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HomeMy WebLinkAbout2011 04 11 Consent 200 Resolution 2011-15 SunTrustCOMMISSION AGENDA ITEM 200 Consent X Informational Public Hearing Regular April 11, 2011 MGR. /DEPT. Regular Meeting Authorization REQUEST: The City Manager and Finance and Administrative Services Department are requesting the Commission adopt Bond Resolution 2011 -15 to accept the proposal by SunTrust Bank to purchase the City's, not to exceed $8.5 million, Water and Sewer System Revenue Refunding Revenue Notes, Series 2011A to refund all of the City's outstanding Water and Sewer Revenue Bonds, Series 2002; and authorize the City Manager and City Attorney to execute all necessary documents to complete a loan agreement with SunTrust Bank. SYNOPSIS: The Purpose of this agenda item is approve the advanced refunding of the Water and Sewer Revenue Bonds, Series 2002; take advantage of the low interest rate environment and issue a traditional bank note to replace the outstanding bonds, to minimize the issuances costs and allow for maximum flexibility for repayment of the bank notes. CONSIDERATIONS: In 2002 the City of Winter Springs Issued $13,980,000 Water and Sewer Refunding Revenue Bonds, Series 2002 with a final maturity of 18 years for the purpose of refinancing the original construction cost of the City's Utilities. Due to the soft economy, the interest rate environment is very favorable to refinancing debt that is in its later stages of repayment. Typically, bonds are issued for a term between 15 and 30 years at an increasing rate of interest as you move further from the date of issuance. This is best illustrated by the current yield curve seen below. U.S. Treasury Yield Curve (4/5/2011) Refinance the existing debt at 4.5 the same remaining life (term) 4 but at the low end of the yield 3.5 3 ?.5 2002 Bonds are in their last 9 2 years of the life cycle 1.5 Interest Rates 0.5 Term in Years 0.04 ❑2 1 1 1 1 . o 3m 6m 1y 2y 3y 4y Sy 6y 7y 8y 9y 1 O 15y 20y 30y Term in Years By refinancing the bonds at the short end (terms less than 15 years) of the yield curve the City will realize substantial interest rate savings thus lowering the cost of repaying the debt. The graph below demonstrates the benefit that could be realized if the Citv 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 12 -Month 2 -Year 3 -Year 5 -Year 7 -Year 10 -Year US Treasury •SunTrust 2002 Bonds 1% , Nhnanung0ppnrwniW refinances the Water and Sewer Revenue Bonds, Series 2002 with a SunTrust Bank Note. There are several considerations that were analyzed to develop the recommendation to refinance the 2002 bonds; financial gain, affordability of debt and flexibility in repayment of the debt. Current interest rates are at historically low levels, due primarily to the U.S. enduring one of the steepest economic contractions in many years. The Federal Reserve has maintained short and long -term rates at very low levels in order to attempt to stimulate economic growth. These low rates present an opportunity for the City to review its bond contracts to determine if refinancing debt would have a positive economic impact on the City's financials. The Water and Sewer Revenue Bonds, Series 2000 and 2002 are both excellent candidates for refinancing at this time. We will defer the discussion on the Series 2000 to the May 9th commission meeting. The Series 2002 Bonds were issued on November 15 2001 with the total principal amount of $13,980,000 and a weight average interest rate (coupon) of 4.42% over the 18 year term. After 11 years, the remaining principal outstanding (Series 2002) is now $8,462,359 (gross) with a weighted average interest rate of 4.99 %. The reason the weighted average interest rate has increased is because we have moved further away from the origination date and interest rates tend to increase over time (see Treasury Yield Curve above). This present an opportunity! Originally, the debt (Series 2002) was issued as an 18 year bond (long -term borrowing) now the City has the opportunity to reissue this debt as a 9 year note (short-term borrowing) and take advantage of exceptionally low interest rate market and the lower cost of interest for short term borrowing. These savings are demonstrated in the chart below. We have set the new proposed 3.28% (fixed rate) bank note next to the remaining bond payments. The net effect of this 4.60% 5.25% 5.00% 5.00 4.38% C ° ° 3.28% 3.28% 3.28% 3.28% 3.28% 3.28° Risk Premium ° �.25. 1.25% 5% 12 -Month 2 -Year 3 -Year 5 -Year 7 -Year 10 -Year US Treasury •SunTrust 2002 Bonds 1% , Nhnanung0ppnrwniW refinances the Water and Sewer Revenue Bonds, Series 2002 with a SunTrust Bank Note. There are several considerations that were analyzed to develop the recommendation to refinance the 2002 bonds; financial gain, affordability of debt and flexibility in repayment of the debt. Current interest rates are at historically low levels, due primarily to the U.S. enduring one of the steepest economic contractions in many years. The Federal Reserve has maintained short and long -term rates at very low levels in order to attempt to stimulate economic growth. These low rates present an opportunity for the City to review its bond contracts to determine if refinancing debt would have a positive economic impact on the City's financials. The Water and Sewer Revenue Bonds, Series 2000 and 2002 are both excellent candidates for refinancing at this time. We will defer the discussion on the Series 2000 to the May 9th commission meeting. The Series 2002 Bonds were issued on November 15 2001 with the total principal amount of $13,980,000 and a weight average interest rate (coupon) of 4.42% over the 18 year term. After 11 years, the remaining principal outstanding (Series 2002) is now $8,462,359 (gross) with a weighted average interest rate of 4.99 %. The reason the weighted average interest rate has increased is because we have moved further away from the origination date and interest rates tend to increase over time (see Treasury Yield Curve above). This present an opportunity! Originally, the debt (Series 2002) was issued as an 18 year bond (long -term borrowing) now the City has the opportunity to reissue this debt as a 9 year note (short-term borrowing) and take advantage of exceptionally low interest rate market and the lower cost of interest for short term borrowing. These savings are demonstrated in the chart below. We have set the new proposed 3.28% (fixed rate) bank note next to the remaining bond payments. The net effect of this refinancing is a savings of $612,450 over the next nine years. This savings is accomplished without extending the length of the debt beyond the original financing. SAVINGS City of Winter Springs Refunding of the Series 2002 Bonds (SunTrust) Total Savings $10,511,365 $ 9,898,915 $ 612,450 $ 612,450 $ 528,304 Second, we have analyzed the ability of the Water and Sewer Utility pledged revenues to support this refinancing and have determined that current utilities revenue are healthy /sufficient enough to support this debt and to achieve a debt coverage ratio of 1.4% (1.1% is required) for the length of this new bank note. Additionally, by issuing a traditional bank note as an alternative to a traditional bond the City will realize a "Cost of Issuance" savings of approximately $131,000. The final variable reviewed was the flexibility of repayment terms between bank notes and bonds. The SunTrust Bank Note has a "no prepayment penalty" clause which will permit the City repay the loan at anytime. Bonds typically are much more rigid in their terms for repayment. This flexibility is important because the City currently has an application with the State Revolving Loan Fund (SRLF) requesting a low interest rate loan to finance part or all of the Lake Jessup Reclaimed Water Project. The SRLF is a State agency that makes low interest loan available to Municipalities for Water and Sewer Infrastructure projects. These loans typically come with very favorable rates (2 %) and can be extended to terms as long as 20 years. If the City is granted the SRLF loan we would immediately retire that part of the Bank Note that was funded by the State, further reducing interest expense. Present Value Current Proposed Annual to 4/13/2011 Date Bond Bank Note Savings Savings @3.2801768% 10/1/2011 $ 203,821 $ 129,531 $ 74,291 $ 73,171 4/1/2012 963,821 972,086 -8,264 66,026 $ (8,009) 10/1/2012 187,196 125,117 62,080 $ 59,187 4/1/2013 982,196 975,974 6,223 68,302 $ 5,837 10/1/2013 169,309 111,162 58,146 $ 53,662 4/1/2014 999,309 989,152 10,156 68,303 $ 9,222 10/1/2014 150,219 96,763 53,455 $ 47,754 4/1/2015 1,015,219 1,000,371 14,847 68,303 $ 13,050 10/1/2015 127,513 81,944 45,568 $ 39,405 4/1/2016 1,037,513 1,014,777 22,735 68,303 $ 19,343 10/1/2016 103,625 66,646 36,979 $ 30,954 4/1/2017 1,068,625 1,037,301 31,324 68,303 $ 25,797 10/1/2017 79,500 50,727 28,773 $ 23,314 4/1/2018 1,089,500 1,049,970 39,530 68,303 $ 31,513 10/1/2018 54,250 34,339 19,911 $ 15,616 4/1/2019 1,114,250 1,065,857 48,393 68,303 $ 37,343 10/1/2019 27,750 17,423 10,327 $ 7,841 4/1/2020 1,137,750 1,079,775 57,975 68,303 $ 43,306 Total Savings $10,511,365 $ 9,898,915 $ 612,450 $ 612,450 $ 528,304 Second, we have analyzed the ability of the Water and Sewer Utility pledged revenues to support this refinancing and have determined that current utilities revenue are healthy /sufficient enough to support this debt and to achieve a debt coverage ratio of 1.4% (1.1% is required) for the length of this new bank note. Additionally, by issuing a traditional bank note as an alternative to a traditional bond the City will realize a "Cost of Issuance" savings of approximately $131,000. The final variable reviewed was the flexibility of repayment terms between bank notes and bonds. The SunTrust Bank Note has a "no prepayment penalty" clause which will permit the City repay the loan at anytime. Bonds typically are much more rigid in their terms for repayment. This flexibility is important because the City currently has an application with the State Revolving Loan Fund (SRLF) requesting a low interest rate loan to finance part or all of the Lake Jessup Reclaimed Water Project. The SRLF is a State agency that makes low interest loan available to Municipalities for Water and Sewer Infrastructure projects. These loans typically come with very favorable rates (2 %) and can be extended to terms as long as 20 years. If the City is granted the SRLF loan we would immediately retire that part of the Bank Note that was funded by the State, further reducing interest expense. This financing request was bid via a formal Request for Proposal to all banks that had both the financial means to bid and are of the highest investment grade quality as deemed by Standard and Poor's and Fitch Rating. Three banks choose to bid on this financing (BB &T, Bank of America, SunTrust Bank) and SunTrust