V (B) Resolution No. 96-31, authorizing the execution and delivery of a loan agreement and promissory note and the borrowing of $4,480,000 to finance the cost of certain capital improvements and construction of facilities etc AGENDA 12-3-96
I Item V B
"CENTER OF GOOD LIVING-PRIDE OF WEST ORANGE"
Ocoee S.SCOTT VANDERGRIFT
f(411:44 COMMISSIONERS
_ • CITY OF OCOEE
RUSTY JOHNSON
• a SCOTT ANDERSON
150 N.LAKESHORE DRIVE SCOTT A.GLASS
OCOEE,FLORIDA 34761-2258 JIM GLEASON
(407)656-2322 CITY MANAGER
GOOp ELLIS SHAPIRO
MEMORANDUM
TO: The Honorable Mayor and Board of City Commissioners
FROM: Wanda Horton, Finance Director c4L
DATE: November 26, 1996
RE: SunTrust Loan Agreement for Financing Capital
Improvements
As reported at the November 19, 1996 Commission meeting, SunTrust's
proposal for financing certain capital improvements was ranked
number one.
Improvements: Estimated Costs:
Construction of Fire Station- District 3 $ 850, 000
Construction of Fire Station- District 4 $ 700, 000
Construction of Gymnasium & Recreation
Improvements $ 1,500, 000
Construction of Public Works Facility $ 1, 350, 000
Total $ 4, 400, 000
The attached resolution and loan documents were prepared by City
Bond Counsel- Bryant, Miller and Olive, P.A. and reviewed by our
City Attorney.
Loan Amount $4 , 840, 000
Loan Date December 4 , 1996
Interest Rate 5. 04 %
Loan Term 15 years
No Prepayment Penalty
Security Non Ad Valorem Revenues
Staff Recommendation
Staff recommends the adoption of Resolution 96-31 and approval of
the loan agreement between the City of Ocoee and SunTrust N.A. for
the financing of the above listed improvements and the Mayor and
City Clerk be authorized to execute the documents.
AGENDA DRAFT
BRYANT, MILLER AND OLIVE
RESOLUTION 96- 31
A RESOLUTION AUTHORIZING THE EXECUTION AND
DELIVERY OF A LOAN AGREEMENT AND PROMISSORY
NOTE AND THE BORROWING OF NOT TO EXCEED $4,840,000
TO FINANCE THE COST OF ACQUISITION OF EQUIPMENT
AND LAND AND CONSTRUCTION OF AND IMPROVEMENTS
TO CERTAIN CAPITAL PROJECTS INCLUDING TWO FIRE
STATIONS, A GYMNASIUM AND RECREATIONAL FACILITY,
AND A PUBLIC WORKS FACILITY; COVENANTING TO
BUDGET AND APPROPRIATE FROM LEGALLY AVAILABLE •
NON-AD VALOREM REVENUES OF THE CITY FOR THE
REPAYMENT OF THE PROMISSORY NOTE TO SUNTRUST
BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION;
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; DESIGNATING THE NOTE AS A BANK QUALIFIED
OBLIGATION; 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 December 4, 1996.
"Note" shall mean the City's Capital Improvement Revenue Promissory Note, Series
1996 issued pursuant to the Loan Agreement.
"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 and Project. 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. The City hereby authorizes the
acquisition, improving, constructing and equipping of the Project as defined and described
in the Loan Agreement.
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
$4,840,000 of debt or obligation for the purpose of constructing the Project. The Bank shall
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be required to file a truth-in-bonding statement with the City as a precondition to the award
and sale of the Note to the Bank.
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 any one 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.
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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.
SECTION 1.13 Effective Date. This Resolution shall take effect immediately
upon its adoption.
PASSED AND ADOPTED THIS 3RD DAY OF DECEMBER, 1996.
APPROVED:
Attest CITY OF OCOEE
Jean Grafton, City Clerk S. Scott Vandergrift, Mayor
FOR USE AND RELIANCE ONLY APPROVED BY THE OCOEE CITY
BY THE CITY OF OCOEE CITY COMMISSION AT THE
APPROVED AS TO FORM AND ABOVE REFERENCED MEETING
LEGALITY THIS DAY OF UNDER AGENDA ITEM NO.
, 1996.
FOLEY & LARDNER
By:
City Attorney
J:\BONDS\4133\RESO2I 11/25/96I GED I R
4
EXHIBIT A
Form of Loan Agreement
EXHIBIT A TO RESOLUTION
Form of Loan Agreement
Dated as of December 4, 1996
By and Between
CITY OF OCOEE, FLORIDA
(the "City")
and
SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION
(the "Bank")
TABLE OF CONTENTS
Page
Article 1
Definition of Terms
1.1 Definitions. 1
1.2 Interpretation 4
1.3 Titles and Headings. 5
1.4 Findings 5
Article 2
Representations and Warranties of the Parties
2.1 Representations and Warranties of City. 6
2.2 Representations and Warranties of Bank. .7
Article 3
The Loan and the Note
3.1 The Loan 8
3.2 The Note. 8
3.3 Adjustments to Note Rate. 9
3.4 Determination of Taxability. 11
3.5 Compliance with Section 215.84 12
3.6 Conditions Precedent to the Loan 12
3.7 Registration of Transfer; Assignment of Rights of Bank. 13
3.8 Ownership of the Note. 14
3.9 Use of Proceeds of Loan. 14
3.10 Reserve Fund 14
Article 4
Covenants of the City
4.1 Performance of Covenants. 15
4.2 Payment of Note. 15
4.3 Limited Obligations. 16
4.4 Preservation of Exclusion of Interest; etc. 16
4.5 Special Covenants Regarding Non-Ad Valorem Revenues. 17
4.6 Budget and Other Financial Information 17
Article 5
Events of Default and Remedies
5.1 Events of Default . 18
5.2 Exercise of Remedies. 19
5.3 Remedies Not Exclusive. 19
5.4 Waivers, Etc. 20
Article 6
Miscellaneous Provisions
6.1 Covenants of City, Etc.; Successors. 20
6.2 Term of Agreement. 20
6.3 Notice of Changes in Fact. 20
6.4 Amendments and Supplements. 21
6.5 Notices. r 21
6.6 Benefits Exclusive. 21
6.7 Severability. 21
6.8 Payments Due on Saturdays, Sundays and Holidays 22
6.9 Counterparts. 22
6.10 Applicable Law. 22
6.11 No Personal Liability. 22
6.12 Incorporation by Reference. 22
Exhibit A: Form of Note
Exhibit B: Project Description
Exhibit C: Debt Service Schedule
ii
•
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement"), made and entered into as of
December 4, 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 ASSOCIATION, a national banking association, and
its successors (the "Bank").
WITNESSETH:
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 improvements for the City's public purposes;
WHEREAS, the City desires to borrow certain sums from the Bank in order to
finance certain capital improvements for the City as described on Exhibit B hereto
(collectively, the "Project");
WHEREAS, the Bank has agreed to provide financial accommodations to the City
in an amount equal to Four Million Eight Hundred Forty Thousand Dollars ($4,840,000)
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
defined 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.
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"Bank" shall mean SunTrust Bank, Central Florida, National Association, Orlando,
Florida, and its successors.
"Bond Counsel" shall mean, initially, Bryant, Miller and Olive, P.A., Tampa, Florida,
or any other attorney at law or firm of attorneys of nationally recognized standing in matters
pertaining to the federal tax exemption of interest on obligations issued by states and
political subdivisions.
"Business Day" shall mean any day other than a Saturday, a Sunday, or a day on
which banks in Orlando, Florida are authorized or required to be closed.
"City" shall mean the City of 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.
"Conversion Date" shall mean January 1, 2008.
"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 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 final administrative determination or determination by a court of
competent jurisdiction (from which no further right of appeal exists) as to the existence of
2
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.
"Event of Default" shall mean an Event of Default as defined in 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 January 1, 2012 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.
"Five Year U.S.Treasury Bond Rate" shall mean such rate for the five year term U.S.
Treasury Bonds as published by Bloomberg L.P. Business News, or, if that source is
unavailable, any other nationally published financial reporting service or publication.
"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 11 of the Code.
"Non-Ad Valorem Revenues" means all revenues, fees and taxes of the City derived
from any source whatever other than ad valorem taxation on real and personal property,
which are legally available for repayment of the Loan.
"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 4.50% until December 31, 1997, and thereafter in accordance
with the debt service schedule attached hereto as Exhibit C through December 31,
2007 and subject to the interest rate being recalculated by using the formula set forth
in Section 3.2(b) to become effective on the Conversion Date;
3
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.
"Project" shall mean the Project authorized to be financed with the proceeds of the
Note, as described on Exhibit B hereto.
"Project Costs" shall mean all costs of the Project authorized to be paid to the extent
permitted 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 Project
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.
"Qualified Tax-Exempt Obligation" shall mean an obligation described in Section
265(b)(3) of the Code.
"Resolution" shall mean Resolution No. 96- , adopted at a meeting of the Board
of City Commissioners on December 3, 1996 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 and such supplementary resolutions of the City as are satisfactory to
the Bank.
"Reserve Fund" shall mean the Reserve Fund created and established pursuant to
Section 3.10 of this Agreement.
"Reserve Requirement" shall be $484,000.
"Series 1996 Promissory Note" shall mean the City of Ocoee Capital Improvement
Revenue Promissory Note, Series 1996 in the original principal amount of Four Million
Eight Hundred Forty Thousand Dollars ($4,840,000) issued by the City to the Bank on the
date hereof in order to evidence the Loan.
"Taxable Rate" shall mean the lower of Prime Rate plus two percent (2%) per
annum, or the maximum interest rate permitted by applicable law.
1.2 Interpretation. Unless the context clearly requires otherwise, words of
masculine gender shall be construed to include correlative words of the feminine and neuter
genders and vice versa, and words of the singular number shall be construed to include
correlative words of the plural number and vice versa.Any capitalized terms used in this
Agreement not herein defined shall.have the meaning ascribed to such terms in the
4
Resolution. This Agreement and all the terms and provisions hereof shall be construed to
effectuate the purpose set forth herein and to sustain the validity hereof.
1.3 Titles and Headings. The titles and headings of the Articles and Sections of
this Agreement, which have been inserted for convenience of reference only and are not to
be considered a part hereof, shall not in any way modify or restrict any of the terms and
provisions hereof, and shall not be considered or given any effect in construing this
Agreement or any provision hereof or in ascertaining intent, if any question of intent should
arise.
1.4 Findings. It is hereby ascertained, determined and declared that:
(a) Due to the timing of the construction of the Project, security to be
pledged and the desire for the Note to be deemed "bank qualified", it was in the City's best
interest to seek proposals from local banks and negotiate the sale of the Note thereby
securing the most favorable interest rate for the City.
(b) The City received proposals to finance the Project from two lenders:
First Union National Bank of Florida and the Bank. The Bank, pursuant to its commitment,
agreed to loan to the City $4,840,000 for such purpose.
(c) The City determined that the Bank's proposal provided the City with
,the most favorable terms thereby permitting the City to obtain the best possible price and
interest rate 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.
(d) 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.
(e) The principal of and interest on the Note and all reserve and other
payments shall be payable solely from the Non-Ad Valorem 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.
(f) The covenant to budget and appropriate from the Non-Ad Valorem
Revenues should be sufficient to pay all principal of and interest on the Note to be issued
5
hereunder, as the same become due, and to make all required deposits or payments
required by this Agreement.
(g) All costs of the Project incurred after the date of this Agreement shall
be reimbursed from proceeds of the Loan.
(h) 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 financial 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 defined in Section 141 of the Code, other than qualified 501(c)(3) bonds, as
defined 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. The making 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, 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 terms, 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.
6
(c) No Financial Material Adverse Change. No material adverse change
in the financial condition of the City has occurred since the last audited financial statement
was prepared (for Fiscal Year 1995).
(d) Powers of City. The City has the legal power and authority to covenant
as described in Section 4.2 hereof to repay the Note.
(e) 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
Obligation 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 perform 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 terms, 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.
(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.
7
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 Four Million Eight Hundred Forty Thousand Dollars ($4,840,000)
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 Four Million
Eight Hundred Forty Thousand Dollars ($4,840,000).
(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). The
Note Rate shall be adjusted to be effective as the Conversion Date during the 31-day period
prior to the Conversion Date as described in Section 3.3(e) hereof based upon the following
formula:
Five Year U.S. Treasury Bond plus 1.0%
1.45
(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 April 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 January 1,
commencing on January 1, 1998, 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 Maturity Date. Installments 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
8
prepayment shall be made on such date and in such principal amount as shall be specified
by the City in a written notice delivered to the Noteholder not more than fifteen (15) and
not less than five (5) days prior to the specified prepayment date. Any prepayments shall
be applied to the sums last maturing 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 adjustment. Adjustments 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
adjustment 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:
(1) 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:
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(1) 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).
(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 of the 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 Old Maximum Corporate Tax Rate
Note Rate X 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)
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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 after written notice to the City within three (3) months of
receipt of such notice 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.
(e) Selection of Five Year U.S. Treasury Bond Rate. With respect to rate
adjustment on the Conversion Date, the City shall select the date during the period
commencing December 1, 2007 through December 31, 2007 on which the Five Year U.S.
Treasury Bond rate shall be determined. In the event the City shall fail to select a date of
determination, the Five Year U.S. Treasury Bond rate shall be determined as of December
31, 2007.
(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. If a 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 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.
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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: (1) 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, 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 covenant to budget and appropriate from its Non-Ad
Valorem 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
(f) 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 (f), 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.
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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 MAY BE 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 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 VIOLATE 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.
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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 as holder of the Note. 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.
Any withdrawals from the Reserve Fund shall be subsequently restored from the first
moneys available, after 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
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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 on each
January 1. 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.
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. Subject to Section 4.3 hereof, the City
hereby covenants and agrees to appropriate in its annual budget,by amendment, if required,
and to pay when due under this Loan Agreement as promptly as money becomes available
directly into the appropriate fund or account, amounts of Non-Ad Valorem Revenues of the
City sufficient to satisfy the Loan payment as required under this Loan Agreement. Such
covenant is subject in all respects to the payment of obligations secured by a pledge of such
Non-Ad Valorem Revenues heretofore or hereinafter entered into. Such covenant and
agreement on the part of the City to budget and appropriate such amounts of Non-Ad
Valorem Revenues shall be cumulative, and shall continue until such Non-Ad Valorem
Revenues or other legally available funds in amounts sufficient to make all required Loan
payments, including delinquent Loan payments, shall have been budgeted, appropriated and
actually paid into the appropriate fund or account. The City further acknowledges and
agrees that its covenant to pay such deficiencies from Non-Ad Valorem Revenues may be
enforced in a court of competent jurisdiction in accordance with the remedies set forth
herein. Notwithstanding the foregoing or any provision of this Loan Agreement to the
contrary, the City does not covenant to maintain any services or programs it now maintains
which generate Non-Ad Valorem Revenues.
(b) The Loan, as evidenced by the Note, will be a special obligation of the
City secured solely as provided in Section 4.2 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
15
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.
4.3 Limited Obligations. Anything in this Loan Agreement to the contrary
notwithstanding, it is understood and agreed that all obligations of the City hereunder shall
be payable only from Non-Ad Valorem Revenues budgeted and appropriated as provided
for hereunder and nothing herein shall be deemed to pledge ad valorem taxation revenues
or to permit or constitute a mortgage or lien upon any assets owned by the City and no
Noteholder or any other person, including the Bank, may compel the levy of ad valorem
taxes on real or personal property within the boundaries of the city. The obligations
hereunder do not constitute an indebtedness of the City within the meaning of any
constitutional, statutory or charter provision or limitation, and neither the Noteholder or any
other person shall have the right to compel the exercise of the ad valorem taxing power of
the City or taxation of any real or personal property therein for the payment by the City of
its obligations hereunder. Except to the extent expressly set forth in this Loan Agreement,
this Loan Agreement and the obligations of the City hereunder shall not be construed as
a limitation on the ability of the City to pledge or covenant to pledge said revenues or any
revenues or taxes of the City for other legally permissible purposes. Notwithstanding any
provisions of this Loan Agreement, or the Note to the contrary, the City shall never be
obligated to maintain or continue any of the activities of the City which generate user
service charges, regulatory fees or any Non-Ad Valorem Revenues. Neither this Loan
Agreement nor the obligations of the City hereunder shall be construed as a pledge of or
a lien on all or any legally available Non-Ad Valorem Revenues of the city, but shall be
payable solely as provided herein and is subject in all respects to the provisions of Section
129.07, Florida Statutes, and is subject, further, to the payment of services and programs
which are for essential public purposes affecting the health, welfare and safety of the
inhabitants of the City expressly limited to the Loan payments.
The City understands that the amounts available to be budged and appropriated to
make Loan payments hereunder are subject to the obligation of the City to provide essential
services; however, such obligation is cumulative and would carry over from Fiscal Year to
Fiscal Year.
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.
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(b) In order to maintain the exclusion from gross income for purposes of
federal income taxation of interest on the Note (and its "hank 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 Special Covenants Regarding Non-Ad Valorem Revenues. The City Covenants
so long as the Note is outstanding that in each Fiscal Year of the City, it will not issue non-
self-supporting revenue debt if after the issuance of such debt, maximum annual debt service
resulting from the total outstanding non-self-supporting revenue debt service of the
Borrower exceeds 50%of total general purpose Non-Ad Valorem Revenues of the Borrower
received in the immediately preceding Fiscal Year of the City. As used above, the term
"non-self-supporting revenue debt" shall not include any debt payable from revenues of a
utility system. The City covenants not to incur any indebtedness payable from non-ad
valorem revenue sources unless the gross non-ad valorem revenues (all legally available non-
ad valorem revenues of the City from whatever source including investment income) of the
City for the preceding Fiscal Year were at least 1.10 times average annual debt service of
all indebtedness payable from such sources. As used above, the term "net available non-ad
valorem revenues" shall mean "gross non-ad valorem revenues" as defined above minus cost
of operation and maintenance of the City (minus, however, any such costs paid from ad
valorem taxes plus legally available unencumbered fund balances). For the purpose of
calculating average annual debt service on any indebtedness which bears interest at a
variable rate, such indebtedness shall be deemed to bear interest at the greater of (i) 1.25
times the most recently published Bond Buyer Revenue Bond 30 Year Index or (ii) 1.25
times actual average interest rate during the prior Fiscal Year of the City.
4.6 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; 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.
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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 covenant
to budget and appropriate; or
(e) any representation or warranty of the City contained in this Agreement
or in any certificate or other closing document executed and delivered by the City in
connection with the closing of this Loan shall prove to have been untrue in any material
respect when executed and delivered, thereby adversely impairing the security for the Note;
or
(f) any proceedings are instituted with the consent or acquiescence of the
City, for the purpose of effecting a compromise between the City and its creditors or for the
purpose of adjusting the claims of such creditors, pursuant to any federal or state statute
now or hereinafter enacted; or
(g) the City admits in writing its inability to pay its debts generally as they
become due, or files a petition in bankruptcy or makes an assignment for the benefit of its
creditors or consents to the appointment of a receiver or trustee for itself or shall file a
petition or answer seeking reorganization or any arrangement under the federal bankruptcy
laws or any other applicable law or statute of the United States of America or any state
thereof; or
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(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.
5.2 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), 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 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,
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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.
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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 Director
(b) As to the Bank:
SunTrust Bank, Central Florida, National Association
200 South Orange Avenue
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 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.
21
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 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.
22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first set forth herein.
CITY OF OCOEE, FLORIDA
S. Scott Vandergrift, Mayor
[SEAL]
Attest:
Jean Grafton, City Clerk
SUNTRUST BANK, CENTRAL
FLORIDA, NATIONAL ASSOCIATION
By:
Edward Stull, