to v. 5 (5/24/04)
LOAN AGREEMENT
BETWEEN
CITY OF WINTER SPRINGS, FLORIDA
AND
BANK OF AMERICA, N .A.
Dated as of June 2, 2004
{OR754499; 1}
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITION OF TERMS
Section 1.1 Definitions.......................................................................... 1
Section 1.2 Interpretation. ..................................................................... 5
Section 1.3 Titles and Headings. .............................................................. 6
ARTICLE 2
REPRESENTATIONS, WARRANTIES AND COYENANTS;
SECURITY FOR 2004A NOTE; ADDITIONAL OBLIGATIONS
Section 2.1
Section 2.2
Section 2.3
Section 2.4
Section 2.5
Section 2.6
Section 2.7
Section 2.8
Section 2.9
Section 2.10
Representations by the City. ...................................................6
General Representations, Warranties and Covenants of the
Bank. 8
Making of Loan. .................................................................. 8
Tax Covenants. .................................................................... 8
2004A Note not to be Indebtedness of the City or State. ................9
Security for 2004A Note. ........................................................9
Covenant to Budget and Appropriate. .......................................9
Payment Covenant. ............................................................. 10
Financial Covenants. ........................................................... 10
Assessments....................................................................... 10
ARTICLE 3
DESCRIPTION OF 2004A NOTE; PAYMENT TERMS;
OPTIONAL PREPAYMENT
Section 3.1 Description and Payment Terms of the 2004A Note. ................... 11
Section 3.2 Optional Prepayment........................................................... 12
Section 3.3 Adjustments to Interest Rates...... .... .... ..... ..... ..... ...... ........ ..... 13
ARTICLE 4
ISSUANCE OF 2004A NOTE
Section 4.1 Issuance of 2004A Note. ....................................................... 16
{OR754499;1}
-1-
"
Section 4.2
Section 5.1
Section 5.2
Section 6.1
Section 6.2
Section 6.3
Section 6.4
Section 6.5
Section 6.6
Section 6.7
Section 6.8
Section 6.9
Section 6.10
EXHffiIT A
EXHIBIT B
{OR754499; l}
Project Fund. ...... ... ......., ...... ............ .... ............... .... .......... 18
ARTICLE 5
EVENTS OF DEFAULTS; REMEDIES
Events of Default. ..................................................... .......... 19
Remedies. . ............. ..... ... ........ ............ .................. ... .......... 20
ARTICLE 6
MISCELLANEOUS
Arbitration... ... ... ......... ........... ........... .................. .............. 20
Amendments, Changes or Modifications to the Agreement........... 20
Counterparts. ...... ... ................ ... ...... ... ..................... ..... ..... 21
Severability. ..... .... ................................... .......................... 21
Term of Agreement. ........................................... . . . . . . . . . . . . . . . .. 21
Assignment...... ....... ... .............. .......................................... 21
Notice of Changes in Fact. ~. .......... ........................................ 21
Notices. ......................................... ................................... 22
Applicable Law. . ................ ..... .... ....................................... 22
Incorporation by Reference.......... ............ ... ... .... ........ ...... ..... 22
The Project
Form of2004A Note
11
LOAN AGREEMENT
This LOAN AGREEMENT (this "Agreement") is made and entered into as of
June 2, 2004, between the City of Winter Springs, a municipality created and existing under
and by virtue of the laws of the State of Florida (the "City"), and Bank of America, N.A., a
national banking association, and its successors and assigns (the "Bank");
WIT N E SSE T H:
WHEREAS, the City is authorized pursuant to Chapter 166, Part II, Florida
Statutes, as amended, and other applicable provisions of law to, among other things,
(a) refinance a note in the current outstanding principal balance of $~ 95,906.86 ,debt of the
Citv. (b) fmance the cost of certain capital projects in and for the City, consisting of
completing the construction of the Oak Forest subdivision wall, and (c) pledge thecertain
funds and credit of the City for payment of such debts; and
WHEREAS, the Bank is willing to make available to the City, and the City is
willing to enter into, a loan arrangement pursuant to the terms and provisions of this
Agreement in an aggregate principal anlount of $575,907 under which the City shall refmance
the Prior Note (as hereinafter defined) and finance the cost of the Project (as hereinafter
defined); and
WHEREAS, the City deems it necessary, desirable and in the best interest of the
City that the City undertake to refmance the Prior Note and to complete the construction of the
Oak Forest subdivision wall (the "Project," as more particularly described. in Exhibit A
attached hereto).
NOW, THEREFORE, THIS AGREEMENT WITNESSETH:
That the parties hereto, intending to be legally bound hereby and in
consideration of the mutual covenants hereinafter contained, DO HEREBY AGREE as follows:
ARTICLE 1
DEFINITION OF TERMS
Section 1.1 Definitions.
The terms defined in this Article 1 shall, for all purposes of this Agreement,
have the meanings specified in this Article 1, unless the context clearly otherwise requires.
"Act" shall mean Chapter 166, Part II, Florida Statutes, as amended, Chapter
72-718, Laws of Florida, Special Acts of 1972, as amended, and other applicable provisions of
law.
{OR754499;1 }
I
"
"Additional Amount" shall have the meaning ascribed to such term in Section
3.1(d) hereof.
"Agreement" shall mean this Loan Agreement dated as of June 2, 2004,
between the City and the Bank, and any and all modifications, alterations, amendments and
supplements hereto made in accordance with the provisions hereof.
"Authorized Depository" shall mean the State Board of Administration of
Florida or a bank or trust company which is eligible under the laws of the State to receive
funds of the City.
"Authorized Investments" shall mean any of the following which shall be
authorized from time to time by applicable laws of the State of Florida for deposit or purchase
by the City for the investment of its funds:
(a) Direct obligations of (including obligations issued or held in book entry form
on the books of the Department of the Treasury of the United States of America and stripped
and zero coupon obligations), or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America.
(b) Bonds, debentures or notes or other evidences of indebtedness payable in
cash issued by anyone or a combination of any of the following federal agencies whose
obligations represent the full faith and credit of the United States of America: Export Import
Bank of the United States, Federal Financing Bank, Farmers Home Administration', Federal
Housing Administration, Maritime Administration, Public Housing Authority and Government
National Mortgage Association.
(c) Certificates of deposit properly secured at all times by collateral security
described in either or both of paragraphs (a) and (b) of this definition or in the collateral
provisions of Chapter 280, Florida Statutes, as amended, and issued by commercial banks,
savings and loan associations or mutual savings banks chartered by the State of Florida or the
United States of America, and bank trust receipts issued by commercial banks or trust
companies chartered by the State of Florida or the United States of America upon any
securities described in paragraph (a) of this definition.
(d) The following investments fully insured by the Federal Deposit Insurance
Corporation: (i) certificates of deposit, (ii) savings accounts, (iii) deposit accounts, or (iv)
depository receipts of a bank, savings and loan association or mutual savings bank.
(e) Commercial paper rated in one of the two highest rating categories by at
least two nationally recognized rating agencies or commercial paper backed by a letter of credit
or line of credit rated in one of the two highest rating categories by Moody's Investors Service
and Standard & Poor's.
{OR754499;1}
2
(t) Written repurchase agreements with any bank, savings institution or trust
company which is insured by the Federal Deposit Insurance Corporation, or with any
broker-dealer with retail customers which falls under Securities Investors Protection
Corporation protection, provided that such repurchase agreements are fully secured by
collateral described in (a) above or obligations of any agency or instrumentality of the United
States of America, and provided further that (i) such collateral is held by a bank or trust
company chosen by the City which has no interest in the repurchase agreement during the term
of such repurchase agreement, (ii) such collateral is not subject to liens or Claims of third
parties, (iii) such collateral has a market value (determined at least once every 30 days) at least
equal to the amount invested in the repurchase agreement, (iv) the entity holding the collateral
has a perfected first security interest in the collateral for the benefit of the Noteholder, (v) the
agreement shall be for a term not longer than 270 days and (vi) the failure to maintain such
collateral at the level required in (iii) above will require the entity holding the collateral to
liquidate the collateral.
(g) Money market funds rated in the highest rating category by Moody's
Investors Service and Standard & Poor's.
(h) Units of participation in the Local Government Surplus Funds Trust Fund
established pursuant to Chapter 218, Part IV, Florida Statutes, as amended, or any similar
common trust fund which is established pursuant to the law of the State of Florida as a legal
depository of public moneys.
(i) Obligations of state or local government municipal bond issuers that are
rated in one of the two highest rating categories by Moody's Investors Service and Standard &
Poor's.
(j) Such other obligations as shall be permitted to be legal investments of the
City by the laws of the State of Florida.
Rating categories when referred to herein shall be without regard to gradations
within such categories, such as "plus" or "minus."
"Authorized City Officer" for the performance on the behalf of the City of any
act of the City or the execution of any instrument on behalf of the City shall mean any person
authorized by resolution or certificate of the City to perform such act or sign such document.
"Bank" shall mean Bank of America, N.A., and its successors and assigns.
"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,
{OR754499;1}
3
and duly admitted to practice law before the highest court of any state of the United States of
America.
"Business Day" or "business day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions within the State are authorized by law to remain
closed.
"City" shall mean the City of Winter Springs, Florida.
"City Clerk" shall mean the City Clerk of the City and such other person as
may be duly authorized to act on his or her behalf.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
applicable rules and regulations thereto and thereunder.
"Cost" when used in connection with the Project, shall mean the costs of the
Project described in Section 4.1(b) hereof.
"Determination of Taxability" shall mean the circumstance of interest paid or
payable on the 2004A Note becoming includable for federal income tax purposes in the gross
income of the Noteholder as a consequence of any act, omission or event whatsoever and
regardless of whether the same was within 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 2004A Note is
includable in the gross income of the Noteholder; (b) the issuance of any public or private
ruling of the Internal Revenue Service that any interest payable on the 2004A Note is
includable in the gross income of the Noteholder; or (c) receipt by the City or a Noteholder of
an opinion of Bond Counsel that any interest on the 2004A Note has become includable in the
gross income of the Noteholder for federal income tax purposes. For all purposes of this
defmition, a Determination of Taxability will be deemed to occur on the date as of which the
interest on the 2004A Note is deemed includable in the gross income of the Noteholder. A
Determination of Taxability shall not occur solely from the fact that such interest is taken into
account in determining adjusted current earnings for the purpose of the alternative minimum
income tax imposed on corporations.
"Fiscal Year" shall mean the period commencing on October 1 of each year and
continuing through the next succeeding September 30, or such other period as may be
prescribed by law.
"Interest Payment Date" shall have the meaning ascribed thereto in Section
3 .1(c) hereof.
{OR754499;1}
4
"Mayor" shall mean the Mayor of the City and such other person as may be
duly authorized to act on his or her behalf.
"Non-Ad Valorem Funds" shall mean all legally available funds of the City
derived from any source whatsoever other than ad valorem taxation on real and personal
property, which are legally available to make the payments required herein, but only after
provision has been made by the City for the payment of services and programs which are for
essential public purposes affecting the health, welfare and safety of the inhabitants of the City
or which are legally mandated by applicable law.
"Noteholder" shall mean the Bank as the holder of the 2004A Note, or any
other registered holder of or participant in the 2004A Note.
"Noteholder's Adjusted Cost of Funds" shall mean the fraction (expressed as a
percentage), determined by the Noteholder, the numerator of which is the total interest expense
of the Noteholder for each calendar year and the denominator of which is the total average
adjusted basis of all assets of the Noteholder during the calendar year as determined under
Section 265(b )(2)(B) of the Code or any successor provision thereto.
"Pledged Funds" shall mean (a) the proceeds of the 2004A Note pending the
application thereof and (b) moneys budgeted and appropriated pursuant to Section 2.7 hereof.
"Prior Note" shall mean that certain Capital Improvement Revenue Note, Series
2000B, dated as of June 16,2000, in the original principal amount of $723,262.00 and having
a current outstanding principal balance of $495,906.86.
"Project" shall refer to the capital projects described generally in Exhibit A
attached hereto, as such Project may be amended from time to time by the City with the prior
written approval of the Bank.
"Project Fund" shall mean the Project fund established pursuant to Section 4.2
hereof.
"Resolution" shall mean the resolution adopted by the City on May 24, 2004,
which among other things authorized the execution and delivery of this Agreement and the
issuance of the 2004A Note.
"State" shall mean the State of Florida.
"Taxable Period" shall have the meaning ascribed to such term in Section 3 .1 (d)
hereof.
"Tax Certificate" shall have the meaning ascribed to such term in Section 2.4
hereof.
{OR754499;1}
5
"Taxable Rate" shall mean the interest rate on the 2004A Note multiplied by
1.54.
"2004A Note" shall mean the revenue note authorized by the Resolution and
delivered by the City to the Noteholder in accordance with the requirements set forth in Article
4 hereof.
Section 1.2 Interpretation.
Unless the context clearly requires otherwise, words of the 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 meanings 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 1.3 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 2
REPRESENTATIONS, WARRANTIES AND COVENANTS;
SECURITY FOR 2004A NOTE; ADDITIONAL OBUGA TIONS
Section 2.1 Representations bv the Citv.
The City represents, warrants and covenants that:
(a) The City is a municipality validly created and existing under the laws of the
State of Florida. Pursuant to the Resolution, the City (i) has duly authorized the execution and
delivery of this Agreement and the performance by the City" of all of its obligations hereunder,
and (ii) &haJ1.has duly authorizeauthorized the 2004A Note issued hereunder and the
performance by the City of all its obligations relating thereto.
(b) The City has complied with all of the provisions of the Constitution and laws
of the State, and has full power and authority to enter into and consummate all transactions
contemplated by this Agreement or under the 2004A Note, and to perform all of its obligations
hereunder and, to the best knowledge of the City, the transactions contemplated hereby do not
{OR754499;1}
6
conflict with the terms of any statute, order, rule, regulation, judgment, decree, agreement,
instrument or commitment to which the City is a party or by which the City is bound.
(c) The City is duly authorized and entitled to issue the 2004A Note. This
Agreement and, when issued in accordance with the terms of this Agreement, the 2004A Note
will constitute legal, valid and binding obligations of the City enforceable in accordance with
their terms, subject as to enforceability to bankruptcy, insolvency, moratorium, reorganization
or other similar laws affecting creditors' rights generally, or by the exercise of judicial
discretion in accordance with general principles of equity.
(d) There are no actions, suits or proceedings pending or, to the best knowledge
of the City, threatened against or affecting the City, at law or in equity, or before or by any
governmental authority, that, if adversely determined, would materially impair the ability of
the City to perform the City's obligations under this Agreement or under the 2004A Note.
(e) The City will furnish to the Bank (i) within 270 days following the end of
each Fiscal Year, a comprehensive annual fmancial report of the City for such Fiscal Year, -
which shall include a balance sheet as of the end of such Fiscal Year, audited without scope
limitations by independent certified public accountants of recognized standing selected by the
City and (ii) by November 15 of each year, the annual budget of the City for the upcoming
Fiscal Year. ReportsSuch reoorts shall be prepared in accordance with generally accepted
accounting principles. The City acknowledges and agrees that the Bank's ability to monitor
and evaluate the status of the loan is dependent upon the City timely providing the fmancial
information required herein. Should the City fail to timely provide the financial information,
in addition to all other rights and remedies the Bank has, including declaring the loan to be in
default, the Bank may charge the City, upon ten (10) days prior written notice, a late fee up to
10 basis points (.1 %) of the outstanding principal balance of the loan, not to be less than
$500.00. The charging and/or payment of such late fee is not a waiver of the City's
continuing obligation to provide the required financial information.
(f) No authorization, consent, approval, license, exemption of or registration or
filing with any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, has been or will be necessary for the valid execution,
delivery and performance by the City of this Agreement, the 2004A Note and the related
documents, except such as have been obtained, given or accomplished and copies of which
have been provided to the Bank.
(g) Except as disclosed in writing to the Bank, the City is not in default in the
payment when due of any indebtedness of the City.
(h) The financial statements of the City for the fiscal year ending September 30,
2003, copies of which have been furnished to the Bank, have been prepared in accordance with
generally accepted accounting principles and present fairly the financial condition of the City
{OR754499;1}
7
. .
as of such date and the results of its operations for the period then ended. Since September 30,
2003. there has been no material adverse change in the financial condition, revenues,
properties or operations of the City.
(i) Any written information, reports and other papers and data prepared by the
City and furnished to the Bank by the City were, at the time the same were so furnished,
complete and correct in all material respects to the extent .necessary to give the Bank a true and
accurate knowledge of the subject matter thereof. There is no fact, circumstance or condition
that has not been disclosed to the Bank in writing by the City which materially and adversely
affects or, so far as the City can now foresee, will materially and adversely affect, (i) the
fmancial condition, revenues, properties or operations of the City or (ii) the validity or
enforceability of, or the authority or ability of the City to perform its obligations under, this
Agreement, the 2004A Note and the related documents.
(j) The obligations of the City under this Agreement and the 2004A Note are
not subject to any law, rule or regulation of the State of Florida prescribing a maximum rate of
interest, except for Sections 159.825(1),215.84 and 687.03, Florida Statutes, as amended.
(k) The City acknowledges and agrees that its timely and complete compliance
with all of the terms and conditions contained in this Agreement is material consideration for
the loan made hereunder. The City's failure to timely and completely comply with each and
every term and condition contained in this Agreement is, at the Bank's option, an Event of
Default under this Agreement. In addition to all other rights and remedies the Bank has, the
Bank may, in its sole discretion, elect to waive such default or to forbear to exercise its rights
and remedies for such default and may charge the City a fee for agreeing to do so.
0) The City hereby authorizes the Bank to automatically deduct from any of the
City's accounts with the Bank the amount of any loan payment due hereunder to the extent
there are sufficient Pledged Funds in such accounts. If the funds in the account are insufficient
to cover any payment, the Bank shall not be obligated to advance funds to cover the payment.
At any time and for any reason, the City or the Bank may voluntarily terminate automatic
payments. Please debit account number for such Davments.
(m) The City will discharge all outstanding principal and interest on the Prior
Note on the date the 2004A Note is issued.
Section 2.2 General Representations, Warranties and Covenants of the Bank.
The Bank hereby represents, warrants and agrees that it is a national banking
association authorized to execute and deliver this Agreement and to perform its obligations
hereunder, and such execution and delivery will not constitute a violation of its charter, articles
of incorporation or bylaws.
{OR754499;1}
8
Section 2.3 Making of Loan.
Pursuant to the terms and provisions of this Agreement, the Bank agrees to
make one or more loans to the City for the purpose of refinancing the Prior Note and financing
the cost of the Project.
Section 2.4 Tax Covenants.
(a) The City hereby covenants with the holder of the 2004A Note that in order
to maintain the exclusion from gross income for purposes of federal income taxation of interest
on the 2004A Note, it shall comply with each requirement of the Code applicable to the 2004A
Note. In furtherance of the covenant contained in the preceding sentence, the City agrees to
continually comply with the provisions of the Federal Tax Certificate to be executed by the
City relating to the 2004A Note, as such Certificate may be amended from time to time, as a
source of guidance for achieving compliance with the Code (referred to herein as the "Tax
Certificate") .
(b) The City hereby covenants with the holder of the 2004A Note that it shall
make any and all payments required to be made to the United States Department of the
Treasury in connection with the 2004A Note pursuant to Section 148(t) of the Code.
(c) So long as necessary in order to maintain the exclusion from gross income of
interest on the 2004A Note for federal income tax purposes, the covenants contained in this
Section 2.4 shall survive the payments of the 2004A Note and the interest thereon, including
any payment or defeasance thereof.
(d) The City hereby covenants with the holder of the 2004A Note that it shall
not take or permit any action or fail to take any action which would cause the 2004A Note to
be "arbitrage bonds" within the meaning of Section 148(a) of the Code.
Section 2.5 2004A Note not to be Indebtedness of the City or State.
The 2004A Note, when delivered by the City pursuant to the terms of this
Agreement, shall not be or constitute an indebtedness of the City, the State or any political
subdivision or agency thereof, within the meaning of any constitutional, statutory or charter
limitations of indebtedness, but shall be payable from and secured by a lien upon and pledge of
the Pledged Funds, in the manner and to the extent provided herein. No Noteholder shall ever
have the right to compel the exercise of the ad valorem taxing power of the City or taxation in
any form on any property therein to pay the 2004A Note or the interest thereon. The 2004A
Note is a special and limited obligation payable as to principal and interest from the Pledged
Funds in the manner and to the extent provided herein.
{OR754499;1}
9
Section 2.6 Security for 2004A Note.
The 2004A Note shall be secured by and payable from the Pledged Funds. The
City does hereby irrevocably pledge the Pledged Funds to the payment of the 2004A Note in
accordance with the provisions hereof.
Section 2.7 Covenant to Budget and Appropriate.
(a) Until the 2004A Note is paid or deemed paid pursuant to the provisions of
this Agreement, the City hereby covenants to appropriate in its annual budget, by amendment
if necessary, from Non-Ad Valorem Funds lawfully available in each Fiscal Year of the City in
which principal of or interest on the 2004A Note becomes due and payable, amounts sufficient,
together with other available moneys, to pay the principal of and interest on the 2004A Note,
as the same become due (whether by redemption, at maturity or otherwise). Such covenant
and agreement on the part of the City to budget and appropriate such amounts of Non-Ad
Valorem Funds shall be cumulative to the extent not paid, and shall continue until such Non-
Ad Valorem Funds or other legally available funds in amounts sufficient to make all such
required payments hereunder and under the 2004A Note shall have been budgeted,
appropriated and actually paid. Notwithstanding the foregoing covenant of the City, the City
does not covenant to maintain any services or programs, now provided or maintained by the
City, which generate Non-Ad Valorem Funds. No Noteholder shall have a lien on such Non-
Ad Valorem flma&Punds until such time as the City has irrevocably set such funds aside for
payment of debt service on the 2004A Note.
(b) Except as otherwise provided in Section 2.6 hereotherein, such covenant to
budget and appropriate does not create any lien upon or pledge of such Non-Ad Valorem
Funds, nor does it preclude the City from pledging in the future its Non-Ad Valorem Funds,
nor does it require the City to levy and collect any particular Non-Ad Valorem Funds, nor
does it give the Noteholder a prior claim on the Non-Ad Valorem Funds as opposed to claims
of general creditors of the City. Such covenant to budget and appropriate Non-Ad Valorem
Funds is subject in all respects to the payment of obligations secured by a pledge of such Non-
Ad Valorem Funds heretofore or hereafter entered into (including the payment of debt service
on bonds and other debt instruments). However, the covenant to budget and appropriate in its
general annual budget for the purposes and in the manner stated herein shall have the effect of
making available for the payment of the principal of and interest on the 2004A Note in the
manner described herein Non-Ad Valorem Funds and placing on the City a positive duty to
appropriate and budget, by amendment, if necessary, amounts sufficient to meet its obligations
hereunder; subject, however, in all respects to the restrictions of Section 166.241(3), Florida
Statutes, as amended, which provides that the governing body of each municipality shall make
appropriations for each fiscal year which, in anyone year, shall not exceed the amount to be
received from taxation or other revenue sources; and subject, further, to the payment of
services and programs which are essential public purposes affecting the health, welfare and
safety of the inhabitants of the City or which are legally mandated by applicable law.
{OR754499;1 }
10
Section 2.8 Payment Covenant.
The City covenants that it shall duly and punctually pay from the Pledged Funds
the principal of and interest on the 2004A Note at the dates and place and in the manner
provided herein and in the 2004A Note according to the true intent and meaning thereof and all
other amounts due under this Agreement.
Section 2.9 Financial Covenants.
The City covenants that it shall maintain a debt service coverage ratio calculated
annually (as reflected in the City's audited financials) of at least 1.10 to 1.0 based upon the
City's general fund as more particularly described as follows: the sum of the general fund's
total revenues plus operating transfers into the general fund, less the general fund's total
expenditures inclusive of debt service paid from the general fund during the year other than
debt service on the 2004A Note, less operating transfers out from the general. fund, plus the
general fund's undesignated/unreserved fund balance, divided by debt service to be paid on the
2004A Note during the year.
Section 2.10 Assessments.
The City covenants in each Fiscal Year to designate to the payment of debt
service due on the 2004A Note the first amounts received in each Fiscal Year of the "Debt
Service Amount" of the Annual Improvement Assessments as such terms are defmed in
Resolution No. 2000-6 of the City as amended and supplemented.
ARTICLE 3
DESCRIPTION OF 2004A NOTE; PAYMENT TERMS;
OPTIONAL PREP A YMENT
Section 3.1 Description and Payment Terms of the 2004A Note.
(a) The City shall, pursuant to authority granted under the Resolution, issue and
deliver the 2004A Note to the Bank, which 2004A Note shall be issued in the principal amount
of FIVE HUNDRED SEVENTY -FIVE THOUSAND NINE HUNDRED AND SEVEN AND
NO/lOO DOLLARS ($575,907) in aggregate principal amount. The 2004A Note shall be
designated as "City of Winter Springs, Florida, Capital Improvement Revenue Note, Series
2004A." The text of the 2004A Note shall be substantially in the form attached hereto as
Exhibit B, with such omissions, insertions and variations as may be necessary and desirable to
reflect the terms of the 2004A Note. The provisions of the form of the 2004A Note are hereby
incorporated in this Agreement.
(b) The 2004A Note shall be dated the date of its delivery, shall be in the
principal amount set forth therein and payable as set forth therein and shall bear interest from
{OR754499;1}
11
, .
its date at the rate or rates set forth therein or as the same may be adjusted pursuant to Section
3.3 hereof. The 2004A Note shall be executed in the name of the City by the manual signature
of the Mayor and the official seal of the City shall be affixed thereto and attested by the manual
signature of the City Clerk. In case anyone or more of the officers, who shall have signed or
sealed the 2004A Note, shall cease to be such officer of the City before the 2004A Note so
signed and sealed has been actually delivered, the 2004A Note may nevertheless be delivered
as herein provided and may be issued as if the person who signed or sealed the 2004A Note
had not ceased to hold such office. The 2004A Note may be signed and sealed on behalf of the
City by such person who at the actual time of the execution of the 2004A Note shall hold the
proper office, although at the date the 2004A Note shall actually be delivered, such person may
not have held such office or may have been so authorized.
(c) Interest on the 2004A Note shall be paya~le on the dates set forth therein
(the "Interest Payment Dates") commencing on the date set forth therein. Principal of the
2004A Note shall be payable at the times and in the manner set forth therein. Interest on the
2004A Note shall be calculated on the basis of a 365/366-day year.
(d) In the event of a Determination of Taxability, the interest rate on the 2004A
Note subject to such Determination of Taxability shall be changed to the Taxable Rate effective
retroactively to the date on which such Determination of Taxability was made. Immediately
upon a Determination of Taxability, the City agrees to pay to any holder of the 2004A Note
subject to such Determination of Taxability the Additional Amount (as defmed herein).
"Additional Amount" means (i) the difference between (A) interest on the 2004A Note for the
period commencing on the date on which the interest on the 2004A Note (or portion thereof)
loses its tax-exempt status and ending on the earlier of the date the 2004A Note ceased to be
outstanding or such adjustment is no longer applicable to the 2004A Note (the "Taxable
Period") at a rate per annum equal to the Taxable Rate as adjusted from time to time on the
same dates and in the same manner as the interest rate on the 2004A Note was or would be
adjusted pursuant to the provisions of the 2004A Note, and (B) the aggregate amount of
interest payable on the 2004A Note for the Taxable Period under the provisions of the 2004A
Note without considering the Determination of Taxability, plus (ii) any penalties and interest
paid or payable by the Noteholder to the Internal Revenue Service by reason of such
Determination of Taxability. This provision shall survive the repayment of the Note until the
federal statute of limitation applicable to a Determination of Taxability shall have expired. If
the 2004A Note has matured, any Additional Amount shall be paid to the fonner Noteholder(s)
within thirty (30) days after written demand.
(e) All payments of principal of and interest on the 2004A Note shall be payable
in any coin or currency of the United States which, at the time of payment, is legal tender for
the payment of public and private debts and shall be made to the Bank (i) in immediately
available funds, (ii) by delivering to the Bank no later than payment date a check drawn on an
account at any bank that is a member of the Federal Reserve system, or (iii) in such other
manner as the City and the Bank shall agree upon in writing.
{OR754499;1}
12
(f) There will be no Bank fees to maintain the loan and the 2004A Note. The
Bank shall pay for all of its costs relating to servicing the loan and the 2004A Note. The City
agrees to pay the legal fees and costs of Bond Counsel and counsel to the Bank. The fees and
costs of counsel to the Bank shall not exceed $2.500.00.
Section 3.2 OPtional Prepayment.
The City may prepay and redeem the 2004A Note as a whole or in part, at any
time or from time to time, without penalty or premium, by paying to the Noteholder all or part
of the principal amount of the 2004A Note, together with the unpaid interest accrued on the
amount of principal so prepaid to the date of such prepayment. Notwithstanding the
immediately preceding sentence if the funds used to effectuate such prepayment are obtained
from a [mancial institution other than the Bank, (a premium of 1 % of the principal amount of
the 2004A Note shall also be due at the time of prepayment. Each prepayment of the 2004A
Note 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 less than five (5) Business Days prior
thereto specifying the principal amount of the 2004A Note to be prepaid and the date of such
prepayment. Notice having been given as aforesaid, the principal amount of the 2004A Note
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 (a) in case the entire unpaid balance of the principal
of the 2004A Note is to be prepaid, upon presentation and surrender of the 2004A Note at the
office of the City on the date specified for prepayment, and (b) in case only part of the unpaid
balance of principal of the 2004A Note is to be p'aid, upon presentation of the 2004A Note at
the office of the City for notation thereon of the amount of principal and interest on the 2004A
Note then paid. If on the prepayment date moneys for the payment of the principal amount to
be prepaid, together with interest to the prepayment date on such principal amount, shall have
been paid to the Noteholder as above provided and if notice of prepayment shall have been
given to the Noteholder as above provided, then from and after the prepayment date interest on
such principal amount of the 2004A Note shall cease to accrue. If said moneys shall not have
been so paid on the prepayment date, such principal amount of the 2004A Note shall continue
to bear interest until payment thereof at the rate or rates provided for in this Agreement.
Section 3.3 Adiustments to Interest Rates.
(a) The interest rate on the 2004A Note shall be subject to adjustment as
described in this Section 3.3 from the date of tlwHits issuance. The Bank shall promptly notify
the City in writing of any adjustments for the 2004A Note pursuant to this Section 3.3. Such
adjustments shall become effective as of the effective date of the event causing such
adjustment. Adjustments pursuant to this Section 3.3 may be retroactive. The Bank shall
certify to the City in writing the additional amount, if any, due to the Bank as a result of an
adjustment pursuant to this Section ~3.3.
{OR754499;1}
13
(b) Subject to the provisions of Section 3.3(a) above, the interest rate on the
2004A Note shall be adjusted as follows:
0) Alternative Minimum Tax Where Interest on the 2004A Note is a
Direct Tax Preference Item. If the Noteholder or its holding company pays an
alternative minimum tax in any tax year and the interest on the 2004A Note is a
direct tax preference item under Section 57(a)(5) or any successor provision of
the Code then the interest rate on the 2004A Note for the period during such tax
year in which interest is accruing on the 2004A Note shall be increased during
such accrual period by an amount equal to (A - B) x C where:
(A) A equals the interest rate on the 2004A Note expressed as
a percentage;
(B) B equals the Noteholder's Adjusted Cost of Funds; and
(C) C equals the maximum marginal rate of the alternative
minimum tax expressed as a decimal (currently .20);
(ii) Alternative Minimum Tax Where Interest on the 2004A Note is an
Indirect Tax Preference Item. If the Noteholder or its holding company pays an
alternative minimum tax in any tax year and the interest on the 2004A Note is
not a direct tax preference item under Section 57(a)(5) or any successor
provision of the Code, but is an indirect tax preference item because of the
application of Section 56(g) or any succesSor provision of the Code then the
interest rate on the 2004A Note for the period during such tax year in which
interest is accruing on the 2004A Note shall be increased during such accrual
period by an amount equal to (A - B) x C where:
(A) A equals the interest rate on the 2004A Note expressed as
a percentage;
(B) B equals the Noteholder's Adjusted Cost of Funds; and
(C) C equals 75 % of the maximum marginal rate of the
alternative minimum tax expressed as a decimal, or, if the
Code is amended to effectively increase or decrease the
percentage of interest on the 2004A Note which is subject
to such indirect alternative minimum tax, then C shall
equal the percentage of such interest which is effectively
subject to such indirect alternative minimum tax.
(iii) Loss of Federal Income Tax Deduction for State Income Taxes. If
the federal income tax deduction for state income taxes paid on the interest
{OR754499;1}
14
{OR754499;1}
payments received under the 2004A Note during any period is reduced because
of any change in the tax laws or regulations and the Noteholder is then subject
to payment of state income tax on the interest on the 2004A Note then the
interest rate on the 2004A Note shall be increased during such period by an
amount equal to A x B x C x D where:
(A) A equals the fraction (expressed as a decimal) of the total
state income tax disallowed as a result of such tax law
change;
(B) B equals the rate of the Florida state income tax
(expressed as a decimal);
(C) C equals the maximum federal corporate tax rate then in
effect for the Noteholder (expressed as a decimal); and
(D) D equals the interest rate on the 2004A Note (expressed as
a percentage).
(iv) Partial Taxabilitv. If the interest payments received under the 2004A
Note during any period become partially taxable to the extent not otherwise
taxable on the date of issuance thereof because of any change in the tax laws or
regulations, then the interest rate on the 2004A Note shall be increased during
such period by an amount equal to (A - B) x C where:
(A) A equals the Taxable Rate (expressed as a percentage);
(B) B equals the interest rate on the 2004A Note (expressed as
a percentage); and
(C) C equals the fraction of the interest rate on the 2004A
Note which has become taxable as the result of such tax
change (expressed as a decimal).
(v) Other Changes in Tax Laws. If the tax laws or regulations are
amended to cause the interest on the 2004A Note to become taxable to the extent
not otherwise taxable on the date of issuance thereof, to be subject to a
minimum tax or an alternative minimum tax or to otherwise decrease the yield
on the 2004A Note to the Noteholder (directly or indirectly, other than a change
described in (i) through (iv) above or because of a Determination of Taxability),
then the interest rate on the 2004A Note shall be adjusted to cause the yield on
the 2004A Note to equal what the yield on the 2004A Note would have been in
the absence of such change or amendment in the tax laws or regulations. If the
tax laws or regulations are amended to increase the yield on the 2004A Note to
15
'.
the Noteholder, then the Bank shall adjust the interest rate on the 2004A Note to
cause the yield on the 2004A Note to equal what the yield on the 2004A Note
would have been in the absence of such change or amendment in the tax laws or
regulations,
(vi) Transfer of Primary Depository Accounts. If the City transfers
its primary depository accounts out of the Bank prior to the payment in full of
the 2004A Note, the interest rate on the then outstanding 2004A Note shall be
increased by 1.25 % ,
(c) The above adjustments shall be cumulative, but in no event shall the interest
rate on the 2004A Note exceed the maximum rate permitted by law. Interest on the 2004A
Note and all other tax rates and interest rates are expressed as annual rates. However, proper
partial adjustment shall be made if the tax law change is effective after the first day of the
Noteholder's tax year or if interest on the 2004A Note does not accrue for the entire tax year
of the Noteholder. Adjustments which create a circular calculation because the interest rate on
the 2004A Note is affected by the calculation shall be carried out sequentially, increasing the
interest rate on the 2004A Note, until the change on the interest rate on the 2004A Note caused
by the next successive calculation of the adjustment is de minimis. If more than one of
paragraphs numbered (i) through (vi) in Section 3.3(b) apply, then the interest rate on the
2004A Note shall be adjusted in the order in which listed above.
(d) To the extent an adjustment to the interest rate on the 2004A Note is not
effected within three (3) months of the event giving rise to the adjustment, the additional
interest due as a result of such adjustment shall be paid with interest thereon compounded
monthly at the rate which is equal to the interest rate on the 2004A Note; provided, however,
in no event shall such interest rate exceed the maximum rate permitted by law. Subject to the
provisions of Section 3.3(a) hereof, all unpaid amounts determined to be owing as a result of
such calculation shall be due and payable within ten (10) days after delivery of written notice
of the amount of such adjustment, and shall be paid to the Noteholder of record during the
period to which the adjustment relates. This obligation shall survive the payment and
cancellation of the 2004A Note.
(e) In the event the maturity of the 2004A 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 (i) the applicable maximum rate of interest allowed by Sections 215.84 and
159.825(1), Florida Statutes, as amended, or (ii) the non-usurious interest allowed by the laws
of the State of Florida or the United States of America to the extent applicable, as presently in
effect and to the extent an increase is allowable 'by such la'Ns; and excess interest, if any, shall
be cancelled automatically as of the date of such accderation, or, if theretofore paid, shall be
{OR754499;1}
16
credited on the principal amount of the 2004A Note unpaid, but such crediting shall not cure or
waive any default under this Agreement.
ARTICLE 4
ISSUANCE OF 2004A NOTE
Section 4.1 Issuance of2004A Note.
(a) The Bank shall not be obligated to make any loan under this Agreement
unless at or prior to the date of issuance of the 2004A Note the City delivers to the Bank the
following items in form and substance acceptable to the Bank:
(i) A certificate of the Mayor, dated as of the date of issuance of the
2004A Note, to the effect that the representations and warranties of the City
contained in Section 2.1 hereof are true and correct as of such date and that
there is currently no Event of Default or event that with notice or lapse of time
or both would become an Event of Default hereunder;
(ii) A fully executed Tax Certificate relating to the 2004A Note;
(iii) A copy of a completed and executed Form 8038-G relating to the
2004A Note to be filed with the Internal Revenue Service;
(iv) An opinion of Bond Counsel in form and substance to the effect that
(A) this Agreement and the 2004A Note have been duly authorized by the City
and are enforceable obligations in accordance with their terms and the
Resolution has been du1y adopted and is enforceable in accordance with its
terms (enforceability of such instruments may be subject to standard bankruptcy
exceptions and the like), (B) interest on the 2004A Note shall be excluded from
gross income for federal income tax purposes and shall not be treated as a
preference item for purposes of computing the alternative minimum tax imposed
by the Code (however, the interest on the 2004A Note owned by corporations
may be subject to the federal alternative minimum tax which is based in part on
adjusted current earnings), (C) the 2004A Note is a "qualified tax-exempt
obligation" under Section 265(b)(3)(B) of the Code and (D) the interest on the
2004A Note shall be exempt from present Florida intangible taxes;
(v) A certificate of the Mayor, dated the date of issuance of the 2004A
Note, to the effect that the interest rate on the 2004A Note is in compliance with
the applicable maximum interest rate provisions contained in Sections 215.84
and 159.825(1), Florida Statutes, as amended;
(vi) The fully executed 2004A Note;
{OR754499;1}
17
(vii) An opinion of counsel to the City regarding the due authorization,
validity and enforceability of this Agreement and the 2004A Note and the due
adoption of the Resolution (enforceability may be subject to standard bankruptcy
exceptions and the like); and
(viii) Such additional certificates, instruments and other documents as the
Bank, or its counselor Bond Counsel, or counsel to the City, may deem
necessary or appropriate.
(b) The City shall apply the proceeds of the 2004A Note described in Section
3.1 hereof to pay for the costs of the Prior Note and the Costs of the Project, which Costs Qf
the Proiect shall include but not be limited to:
(i) The costs of architectural and engineering services related to the
Project, including, without limitation, the costs of preparation of studies,
surveys, reports, tests, plans and specifications;
(ii) The costs of legal, accounting, financial advisory, consulting,
marketing and other special services related to the Project;
(iii) Costs and fees incurred in connection with the issuance of the 2004A
Note;
(iv) Fees and charges incurred in connection with applications to federal,
state and local governmental agencies for any requisite approval or permits
regarding the construction of the Project;
(v) Costs incurred in connection with the acquisition of the sites for the
Project, including any necessary rights-of-way, easements or other interests in
real or personal property;
(vi) Costs incurred in connection with the acqulSltlon, construction,
improvement or extension of the buildings, structures and facilities comprising
the Project;
(vii) Costs incurred in connection with the acquisition and installation of
any machines, equipment, vehicles, fixtures, appurtenances or personal property
.of any kind or nature, which are to comprise a part of the Project;
(viii) Interest on 2004A Note accruing prior to the completion date of the
Project; and
(ix) To the extent permitted by law, other costs and expenses relating to
the Project which are incurred for the purpose of providing for the Project.
{OR754499;1}
18
Section 4.2 Proiect Fund.
The City covenants and agrees to establish a separate fund with an Authorized
Depository to be known as the "City of Winter Springs, Florida, Capital Improvement
Revenue 2004A Note Project Fund." Any proceeds not expended to retire the Prior Note shall
be deposited into the Project Fund. Moneys in the Project Fund shall be used only for
payment of the Cost of the Project and, until applied in payment of any item of the Cost of the
Project in the manner hereinafter provided, shall be held in trust by the City and shall be
subject to a lien and charge in favor of the Noteholder and for the further security of the
Noteholder.
There shall be paid into the Project Fund as provided in the first paragraph of
this section, the proceeds derived from the 2001.'\ Nott~ simultaneously with the delivery of the
2001.^... Note to the Noteholder, and there may be paid into the Project Fund, at the option of
the City, any moneys received for or in connection with the Project by the City from any other
source.
The City covenants that the construction of the Project will be completed
without delay and in accordance with sound governmental practices. The City shall make
disbursements or payments from the Project Fund to pay the Cost of the Project upon the filing
with the City Clerk of documents and/or certificates signed by an Authorized City Officer
stating with respect to each disbursement or payment to be made: (a) the item. number of the
payment, (b) the name and address of the person to whom payment is due, (c) the amount to be
paid, (d) the purpose, by general classification, for which payment is to be made, and (e) that
(i) each obligation, item of cost or expense mentioned therein has been properly incurred, is in
payment of a part of the Cost of the Project and is a proper charge against the Project Fund
and has not been the basis of any previous disbursement or payment, or (ii) each obligation,
item of cost or expense mentioned therein has been paid by the City, is a reimbursement of a
part of the Cost of the Project, is a proper charge against the Project Fund, has not been
theretofore reimbursed to the City or otherwise been the basis of any previous disbursement or
payment and the City is entitled to reimbursement thereof. The City Clerk shall retain all such
documents and/or certificates of the Authorized IssoofCitv Officers for seven (7) years from
the dates of such documents and/or certificates. The City Clerk shall make available the
documents and/or certificates at all reasonable times for inspection by the Noteholder or the
agent or representative of the Noteholder.
The date of completion of the Project shall be determined by the Authorized
City Officer who shall certify such fact in writing to the City. Promptly after the date of the
completion of the Project, and after paying or making provisions for the payment of all unpaid
items of the Cost of the Project, the City shall deposit any balance of moneys remaining in the
Project Fund in such other fund or account of the City as shall be determined by the City,
provided the City has received an opinion of Bond Counsel to the effect that such transfer shall
not adversely affect the exclusion, if any, of interest on the 2004A Note from gross income for
{OR754499;1}
19
federal income tax purposes. The Project Fund shall be continuously secured in the manner by
which the deposit of public funds are authorized to be secured by the laws of the State of
Florida. Moneys on deposit in the Project Fund may be invested and reinvested in Authorized
Investments maturing not later than the date on which the moneys therein will be needed.
"
Any and all income received by the City from the investment of moneys in the
Project Fund shall be retained in the Project Fund.
All investments shall be valued at cost. Nothing contained in this Agreement
shall prevent any Authorized Investments acquired as investments of or security for funds in
the Project Fund from being issued or held in book-entry form on the books of the Department
of the Treasury of the United States.
ARTICLE 5
EVENTS OF DEFAULTS; REMEDIES
Section 5 .1 Events of Default.
An "Event of Default" shall be deemed to have occurred under this Agreement
if:
(a) The City shall fail to make payment of principal or interest then due on the
2004A Note; or
(b) Failure by the City to observe and perform any covenant, condition or
agreement on its part to be observed or performed by it under this Agreement or the
Resolution other than as referred to in clause (a) of this Section, for a period of forty-five (45)
days after written notice specifying such failure and requesting that it be remedied has been
given to the City, unless the Noteholder shall determine in good faith that the delay would
materially impair its likelihood of full repayment; and during such period, the City shall cure
the default or provide to the Noteholder a written plan for curing such default, which may be
accepted or rejected in the Noteholder's discretion; or
(c) There shall occur the dissolution or liquidation of the City, or the filing by
the City of a voluntary petition in bankruptcy, or the commission by the City of any act of
bankruptcy, or adjudication of the City as a bankrupt, or assignment by the City for the benefit
of its creditors, or appointment of a receiver for the City, or the entry by the City into an
agreement of composition with its creditors, or the approval by a court of competent
jurisdiction of a petition applicable to the City in any proceeding for its reorganization
instituted under the provisions of the Federal Bankruptcy Act, as amended, or under any
similar act in any jurisdiction which may now be in effect or hereafter amended; or
{OR754499;1}
20
(d) Any representation or warranty made by the City in connection with the
transactions contemplated hereunder proves to be untrue in any material respect as of the date
made or deemed made; or
(e) Default shall occur in the payment of the principal of or interest on any
obligation of the City for borrowed money, as and when the same shall become due, and which
payment is not subsequently made within ten (10) days after the scheduled payment date,
unless the City shall be contesting its liability therefor in good faith; or
(t) Any judgment in an amount in excess of $1,000,000 shall be entered or filed
against the City and remains unvacated, unpaid, unbonded or ullStayed for a period of thirty
(30) days.
Section 5.2 Remedies.
If any such Event of Default shall have occurred, the Noteholder may seek
enforcement of all remedies available to it under law. The holder of the defaulted 2004A Note
may declare the 2004A Note to be immediately due and payable. Any amounts due on the
2004A Note which shall remain unpaid past the scheduled payment dates, shall bear interest at
the lesser of the Taxable Rate or the maximum rate of interest permitted by law until all
amounts then due under the 2004A Note are paid in full. The Bank shall be entitled to its
reasonable costs and expenses (including reasonable fees and expenses of counsel) incurred in
enforcing any of its rights under this Agreement after an Event of Default.
ARTICLE 6
MISCELLANEOUS
Section 6.1 Arbitration.
IN THE EVENT ANY DISPUTE SHOULD ARISE UNDER THIS
AGREEMENT OR ANY OTHER ASPECT OF THE TRANSACTION REFLECTED IN
THIS AGREEMENT BETWEEN THE BANK AND THE CITY, WHETHER OR NOT
SPECIFICALLY RELATING TO THIS AGREEMENT, SAID DISPUTE WILL BE
RESOLVED THROUGH BINDING ARBITRATION IN ORANGE COUNTY, FLORIDA,
IN ACCORDANCE WITH THE RULES OF THE AMERICAN ARBITRATION
ASSOCIATION.
Section 6.2 Amendments, Changes or Modifications to the Agreement.
This Agreement shall not be amended, changed or modified without the prior
written consent of the Bank and the City.
{OR754499;1}
21
Section 6.3 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 6.4 Severability .
If any clause, provision or section of this Agreement shall be held illegal or
invalid by any court, the invalidity of such provisions or sections shall not affect any other
provisions or sections hereof, and this Agreement shall be construed and enforced to the end
that the transactions contemplated hereby be effected and the obligations contemplated hereby
be enforced, as if such illegal or invalid clause, provision or section had not been contained
herein.
Section 6.5 Term of A1!reement.
This Agreement shall be in full force and effect from the date hereof and shall
continue in effect as long as the 2004A Note is outstanding. Notwithstanding the other
provisions set forth herein, to the extent any law or regulation enacted subsequent to the
termination of this Agreement retroactively reduces the Bank's yield on the 2004A Note, the
provisions regarding adjustments to interest rates shall survive the repayment of the 2004A
Note hereunder for a period not to exceed two (2) years after such repayment.
Section 6.6 Assignment.
The Bank acknowledges and agrees that it is treating the transactions
contemplated hereunder as loan transactions and not as the sale and purchase of securities.
The Bank further acknowledges and agrees that it presently intends to hold the 2004A Note
issued hereunder through its respective final maturity date. The Bank may assign the 2004A
Note or its obligations hereunder; provided, however, the Bank shall give the City ten (10)
days prior written notice of any such assignment and, provided further, the Bank shall comply
with all applicable securities laws at the time of such assignment.
Section 6.7 Notice of Changes in Fact.
Promptly after the City becomes aware of the same, the City will notify the
Bank of (a) any change in any material fact or circumstance represented or warranted by the
City in this Agreement or in connection with the issuance of the 2004A Note, and (b) any
default or event which, with notice or lapse of time or both, could become a default under the
Agreement, specifying in each case the nature thereof and what action the City has taken, is
taking and/or proposed to take with respect thereto.
{OR754499;1}
22
Section 6.8 Notices.
Any notices or other communications required or permitted hereunder shall be
sufficiently given if delivered personally or sent registered or certified mail, postage prepaid,
to the City, City of Winter Springs, 1126 East State Road 434, Winter Springs, Florida 32708,
Attention: City Manager, and to the Bank, Bank of America, N.A., 390 N. Orange Avenue,
7th Floor, Orlando, Florida 32801, Attention: Mark W. Irby, with a copy to Bank of America,
N.A., 9000 Southside Blvd., Attn: Notice Desk, Building 100, Jacksonville, FL 32256, or at
such other address as shall be furnished in writing by any such party to the other, and shall be
deemed to have been given as of the date so delivered or deposited in the United States mail.
Section 6.9 Applicable Law.
The substantive laws of the State of Florida shall govern this Agreement.
Section 6.10 Incorporation bv Reference.
All of the terms and obligations of the Resolution are hereby incorporated herein
by reference as if said Resolution was fully set forth in this Agreement.
[Remainder of Page Left Intentionally Blank;
Signature Page Follows]
{OR754499;1}
23
. .
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first set forth herein.
CITY OF WINTER SPRINGS, FLORIDA
(OFFICIAL SEAL)
By
Mayor
ATTEST:
By
City Clerk
BANK OF AMERICA, N.A.
By
Title: Authorized Officer
{OR754499;1}
24
EXIDBIT A
THE PROJECT
The Project consists of the completion of construction of the Oak Forest
subdivision wall, in and for the City of Winter Springs, Florida, in accordance with the plans
and specifications on file or to be on file with the City.
{OR754499;\ }
A-I
,-
EXIDBIT B
Principal
Sum
UNITED STATES OF AMERICA
STATE OF FLORIDA
CITY OF WINTER SPRINGS
CAPITAL IMPROVEMENT REVENUE NOTE, SERIES 2004A
Interest
Rate Date of Issuance Maturity Date
$575.907
%
June 2. 2004
Julv 1. 2010
The CITY OF WINTER SPRINGS, FLORIDA (the "City"), for value received,
hereby promises to pay, solely from the Pledged Funds described in the within mentioned
Agreement, to the order of BANK OF AMERICA, N. A., or its successors or assigns (the
"Noteholder"), the Principal Sum specified above loaned to the City pursuant to that certain
Loan Agreement by and between Bank of America, N. A., and the City, dated as of June 2,
2004 (the" Agreement"), and to pay interest on such Principal Sum from the Date of Issuance
specified above or from the most recent date to which interest has been paid at the Interest Rate
per annum specified above (subject to adjustment as hereinafter provided) on June 1 and
December 1 of each year, commencing December 1,2004, until such Principal Sum shall have
been paid. The Principal Sum hereof shall be due and payable on the maturity date hereof.
Such Principal Sum and interest is payable 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. This Note may not be issued in denominations less than the lesser of $100,000.00 or
the remaining principal amount of the Note.
This Note is authorized to be issued in the principal amount of $575,907 under
the authority of and in full compliance with the Constitution and laws of the State of Florida,
including, particularly, Chapter 166, Part II, Florida Statutes, as amended, the Charter of the
City and other applicable provisions of law, and a resolution duly adopted by the City on May
24, 2004 (the "Resolution"), as such resolution may be amended and supplemented from time
to time, and is subject to all terms and conditions of the Resolution and the Agreement. Any
term used in this Note and not otherwise defined shall have the meaning ascribed to such term
in the Agreement.
This Note is being issued to refinance the Prior Note and to finance the cost of
comoleting the construction of the Oak Forest subdivision wall, as described in the Agreement
and the Resolution. This Note is payable from the Pledged Funds as described. in and in
accordance with the Agreement.
Pursuant to the Agreement, the City has covenanted to appropriate in its annual
budget, by amendment, if necessary, from Non-Ad Valorem Funds lawfully available amounts
sufficient, together with other available moneys, to pay the principal of and interest on this
{OR754499;1}
B-1
v ~
Note, as the same become due (whether by redemption, at maturity or otherwise). Such
covenant and agreement on the part of the City to budget and appropriate such amounts of
Non-Ad Valorem Funds shall be cumulative to the extent not paid, and shall continue until
such Non-Ad Valorem Funds or other legally available funds in amounts sufficient to make all
such required payments under this Note shall have been budgeted, appropriated and actually
paid. Notwithstanding the foregoing, the City has not covenanted to maintain any services or
programs, now provided or maintained by the City, which generate Non-Ad Valorem Funds.
Such covenant and agreement on the part of the City to budget and appropriate such amounts
of Non-Ad Valorem Funds is subject, however, in all respects to certain appropriation
constraints contained in Section 166.241(3), Florida Statutes, as amended, and 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 or which are legally mandated by applicable law.
This Note shall bear interest from its Date of Issuance at the Interest Rate
specified above on the basis of a 365/366-day year. The Interest Rate specified above is
subject to adjustment as provided in Section 3.1(d) of the Agreement in the event of a
Determination of Taxability. In addition, this Note is subject to adjustment in accordance with
the provisions in Section 3.3 of the Agreement. The Noteholder shall provide to the City upon
request such documentation to evidence the amount of interest due on this Note.
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 interest allowed under the
laws of the State of Florida as presently in effect. In the event the maturity of this Note is
accelerated or prepaid in accordance with the provisions hereof or of the Agreement, 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 (a) the applicable maximum rate of
interest allowed by Sections 215.84 and 159.825(1), Florida Statutes, as amended, or (b) the
nonusuriousnon-usurious interest allowed by the laws of the State of Florida or the United
States, to the extent applicable, 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 this Note.
All payments made by the City hereon shall apply first to accrued interest, and
then to the principal amount then due on this Note.
The City may prepay this Note as a whole or in part, at any time or from time
to time, without premium (exceot as otherwise orovided in the Agreement), by paying to the
Noteholder all or part of the Principal Sum of the Note, together with the unpaid interest
accrued on the amount of principal so prepaid to the date of such prepayment. Each
{OR754499;1}
B-2
"'~. ..., ~
\
\
prepayment of this Note 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 less than five (5)
Business Days prior thereto. Notice having been given as aforesaid, the Principal Sum of this
Note 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 (a) in case the entire unpaid balance of the
principal of this Note is to be paid, upon presentation and surrender of this Note at the office
of the City, and (b) in case only part of the unpaid balance of principal of this Note is to be
paid, upon presentation of this Note at the office of the City for notation thereon of the amount
of principal and interest on this Note then paid. If on the prepayment date moneys for the
payment of the principal amount to be prepaid on this Note, together with interest to the
prepayment date on such principal amount, shall have been paid to the Noteholder as above
provided and if notice of prepayment shall have been given to the Noteholder as above
provided, then from and after the prepayment date interest on such principal amount of this
Note shall cease to accrue. If said moneys shall not have been so paid on the prepayment date,
such principal amount of this Note shall continue to bear interest until payment thereof at the
rate or rates provided for in the Agreement.
This Note, when deliyered by the City pursuant to the terms of the Agreement
and the Resolution, shall not be. or constitute an indebtedness of the City or of the State of
Florida or any political subdivision or agency thereof, within the meaning of any
constitutional, statutory or charter limitations of indebtedness, but shall be payable solely from
the Pledged Funds, as provided in the Agreement and the Resolution. No Noteholder shall
ever have the right to compel the exercise of the ad valorem taxing power of the City or the
State of Florida, or taxation in any form on any property therein to pay this Note or the interest
thereon.
Upon the occurrence of an Event of Default relating to this Note, the Principal
Sum of this Note may become or be declared due and payable before the maturity date hereof
in the manner, with the effect and subject to the conditions set forth in the Agreement and the
Resolution. The Noteholder shall also have such other remedies as described in the
Agreement.
If this Note shall be declared to be immediately due and payable or any amounts
due on this Note shall remain unpaid past any scheduled payment date, this Note shall bear
interest at the lesser of the Taxable Rate (as' defined in the Agreement) or the maximum rate
permitted by law until all amounts then due under this Note are paid in full.
The City hereby waives demand, protest and notice of dishonor.
No obligation under the Agreement or this Note shall be or be deemed to be an
obligation of any member of the City Commission or any officer, employee or agent of the
{OR754499;1 }
B-3
. 7
... ...
City in his or her individual capacity, and none of such persons executing the Agreement or
this Note shall be liable personally thereon or hereon by reason thereof.
It is certified, recited and declared that all acts, conditions and things required to
exist, happen and be performed precedent to and in connection with the execution and delivery
of the Agreement and the issuance of this Note do exist, have happened and have been
performed in due time, form and manner as required by law, and that the issuance of this
Note, together with all other obligations of the City under the Agreement, does not exceed or
violate any constitutional or statutory limitation.
IN WITNESS WHEREOF, the City of Winter Springs, Florida, caused this
Note to be signed by the manual signature of its Mayor and its official seal to be affixed hereto
or imprinted or reproduced hereon, and attested by the manual signature of its City Clerk, and
this Note to be dated the Date of Issuance set forth above.
CITY OF WINTER SPRINGS, FLORIDA
(OFFICIAL SEAL)
By
Mayor
ATTEST:
City Clerk
CERTIFICATE OF AUTHENTICATION
This Note is the Note described in the within-mentioned Resolution and Agreement.
Dated: June 2, 2004
City Clerk of Winter Springs, as Registrar
{OR754499;\ }
B-4