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Home My WebLink AboutResolution 96-12 RESOLUTION 96-12 A RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT AND PROMISSORY NOTE AND THE BORROWING OF $2,200,000 TO FINANCE THE COST OF ACQUISITION OF EQUIPMENT AND LAND AND CONSTRUCTION OF AND IMPROVEMENTS TO CERTAIN STORMW A TER UTILITY CAPITAL IMPROVEMENTS; PLEDGING THE STORMW A TER MANAGEMENT UTILITY FEES OF THE CITY TO SECURE PAYMENT OF THE PROMISSORY NOTE; MAKING CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; PROVIDING FOR THE RIGHTS, SECURITY AND REMEDIES OF THE HOLDERS THEREOF; AUTHORIZING A NEGOTIATED SALE OF SAID PROMISSORY NOTE; AND PROVIDING FOR AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COMMISSION THE CITY OF OCOEE, FLORIDA: ARTICLE 1 DEFINITIONS, AUTHORITY AND FINDINGS; RESOLUTION CONSTITUTES CONTRACT SECTION 1.1 Definitions. Unless otherwise defined herein, capitalized terms shall have the meaning as set forth in the Loan Agreement, defined herein. In addition to the words and terms elsewhere defined in this Resolution and the Loan Agreement, the following words and terms as used in this Resolution shall have the following meanings unless the context or use indicates another or different meaning or intent: "Act" shall mean the Charter and Code of Ordinances of the City of Ocoee, Part II of Chapter 166, Florida Statutes, as amended, and other applicable provisions of law. "Bank" shall mean SunTrust Bank, Central Florida, National Association. "Clerk" shall mean the City Clerk or acting City Clerk of the City. "City" shall mean the City of Ocoee, Florida. "Loan Agreement" shall mean the Loan Agreement by and between the City and the Bank dated as of May 1, 1996. "Note" shall mean the City's Stormwater Utility Revenue Promissory Note, Series 1996 issued pursuant to the Loan Agreement. KAR\RLG\RES0\502007.4 "Resolution" shall mean this Resolution as the same may from time to time be amended and supplemented in accordance with the terms hereof which authorized the execution and delivery of the Loan Agreement and the Note. Words importing the singular number shall include the plural number in each case and vice versa, and words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter gender and vice versa. SECTION 1.2 Authority for Resolution. This Resolution is adopted pursuant to the provisions of the Act. The City has ascertained and hereby determined that adoption of this Resolution is necessary to carry out the powers, purposes and duties expressly provided in the Act, that each and every matter and thing as to which provision is made herein is necessary in order to carry out and effectuate the purposes of the City in accordance with the Act and that the powers herein exercised are in each case exercised in accordance with the provisions of the Act and in furtherance of the purposes of the City. SECTION 1.3 Authorization of Loan Agreement. The City hereby authorizes and directs the Mayor and the Clerk to execute the Loan Agreement and to deliver the Loan Agreement to the Bank. All of the provisions of the Loan Agreement when executed and delivered by the City as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein, and the Loan Agreement shall be in substantially the form of the Loan Agreement attached hereto as Exhibit A with such changes, amendments, modifications, omissions and additions, including the date of such Loan Agreement, as may be approved by said Mayor and the Clerk. Execution by the Mayor and the Clerk of the Loan Agreement shall be deemed to be conclusive evidence of approval of such changes. SECTION 1.4 Sale of Note. The sale of the Note to the Bank pursuant to terms and provisions of this Resolution and the Loan Agreement is hereby approved. Delivery of the Note shall be made to the Bank or its designee upon payment therefor in accordance with the terms of sale. SECTION 1.5 Truth-in-Bonding Statement. The City is proposing to issue $2,200,000 of debt or obligation for the purpose of constructing the 1996 Project. This debt or obligation is expected to be repaid over a period of fifteen (15) years. At a forecasted interest rate of 4.77%, and assuming, only for purposes of making this statement, that the interest rate on the Note is adjusted on October 1, 2006 to 5.06% the total interest paid over the life of the debt or obligation is expected to be $1,010,810. The source of repayment or security for this proposal is the City's existing Stormwater Utility Fees. Authorizing this debt or obligation will result in approximately $216,000 of the City's Stormwater Utility Fees not being available to finance the other services of the City each year for fifteen (15) years. KARIRLG\RES0\502007.4 SECTION 1.6 Designation of Note. For the purpose of qualifying the Note for the exception contained in Section 265(b )(3) of the Code, the City hereby designates the Note as a Qualified Tax-Exempt Obligation. SECTION 1.7 Authority of Officers. In the event that the office of any officer of the City mentioned in this Resolution shall be abolished or any two or more of such offices shall be merged or consolidated, or in the event of a vacancy in any such office by reason of death, resignation, removal from office or otherwise, or in the event any such officer shall become incapable of performing the duties of his office by reason of sickness, absence from the City or otherwise, all powers conferred and all obligations and duties imposed upon such officer shall be performed by the officer succeeding to the principal functions thereof or by the officer upon whom such powers, obligations and duties shall be imposed by law. SECTION 1.8 Benefits Exclusive. Except as herein otherwise expressly provided, nothing in this Resolution express or implied is intended or shall be construed to confer upon any person, firm or corporation other than the City and the Holder of the Note issued under and secured by this Resolution any right, remedy or claim, legal or equitable, under or by reason of this Resolution or any provision hereof, this Resolution and all its provisions being intended to be and being for the sole and exclusive benefit of the City and the Holder from time to time of the Note issued hereunder. SECTION 1.9 Severability. In case anyone or more of the provisions of this Resolution or of the Note issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Resolution or of the Note, but this Resolution and the Note shall be construed and enforced as if such illegal or invalid provision had not been contained therein. The Note is issued and this Resolution is adopted with the intent that the laws of the State shall govern their construction. SECTION 1.10 General Authorization. The officers and agents of the City are hereby authorized and directed to do all the acts and things required of them by the Loan Agreement and this Resolution for the full, punctual and complete performance of all of the terms, covenants, provisions and agreements contained in the Loan Agreement, the Note and this Resolution binding upon the City. SECTION 1.11 Repeal. All Resolutions of the City, or parts thereof, which are In conflict or inconsistent with any provision of this Resolution are hereby repealed and declared to be inapplicable, and the provisions of this Resolution shall be and remain controlling. SECTION 1.12 Headings, etc. Any heading preceding the texts of the several articles and Sections hereof, and the table of contents hereto shall be solely for convenience of reference and shall not constitute a part of this Resolution, nor shall they affect its meaning, construction or effect. KAR\RLG\RESO\502007.4 SECTION 1.13 upon its adoption. Effective Date. This Resolution shall take effect immediately PASSED AND ADOPTED THIS 7th DA Y OF MA Y, 1996 APPROVED: City of Ocoee (5' S;:4d~~; S. Scott Vandergrift, Mayo r FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE APPROVED AS TO FORM AND LEGALITY THIS 7TH DAY OF MAY, 1996. APPROVED BY THE OCOEE CITY CITY COMMISSION AT THE ABOVE REFERENCED MEETING UNDER AGENDA ITEM NO.~. ::LEY P::J~~ City Attorney ADVERTISED: APRIL 30, 1996 KAR\RLG\RES0\502007.4 EXHIBIT A Form of Loan Agreement KARIRLGIRES0\502007.4 EXHIBIT A Loan Agreement Dated as of May 8, 1996 By and Between CITY OF OCOEE, FLORIDA (the "City") and SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION (the "Bank") KAR\RLG\AGRE\502009.6 TABLE OF CONTENTS ~ . Article 1 Definition of Terms 1.1 Definitions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1 1.2 Interpretation... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 6 1.3 Titles and Headings. ................................ 6 1.4 Findings.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 6 Article 2 Representations and Warranties of the Parties 2.1 Representations and Warranties of City. . . . . . . . . . . . . . . . . . .. 8 2.2 Representations and Warranties of Bank. .................. 9 Article 3 The Loan and the Note 3.1 The Loan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 9 3.2 The Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . " 9 3.3 Adjustments to Note Rate. ............................ 10 3.4 Determination of Taxability. ........................... 12 3.5 Compliance with Section 215.84 ... . . . . . . . . . . . . . . . . . . . .. 13 3.6 Conditions Precedent to the Loan. . . . . . . . . . . . . . . . . . . . . . .. 13 3.7 Registration of Transfer; Assignment of Rights of Bank. ....... 14 3.8 Ownership of the Note. .............................. 15 3.9 Use of Proceeds of Loan. ....................... . . . . .. 15 3.10 Reserve Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 15 Article 4 Covenants of the City 4.1 Performance of Covenants. ............................ 16 4.2 Payment of Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 16 4.3 Creation of Lien on Pledged Revenues. ................... 16 4.4 Preservation of Exclusion of Interest; etc. . . . . . . . . . . . . . . . . .. 16 4.5 Eligibility to Receive Pledged Revenues. .................. 17 4.6 Operation and Maintenance. ........................... 17 4.7 Books and Accounts. ................................ 17 4.8 Disposition of System. ............................... 