Bank put forth the best proposal for this particular request. The RFP and the responses were managed by PFM, the City of Winter Springs' Financial Advisor. FISCAL IMPACT: Upon acceptance of the refinancing of the Water and Sewer Revenue Bonds, Series 2002 by SunTrust Bank the City will realize a Net Present Value savings of $528,305 (6.36 %) over the remaining 9 years until final maturity of the SunTrust note on 4/1/2020. This equates to a savings for the Water and Sewer Fund of $68,000 (nominal) annually. This coupled with the future recommendation to refinance the Water and Sewer Revenue Bond, Series 2000, will yield significant savings for the City's Utility Operations. COMMUNICATION EFFORTS: This Agenda Item has been forwarded to the Mayor and City Commission; City Manager; City Attorney /Staff, placed in Press Packets; placed in the City Hall (Lobby) City Commission Meeting binder; and will be available on the City's Website, Laser Fiche, and the City's Server. Additionally, information related to this Agenda Item has been sent to media /press representatives who have requested Agendas /Agenda Item information, all Homeowner's Associations on file with the City, all individuals who have requested Agendas /Agenda Item information, Department Directors; and also posted outside City Hall; posted inside City Hall with additional copies available for the general public; and posted at five (5) different locations around the City. RECOMMENDATION: The City Manager and Finance Department recommend that the City Commission accept the SunTrust proposal to issue a bank note to refund the Water and Sewer Revenue Bonds, Series 2002 not to exceed $8.5, adopt Resolution 2011 -15, and to authorize the City Manager and City Attorney to complete all applicable paperwork necessary to complete this refinancing. ATTACHMENTS: Resolution 2011 -15 SunTrust Bank Loan Agreement SunTrust Bank- Letter of Commitment RESOLUTION NO. 2011-15 A RESOLUTION OF THE CITY OF WINTER SPRINGS, FLORIDA ACCEPTING THE PROPOSAL OF SUNTRUST BANK TO PURCHASE THE CITY'S NOT TO EXCEED $$.5 MILLION WATER AND SEWER SYSTEM REVENUE REFUNDING NOTE, SERIES 2011A TO REFUND ALL OF THE CITY'S OUTSTANDING WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 2002; AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT WITH SAID BANK TO SECURE THE REPAYMENT OF SAID LOAN; PROVIDING FOR THE PAYMENT OF SUCH NOTE FROM THE NET REVENUES OF THE CITY'S WATER AND SEWER SYSTEM ON PARITY WITH CERTAIN OUTSTANDING WATER AND SEWER DEBT OF THE CITY, ALL AS PROVIDED IN THE LOAN AGREEMENT; AUTHORIZING THE PROPER OFFICIALS OF THE CITY TO DO ANY OTHER ADDITIONAL THINGS DEEMED NECESSARY OR ADVISABLE IN CONNECTION WITH THE EXECUTION OF THE LOAN AGREEMENT, THE NOTE, AND THE SECURITY THEREFOR; AUTHORIZING THE EXECUTION AND DELIVERY OF OTHER DOCUMENTS IN CONNECTION WITH SAID LOAN; PROVIDING FOR SEVERABILITY; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA, AS FOLLOWS: SECTION 1. AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted pursuant to the provisions of Chapter 166, Florida Statutes, the Florida Constitution, 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 refund all of its outstanding Water and Sewer Refunding Revenue Bonds, Series 2002 (the "Refunded Bonds "), all as more particularly described in the Loan Agreement (as defined herein). (B) Pursuant to Section 2(b), Article VIII of the State Constitution, and Section 166.021, Florida Statutes, municipalities have the governmental, corporate and proprietary powers to enable them to conduct municipal government, perform municipal functions, and render municipal services, and may exercise any power for municipal purposes, except when expressly prohibited by law. The issuance by the City of its Water and Sewer System Revenue Refunding Note, Series 2011A (the "2011A Note ") and the execution and delivery of the Loan Agreement for the purposes of refunding the Refunded Bonds is not prohibited by law. (C) The 2011A Note will be issued as "Additional Parity Obligations" in accordance with the provisions of City Resolution No. 665 (the "Original Instrument ") and will (01646064;2) Page 1 of 4 be secured by the Net Revenues as provided in Section 6 hereof and the Loan Agreement pursuant to which the City will issue the 2011A Note to secure the repayment of the Loan. (D) In accordance with the provisions of the Original Instrument, it is hereby found that all of the covenants contained in said resolution shall be fully applicable to the 2011A Note except as otherwise provided in the Loan Agreement. (E) The City engaged Public Financial Management, Inc. ( "PFM "), the City's financial advisor, to solicit proposals from qualified financial institutions for a refunding of the Refunded Bonds. Three such proposals were solicited and PFM has recommended that the City accept the proposal of SunTrust Bank (the "Bank "). In furtherance of such recommendation, PFM advises the City that due to the present volatility of the market for municipal debt, it is in the best interest of the City to issue the 2011A Note pursuant to the Loan Agreement by negotiated sale, allowing the City to issue the 2011A 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 2011A Note and, accordingly, the City Commission of the City hereby finds and determines that it is in the best financial interest of the City that a negotiated sale of the 2011A Note to the Bank be authorized. SECTION 3. AUTHORIZATION OF REFUNDING OF REFUNDED BONDS. The City hereby authorizes the refunding of the Refunded Bonds as more particularly described in the Loan Agreement. SECTION 4. ACCEPTANCE OF COMMITMENT LETTER WITH BANK. Based on a recommendation from the City's financial advisor, the City hereby accepts the commitment letter of the Bank dated May 25, 2011 attached hereto to provide the City with the Loan. SECTION 5. APPROVAL OF FORM OF AND AUTHORIZATION OF LOAN AGREEMENT AND EXECUTION OF LOAN AGREEMENT AND 2011A NOTE. The Loan and the repayment of the Loan as evidenced by the 2011 A Note shall be pursuant to the terms and provisions of the Loan Agreement and the 2011A Note. The City hereby approves the Loan Agreement by and between the City and the Bank in substantially the form attached hereto as Exhibit A (the "Loan Agreement ") and authorizes the Mayor or the Deputy Mayor /Commissioner of the City (collectively, the "Mayor ") and the City Clerk or any deputy or assistant City Clerk of the City (collectively, the "City Clerk ") to execute and deliver on behalf of the City the Loan Agreement and the 2011A Note in substantially the form attached to the Loan Agreement, with such changes, insertions and additions as they may approve, their execution thereof being evidence of such approval. SECTION 6. PAYMENT OF DEBT SERVICE ON 2011A NOTE. Pursuant to the Loan Agreement, the 2011A Note will be secured by the Net Revenues of the City's Water and Sewer System on parity with other City debt, all as more particularly described in the Loan Agreement. SECTION 7. AUTHORIZATION OF OTHER DOCUMENTS TO EFFECT TRANSACTION. To the extent that other documents including but not limited to an escrow deposit agreement, redemption and defeasance notices, certificates, opinions, or items are needed to effect any of the transactions referenced in this Resolution, the Loan Agreement or the 2011A {01646064;2} Page 2 of 4 Note and the security therefore, the Mayor, the City Clerk, the City Manager, the Finance Director and the City Attorney are hereby authorized to execute and deliver such documents, certificates, opinions, or other items and to take such other actions as are necessary for the full, punctual, and complete performance of the covenants, agreements, provisions, and other terms as are contained herein and in the documents included herein by reference. SECTION 8. PAYING AGENT AND REGISTRAR. The City hereby accepts the duties to serve as registrar and paying agent for the 2011A Note. SECTION 9. LIMITED OBLIGATION. The obligation of the City to repay amounts under the Loan Agreement and the 2011A Note are limited and special obligations, payable solely from the sources and in the manner set forth in the Original Instrument and the Loan Agreement and shall not be deemed a pledge of the faith and credit or taxing power of the City. SECTION 10. EFFECT OF PARTIAL INVALIDITY. If any one or more provisions of this Resolution, the Loan Agreement or the 2011A Note shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not effect any other provision of this Resolution or the 2011A Note or the Loan Agreement, but this Resolution, the Loan Agreement and the 2011A Note shall be construed and enforced as if such illegal or invalid provision had not been contained therein. The 201 IA Note and Loan Agreement shall be issued and this Resolution is adopted with the intent that the laws of the State of Florida shall govern their construction. SECTION 11. EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption. PASSED, APPROVED AND ADOPTED this 11 «' day of April, 2011. [SEAL] CITY OF WINTER SPRINGS, FLORIDA Mayor /:TIMMU By City Clerk Approved as to form: By City Attorney {01646064;2} Page 3 of 4 EXHIBIT A LOAN AGREEMENT (See Attached) {01646064;2) A -I Loan Agrecinent ""I MMIMA Dated as of April , 2011 By and Behveen THE CITY OF WINTER SPRINGS, FLORIDA (the "City ") and SUNTRUST BANK (the "Bank ") (01646180;3) TABLE OF CONTENTS (The Table of Contents for this Loan Agreement is for convenience of reference only and is not intended to define, limit or describe the scope or intent of any provisions of this Loan Agreement.) Page ARTICLEI DEFINITION OF TERMS .......................................................... ............................... I Section1.01. Definitions .................................................................... ............................... I Section1.02. Interpretation ................................................................ ............................... 3 Section 1.03. Titles and Headings ...................................................... ............................... 3 ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE PARTIES ......................... 3 Section 2.01. Representations and Warranties of City ....................... ............................... 3 Section 2.02. Covenants of the City ................................................... ............................... 4 Section 2.03. Representations and Warranties of Bank ..................... ............................... 4 ARTICLEIII THE NOTE ........................................................ ............................... I...................... 5 Section3.01. Purpose and Use... ....................................................................................... 5 Section3.02. The Note ....................................................................... .................I............. 5 Section 3.03. Conditions Precedent to Issuance of Note... ................................................ 5 Section 3.04. Registration of Transfer; Assignment of Rights of Bank ............................ 7 Section 3.05. Ownership of the Note .................................................. ............................... 8 Section 3.06. Use of Proceeds of Note Permitted Under Applicable Law ........................ 8 Section3.07. Authentication .............................................................. ............................... 8 ARTICLE IV COVENANTS OF THE CITY ...................................................... I......................... 8 Section 4.01. Performance of Covenants ........................................... ............................... 8 Section4.02. Payment of Note ........................................................... ............................... 8 Section4.03. Tax Covenant ................................................................ ............................... 9 Section 4.04. Application of Provisions of Original Instrument ........ ............................... 9 Section 4.05. Compliance with Laws and Regulations ...................... ............................... 9 ARTICLE V EVENTS OF DEFAULT AND REMEDIES ............................. I............................. 9 Section 5.01. Events of Default; Remedies ........................................ ............................... 9 ARTICLE VI MISCELLANEOUS PROVISIONS ........................................ ............................... 9 Section 6.01. Covenants of City, Etc.; Successors ............................. ............................... 9 Section 6.02. Term of Agreement ....................................................... ............................. Section 6.03. Amendments and Supplements .................................. ............................... Section6.04. Notices ........................................................................ ............................... 10 Section 6.05. Benefits Exclusive ...................................................... ............................... 10 Section6.06. Severability ................................................................. ............................... 10 Section 6.07. Payments Due on Saturdays, Sundays and Holidays . ............................... Section6.08. Counterparts ............................................................... ............................... I I Section6.09. Applicable Law .......................................................... ............................... 11 Section 6.10. No Personal Liability .................................................. ............................... I I Section 6.11. Incorporation by Reference ........................................ ............................... I I Exhibit A Form of Note Including Purchaser's Certificate A -1 {01646180;3} LOAN AGREEMENT THIS LOAN AGREEMENT (the "Agreement "), made and entered into this day of April, 2011, by and between THE CITY OF WINTER SPRINGS, FLORIDA (the "City"), a municipal corporation of the State of Florida, and SUNTRUST BANK, a Georgia state banking corporation authorized to do business in Florida, and its successors and assigns (the "Bank "). WITNESSET11: WHEREAS, capitalized terms used in these recitals and not otherwise defined shall have the meanings specified in Article I of this Agreement; WHEREAS, the City, pursuant to the provisions of the Florida Constitution, Chapter 166, Florida Statutes, City Resolution No. 665 adopted by the City Commission of the City on April 29, 1991, and other applicable provisions of law (all of the foregoing, collectively, the "Act "), and Resolution No. 2011 -15, adopted by the City on April 11, 2011, is authorized to borrow money, and more particularly issue the Note described below for the City's public purposes; and WHEREAS, in response to a request for proposal regarding an intended borrowing to refund all of the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 2002 (the "Refunded Bonds "), the Bank submitted its commitment, dated March 25, 2011, to the City (the "Commitment "); and WHEREAS, pursuant to City Resolution 2011 -15, the City has accepted the Commitment and the Bank is willing to purchase the Note (as hereinafter defined), but only upon the terms and conditions of this Agreement; NOW, THEREFORE, the parties hereto agree as follows: ARTICLE I DEFINITION OF TERMS Section 1.01. Definitions. Capitalized terms used in this Agreement shall have the respective meanings assigned thereto by the Original Instrument (as hereinafter defined) and the following terms not otherwise defined shall have the respective meanings as follows unless the context clearly requires otherwise: "Act" shall have the meaning assigned to that term in the recitals hereof. "Agreement" shall mean this Loan Agreement and all modifications, alterations, amendments and supplements hereto made in accordance with the provisions hereof. "Bank" shall mean SunTrust Bank, a Georgia state banking corporation, and its successors and assigns. (01646180;3) "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 hired by the City to render an opinion on such matters with regard to the Note. "Business Day" shall mean any day other than a Saturday, a Sunday, or a day on which the office of the Holder at which payments on the Note are due or the offices of the City are lawfully closed. "City" shall mean the City of Winter Springs, Florida, a municipal corporation of the State of Florida. "City Clerk" shall mean the City Clerk or any deputy or assistant city clerk of the City and such other person as may be duly authorized to act on his or her behalf. "City Manager" shall mean the City Manager 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 from time to time, and the applicable rules and regulations promulgated thereunder. "Debt Service" means principal and interest, and other debt - related costs, due in connection with the Note, as applicable. "Escrow Deposit Agreement" shall mean that certain agreement between the City and as escrow trustee pursuant to which amounts shall be deposited and invested in trust to provide for the payment of the Refunded Bonds as provided therein. "Event of Default" shall mean an Event of Default as defined in Section 5.01 of this Agreement. "Maturity Date" shall mean the date on which all principal and all unpaid interest accrued on the Note shall be due and payable in full, which date shall be, if not sooner due to prepayment, April 1, 2020. "Finance Director" shall mean the City's Finance Director or such other person as may be duly authorized to act on his or her behalf. "Financial Advisor" shall mean Public Financial Management, Inc. "Fiscal Year" shall mean the 12 -month period commencing October I of each year and ending on the succeeding September 30, or such other 12 -month period as the City may designate as its "fiscal year" as permitted by law. "Loan" shall refer to an amount equal to the outstanding principal of the Note, together with unpaid interest and penalties, if any, which have accrued. 101646180;3) 2 "Note" shall mean the City of Winter Springs, Florida Water and Sewer System Revenue Refunding Note, Series 2011 issued by the City under the Agreement and the Resolution. "Note Rate" shall mean the rate of interest to be borne by the Note which shall be a fixed rate equal to 3.28% per annum calculated on the basis of a 360 -day year of 12, 30 -day months. "Noteholder" or "Holder" shall mean the Bank as the holder of the Note and any subsequent registered holder of the Note. "Original Instrument" shall mean Resolution No. 665 of the City adopted by the City Commission on April 29, 1991, as amended and supplemented to the date hereof. "Parity Obligations" shall mean collectively the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 2000 and the City's outstanding Water and Sewer Revenue Refunding Bonds, Series 2001. "Payment Date" shall mean each April 1 and October 1, commencing October 1, 2011 until the Note has been paid in full. "Pledged Revenues" means the Net Revenues. "Refunded Bonds" shall have the meaning set forth in the "Whereas" clauses to this Agreement. " Resolution" shall mean Resolution No. 2011 -15, adopted at a meeting of the City Commission on April 11, 2011, which, among other things, authorized and confirmed the borrowing of the Loan and execution and delivery of this Agreement and the issuance of the Note. Section 1.02. Interpretation. Unless the context clearly requires otherwise, words of masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa and words of the singular number shall be construed to include correlative words of the plural number and vice versa This Agreement and all the terms and provisions hereof shall be construed to effectuate the purpose set forth herein and to sustain the validity hereof. Section 1.03. Titles and Headings. The titles and headings of the Articles and Sections of this Agreement, which have been inserted for convenience of reference only and are not to be considered a part hereof, shall not in any way modify or restrict any of the terms and provisions hereof, and shall not be considered or given any effect in construing this Agreement or any provision hereof or in ascertaining intent, if any question of intent should arise. ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE PARTIES Section 2.01. Representations and Warranties of City. The City represents and warrants to the Bank as follows: (01646184;3) 3 (a) Existence The City is a municipal corporation of the State of Florida, duly created and validly existing under the laws of the State of Florida, with full power to enter into this Agreement, to perform its obligations hereunder and to issue and deliver the Note to the Bank. The making, execution and performance of this Agreement on the part of the City and the issuance and delivery of the Note have been duly authorized by all necessary action on the part of the City and will not violate or conflict with the Act, or any agreement, indenture or other instrument by which the City or any of its material properties is bound. (b) Validity, Etc This Agreement, the Note, the Escrow Deposit Agreement and the Resolution are valid and binding obligations of the City enforceable against the City in accordance with their respective terms, except to the extent that enforceability may be subject to valid bankruptcy, insolvency, financial emergency, reorganization, moratorium or similar laws relating to or from time to time affecting the enforcement of creditors' rights and except to the extent that the availability of certain remedies may be precluded by general principles of equity. (c) No Financial Material Adverse Change No material adverse change in the financial condition of the City or the Pledged Revenues has occurred since the audited financial statements of the City for its year ended September 30, 2010. (d) Powers of City The City has the legal power and authority to pledge the Pledged Revenues to the repayment of the Note as described herein, (e) Authorizations etc, 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 Note and the related documents, except such as have been obtained, given or accomplished, Section 2.02. Covenants of the City. The City covenants as follows: The City will furnish to the Bank (i) within 210 days following the end of each Fiscal Year, a comprehensive annual financial report of the City for such Fiscal Year prepared in accordance with generally accepted accounting standards, which shall include a balance sheet and income statement as of the end of such Fiscal Year, and an audit report of an independent CPA, (ii) within 30 days of adoption in each year the current annual budget of the City, and (iii) any other information which the Bank may reasonably request. Section 2.03. Representations and Warranties of Bank. The Bank represents and warrants to the City as follows: (a) Existence The Bank is a Georgia state banking corporation, authorized to do business in the State of Florida, with full power to enter into this Agreement, to perform its obligations hereunder and to make the Loan. The performance of this Agreement on the part of the Bank and the making of the Loan have been duly authorized by all necessary action on the part of the Bank and will not violate or conflict with applicable law or any material agreement, indenture or other instrument by which the Bank or any of its material properties is bound. {01646180;3} 4 (b) Validity. This Agreement is a valid and binding obligation of the Bank enforceable against the Bank in accordance with its terms, except to the extent that enforceability may be subject to valid bankruptcy, insolvency, financial emergency, reorganization, moratorium or similar laws relating to or from time to time affecting the enforcement of creditors' rights (and specifically creditors' rights as the same relate to banks) and except to the extent that the availability of certain remedies may be precluded by general principles of equity. (c) Krlowled e and Ex erience. The Bank (i) has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of making the Loan and investing in the Note, (ii) has received and reviewed such financial information concerning the Pledged Revenues as it has needed in order to fairly evaluate the merits and risks of making the Loan and investing in the Note; and (iii) is purchasing the Note as an investment for its own account and not with a current view toward resale to the public. ARTICLE III THE NOTE Section 3.01. Purpose and Use. On the date of this Agreement, the Bank shall make available to the City the Loan in the principal amount of Million and Thousand Dollars ($ ..... .) . The proceeds available under this Agreement shall be used solely to currently refund the Refunded Bonds and to pay costs of issuing the Note. Section 3.02. The Note. The Note shall be substantially in the form set forth as Exhibit A to this Agreement. The general terms of the Note shall be as follows: (a) Amount of Note The aggregate principal amount of the Note shall be Million Thousand Dollars ($ } . (b) Interest The Note shall bear interest at the Note Rate payable on each Payment Date. The Note Rate shall be subject to adjustment as provided in the Note. The Noteholder shall promptly notify the City in writing of any adjustments in the Note Rate. Notwithstanding any provision hereof the contrary, in no event shall the interest rate on the Note exceed the maximum rate permitted by law. Interest on the Note shall be computed on the basis of 12, 30- day months and a 360 -day year. (c) Prepayments and Principal Payments The Note shall be subject to prepayment at the option of the City, as provided in the Note. Any prepayment shall be made on such date as shall be specified by the City in a written notice delivered to the Notcholder not less than five (5) days prior to the specified prepayment date. Any prepayment shall be applied first to accrued interest, then to other amounts owed the Bank, and finally to principal as directed by the City. Principal on the Note is payable on each April 1 commencing April 1, 2012 as set forth in the Note. Section 3.03. Conditions Precedent to Issuance of Note. Prior to or simultaneously with the delivery of the Note, there shall be filed with the Bank the following, each in form and substance reasonably acceptable to the Bank: (01646180;3) (a) an opinion of legal counsel to the City substantially to the effect that (i) the Resolution has been duly adopted and this Agreement, the Escrow Deposit Agreement and the Note has been duly authorized, executed and delivered by the City and each constitutes a valid, binding and enforceable agreement of the City in accordance with their respective terms, except to the extent that the enforceability of the rights and remedies set forth therein may be limited by bankruptcy, insolvency, financial emergency or other laws affecting creditors' rights generally or by usual equity principles; (ii) the City's execution, delivery and performance of this Agreement, the Escrow Deposit Agreement and execution and issuance of the Note are not subject to any authorization, consent, approval or review of any governmental body, public officer or regulatory authority not heretofore obtained or effected; (iii) the execution, issuance and delivery of the Note has been duly and validly authorized by the City, and the Note constitutes a valid and binding special obligation of the City enforceable in accordance with its terms; (iv) the City (A) is a municipal corporation duly organized and validly existing under the laws of the State of Florida, and (B) has power and authority to adopt the Resolution, to execute and deliver this Agreement, and the Escrow Deposit Agreement to execute and deliver the Note, and to consummate the transactions contemplated by such instruments; (v) the execution, delivery and performance of the Note and this Agreement, and compliance with the terms thereof and hereof, under the circumstances contemplated hereby, do not and will not in any material respect conflict with, or constitute on the part of the City a breach or default under, any indenture, mortgage, deed of trust, agreement or other instrument to which the City or to which its properties are subject or conflict with, violate or result in a breach of any existing law, administrative rule or regulation, judgment, court order or consent decree to which the City or its properties are subject; (vi) to the best of such counsel's knowledge, there is no claim, action, suit, proceeding, inquiry, investigation, litigation or other proceeding, at law or in equity, pending or threatened in any court or other tribunal, state or federal (W) restraining or enjoining, or seeking to restrain or enjoin, the issuance, sale, execution or delivery of the Note, (X) in any way questioning or affecting the validity or enforceability of any provision of this Agreement, the Note, or the Resolution, (Y) in any way questioning or affecting the validity of any of the proceedings or authority for the authorization, sale, execution or delivery of the Note, or of any provision made or authorized for the payment thereof, or (Z) questioning or affecting the organization or existence of the City or the right of any of its officers to their respective offices; (vii) the City has the legal authority to refund the Refunded Bonds, to grant a lien on the Pledged Revenues as described herein and in the Resolution; and (viii) all conditions contained in the ordinances and resolutions of the City precedent to the issuance of the Note have been complied with; (b) an opinion of Bond Counsel (who may rely on opinion of legal counsel to the City), substantially to such effect that such counsel is of the opinion that: (i) this Loan Agreement constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its terms; (ii) the Note is a valid and binding special obligation of the City enforceable in accordance with its terms, payable solely from the sources provided therefor in this Loan Agreement; (iii) assuming compliance by the City with certain covenants relating to requirements contained in the Code interest on the Note is excluded from gross income for purposes of federal income taxation; and (iv) the lien of the Refunded Bonds on the Net Revenues has been discharged; (c) a copy of a completed and executed Form 8038 -G to be filed with the Internal Revenue Service by the City; {01646180;3} 6 (d) the original executed Note, Escrow Deposit Agreement and Agreement; and (e) such other documents as the Bank reasonably may request (including, without limitation, Florida Division of Bond Finance forms). When the documents and items mentioned in clauses (a) through (e), inclusive, of this Section shall have been filed with the Bank, and when the Note shall have been executed as required by this Agreement, and all conditions of the Resolution have been met, the City shall deliver the Note to or upon the order of the Bank upon receipt of the purchase price therefor. Section 3.04. Registration of Transfer; Assignment of Rights of Bank. The City shall keep at the office of the City Clerk in the City's records the registration of the Note and the registration of transfers of the Note as provided in this Agreement. The transfer of the Note may be registered only upon the books kept for the registration of the Note and registration of transfer thereof upon surrender thereof to the City together with an assignment duly executed by the Notcholder or its attorney or legal representative in the form of the assignment set forth on the form of the Note attached as Exhibit A to this Agreement; provided however that the Note may be transferred only in whole and not in part. In the case of any such registration of transfer, the City shall execute and deliver in exchange for the Note a new Note registered in the name of the transferee. In all cases in which the Note shall be transferred hereunder, the City shall execute and deliver at the earliest practicable time a new Note in accordance with the provisions of this Agreement. The City may make a charge for every such registration of transfer of a Note sufficient to reimburse it for any tax or other governmental charges required to be paid with respect to such registration of transfer, but no other charge shall be made for registering the transfer hereinabove granted, The Note shall be issued in fully registered form and shall be payable in any lawful coin or currency of the United States. The registration of transfer of the Note on the registration books of the City shall be deemed to effect a transfer of the rights and obligations of the Bank under this Agreement to the transferee. Thereafter, such transferee shall be deemed to be the Bank under this Agreement and shall be bound by all provisions of this Agreement that are binding upon the Bank. The City and the transferor shall execute and record such instruments and take such other actions as the City and such transferee may reasonably request in order to confirm that such transferee has succeeded to the capacity of Bank under this Agreement and the Note. The Holder of the Note is hereby granted power to transfer absolute title thereof by assignment thereof to a bona fide purchaser for value (present or antecedent) without notice of prior defenses or equities or claims of ownership enforceable against such owner's assignor or any person in the chain of title and before the maturity of the Note; provided however that no transfer shall be permitted absent the City's receipt of a certificate in form and substance similar to the one included as part of Exhibit A hereto from such proposed transferee. Every prior Holder of the Note shall be deemed to have waived and renounced all of such owner's equities or rights therein in favor of every such bona fide purchaser, and every such bona fide purchaser shall acquire absolute title thereto and to all rights represented thereby. In the event any Note is mutilated, lost, stolen, or destroyed, the City shall execute a new Note of like date and denomination as that mutilated, lost, stolen or destroyed, provided that, in (01646180;3) 7 the case of any mutilated Note, such mutilated Note shall first be surrendered to the City, and in the case of any Lost, stolen, or destroyed Note, there first shall be furnished to the City evidence of such loss, theft or destruction together with an indemnity satisfactory to it. Section 3.05. Ownership of the Note. The person in whose name the Note is registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the Note shall be made only to the Holder thereof or such owner's legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon the Note, and interest thereon, to the extent of the sum or sums so paid. Section 3.06. Use of Proceeds of Note Permitted Under Applicable Law. The City represents, warrants and covenants that the proceeds of the Note will be used solely to refund the Refunded Bonds and to pay costs of issuing the Note, and that such use is permitted by applicable law. Section 3.07. Authentication. Until the Note shall have endorsed thereon a certificate of authentication substantially in the form set forth in Exhibit A, duly executed by the manual signature of the registrar as authenticating agent, it shall not be entitled to any benefit or security under this Loan Agreement. The Note shall not be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the registrar, and such certificate of the registrar upon the Note shall be conclusive evidence that such Note has been duly authenticated and delivered under this Loan Agreement. ARTICLE IV COVENANTS OF THE CITY Section 4.01. Performance of Covenants. The City covenants that it will perform faithfully at all times its covenants, undertakings and agreements contained in this Agreement and the Note or in any proceedings of the City relating to the Loan. Section 4.02. Payment of Note. (a) The City does hereby irrevocably pledge the Pledged Revenues as security for the repayment of the Note. The lien of the Note on the Pledged Revenues is on parity with the lien thereon of the Parity Obligations. (b) The Note will be a special obligation of the City secured solely by the Pledged Revenues and is payable from the Pledged Revenues as provided in this Agreement. The Note will not constitute a general debt, liability or obligation of the City or the State of Florida or any political subdivision thereof within the meaning of any constitutional or statutory limitation. Neither the faith and credit nor the taxing power of the City or of the State of Florida or any political subdivision thereof is pledged to the payment of the principal of or interest on the Note and the Noteholder shall never have the right to compel any exercise of any ad valorem taxing power of the City or of the State of Florida or any political subdivision thereof, directly or indirectly to enforce such payment. The Note shall not constitute a lien upon any property of the City except upon the Pledged Revenues. (01646180;3) 8 Section 4.03. Tax Covenant. The City covenants to the Noteholder that the City will not make any use of the proceeds of the Note at any time during the term of such Note which, if such use had been reasonably expected on the date the Note was issued, would have caused such Note to be an "arbitrage bond" within the meaning of the Code. The City will do all acts including complying with the requirements of the Code and any valid and applicable rules and regulations promulgated thereunder necessary to insure the exclusion of interest on the Note from the gross income of the holders thereof for purposes of federal income taxation, Section 4.04. Application of Provisions of Original Instrument. The Note shall for all purposes be considered to be Additional Parity Obligations issued under the authority of Section 19N of the Original Instrument and shall be entitled to all the protection and security provided in and by the Original Instrument for Additional Parity Obligations, and the Note shall be in all respects entitled to the same security, rights and privileges enjoyed by the Parity Obligations except as otherwise provided herein. The debt service on the Note shall be payable on a parity with the Parity Obligations provided hereunder, the Note shall have no lien or otherwise be entitled to payments from any amounts on deposit in the Reserve Account or any subaccount therein. The terms and provisions of the Original Instrument as supplemented hereby shall remain in full force and effect and be applicable with respect to the Note. Section 4.05. Compliance with Laws and Regulations. The City shall maintain compliance with all federal, state and local laws and regulations applicable to the refinancing of the Refunded Bonds and the Loan. ARTICLE V EVENTS OF DEFAULT AND REMEDIES Section 5.01. Events of Default; Remedies. The provisions of Section 21 of the Original Instrument shall apply for purposes of this Loan Agreement and shall be applied to the Note as though fully restated herein. ARTICLE VI MISCELLANEOUS PROVISIONS Section 6.01. Covenants of City, Etc.; Successors. All of the covenants, stipulations, obligations and agreements contained in this Agreement shall be deemed to be covenants, stipulations, obligations and agreements of the City to the full extent authorized or permitted by law, and all such covenants, stipulations, obligations and agreements shall be binding upon the successor or successors thereof from time to time, and upon any officer, board, commission, authority, agency or instrumentality to whom or to which any power or duty affecting such covenants, stipulations, obligations and agreements shall be transferred by or in accordance with law. Section 6.02. Term of Agreement. This Agreement shall be in full force and effect from the date hereof until the Note and all other sums payable to the Bank hereunder have been paid in full. {01646180;3} 9 Section 6.03. Amendments and Supplements. This Agreement may be amended or supplemented from time to time only by a writing duly executed by each of the City and the Noteholders. Section 6.04. Notices. Any notice, demand, direction, request or other instrument authorized or required by this Agreement to be given to or filed with the City or the Bank, shall be deemed to have been sufficiently given or filed for all purposes of this Agreement if and when sent by certified mail, return receipt requested: (a) As to the City: City of Winter Springs, Florida City Hall 1126 East State Road 434 Winter Springs, Florida 32708 Attention: Finance Director (b) As to the Bank: SunTrust Bank 200 S. Orange Ave. — Mail Code 2063 Orlando, FL 32801 Attention: Not - for - Profit and Governmental Banking 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. Either party may, by notice sent to the other, designate a different or additional address to which notices under this Agreement are to be sent. Section 6.05. Benefits Exclusive. Except as herein otherwise provided, nothing in this Agreement, expressed or implied, is intended or shall be construed to confer upon any person, firm or corporation, other than the City and the Noteholder, any right, remedy or claim, legal or equitable, under or by reason of this Agreement or any provision hereof, this Agreement and all its provisions being intended to be and being for the sole and exclusive benefit of the City and the Noteholder. Section 6.06. Severability. In case any one or more of the provisions of this Agreement, any amendment or supplement hereto or of the Note shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Agreement, any amendment or supplement hereto or the Note, but this Agreement, any amendment or supplement hereto and the Note shall be construed and enforced at the time as if such illegal or invalid provisions had not been contained therein, nor shall such illegality or invalidity or any application thereof affect any legal and valid application thereof from time to time. In case any covenant, stipulation, obligation or agreement contained in the Note or in this Agreement shall for any reason be held to be in violation of law, then such covenant, stipulation, obligation, or agreement shall be deemed to be the covenant, stipulation, obligation or agreement of the City to the full extent from time to time permitted by law. {0164618 0;3) 10 Section 6.07. Payments Due on Saturdays, Sundays and Holidays. In any case where the date of maturity of interest on or principal of the Note or the date fixed for prepayment of the Note shall be other than a Business Day, then payment of such interest or principal shall be made on the next succeeding Business Day with the same force and effect as if paid on the date of maturity or the date fixed for prepayment, and no interest on any such principal amount shall accrue for the period after such date of maturity or such date fixed for prepayment. Section 6.08. 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 6.09. Applicable Law, This Agreement shall be governed exclusively by and construed in accordance with the applicable laws of the State of Florida. Section 6.10. No Personal Liability. Notwithstanding anything to the contrary contained herein or in the Note, or in any other instrument or document executed by or on behalf of the City in connection herewith, no stipulation, covenant, agreement or obligation of any present or future member of the City Commission, officer, employee or agent of the City, officer, employee or agent of a successor to the City, in any such person`s individual capacity, and no such person, in his or her individual capacity, shall be liable personally for any breach or non- observance of or for any failure to perform, fulfill or comply with any such stipulations, covenants, agreements or obligations, nor shall any recourse be had for the payment of the principal of or interest on the Note or for any claim based thereon or on any such stipulation, covenant, agreement or obligation, against any such person, in his or her individual capacity, either directly or through the City or any successor to the City, under any rule or law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise and all such liability of any such person, in his or her individual capacity, is hereby expressly waived and released. Section 6.11. Incorporation by Reference. All of the terms and obligations of the Resolution and the Exhibit hereto are hereby incorporated herein by reference as if all of the foregoing were frilly set forth in this Agreement. All recitals appearing at the beginning of this Agreement are hereby incorporated herein by reference. (01646180;3) 11 [Signature Page for LOANAGREEMENT dated as of July 8, 2010 between the City of Winter Springs, FL and SunTrust Bank] 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 ATTEST: City Clerk Approved as to form: City Attorney By:_ Mayor SUNTRUST BANK AV. Title: Authorized Officer {016461$0;3} 12 EXHIBIT A FORM OF NOTE PRIOR TO BECOMING A HOLDER, A PROPOSED PURCHASER SHALL EXECUTE A PURCHASER'S CERTIFICATE IN THE FORM ATTACHED HERETO CERTIFYING, AMONG OTHER THINGS, THAT SUCH HOLDER IS AN "ACCREDITED INVESTOR" AS SUCH TERM IS DEFINED IN THE SECURITIES ACT OF 1933, AS AMENDED, AND REGULATION D THEREUNDER. CITY OF WINTER SPRINGS, FLORIDA WATER AND SEWER SYSTEM REVENUE REFUNDING NOTE, SERIES 2011 Principal Sum Maturity D Note Rate Date of Issuance R April 1, 2020 3.28% April _, 2011 The CITY OF WINTER SPRINGS, FLORIDA (the "City "), for value received, hereby promises to pay, solely from the sources described in the within mentioned Agreement, to the order of SUNTRUST BANK, a Georgia state banking corporation, or its assigns (the "Holder "), at 200 S. Orange Avenue — Mail Code 2063, Orlando, Fl 32801, Attention; Not - for - Profit and Government Banking, or at such place as the Holder may from time to time designate in writing, the Principal Sum, such principal to be repaid in installments due on the dates and in the amounts set forth on Exhibit "A" hereto, with all unpaid principal and interest due in full on the above referenced Maturity Date, and to pay interest on the outstanding principal amount hereof from the most recent date to which interest has been paid or provided for, or if no interest has been paid, from the Date of Issuance shown above, on April 1 and October 1 of each year (each, an "Interest Payment Date "), commencing on October 1, 2011, until payment of said principal sum has been made or provided for, at the above referenced Note Rate calculated on the basis of 12, 30 -day months and a 360 -day year. Payments due hereunder shall be 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, which payments shall be made to the Holder hereof by check mailed to the Holder at the address designated in writing by the Holder for purposes of payment or by bank wire or bank transfer as such Holder may specify in writing to the City or otherwise as the City and the Holder may agree. The original Holder is authorized to receive payments due hereunder by auto debiting from a City deposit account with such original Holder. This Note is issued for the purpose of refunding all the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 2002, under the authority of and in full compliance with the Constitution and Statutes of the State of Florida, including particularly Chapter 166, Florida Statutes City Resolution No. 665 as amended and other applicable provisions of law, and Resolution No. 2011 -15, adopted by the City Commission (the "Commission ") on April 11, 2011, and a Loan Agreement dated April , 2011 by and between the City and the Holder (the "Agreement "). This Note is being issued as "Additional Parity Obligations" within the meaning of City Resolution No. 665 adopted by the City Commission of the City on April 29, 1991. {01646180;3} Exhibit A -1 This Note is a limited, special obligation of the City, payable from and secured solely by a lien upon and pledge of the Pledged Revenues, as defined and described and in the manner provided in the Agreement. The pledge of the Pledged Revenues to the payment of this Note is on a parity (except as otherwise provided in the Agreement) with the City's outstanding (a) Water and Sewer Refunding Revenue Bonds, Series 2000; (b) Water and Sewer Refunding Revenue Bonds, Series 2001. All capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Agreement. This Note may be prepaid in whole or in part on any date, with five (S) days prior written notice to the Holder by payment in an amount equal to the principal amount to be prepaid plus accrued interest thereon to the date of such prepayment. The Note Rate, as stated above, is subject to adjustment as follows: (a) Adjustment in the Event of a Determination of Taxability In the event that a Determination of Taxability shall have occurred, the Note Rate shall be subject to adjustment to the Taxable Rate, effective retroactively to the date on which the interest payable on this Note is includable for federal income tax purposes in the gross income of the Holder hereof. In addition, the Holder of this Note or any former Holders of this Note, as appropriate, shall be paid an amount equal to any additions to tax, interest and penalties, and any arrears in interest that are required to be paid to the United States of America by the Holder or former Holders of this Note as a result of such Determination of Taxability. All such additional interest, additions to tax, penalties and interest shall be paid by the City within sixty (60) days following the Determination of Taxability and demand by the Holder. (b) Adjustment of Rate of Interest for Partial Taxabil . In the event that interest on this Note during any period becomes partially taxable as a result of a Determination of Taxability applicable to less than all of this Note, then the Note Rate 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 Note Rate (expressed as a percentage); and (C) "C" equals the portion of this Note the interest on which has become taxable as the result of such tax change (expressed as a decimal). In addition, the Holder of this Note or any former Holder of this Note, as appropriate, shall be paid an amount equal to any additions to tax, interest and penalties, and any arrears in interest that are required to be paid to the United States by the Holder or former Holders of this Note as a result of such Determination of Taxability. All such additional interest, additions to tax, penalties and interest shall be paid by the City within sixty (60) days following the Determination of Taxability and demand by the Holder. (c) Adjustment of Rate of Interest for Change in Maximum Corporate Tax Rate. In the event that the maximum effective federal corporate tax rate (the "Maximum Corporate Tax {01646180;3} Exhibit A -2 Rate ") during any period with respect to which interest shall be accruing on this Note on a tax - exempt basis, changes from the Maximum Corporate Tax Rate then in effect, the interest rate on this Note that is bearing interest on a tax - exempt basis shall be adjusted to the product obtained by multiplying the interest rate then in effect on this Note by a fraction equal to (1 -A divided by 1 -B), where A equals the Maximum Corporate Tax Rate in effect as of the date of adjustment and B equals the Maximum Corporate Tax Rate in effect immediately prior to the date of adjustment. (d) Adjustment of Rate of Interest for Other Chan es Affecting After -Tax Yield. So long as any poilion of the principal amount of this Note or interest thereon remains unpaid and this Note is held by SunTrust Bank (a) if any law, rule, regulation or executive order is enacted or promulgated by any public body or governmental agency which changes the basis of taxation of interest on this Note or causes a reduction in yield on this Note (other than by reason of a change described above or other than due to the deterioration in the financial condition of SunTrust Bank) to SunTrust Bank, including without limitation the imposition of any excise tax or surcharge thereon, or (b) if, as result of action by any pubic body or governmental agency, any payment is required to be made by, or any federal, state or local income tax deduction is denied to, SunTrust Bank (other than by reason of a change described above or by reason of any action or failure to act on the part of SunTrust Bank or a deterioration in the financial condition of SunTrust Bank), by reason of the ownership of this Note, the City shall reimburse SunTrust Bank within five (5) days after receipt by the City of written demand for such payment. The determination of the after -tax yield calculation shall be verified by a firm of certified public accountants regularly employed by SunTrust Bank and acceptable to the City, and such calculation, in the absence of manifest error, shall be binding on the City and SunTrust Bank. This provision shall apply to and is included for the sole benefit of the initial Holder of this Note (SunTrust Bank), and its successors or assigns due to an acquisition, merger or any other legal combination, restructuring or disposition involving SunTrust Bank (collectively, the "Benefitted Parties "), Any Holder of this Note other than the Benefitted Parties shall not have the benefit of this provision and shall not have a claim to the payment of additional amounts under this provision as a result of their ownership of this Note. For purposes of the foregoing: (1) "Determination of Taxability" shall mean, with respect to this Note, (i) the issuance by the Internal Revenue Service of a statutory notice of deficiency or other written notification which holds in effect that the interest payable on this Note is includable for federal income tax purposes in the gross income of the Holder hereof, which notice or notification is not contested by either the City or the Holder of the Note, or (ii) a determination by a court of competent jurisdiction that the interest payable on this Note is includable for federal income tax purposes in the gross income of the Holder hereof, which determination either is final and non - appealable or is not appealed within the requisite time period for appeal, or (iii) the admission in writing by the City to the effect that interest on this Note is includable for federal income tax purposes in the gross income of the Holder hereof. (2) "Prime Rate" shall mean a rate of interest equal to the announced prime commercial lending rate per annum of SunTrust Bank. The Prime Rate is a reference rate for the information and use of SunTrust in establishing the actual rate to be charged to the City. The {01646180;3} Exhibit A -3 Prime Rate is purely discretionary and is not necessarily the lowest or best rate charged any customer. The Prime Rate shall be adjusted from time to time without notice or demand as of the effective date of any announced change thereof. (3) "Taxable Rate" means a rate equal to the Prime Rate times that percentage which after the Determination of Taxability will result in the same after -tax yield to the Holder of this Note as before said Determination of Taxability. 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 nonusurious interest allowed under the State of Florida as presently in effect and to the extent an increase is allowable by such laws, but in no event shall any amount ever be paid or payable by the City greater than the amount contracted for herein. In the event the maturity of this Note is accelerated or prepaid in accordance with the provisions hereof, the Agreement or the Resolution, then such amounts that constitute payments of interest, together with any costs or considerations which constitute interest under the laws of the State of Florida, may never exceed an amount which would result in payment of interest at a rate in excess of that permitted by Section 215.84(3), Florida Statutes, as presently in effect and to the extent an increase is allowable by such laws; and excess interest, if any, shall be cancelled automatically as of the date of such acceleration, or, if theretofore paid, shall be credited on the principal amount of this Note unpaid, but such crediting shall not cure or waive any default under the Agreement or Resolution, THIS NOTE SHALL NOT BE OR CONSTITUTE AN INDEBTEDNESS OF THE CITY OR THE STATE OF FLORIDA (THE "STATE "), WITHIN THE MEANING OF ANY CONSTITUTIONAL, STATUTORY OR CHARTER LIMITATIONS OF INDEBTEDNESS, BUT SHALL BE PAYABLE SOLELY FROM THE PLEDGED REVENUES, AS PROVIDED IN THE AGREEMENT AND THE RESOLUTION. THE HOLDER SHALL NEVER HAVE THE RIGHT TO COMPEL THE EXERCISE OF THE AD VALOREM TAXING POWER OF THE CITY, OR TAXATION IN ANY FORM OF ANY PROPERTY THEREIN TO PAY THIS NOTE OR THE INTEREST HEREON. Upon the occurrence of an Event of Default the principal of this Note the Holder shall also have such remedies as described in the Agreement. The City hereby waives presentment, demand, protest and notice of dishonor. This Note is governed and controlled by the Agreement and reference is hereby made thereto regarding interest rate adjustments, acceleration, and other matters. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] {0164618 0;3} Exhibit A -4 IN WITNESS WHEREOF, the City has caused this Note to be signed by its Mayor, either manually or with facsimile signature, and the seal of the City to be affixed hereto or imprinted or reproduced hereon, and attested by a City Clerk of the City, either manually or with facsimile signature, and this Note to be dated the Date of Issuance set forth above. [SEAL] ATTEST: By: City Clerk Approved as to form: City Attorney CITY OF WINTER SPRINGS, FLORIDA Mayor (01646I80;3) Exhibit A -5 FORM OF CERTIFICATE OF AUTHENTICATION Date of Authentication: This Note is being delivered pursuant to the within mentioned Agreement. CITY OF WINTER SPRINGS, FLORIDA, as Registrar LM City Clerk {01646180;3} Exhibit A -b ASSIGNMENT FOR VALUE RECEIVED the undersigned sells, assigns and transfers unto (please print or typewrite name, address and tax identification number of assignee) the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints Attorney to transfer the within Note on the books kept for registration thereof, with full power of substitution in the premises. Name of Noteholder: By: (0164618 0;3) Exhibit A -7 EXHIBIT A SERIES 2011 NOTE — PRINCIPAL REPAYMENT SCHEDULE Date Amount 4/1/2012 4/l/2013 4/1/2014 4/l/2015 4/1/2016 4/1/2017 4/1/2018 4/1/2019 4/1/2020 {01646184;3} Exhibit A -8 PURCHASER'S CERTIFICATE City of Winter Springs, Florida (the "City ") Ladies and Gentlemen: The undersigned, as a purchaser of the City of Winter Springs, Florida Water and Sewer System Revenue Refunding Note, Series 2011 (the "Note ") dated April , 2011, consisting of one typewritten Note, hereby certifies that we have been provided (a) a copy of City of Winter Springs Resolution No. , adopted by the City on , 2011, authorizing the issuance of the Note (the "Resolution "), (b) the Loan Agreement dated as of April , 2011, between the City and us as assignee of SunTlust Bank (the "Agreement ") and (c) such financial and general information respecting the Pledged Revenues (as such term is defined in the Agreement) and the City, and the Note described above as we deem necessary to enable us to make an informed investment judgment with respect to the purchase of said Note. We hereby make the following representations, which representations may be relied upon by the City: A. We are aware: (i) that investment in the Note involves various risks; (ii) that the Note is not a general obligation of the City; and (iii) that the principal or premium, if any, and interest on the Note is payable solely from the Pledged Revenues as specified in the Resolution and the Agreement. B. We understand that no official statement, offering memorandum or other form of offering document was prepared or is being used in connection with the offering or sale of the Note (collectively, "Disclosure Documents "), but we have been afforded access to all information we have requested in making our decision to purchase the Note and have had sufficient opportunity to discuss the business of the City with its officers, employees and others. We have not requested any Disclosure Documents in connection with the sale of the Note. We do not require any further information or data incident to our purchase of the Note. C. In purchasing the Note, we have relied solely upon our own investigation, examination, and evaluation of the City, and other relevant matters. (01646180;3) A -1 D. We have knowledge and experience in financial and business matters and are capable of evaluating the merits and risks of our investment in the Note and have determined that we can bear the economic risk of our investment in the Note. H. We acknowledge the understanding that the Note is not being registered under the Securities Act of 1933, as amended (the "1933 Act ") or Chapter 517, Florida Statutes, and that the Resolution and Agreement are not being qualified under the Trust Indenture Act of 1939, as amended, and that the City shall have no obligation to effect any such registration or qualification. F. We are not acting as a bond house, broker or other intermediary, in our purchase of the Note. Although we retain the right to transfer the Note in the future, we understand that the Note may not be readily tradable. G. We have received all documents requested by us incident to our purchase of the Note. H. We acknowledge that we are an "accredited investor" within the meaning of Chapter 517, Florida Statutes and Regulation D of the 1933 Act. Signed as of the day of Authorized Officer (01646180;3) A -2 .:rte SuNTRuST March 25, 2011 Mr. Brent Wilder Public Financial Management, Inc. 300 S. Orange Avenue, Suite 1170 Orlando, FL 32801 SunTrust Bank Not- for - Profit & Government Banking 200 South Orange Avenue — Mail Code 2063 Orlando, Florida 32801 Telephone 407 -237 -5909 Facsimile 407- 237.6030 Subject: Response to Bid Request for "Non- Bank - Qualified" Term Loan / City of Winter Springs, Florida — Utility System Revenue Refunding Note Series 2011 in the amount of up to $8,500,000 Dear Brent: SunTrust Bank is pleased to present our commitment to provide up to $8,500,000 to current refund the remaining portion of the outstanding Series 2002 Water and Sewer Utility System Revenue Bonds. SunTrust appreciates the opportunity to respond to the City's financing request and has provided a comprehensive financing structure that we believe offers you competitive terms based on current market conditions. Although the following provisions, terms and conditions are intended to be all- inclusive, they do not necessarily contain all of the anticipated terms that will be applicable to the credit. All such terms will be set forth in the final, definitive loan documents, and all such terms must be acceptable to the Bank and its Counsel. This Commitment is contingent upon the accuracy of all facts, statements and financial information submitted to the Bank by the Borrower and is conditioned upon the terms outlined below. Borrower: City of Winter Springs, Florida (the "City ") Bank: SunTrust Bank Purpose: To refinance the remaining portion of the outstanding Series 2002 Water and Sewer Utility System Revenue Bonds. Amount: Up to $8,500,000 — City of Winter Springs, Florida/ Utility System Revenue Refunding Note, Series 2011 {the "Note "} Terms: Interest payable semi - annually each April 1 and October 1, with the first interest payment due on October 1, 2011. The first principal payment will be due on April 1, 2012. Security: The 2011 Note principal and interest thereon will be secured by and payable solely from a lien and pledge of (i) Net Revenues (as defined in the Bond Resolution) derived from the ownership, use or operation of the City's Water System and Sewer System (collectively, the "Pledged Revenues "). The 2011 Note will be issued on parity with the City's outstanding Water and Sewer Revenue Bonds, Series 2000 and 2001, and any subsequently issued Senior Lien debt. Interest Rate: Fixed Rate (9 year fully_ amortizing) pre- payable without penalty The non - hank - qualified, tax- exempt, fixed interest rate sball be calculated on a 301360 day basis. As of March 25, 2011, the interest rate will equal 3.28% with the interest rate Iocked until April 16, 2011. The interest rate will be fixed through the maturity date. If the Note closing does not occur by April 16, 2011, the interest rate shall be based on the following: After April 16, 2011, the interest rate shall be based on the formula below: 77% x (5 -year U.S. Dollar Swap Rate + 2.33 %) Maturity: The Note will mature on April 1, 2020 Prepayment Penalty: N/A SunTrust Bank ratings: Ratin A enc Short -term rating Long-term rating Outlook Mood 's R-2 A3 Stable Standard & Poor's A -2 BBB+ Stable Fitch F -2 BBB+ Stable Legal Fees: The Borrower shall be responsible for Bond Counsel Fees. Bank legal fees shall not exceed $3,500 for the Bank's Counsel to review documents. The Bank shall be - using Joe Stanton from Broad & Cassel, P.A. Conditions: (1) All matters relating to this loan, including all instruments and documents required, are subject to the Bank's policies and procedures in effect, applicable governmental regulations and /or statutes, and approval by the Bank and Bank's Counsel. (2) A written opinion from Borrower's attorney, in form and substance acceptable to Bank and Bank's Counsel, that all documents are valid, binding and enforceable in accordance with their terms, that the execution and delivery of said documents have been duly authorized. The opinion should also address such other matters as the Bank and Bank's Counsel deem appropriate. (3) The Borrower shall submit annual audited statements within 210 days of fiscal year end, together with an annual budget within 30 days of adoption, together with any other information the Bank may reasonably request. (4) The Borrower shall maintain compliance with all federal, state and local regulations regarding the purpose of the proposed Note. (S) The Borrower and the Bank shall agree on the content of final documentation, to include events of default, covenants, resolutions from the Borrower and all other legal documentation relating to the Note, (5) The "non- bank - qualified" tax - exempt interest rates quoted herein take into consideration a corporate tax rate of 35%. In the event of a change in the maximum corporate tax rate, the Bank shall have the right to adjust the interest rate in order to maintain the same after tax yield. (7) The Bank shall have the right to adjust the tax - exempt interest rate in order to maintain the same after tax yield if any amendments to existing law are enacted which would adversely affect the Bank's after tax yield including any "determination of taxability" as will be defined in the Note documentation. (8) The Borrower shall comply with and agree to such other covenants, terms, and conditions that may be reasonably required by the Bank and its counsel and are customary in tax - exempt financings of this nature. These covenants would include, but are not to be limited to, covenants regarding compliance with laws and regulation, remedies in the event of default and Bond Counsel's opinion regarding the "non- bank - qualified" tax - exempt nature of the Note. (9) The Borrower shall not issue additional parity debt secured by and payable from Net Revenues (as described in the City's Resolution authorizing the issuance of the 2011 Note) derived from the use or operation of the City's Water System and Sewer System (collectively, the "Pledged Revenues ") unless the maximum annual debt service coverage for both the existing and proposed debt service exceeds 1.10:1.0 for the preceding twelve months. (10) The City covenants to fix, establish, revise from time to time, whenever necessary, maintain and collect such fees, rates, rentals and other charges for the use of the products, services and facilities of the System which will always provide Not Revenues in each year sufficient to pay all operating and maintenance expenses of the System, plus 110% of the Bond Service Requirement coming due in such year on all Outstanding Bonds. (11) The SunTrust Bank loan commitment expires thirty (30) days after the date of this commitment letter. If the City desires for us to provide a new commitment letter, our interest rate calculations will be modified to reflect the prevailing interest rate environment. If you have any questions regarding any aspect of our commitment letter, please do not hesitate to contact me at (407) 237 -5909. I look forward to continuing to build a stronger relationship with the City of Winter Springs, Florida. Sincerely, William C. Jones First Vice President Not - for - Profit & Goverment Banking SunTrust Bank Accepted this day of 2011 Title: RESOLUTION NO. 2011-15 A RESOLUTION OF THE CITY OF WINTER SPRINGS, FLORIDA ACCEPTII�IG THE PROPOSAL OF SUNTRUST BANK TO PURCHASE THE CITY'S NOT TO EXCEED $8.5 MII,LION WATER AND SEWER SYSTEM REVENUE REFUNDING NOTE, SERIES 2011A TO REFUND ALL OF THE CITY'S OUTSTANDING WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 2002; AUTHORIZING TAE EXECUTION AND DELIVERY OF A LOAN AGREEMENT WITH SAID BANK TO SECURE THE REPAYMENT OF SAID LOAN; PROVIDING FOR THE PAYMENT OF 5UCH NOTE FROM THE NET REVENUES OF THE CITY'S WATER AND SEWER SYSTEM ON PAI�ITY WIT$ CERTAIN OUTSTANDING WATER AND SEWER DEBT OF THE CITY, ALL AS PROVIDED IN THE LOAN AGREEMENT; AUTHORIZING THE PROPER OFFICIALS OF THE CITY TO DO ANY OT'HER ADDITIONAL THINGS DEEMED NECESSARY OR ADVLSABLE IN CONNECTION WITH THE EXECUTION OF THE LOAN AGREEMENT, THE NOTE, AND THE SECURITY THEREFOR; AUTHORIZING THE EXECUTION AND DELIVERY OF OTI�R DOCUA�NTS IN CONNECTION WITH SAID LOAN; PROVIDING FOR SEVERABILITY; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA, AS FOLLOWS: SECTION 1. AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted pursuant to the provisions of Chapter 166, Florida Statutes, the Florida Constitution, and other applicable provisions of law. SEG"TION 2. FINDINGS. It is hereby ascertained, detennined 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 refund aIl of its outstanding R/ater and Sewer Refunding Revenue Bonds, Series 2002 (the "Refunded Bonds"), all as more particularly described in the Loan Agreement (as defined herein). (B) Pursuant to Section 2(b), Article VIII of the State Constitution, and Section 166.021, Florida Statutes, municipalities have the governmental, corporate and proprietary powers to enable them to conduct municipal government, perform municipal functions, and render municipal services, and may exercise any power for municipal purposes, except when expressly prohibited by law. The issuance by the City of its Water and Sewer System Revenue Refunding Note, Series 2011A (the "2011A Note") and the execution and delivery of the Loan Agreement for the purposes of refunding the Refunded Bonds is not prohibited by law. (C� The 201IA Note will be issued as "Additional Parity Obligations" in accordance with the provisions of City Resolution No. 665 (the "Original Instrument") and will {oi�wo6�;z} Page 1 of4 i , _ � I I be secured by the Net Revenues as provided in Section 6 hereof and the Loan Agreement pursuant to which the City will issue the 201 lA Note to secure the repayment of the Loan. (D} In accardance with the provisions of the Original Instrument, it is hereby found that all of the covenants contained in said resolution shall be fully applicable to the 2011A Note except as otherwise provided in the Loan Agreement. (E) The City engaged Public Financial Management, Inc. ("PFM"), the City's financial advisor, to solicit proposals from qualified financial institutions for a refunding of the Refunded Bonds. Three such proposals were solicited and PFM has recommended that the City accept the pmposal of SunTrust Bank (the "Bank"). In furtherance of such recommendation, PFM advises the City that due to the present volatility of the market far municipal debt, it is in the best interest of the City to issue the 2011A Note pursuant to the Loan Agreement by negotiated sale, allowing tfie City to issue the 2011A Note a# 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 2011A Note and, accordingly, the City Commission of the City hereby finds and determines that it is in the best financial interest of the City that a negotiated sale of the 2011A No#e to the Bank be authorized. SECTION 3. AUTHORIZATION OF REFUNDING OF REFUNDED BONDS. The City hereby authorizes the refunding of the Refunded Bonds as more particularly described itt the Loan Agreement. SECTION 4. ACCEPTAIdCE OF COMMTTMENT LETTER WITH BANK. Based on a recommendation from the City's financial advisor, the City herehy accepts the commitment letter of the Bank dated May 25, 2011 attached hereto to provide the City with the Loan. SECT'ION 5. APPROVAL OF FORM OF AND AUTHORIZATION OF LOAN AGREEMENT AND EXECLTTION OF LOAN AGREEMF�IT AND 2011A NOTE. The Loan and the repayment of the Loan as evidenced by the 2011 A I�iote shall be pursuant to the terms and pravisions of the Loan Agreement and the 2Q I 1 A Note. The City hereby approves the Loan Agreement by and between the City and the Bank in substantially the form attached hereto as Ezhibit A(the "Loan Agreement") and authorizes the Mayor or the Deputy Mayor/Comm.issioner of the City (collectively, the "Mayor'� and the City Clerk or any deputy or assista.nt City Clerk of the City (collectively, the "City Clerk") to execute and deliver on behalf of the City the Loan Agreement and the 2011A Note in substantially the form attached to the Loan Agreement, with such changes, insertions and additions as they may approve, their execution thereof being evidence of such approval. SECTION 6. PAYMENT OF DEBT SERVICE ON 2011A NOTE. Pursuant to the Loan Agreement, the 2011A Note will be secured by the Net Revenues of the City's Water and Sewer System on parity with other City debt, all as more particularly described in the Loan Agreement SECTION 7. AUTHORIZATION OF OTHF� DOCUMENT'S TO EFFECT TR.ANSACTION. To the extent that other documents including but not Iimited to an escrow deposit agreement, redemption and defeasance notices, certificates, opinions, or items are needed to effect any of the transactions referenced in this Resolution, the Loan Agreement or the 2011A {oi6aso6a;�} Page 2 of 4 � s Note and the security therefore, the Mayar, the City Clerk, the City Manager, the Finance Director and the City Attorney are hereby authorized to execute and deliver such documents, certificates, opinions, or other items and to take such other actions as are necessary for the full, punctuai, and complete performance of the covenants, agreements, provisions, and other terms as are contained herein and in the documents included herein by reference. SECTION S. PAYING AGENT AND REGISTR.AR The City hereby accepts the duties to serve as registrar and paying agent for the 201 lA Note. SECTION 9. LIMITED OBLIGATION. The obligation of the City to repay amounts under the Loan Agreement and the 2011A Note are limited and special obligations, payable solely from the sources and in the manner set forth in the Original Instrumen# end the Loan Agreement aad shall not t�e deemed a pledge of the faith and credit or taxing power of the City. SECTION 10. EFFECT OF PARTIAL INVALIDITY. If any one or more provisions of this Resolution, the Loan Agreement or the 2011A Note shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not effect any other pmvision of this Resolufion or the 2411A Note or the Loan Agreement, but this Resolution, the Loan Agreement and the 2011A Note shall be construed and enforced as if such illegal or invalid pmvision had not been contained therein. The 2011ANote and Loan Agreement shall be issued a.nd this Resolution is adopted with the intent that the laws o€ the State of Florida shall govern their construction. SEG°TION 11. EFFECTIVE DATE. This Resolution sha(I take effect immediate�y upon its adoption. PAS�'ED, APPROVED AND ADOPTED ttus 11�' day of April, 2011. CITY OF WINTER SPRINGS, FLORIDA [SEAI.] By: . M or AT"I'EST: � By lerk Appraved as to form: By City Attomey {oi6abo�a;z} Page 3 of 4