17 4.9 Insurance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 17 4.10 No Free Service. ................................... 18 4.11 Enforcement of Collections. ........................... 18 4.12 Operating Budget. .................................. 18 4.13 No Competing System. .............................. 19 4.14 Supervisory Personnel. ............................... 19 4.15 Payment of Taxes, Assessments and Other Claims. ........... 19 4.16 Levy and Collection of Stormwater Utility Fee. ............. 19 KARIRLG\AGRE\502009.6 1 4.17 Debt Service Coverage Ratio; Certain Additional Debt. ........ 19 4.18 Budget and Other Financial Information. .................. 20 Article 5 Events of Default and Remedies 5.1 Events of Default. .................................. 20 5.2 Exercise of Remedies. ............................... 21 5.3 Remedies Not Exclusive. ............................. 22 5.4 Waivers, Etc. ..................................... 22 Article 6 Miscellaneous Provisions 6.1 Covenants of City, Etc.; Successors. ..................... 23 6.2 Term of Agreement. ................................ 23 6.3 Notice of Changes in Fact. ............................ 23 6.4 Amendments and Supplements. ......................... 23 6.5 Notices.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . " 23 6.6 Benefits Exclusive. ................................. 24 6.7 Severability.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 6.8 Payments Due on Saturdays, Sundays and Holidays. .......... 24 6.9 Counterparts.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 6.10 Applicable Law. ................................... 24 6.11 No Personal Liability. ............................... 24 6.12 Incorporation by Reference. ........................... 25 Exhibit Exhibit A Form of Note KAR.'RLG AGRE\S02009.6 11 LOAN AGREEMENT THIS LOAN AGREEMENT (this "Agreement"), made and entered into as of May 8, 1996, by and between the CITY OF OCOEE (the "City"), a political subdivision of the State of Florida and its successors and assigns, and SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIA TION, a national banking association, and its successors (the "Bank"). WIT N E SSE T H: 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, Part II, of the Florida Statutes, as amended and supplemented; the Charter and Code of Ordinances of the City; and any other applicable provisions of law (all of the foregoing, collectively, the "Act") is authorized to borrow money and to issue notes or other obligations to finance the costs of capital expenditures for the City's public purposes; WHEREAS, the City desires to borrow certain sums from the Bank in order to fmance certain capital expenditures for the City's stormwater utility management system (collectively, the "Project"); WHEREAS, the Bank has agreed to provide financial accommodations to the City in an amount equal to Two Million Two Hundred Thousand Dollars ($2,200,000) in the form of a fifteen year fully amortizing term loan (the "Loan") but solely upon the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: ARTICLE 1 DEFINITION OF TERMS 1.1 Definitions. Capitalized terms used in this Agreement and not otherwise defmed shall have the respective meanings as follows: "Act" shall have the meaning assigned to that term in the preambles 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, Central Florida, National Association, Orlando, Florida, and its successors. KAIlIJU.G\AGRE\S02009.6 I "Bond Counsel" shall mean, initially, Cobb Cole & Bell, Orlando, Florida, or any other attorney at law or finn of attorneys of nationally recognized standing in matters pertaining to the federal tax exemption of interest on obligations issued by states and political subdivisions. "Business Day" shall mean any day other than a Saturday, a SlDlday, or a day on which banks in Orlando, Florida are authorized or required to be closed. "City" shall mean the City of Ocoee, a political subdivision of the State of Florida. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the applicable rules and regulations promulgated thereunder. "Consulting Engineers" shall mean one or more independent, qualified and recognized consulting engineers or firm of consulting engineers having favorable repute, skill and experience with respect to the planning and operation of the System who shall be retained from time to time by the City. "Contributions in Aid of Construction" shall mean any amount or item of money, services, or property received by the City, any portion of which is provided at no cost to the System, which represents an addition or transfer to the capital of the System, and which is utilized to offset the acquisition, improvement or construction costs of the System. "Cost of Operation and Maintenance" of the System shall mean the then current expenses, paid or accrued, in the operation, maintenance and repair of the System, as calculated in accordance with generally accepted accounting principles, but shall not include expenses not annually recurring, such as any reserve for renewals and replacements, extraordinary repairs or any allowance for depreciation, any Debt Service requirement, any payments in lieu of taxes or any indirect expenses incurred by departments of the City other than those directly responsible for operating and maintaining the System. "Debt Service" means principal and interest, and other debt-related costs, due in connection with the Note and any and all subordinated debt and any other liabilities of the City for borrowed money related to the System. "Debt Service Coverage Ratio" shall mean the fraction of Pledged Revenues received during the Fiscal Year divided by Debt Service for the Fiscal Year in which the greatest amount of Loan repayments are due during the term of the Loan. "Default Rate" shall mean the Prime Rate plus three percent (3%) provided such rate shall not exceed the highest rate of interest allowed by applicable law. "Determination of Taxability" shall mean the circumstance that shall be deemed to have occurred if interest paid or payable on the Note becomes includable for federal income tax purposes in the gross income of the Noteholder as a consequence of any act, omission or event whatsoever, and regardless of whether the same was within or beyond the control of the City. A Determination of Taxability will be deemed to have occurred upon (a) the receipt by the City or a Noteholder of an original or a copy of an Internal Revenue Service Technical Advice KAR'JtLG\AGRE\S02009.6 2 Memorandum or Statutory Notice of Deficiency which holds that any interest payable on the 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 Note is includable in the gross income of a Noteholder; or (c) receipt by the City or the Noteholder of an opinion of Bond Counsel to the effect that any interest on the 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 Note is deemed includable in the gross income of the Noteholder. A Determination of Taxability shall not occur in the event such interest is taken into account in determining adjusted current earnings for the purpose of the alternative minimum tax imposed on corporations. In the case of (a) and (b) above, no Determination of Taxability shall be deemed to occur unless the City has been given timely written notice that such a determination has been made by the Internal Revenue Service and an opportunity to participate in and seek, at its own expense, a fmal administrative determination or determination by a court of competent jurisdiction (from which no further right of appeal exists) as to the existence of such event of taxability; provided that the City, at its own expense, delivers to the Bank an opinion of Bond Counsel acceptable to the Bank to the effect that such appeal or action for judicial or administrative review is not without merit and there is a reasonable possibility that the judgment, order, ruling or decision from which such appeal or action for judicial or administrative review is taken will be reversed, vacated or otherwise set aside. "Eurodollar Rate" shall mean the synthetic forward spot strip rate. as published by Bloomberg L.P. Business News, or, if that source is unavailable, any other nationally published financial reporting service or publication. "Event of Default" shall mean an Event of Default as defmed m Section 5.1 of this Agreement. "Final Maturity Date" shall mean the date on which all principal and all unpaid interest accrued thereon shall be due and payable in full, with such date, if not sooner due to acceleration or prepayment, to be October 1, 2011 for the Note. "Fiscal Year" shall mean the twelve month period commencing October 1 of each year and ending on the succeeding September 30, or such other twelve month period as the City may designate as its "fiscal year" as permitted by law. "Gross Revenues" or "Revenues" shall mean all income and earnings, including but not limited to the Stormwater Utility Fee, received by the City or accrued to the City from the ownership, use or operation of the System and all parts thereof, including investment income, if any, earned on any fund or account created pursuant to this Agreement and on any fund or account established by the City for the System, all as calculated in accordance with generally accepted accounting principles, but "Gross Revenues" or "Revenues" shall not include proceeds from the sale or other disposition of the System or any part thereof, condemnation awards or proceeds of insurance received with respect to the System. Notwithstanding the foregoing, "Gross Revenues" or "Revenues" shall not include Contributions in Aid of Construction. KAR'.JlLG\AGRE\S02009.6 3 "Loan" shall have the meaning assigned to such term in the preambles hereof. "Maximum Corporate Tax Rate" shall mean (a) on the date of issuance of the Note, 35 % and (b) thereafter, the maximum marginal rate of income tax imposed on corporations under Section II of the Code. "Net Revenues" of the System shall mean the Gross Revenues or Revenues, after deduction of the Cost of Operation and Maintenance. "Note" shall mean the Series 1996 Promissory Note. "Noteholder" shall mean the Bank as the holder of the Note and any subsequent registered holder of the Note. "Note Rate" shall mean the rate of interest to be borne by the Note, which, for the Note shall be: (i) initially, 4.30%, to be adjusted on an annual basis as follows: October 1, 1997 adjusted to 4.45%; October 1, 1998 adjusted to 4.60%; October 1, 1999 adjusted to 4.75%; October 1, 2000 adjusted to 4.90%; October 1, 2001 adjusted to 5.05%; October 1, 2002 adjusted to 5.15%; October 1, 2003 adjusted to 5.25%; October 1, 2004 adjusted to 5.35%; October 1, 2005 adjusted to 5.45%; and October 1, 2006 through the Maturity Date adjusted to such rate determined by the following formula: five year Eurodollar Rate + 0.75% 1.48; subject to the adjustments set forth in Section 3.3 hereof upon the occurrence of the events referred to therein; (ii) following the occurrence and during the continuance of any Event of Default, the Default Rate; and (iii) following a Determination of Taxability, the Taxable Rate. "1996 Project" shall mean the Project authorized to be financed with the proceeds of the Note, consisting of constructing and acquiring certain additions, extensions and improvements to the City's System, including but not limited to piping and the purchase of real property for retention ponds and other drainage improvements. KAR'JU.G AGRE\S02009.6 4 "Pledged Revenues" shall mean (i) the Net Revenues of the System, and (ii) the moneys on deposit in the Reserve Fund created pursuant to this Agreement. "Project Costs" shall mean all costs of the System authorized to be paid to the extent pennitted under the laws of the State. It is intended that this definition be broadly construed to encompass all costs, expenses and liabilities of the City related to the System which on the date of this Agreement or in the future shall be permitted to be financed by the City pursuant to the laws of the State. "Prudent Utility Practice" shall mean, in respect of any particular utility industry, any of the practices, methods and acts which, in the exercise of reasonable judgment, in light of the facts, including but not limited to the practices, methods and acts engaged in or approved by a significant portion of such utility industry prior thereto, known at the time the decision was made, would have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety, and expedition. It is recognized that Prudent Utility Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather is a spectrum of possible practices, methods or acts which could have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety and expedition. "Qualified Independent Consultant" shall mean one or more qualified and recognized independent consultants, having favorable repute, skill and experience with respect to the acts and duties of the Qualified Independent Consultant to be provided to the City, as shall from time to time be retained by the City to perform the acts and carry out the duties herein provided for such consultants. "Qualified Tax-Exempt Obligation" shall mean an obligation described in Section 265(b)(3) of the Code. "Resolution" shall mean Resolution No. 96-12, adopted at a meeting of the Board of City Commissioners on May 7, 1996 which among other things authorized and confmned the borrowing of the Loan and execution and delivery of this Agreement and the issuance of the Note and such supplementary resolutions of the City as are satisfactory to the Bank. "Series 1996 Promissory Note" shall mean the City of Ocoee, Stormwater Utility Revenue Promissory Note, Series 1996 in the original principal amount of Two Million Two Hundred Thousand Dollars ($2,200,000) issued by the City to the Bank on the date hereof in order to evidence the Loan. "Reserve Fund" shall mean the Reserve Fund created and established pursuant to Section 3.1 0 of this Agreement. - "Reserve Requirement" shall be the lesser of (i) the maximum debt service requirement with respect to the Note for the then current or any future Fiscal Year, (ii) 125% of the average annual debt service requirement for the Note or (Hi) the largest amount as shall not adversely affect the exclusion of interest on the Note from gross income for Federal income tax purposes but in no event more than $220,000. KAJl' JU..GIAGRE\S02009.6 5 for the Note. The City determined that it was in the best interest of the City to accept the Bank's commitment and authorized the execution and delivery of the Note to the Bank. (e) It is in the best interests of the City and the residents thereof that the City authorize the issuance of the Note for the purpose of designing, permitting, acquiring and constructing the 1996 Project. (f) The principal of and interest on the Note and all reserve and other payments shall be payable solely from the Pledged Revenues. The Loan will not constitute a general debt, liability or obligation of the City or of the State of Florida or any political subdivision thereof within the meaning of any constitutional or statutory provision. Neither the faith and credit nor the taxing power of the City or of the State of Florida or any political subdivision thereof is pledged to the payment of the principal of or interest on the Loan, as evidenced by 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. (g) The Pledged Revenues should be sufficient to pay all principal of and interest on the Note to be issued hereunder, as the same become due, and to make all required deposits or payments required by this Agreement. (h) All costs of the 1996 Project incurred after the date of this Agreement shall be reimbursed from proceeds of the Loan. (i) The City desires to qualify the Note for the exception contained in Section 265(b)(3) of the Code to the provisions contained in Section 265(b) of the Code which deny fmancial institutions any deduction for interest expense allocable to tax-exempt obligations acquired after August 7, 1986, and to designate the Note for the purpose of qualifying such exception; and the City Commission does hereby find and determine that the aggregate face amount of all qualified tax-exempt obligations (excluding private activity bonds, as defmed in Section 141 of the Code, other than qualified 501(c)(3) bonds, as defmed in Section 145 of the Code), including the Note, issued by or on behalf of the City (and all subordinate entities thereof) during the 1996 calendar year is not expected to exceed $10,000,000, and that as of the date hereof, no tax-exempt obligations issued or authorized to be issued by or on behalf of the City (and all subordinate entities thereof) during the 1996 calendar year, other than the Note, have been designated by the City for the purpose of qualifying for such exception. ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF THE PARTIES 2.1 Representations and Warranties of City. The City represents and warrants to the Bank as follows: (a) Existence. The City is a political subdivision 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. KAllJlLGAGRE\S02009.6 7 The making and perfonnance 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, Chapter 218 of the Florida Statutes, or any agreement, indenture or other instrument by which the City or any of its material properties is bound. (b) Validity, Etc. Each of this Agreement, the Note and the Resolution is a valid and binding obligation of the City enforceable against the City in accordance with its tenns, except to the extent that enforceability may be subject to valid bankruptcy, insolvency, 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 or other applicable principal of law. (c) No Financial Material Adverse Change. No material adverse change in the financial condition of the City has occurred since the last audited fmancial statement was prepared (for Fiscal Year 1995). (d) Powers of City. The City has the legal power and authority to pledge the Pledged Revenues. (e) No Prior Pledge. The City has not heretofore pledged or otherwise encumbered the Pledged Revenues that will be used to repay or refmance the Loan; no other indebtedness of the City for borrowed money currently is payable out of Pledged Revenues; no additional debt will be issued by the City which is secured by the revenue sources referenced above except as specifically pennitted pursuant to Section 4.17 hereof. (f) Bank Qualification. The City has not issued in excess of $10,000,000 in tax-exempt debt during the 1996 calendar year nor does it expect to do so. All other actions required of the City that would allow the Note to be a Qualified Tax-exempt Obligations have been completed. 2.2 Representations and Warranties of Bank. The Bank represents and warrants to the City as follows: (a) Existence, Etc. The Bank is a national banking association, duly organized and validly existing under the laws of the United States of America, with full power to enter into this Agreement, to perfonn its obligations hereunder and thereunder and to make the Loan. The performance of this Agreement on the part of the Bank and the making of the Loan have been duly authorized by all necessary action on the part of the Bank and will not violate or conflict with applicable law or any material agreement, indenture or other instrument by which the Bank or any of its material properties is bound. (b) Validity. This Agreement is a valid and binding obligation of the Bank enforceable against the Bank in accordance with its tenns, except to the extent that enforceability may be subject to valid bankruptcy, insolvency, 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 national banks) and except to the extent that the availability of certain remedies may be precluded by general principles of equity. KAR\JU..G\AGRE\S02009.6 8 (c) Knowledge and Experience. The Bank (1) 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, (2) has received and reviewed such financial information concerning the City as it has needed in order to fairly evaluate the merits and risks of making the Loan and investing in the Note; (3) is an "accredited investor" as such term is defined in Regulation D to the Securities Act of 1933; and (4) is purchasing the Note as an investment for its own account and not with a view toward resale to the public. ARTICLE 3 THE LOAN AND THE NOTE 3.1 The Loan. On the date of this Agreement, the Bank shall make the Loan to the City in the sum of Two Million Two Hundred Thousand Dollars ($2,200,000) against the City's issuance to the Bank of the Note. The City agrees to repay the Note in accordance with the terms of the Note and this Agreement. 3.2 The Note. The Loan shall be evidenced by this Agreement and the Note, which 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 Note shall be in the face amount of Two Million Two Hundred Thousand Dollars ($2,200,000). (b) Interest. The Note shall bear interest at the applicable Note Rate. Upon the occurrence of one or more of the events specified in Section 3.3 of this Agreement, the Note Rate shall be adjusted as therein provided. Interest on the Note shall be computed on the basis of twelve (12) thirty (30) day months (i.e., a 360 day year). (c) Payments on the Note. The repayment schedule for the Note shall be as follows: (i) The City shall be required to make quarterly interest payments (as set forth on the amortization schedule attached to the Note) on each October 1, January 1, April 1 and July 1 commencing on October 1, 1997 until the applicable Final Maturity Date. (ii) The City shall be required to make annual principal payments (as set forth on the amortization schedule attached to the Note) on each October 1, commencing on October 1, 1997, until the applicable Final Maturity Date. The entire balance of principal and accrued interest on the Note, if not sooner paid as aforesaid shall be due and payable on the Final Matwity Date. InstaJIments paid as aforesaid shall be credited first to the actual interest then due, and thereafter to principal. (d) Prepayments. The City may, without penalty or premium, prepay the Note, in whole or in part, out of any monies of the City legally available therefor. Each prepayment shall be made on such date and in such principal amount as shall be specified by the City in a written notice delivered to the Noteholder not more than fifteen (15) and not less than five (5) days prior KAJl'JU..G\AGRE\S02009.6 9 to the specified prepayment date. Any prepayments shall be applied to the sums last maturing hereunder. 3.3 Adjustments to Note Rate. (a) Adjustments to Note Rate. The Note Rate may be subject to adjustments as described in this Section at the discretion of the Bank upon the occurrence of certain events described herein. The Bank shall promptly notify the City in writing of any adjustments for the Note pursuant to this Section. Such adjustments shall become effective as of the effective date of the event causing such adjuSbnent. AdjuSbnents pursuant to this Section shall be retroactive from the date of the applicable occurrence. The Bank shall certify to the City in writing the additional amount, if any, due to the Bank as a result of an adjuSbnent pursuant to this Section. (b) Particular Adjustments. Subject to the provisions of Section 3.3(a) above, the interest rate on the Note shall be adjusted as follows: (i) Loss of Federal Income Tax Deduction for State Income Taxes. If the federal income tax deduction for state income taxes paid on the interest payments received under the 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 Note, then the interest rate on the Note shall be increased during such period by an amount equal to A x B x C x D where: (I) A equals the fraction (expressed as a decimal) of the total state income tax disallowed as a result of such tax law change; (2) B equals the rate of the applicable state income tax (expressed as a decimal); (3) C equals the maximum federal corporate tax rate then in effect for the Noteholder (expressed as a decimal); and (4) D equals the interest rate on the Note (expressed as a percentage). (ii) Partial Taxability. If the interest payments received under the 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 Note shall be increased during such period by an amount equal to (A - B) x C where: (I) A equals the Taxable Rate (expressed as a percentage); (2) B equals the interest rate on the Note (expressed as a percentage); and (3) C equals the fraction of the interest rate on the Note which has become taxable as the result of such tax change (expressed as a decimal). KAR\RLG\AGRE\502009.6 10 (iii) Other Changes in Tax Laws. If the tax laws or regulations are amended to cause the interest on the 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 Note to the Noteholder (directly or indirectly, other than a change described in (i) or (ii) above or because of a Determination of Taxability), then, at the discretion ofthe Bank, the interest rate on the Note shall be adjusted to cause the yield on the Note, to equal what the yield on the Note would have been in the absence of such change or amendment in the tax laws or regulations. The interest rate on the Note may change, at the discretion of the Bank, if the Maximum Corporate Tax changes in accordance with the following formula: current Note Rate x Old Maximum Corporate Tax Rate New Maximum Corporate Tax Rate. In the event that the provisions in Section 291(a)(3) of the Code, related to financial institution preference items, are amended, the interest rate on the Note may also change, at the discretion of the Bank, in order to cause the yield on the Note to equal what the yield on the Note would have been in the absence of such amendment to such provisions. If the tax laws or regulations are amended to increase yield on the Note to the Noteholder, then the Bank, if directed by the City, shall adjust the interest rate on the Note to cause the yield on the Note to equal what the yield on the Note would have been in the absence of such change or amendment in the tax laws or regulations. (c) Method of Adjustment. The above adjustments shall be cumulative, but in no event shall the interest rate on the Note exceed the maximum rate permitted by law. Interest on the 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 Note does not accrue for the entire tax year of the Noteholder. Adjustments which create a circular calculation because the interest rate on the Note is affected by the calculation shall be carried out sequentially, increasing the interest rate on the Note accordingly in each successive rate on the Note, until the change on the interest rate on the Note caused by the next successive calculation of the adjustment is de minimis. If more than one of paragraphs numbered (i) through (iii) in Section 3.3(b) apply, then the interest rate on the Note shall be adjusted in the order in which listed above. (d) Retroactive Adjustment. To the extent an adjustment to the interest rate on the 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 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 thirty (30) 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 Note for a period of three years from the date of cancellation. KARIRLGIAGRE\502009.6 11 (e) Selection of Eurodollar Rate. With respect to rate adjustment on October I, 2006, the City shall select the date during the period commencing September 1, 2006 through October I, 2006 on which the five year Eurodollar Rate shall be determined. In the event the City shall fail to select a date of determination, the five year Eurodollar Rate shall be determined as of October I, 2006. (f) Savings Clause. In the event the maturity of the 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 equal an amount which would result in payment of interest at a rate in excess of 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 the Note unpaid, but such crediting shall not cure or waive any default under this Agreement. 3.4 Determination of Taxability. Ifa Determination of Taxability shall occur, the Note will bear interest from the earliest effective date on which such Determination of Taxability is deemed to have occurred at a floating interest rate per annum equal to the Taxable Rate. The City will also pay the holder of this Note or assigns, from Pledged Revenues, any penalties and any interest owed by the holder of this Note due to the failure of the holder of this Note to include interest on this Note in its gross income for federal income tax purposes and any arrears in interest resulting from a Determination of Taxability, and any penalties in the form of interest or otherwise shall be paid by the City on the next succeeding interest payment date. 3.5 Compliance with Section 215.84. The City represents, warrants, and covenants that the Note Rate, as currently calculated in accordance with Section 215.84 Florida Statutes, is in compliance with Section 215.84, Florida Statutes. 3.6 Conditions Precedent to the Loan. Prior to or simultaneously with the delivery of the Note by the City, there shall be filed with the Bank the following, each in form and substance reasonably acceptable to the Bank: (a) a copy, certified by the City Clerk, of the Resolution; (b) an opinion of counsel to the City in a form acceptable to the Bank. (c) a fully executed counterpart of this Agreement; (d) an opinion of Bond Counsel (who may rely on opinion of Counsel to the City for certain factual and procedural matters), stating that such counsel are of the opinion that: (I) the City is a political subdivision of the State of Florida duly organized and validly existing under the laws of the State of Florida; (2) the Resolution has been duly adopted by the City is in full force and effect and has not been amended; (3) the issuance of the Note and the execution of this Agreement by the City have been duly and validly authorized; (4) the Note and this Agreement, when executed by the Bank, are valid, binding obligations of the City enforceable against the City in accordance with their terms, subject to appropriate qualifications for bankruptcy, KAR\RLG\AGRE\502009.6 12 insolvency or other laws affecting creditors' rights and equitable principles; (5) assuming continuing compliance by the City with certain covenants relating to requirements contained in the Code, under existing statutes, regulations, rulings and court decisions, interest on the Note is excludable from gross income of the owner thereof for federal income tax purposes; (6) the Note is a "qualified tax exempt obligation" within the meaning of Section 265(b)(3)(B) of the Code; (7) this Agreement and the Note are exempt from Florida documentary stamp taxes; and (8) the City has the legal power to pledge the Pledged Revenues for payment of the Note; (e) a copy of a completed and executed Form 8038-G to be filed with the Internal Revenue Service by the City; and (t) such other documents as the Bank reasonably may request (including, without limitation, appropriate executed Florida Division of Bond Finance forms). When the documents mentioned in clauses (a) through (t), inclusive, of this Section shall have been filed with the Bank, and when the Note shall have been executed as required by this Agreement, the City shall deliver the Note to or upon the order of the Bank, but only against City's receipt of the initial proceeds of the Loan. 3.7 Registration of Transfer; Assignment of Rights of Bank. The City shall keep at the office of the City Clerk in the City's records the registration of the Note and the registration of transfers of the Note as provided in this Agreement. Subject to the restriction set forth in the third paragraph of this Section, the transfer of the Note may be registered only upon the books kept for the registration of the Note and registration of transfer thereof upon surrender thereof to the City together with an assignment duly executed by the Bank or its attorney or legal representative in the form of the assignment set forth on the form of the Note attached as Exhibit A to this Agreement; provided, however, that the Note may be transferred only in whole and not in part. In the case of any such registration of transfer, the City shall execute and deliver in exchange for the Note a new Note registered in the name of the transferee. In all cases in which the Note shall be transferred hereunder, the City shall execute and deliver at the earliest practicable time a new Note in accordance with the provisions of this Agreement. The City may make a charge for every such registration of transfer of the Note sufficient to reimburse it for any tax or other governmental charges required to be paid with respect to such registration of transfer, but no other charge shall be made for registering the transfer hereinabove granted. The Note shall be issued in fully registered form and shall be payable in any coin or currency of the United States. The registration of transfer of the Note on the registration books of the City shall be deemed to effect a transfer of the rights and obligations of the Bank under this Agreement to the transferee. Thereafter, such transferee shall be deemed to be the Bank under this Agreement and shall be bound by all provisions of this Agreement that are binding upon the Bank. The City and the transferor shall execute and record such instruments and take such other actions as the City and such transferee may reasonably request in order to confirm that such transferee has succeeded to the capacity of Bank under this Agreement. THE NOTE MAYBE TRANSFERRED ONLY IN WHOLE AND NOT IN PART. THE LOAN, AS EVIDENCED BY THE NOTE, HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. ANY KARIRLG\AGRE\502009.6 13 TRANSFER, ASSIGNMENT OR OTHER DISPOSITION OF THE LOAN, AS EVIDENCED BY THE NOTE, OR ANY PARTICIPATION THEREIN (OTHER THAN AS SPECIFIED IN THE NEXT PARAGRAPH), SHALL BE IN EACH CASE ONLY IN A MANNER THAT DOES NOT VIOLA TE THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER, OR ANY APPLICABLE STATE SECURITIES LAWS. In the event any Note is mutilated, lost, stolen, or destroyed, the City shall execute a new Note of like date and denomination as that mutilated, lost, stolen or destroyed, provided that, in the case of any mutilated Note, such mutilated Note shall first be surrendered to the City, and in the case of any lost, stolen, or destroyed Note, there first shall be furnished to the City evidence of such loss, theft or destruction together with an indemnity satisfactory to it. Nothing in this Agreement or in the Note shall be construed to prohibit the Bank from granting a participation or participations in the Note to any other bank or banks within the SunTrust Banks, Inc. system. No such bank participant shall, however, be a registered holder of Note or any portion thereof. 3.8 Ownership of the Note. The person in whose name the Note shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the Note shall be made only to the registered owner thereof or such owner's legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon the Note, and interest thereon, to the extent of the sum or sums so paid. The registered owner of the Note is hereby granted power to transfer absolute title thereof by assignment thereof to a bona fide purchaser for value (present or antecedent) without notice of prior defenses or equities or claims of ownership enforceable against such owner's assignor or any person in the chain of title and before the maturity of the Note; provided, however, that the Note may be transferred only in whole and not in part and provided further, that no transfer shall be permitted absent the City's (and the Bank's) receipt of a letter in form and substance similar to the one delivered by the Bank pursuant to Section 218.385, Florida Statutes from such proposed transferee. Every prior registered owner of the Note shall be deemed to have waived and renounced all of such owner's equities or rights therein in favor of every such bona fide purchaser, and every such bona fide purchaser shall acquire absolute title thereto and to all rights represented thereby. 3.9 Use of Proceeds of Loan. The proceeds received by the City from the Loan shall be used by the City solely for the acquisition and construction of the 1996 Project. The City represents, warrants and covenants that the proceeds of the Loan will be used to finance Project Costs. 3.10 Reserve Fund. There is hereby created and established a Reserve Fund to be held by the City for the benefit of the Bank. The City shall deposit from the proceeds of the Loan an amount equal to the Reserve Requirement. Until the Reserve Fund is released as provided below, the City shall be obligated to maintain the amount on deposit in the Reserve Fund equal to the Reserve Requirement. KAR\RLG\AGRE\502009.6 14 Any withdrawals from the Reserve Fund shall be subsequently restored from the first moneys available, after all required current payments for Cost of Operation and Maintenance and all current applications and allocations to pay amounts due under the Agreement, including all deficiencies for prior payments have been made in full. Notwithstanding the foregoing, in case of withdrawal from the Reserve Fund, in no event shall the City be required to deposit into the Reserve Fund an amount greater than that amount necessary to ensure that the difference between the Reserve Requirement and the amounts on deposit in the Reserve Fund on the date of calculation shall be restored not later than sixty (60) months after the date of such deficiency (assuming equal monthly payments into the Reserve Fund for such sixty (60) month period). Moneys in the Reserve Fund shall be used only for the purpose of the payment of principal of, or interest on the Note when the other moneys are insufficient therefor, and for no other purpose. Securities in the Reserve Fund shall be valued at market value annually. Deficiencies in the amounts on deposit in the Reserve Fund resulting from a decline in market value shall be restored no later than the succeeding interest payment date. At such time as the City has maintained a Debt Service Coverage Ratio of at least 1.15:1.0 for two consecutive Fiscal Years, based on a certification of the City Manager, the amounts on deposit in the Reserve Fund shall be released by the Bank and disbursed by the City for any lawful purpose of the System which, in the opinion of Bond Counsel, shall not impair the exclusion of the interest on the Note from the gross income of the Noteholder. ARTICLE 4 COVENANTS OF THE CITY 4.1 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. 4.2 Payment of Note. (a) The City covenants that it will promptly pay the principal of and interest on the Note at the place, on the dates and in the manner provided herein and in the Note, in accordance with the terms thereof. In accordance with Section 4.3 hereof, the City hereby pledges the Pledged Revenues as security for the Loan. (b) The Loan, as evidenced by the Note, will be a special obligation of the City secured solely by the Pledged Revenues and is payable from the Pledged Revenues and as provided in Section 4.3 hereof. The Loan will not constitute a general debt, liability or obligation of the City or of the State of Florida or any political subdivision thereof within the meaning of any constitutional or statutory provision. Neither the faith and credit nor the taxing power of the City or of the State of Florida or any political subdivision thereof is pledged to the payment of the principal of or interest on the Loan, as evidenced by 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. KARIJU.G\AGRE\502009.6 15 4.3 Creation of Lien on Pledged Revenues. The City hereby creates an irrevocable (until repayment in full of the Note) pledge and first priority lien on the Pledged Revenues in favor of the Bank as Noteholder, and agrees that such funds shall be used to pay the debt service on the Note in accordance herewith. 4.4 Preservation of Exclusion of Interest; etc. (a) The City covenants that it will not knowingly take or omit to take any action which if taken or omitted would result in the loss of the exclusion of interest on the Note from the gross income of the Noteholder for federal income tax purposes under the Code, as enacted and construed on the date of this Agreement, or which the City has reason to believe would affect adversely the continued validity of such exclusion under the Code (or the Note's "bank qualified" status under the Code), as enacted and construed on the date of this Agreement. (b) In order to maintain the exclusion from gross income for purposes of federal income taxation of interest on the Note (and its "bank qualified" status), the City shall comply with each requirement of the Code applicable to the Note. (c) Notwithstanding any other provision of the Resolution or this Agreement to the contrary, so long as necessary in order to maintain the exclusion from gross income of interest on the Note for federal income tax purposes (and its "bank qualified" status), the covenants contained in this Section shall survive the payment of the Note and the interest thereon, including any payment or defeasance thereof. (d) The City shall not knowingly take or permit any action or fail to take any action which would cause the Note to be an "arbitrage bond" within the meaning of Section 148(a) of the Code. 4.5 Eligibility to Receive Pledged Revenues. The City shall take all lawful actions necessary or required to charge and collect and to remain eligible to receive Pledged Revenues in an amount sufficient to satisfy all covenants hereof. 4.6 Operation and Maintenance. The City will maintain the System and all parts thereof in good condition and will operate the same in an efficient and economical manner, making such expenditures for equipment and for renewals, repairs and replacements as may be proper for the economical operation and maintenance thereof. 4.7 Books and Accounts. The City shall keep proper books, records and accounts, separate and apart from all other records and accounts, showing correct and complete entries of all transactions of the System, and the Holder of the Note or any duly authorized agent or agents of such Holder shall have the right at any and all reasonable times to inspect such books, records and accounts. 4.8 Disposition of System. The City shall not sell, lease, encumber or in any manner dispose of the System as a whole until all of the Note shall no longer be Outstanding. KAR\RLG\AGRE\502009.6 16 4.9 Insurance. The City shall provide protection for the System both in accordance with the requirements of all agreements, if any, to which the City may at the time be a party with respect to joint ownership of properties by the City with others which is part of the System, and in accordance with Prudent Utility Practice. Said protection may consist of insurance, self insurance and indemnities. The City will keep, or cause to be kept, the works, plants and facilities comprising the properties of the System insured, and will carry such other insurance against fire and other risks, accidents or casualties at least to the extent and of the kinds that insurance is usually carried by utilities operating like properties. Any insurance shall be in the form of policies or contracts for insurance with insurers of good standing, shall be payable to the City and may provide for such deductibles, exclusions, limitations, restrictions, and restrictive endorsements customary in policies for similar coverage issued to entities operating properties similar to the properties of the System. Any self insurance shall be in the amounts, manner and of the type provided by entities operating properties similar to the properties of the System. In the event of any loss or damage to the System covered by insurance, the City will, with respect to each such loss, promptly repair, reconstruct or replace the parts of the System affected by such loss or damage to the extent necessary to the proper conduct of the operation of the business of the System in accordance with Prudent Utility Practice, shall cause the proceeds of such insurance to be applied for that purpose to the extent required therefor, and pending such application shall hold the proceeds of any insurance policy covering such damage or loss in trust to be applied for that purpose to the extent required therefor. Any excess insurance proceeds received by the City may be used by the City for any lawful purpose. Notwithstanding the foregoing or any provisions of this Agreement to the contrary, the City shall not be required to maintain insurance with respect to facilities for which insurance shall not be available or for facilities which in accordance with Prudent Utility Practice are not customarily insured. 4.10 No Free Service. So long the Note is outstanding, the City shall not furnish or supply the facilities, services and commodities of the System either free of charge or for a nominal charge to any person, firm or corporation, public or private. The City shall take all reasonably prudent and cost effective actions in order to promptly enforce the payment of any and all accounts owing to the City and delinquent, including, but not limited to, discontinuing service or by filing suits, actions or proceedings, or by both discontinuance of service and filing suit. 4.11 Enforcement of Collections. The City will diligently enforce and collect the rates, fees and other charges for the services and facilities of the System and will take all reasonably prudent steps, actions and proceedings for the enforcement and collection of such rates, charges and fees as shall become delinquent to the full extent permitted or authorized by law; and will maintain accurate records with respect thereof. All such fees, rates, charges and revenues shall, as collected, be held in trust to be applied as herein provided. 4.12 Operating Budget. The City shall annually, prior to commencement of each of its Fiscal Years, prepare and adopt a budget of the estimated expenditures for the operation and maintenance of the System during such next succeeding Fiscal Year. The City shall mail copies of such annual budgets (including any amendments thereto) to the Bank which shall file its address with the City and request in writing that copies of all such budgets be furnished it and shall make available such budgets of the System at all reasonable times to the Bank or to anyone acting for and on behalf of the Bank. The Bank shall pay reasonable actual cost of printing and mailing of such copies. KAR\RLG\AGRE\502009.6 17 4.13 No Competing System. To the extent permitted by law, the City will not grant a franchise for the operation of any competing stormwater utility system or systems within the area served by the System as of the date of issuance of the Note until the Loan, together with the interest thereon, and premium, if any, have been paid in full. Notwithstanding the foregoing, the City shall not be required to duplicate services being provided by private or public utilities in the area being served by such private or public utilities on the date of issuance of the Note. In addition, the City shall not be prohibited from allowing other private or public utilities to provide services within the area being served by the System as of the date of issuance of the Note, if the City shall not be providing such service in such area on that date. Nothing herein shall be deemed to constitute the approval of the City for any private or public utility (other than the System) to provide any services within the boundaries of the City or within the area being served by the System as of the date of issuance of the Note or within any other area of the City. 4.14 Supervisory Personnel. The City in operating the System will employ or designate as manager one or more of its qualified employees who have demonstrated ability and experience in operating similar facilities. 4.15 Payment of Taxes, Assessments and Other Claims. The City shall from time to time duly pay and discharge, or cause to be paid and discharged, all taxes, assessments and other governmental charges, or payments in lieu thereof, lawfully impos-ed upon the properties constituting the System or the Gross Revenues when the same shall become due, as well as all lawful claims for labor and materials and supplies which, if not paid, might become a lien or charge upon such properties or any part thereof, or upon the Gross Revenues or which might in any way impair the security of the Note, except assessments, charges or claims which the City shall in good faith contest by proper legal proceedings. 4.16 Levy and Collection of Stormwater Utility Fee. The City covenants that it will not impair or adversely affect the power and right of the City to receive the Stormwater Utility Fees. The City will proceed diligently to perform legally and effectively all steps required on its part in the levy and collection of the Stormwater Utility Fees and shall exercise all legally available remedies to enforce such collections now or hereafter available under State law. Furthermore, the pledging of the Net Revenues in the manner provided herein shall not be subject to repeal, modification or impairment by any subsequent ordinance or other proceeding of the City while the Loan is Outstanding. 4.17 Debt Service Coverage Ratio; Certain Additional Debt. (a) Debt Service Coverage Ratio. The City shall maintain at all times while the Loan is outstanding a Debt Service Coverage Ratio of at least 1.15:1.0. (b) Additional Debt. For so long as the Loan is outstanding, the City shall not issue any additional parity obligations secured by a lien on the Pledged Revenues equal to the lien created by this Agreement unless (i) after giving effect to such additional parity obligation to be issued, the City's Debt Service Coverage Ratio is at least 1.25:1.0 and (ii) for a period of thirty days following notice to the Bank of the City's desire to issue additional parity obligations, it consults with the Bank and negotiates with the Bank for the purchase of such additional parity obligations on terms and conditions which are mutually agreeable to the parties hereto. In the J(AR.\RLG\AGRE\502009.6 18 event that the parties fail to reach agreement as to the sale and purchase of such additional parity obligations within such thirty day period the City shall be free to sell such additional parity obligations by negotiated or competitive sale with any person or entity. 4.18 Budget and Other Financial Information. The City shall: (a) Within two hundred and ten (210) days following the end of each Fiscal Year of the City, provide the Bank with a copy of the City's audited financial statements for the preceding Fiscal Year specifically breaking out the Pledged Revenues; and (b) Provide the Bank with a copy of its resolution adopting its annual budget within thirty (30) days of the adoption of the same, a completed budget book upon the completion of the same, and such other financial information regarding the City as the Bank may reasonably request. ARTICLE 5 EVENTS OF DEFAULT AND REMEDIES 5.1 Events of Default. Each of the following is hereby declared an "Event of Default": (a) payment of the principal of the Loan shall not be made when the same shall become due and payable; (b) payment of any installment of interest on the Loan shall not be made when the same shall become due and payable; or (c) the City shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Note or in this Agreement on the part of the City to be performed, and such default shall continue for thirty (30) days after written notice specifying such default and requiring same to be remedied shall have been given to the City by the Bank; provided, however, that if, in the reasonable judgment of the Bank, the City shall proceed to take such curative action which, if begun and prosecuted with due diligence, cannot be completed within a period of thirty (30) days, then such period shall be increased to such extent as shall be necessary to enable the City to diligently complete such curative action; or (d) the City defaults in the due and punctual payment of any other obligation or evidence of indebtedness which is secured in whole or in part by a pledge of Pledged Revenues; or (e) any representation or warranty of the City contained in this Agreement or in any certificate or other closing document executed and delivered by the City in connection with the closing of this Loan shall prove to have been untrue in any material respect when executed and delivered, thereby adversely impairing the security for the Note; or (t) any proceedings are instituted with the consent or acquiescence of the City, for the purpose of effecting a compromise between the City and its creditors or for the purpose of KARIJU.G\AGRE\502009.6 19 adjusting the claims of such creditors, pursuant to any federal or state statute now or hereinafter enacted; or (g) the City admits in writing its inability to pay its debts generally as they become due, or files a petition in bankruptcy or makes an assignment for the benefit of its creditors or consents to the appointment of a receiver or trustee for itself or shall file a petition or answer seeking reorganization or any arrangement under the federal bankruptcy laws or any ~ther applicable law or statute of the United States of America or any state thereof; or (h) the City is adjudged insolvent by a court of competent jurisdiction or is adjudged bankrupt on a petition of bankruptcy filed against the City, or an order, judgment or decree is entered by any court of competent jurisdiction appointing, without the consent of the City, a receiver or trustee of the City or of the whole or any part of its property and any of the aforesaid adjudications, orders, judgments or decrees shall not be vacated or set aside or stayed within sixty (60) days from the date of entry thereof; or (i) if, under the provisions of any law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the City or of the whole or any substantial part of its property and such custody or control shall not be terminated within ninety (90) days from the date of assumption of such custody or control; or (j) any law that creates the Pledged Revenues is either repealed, declared unconstitutional, or otherwise modified in a manner which is materially adverse to Bank's security hereunder. S.2 Exercise of Remedies. Upon the occurrence and during the continuance of an Event of Default, the Noteholder may, by a notice in writing to the City, declare the principal of the Note (if not then due and payable) to be immediately due and payable, and upon such declaration, the same shall be immediately due and payable, anything contained in the Note or this Agreement to the contrary notwithstanding. Upon the occurrence and during the continuance of an Event of Default, the Noteholder may proceed to protect and enforce its rights under the laws of the State of Florida or under this Agreement by such suits, actions or special proceedings in equity or at law, or by proceedings in the office of any board or officer having jurisdiction, either for the specific performance of any covenant or agreement contained herein or in aid or execution of any power herein granted or for the enforcement of any proper legal or equitable remedy, as the Noteholder shall deem most effective to protect and enforce such rights. Without limiting the generality of the foregoing, the Noteholder shall have the right to bring a mandamus action to require the City to perform its obligations under Article IV of this Agreement. In the enforcement of any remedy under this Agreement, to the extent permitted by law, the Noteholder shall be entitled to sue for, enforce payment of and receive any and all amounts then or during any default becoming, and at any time remaining, due from the City for principal, interest or otherwise under any of the provisions of this Agreement or of the Note then unpaid, with interest on overdue payments of principal and interest (to the extent permitted by law) at the Default Rate, together with any and all costs and expenses of collection and of all proceedings hereunder and under the Note (including, without limitation, reasonable attorneys' and paralegal's fees in all proceedings, including administrative, appellate and bankruptcy proceedings), but KAR\RLG\AGRE\502009 .6 20 payable from the Pledged Revenues, without prejudice to any other right or remedy of the Noteholder, and to recover and enforce any judgment or decree against the City, but solely as provided herein and in the Note, for any portion of such amounts remaining unpaid and interest, costs, and expenses as above provided, and to collect (but only from the Pledged Revenues) in any manner provided by law, the monies adjudged or decreed to be payable. 5.3 Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Noteholder is intended to be exclusive of any other remedy or remedies herein provided, and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder. 5.4 Waivers, Etc. No delay or omission of the Noteholder to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or any acquiescence therein; and every power and remedy given by this Agreement to the Noteholder may be exercised from time to time and as often as may be deemed expedient. The Noteholder may waive any default which in its opinion shall have been remedied before the entry of final judgment or decree in any suit, action or proceeding instituted by it under the provisions of this Agreement or before the completion of the enforcement of any other remedy under this Agreement, but no such waiver shall be effective unless in writing and no such waiver shall extend to or affect any other existing or any subsequent default or defaults or impair any rights or remedies consequent thereon. ARTICLE 6 MISCELLANEOUS PROVISIONS 6.1 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. 6.2 Term of Agreement. This Agreement shall be in full force and effect from the date hereof until the Note and all other sums payable to the Bank hereunder have been paid in full and those provisions that deal with retroactive cost increases for the Bank related to the tax exempt status of the Note shall survive the termination of this Agreement. 6.3 Notice of Changes in Fact. Promptly after the City becomes aware of the same, the City will notify the Bank of (a) any changes in any material fact or circumstance represented or warranted by the City in this Agreement or in connection with the issuance of the Note, and (b) any default under this Agreement, specifying in each case the nature thereof and what action the City has taken, is taking and/or proposes to take with respect thereto. KAR\RLG\AGRE\502009.6 21 6.4 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 Noteholder. 6.5 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 Ocoee, Florida 150 North Lakeshore Drive Ocoee, Florida 34761-2258 Attention: Finance Manager (b) As to the Bank: SunTrust Bank, Central Florida, National Association 200 South Orange A venue Orlando, Florida 32801 Attention: Institutional and Governmental Banking 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. 6.6 Benefits Exclusive. Except as herein otherwise expressly 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. 6.7 Severability. In case anyone 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. 6.8 Payments Due on Saturdays, Sundays and Holidays. In any case where the date of maturity of interest on or principal of the Note or the date fixed for prepayment of the Note shall be a Saturday, Sunday or a day on which the Bank is required, or authorized or not prohibited, by law (including executive orders) to close and is closed, then payment of such interest or principal shall be made on the next succeeding day on which the Bank is open for KAR\RLG\AGRE\502009.6 22 business with the same force and effect as if paid on the date of maturity or the date fixed for prepayment, and no interest on any such principal amount shall accrue for the period after such date of maturity or such date fixed for prepayment. 6.9 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. 6.10 Applicable Law. This Agreement shall be governed exclusively by and construed in accordance with the applicable laws of the State of Florida. 6.11 No Personal Liability. Notwithstanding anything to the contrary contained herein or in the Note, or in any other instrument or document executed by or on behalf of the City in connection herewith, no stipulation, covenant, agreement or obligation contained herein or therein shall be deemed or construed to be a 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 of 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. 6.12 Incorporation by Reference. All of the terms and obligations of the Resolution and the Exhibits hereto are hereby incorporated herein by reference as if all of the foregoing were fully set forth in this Agreement. All recitals appearing at the beginning of this Agreement are hereby incorporated herein by reference. KARIRLGIAGRE\502009.6 23 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first set forth herein. [SEAL] Attest: City Clerk FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, FLORIDA APPROVED AS TO FORM AND LEGALITY THIS 8TH DAY OF MAY, 1996 Foley & Lardner By: City Attorney KARIRLG\AGRE\502009.6 "CITY" BOARD OF CITY COMMISSIONERS THE CITY OF OCOEE, FLORIDA Mayor SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION By: Edward Stull, Jr., Vice President 24 EXIDBIT "A-l" FORM OF NOTE No. R-l $2,200,000.00 UNITED STATES OF AMERICA STATE OF FLORIDA COUNTY OF ORANGE CITY OF OCOEE STORMWATER UTILITY REVENUE PROMISSORY NOTE. SERIES 1996 MATURITY DATE: October 1, 2011 DATED DATE: May 8, 1996 Registered Owner: SunTrust Bank, Central Florida, National Association Principal Amount: Two Million Two Hundred Thousand Dollars KNOW ALL MEN BY THESE PRESENTS that the City of Ocoee, Florida (hereinafter called the "City") for value received, hereby promises to pay to the order of the Registered Owner identified above or registered assigns, as herein provided, the Principal Amount identified above in installments on the payment dates described in EXHIBIT A attached hereto from the revenues hereinafter mentioned, in any coin or currency of the United States of America which on the date of payment thereof is legal tender for the payment of public and private debts, and to pay, solely from said sources, to the Registered Owner hereof by wire transfer or check transmitted to the Registered Owner at his address as it appears on the Note registration books of the City as it appears on the 15th day of the calendar month preceding the applicable interest payment date, interest on said Principal Amount at the Interest Rate per annum described herein on each January 1, April 1, July 1, and October 1 commencing October 1, 1997 from the interest payment date to which interest has been provided for or, in the case of interest to be paid October 1, 1997 from May 8, 1996. The Interest Rate borne by this Note shall be: (i) initially, 4.30%, to be adjusted on an annual basis as follows: October 1, 1997 adjusted to 4.45%; October 1, 1998 adjusted to 4.60%; October 1, 1999 adjusted to 4.75%; October 1, 2000 adjusted to 4.90%; October 1, 2001 adjusted to 5.05%; October 1, 2002 adjusted to 5.15%; October 1, 2003 adjusted to 5.25%; October 1, 2004 adjusted to 5.35%; October 1, 2005 adjusted to 5.45%; and October 1, 2006 through the Maturity Date adjusted to such rate determined by the following formula: KARIRLG\AGRE\502009.6 A-I five year Eurodollar Rate + 0.75% 1.48; subject to the adjustments set forth in the Agreement upon the occurrence of the events referred to therein; (ii) following the occurrence and during the continuance of any Event of Default, the Default Rate; and (iii) following a Determination of Taxability, the Taxable Rate. The Note shall be subject to redemption prior to its maturity at the option of the City, in whole or in part on any date, without premium at the option of the City as provided in the Agreement. Notice of such redemption shall be given 10 the manner required by the Agreement described below. This Note. is authorized in the aggregate principal amount of $2,200,000, issued to acquire, construct, improve and erect certain capital improvements, all in full compliance with the Constitution and Statutes of the State of Florida, including particularly Chapter 166, Part II, Florida Statutes, and Resolution No.96-12 duly adopted by the City on May 7, 1996, as supplemented (hereinafter collectively called the "Resolution') and is subject to all the terms and conditions of such Resolution and the Agreement. All capitalized undefined terms used herein shall have the meaning set forth in the Agreement. This Note is payable solely from and secured by a pledge of the Net Revenues of the System levied and collected by the City, and the moneys in the Reserve Fund pursuant to the Agreement (collectively, the "Pledged Revenues") in the manner provided in the Agreement. Reference is made to the Agreement for more complete definition and description of the System and the Pledged Revenues. This Note does not constitute a general indebtedness of the City within the meaning of any constitutional, statutory or charter provision or limitation, and it is expressly agreed by the Holder of this Note that such Noteholder shall never have the right to require or compel the exercise of the ad valorem taxing power of the City or taxation of any real or personal property therein for the payment of the principal of and interest on this Note or the making of any reserve or other payments provided for in the Agreement. It is further agreed between the City and the Holder of this Note that this Note and the indebtedness evidenced thereby shall not constitute a lien upon the System, or any part thereof, or on any other property of or in the City, but shall constitute a lien only on the Pledged Revenues all in the manner provided in the Agreement. The City has covenanted, in the Agreement, to fix, establish, revise from time to time whenever necessary, maintain and collect always such fees, rates, rentals and other charges for the use of the products, services and facilities of the System which will always provide Net Revenues KARIRLG\AGRE\502009.6 A-2 in each year sufficient to pay one hundred fifteen percent (115%) of the Debt Service requirement as the same shall become due in such year. Such rates, fees, rentals or other charges shall not be reduced so as to render them insufficient to provide revenues for the purposes provided therefor by the Agreement. The City has entered into certain further covenants with the Holders of the Note of this issue for the terms of which reference is made to the Agreement. It is certified that this Note is authorized by and is issued in conformity with the requirements of the Constitution and Statutes of the State of Florida. The transfer of this Note is registrable by the Noteholder hereof in person or by his attorney or legal representative at the office of the Registrar but only in the manner and subject to the conditions provided in the Resolution and upon surrender and cancellation of this Note. This Note shall not be valid or become obligatory for any purpose or be entitled to any benefit or security under the Resolution until it shall have been authenticated by the execution by the Registrar of the certificate of authentication endorsed hereon. IN WITNESS WHEREOF, the City of Ocoee, Florida, has issued this Note and has caused the same to be signed by its Mayor and countersigned and attested to by its Clerk (the signatures of the Mayor and the Clerk being authorized to be facsimiles of such officers' signatures), and its seal or facsimile thereof to be affixed, impressed, imprinted, lithographed or reproduced hereon, all as of the 8th day of May, 1996. CITY OF OCOEE, FLORIDA (SEAL) Mayor A ITESTED AND COUNTERSIGNED: Clerk FOR USE AND RELIANCE ONL Y BY THE CITY OF OCOEE, FLORIDA APPROVED AS TO FORM AND LEGALITY THIS 8TH DAY OF MAY, 1996 Foley & Lardner By: City Attorney KAR\RLG\AGRE\502009.6 A-3 CERTIFICATE OF AUTHENTICATION This Note IS one of the Notes issued under the provisions of the within mentioned Resolution. City of Ocoee. Florida Registrar, as Authenticating Agent Date of Authentication: Mav 8. 1996 By: Authorized Officer ASSIGNMENT AND TRANSFER For value received the undersigned hereby sells, assigns and transfers unto (please insert Social Security or other identifying number of transferee) the attached bond of the City of Ocoee, Florida, and does hereby constitute and appoint , attorney, to transfer the said Note on the books kept for Registration thereof, with full power of substitution in the premises. Date Signature Guaranteed by [member firm of the New York Stock Exchange or a commercial bank or a trust company.] By: Title: NOTICE: No transfer will be registered and no new Note will be issued in the name of the Transferee, unless the signature to this assignment corresponds with the name as it appears upon the face of the within Note in every particular, without alteration or enlargement or any change whatever and the Social Security or Federal Employer Identification Number of the Transferee is supplied. [END OF FORM OF NOTE] K.AR\RLG\AGRE\502009.6 A-4 EXIDBIT A NOTE PAYMENT SCHEDULE Debt Annual Debt Period Ending Principal Coupon Interest Service Service Oct 1, 1997 $ 70,000. 4.300% 132,440.00 202,440.00 202,44ll.oo Jan 1, 1998 23,696.25 23,69625 Apr 1, 1998 23,696.25 23,69625 Jul I, 1998 23,696.25 23,69625 Oct 1, 1998 110,000. 4.450% 23,696.25 133,741.65 204,785.00 Jan I, 1999 23,230.00 23,230.00 Apr I, 1999 23,230.00 23,230.00 Jul I, 1999 23,230.00 23,230.00 Oct I, 1999 115,000. 4.600% 23,230.00 138,266.99 207,920.00 Jan 1,2000 22,621.88 22,621.88 Apr 1,2000 22,621.88 22,621.88 Jul 1,2000 22,621.88 22,621.88 Oct I, 2000 120,000. 4.750% 22,621.88 142,650.92 210,487.52 Jan 1,2001 21,866.25 21,866.25 Apr 1,2001 21,866.25 21,866.25 Jul 1, 2001 21,866.25 21,866.25 Oct 1,2001 125,000. 4.900% 21,866.25 146,887.86 212,465.00 Jan 1,2002 20,957.50 20,957.50 Apr 1,2002 20,957.50 20,957.50 Jul 1, 2002 20,957.50 20,957.50 Oct 1,2002 130,000. 5.050% 20,957.50 150,972.19 213,830.00 Jan I, 2003 19,698.75 19,698.75 Apr 1, 2003 19,698.75 19,698.75 Jul I, 2003 19,698.75 19,698.75 Oct I, 2003 135,000. 5.150% 19,698.75 154,709.19 213,795.00 Jan 1, 2004 18,309.38 18,309.38 Apr 1, 2004 18,309.38 18,309.38 Jull,2004 18,309.38 18,309.38 Oct I, 2004 140,000. 5.250% 18,309.38 158,315.94 213,237.52 Jan 1, 2005 16,785.63 16,785.63 Apr 1,2005 16,785.63 16,785.63 Jul 1, 2005 16,785.63 16,785.63 Oct I, 2005 145,000. 5.350% 16,785.63 161,788.71 212,142.52 Jan 1,2006 15,123.75 15,123.75 Apr 1, 2006 15,123.75 15,123.75 Jul 1, 2006 15,123.75 15,123.75 Oct 1,2006 160,000. 5.45% 15,123.75 175,123.75 220,495.00 Jan 1,2007 Apr 1,2007 Jul I, 2007 Oct 1,2007 175,000. Jan I, 2008 Apr 1,2008 Jull,2008 Oct 1,2008 180,000. Jan 1,2009 Apr I, 2009 Jul I, 2009 Oct 1, 2009 190,000. Jan 1,2010 Apr 1,2010 JuI 1,2010 Oct 1,2010 200,000. Jan 1,2011 Apr 1,2011 Jull,20Il Oct 1,2011 205,000. $2,200,000. · Interest rate subject to adjustment on October 1, 2006. KAR\RLG\AGRE\502009.6 A-5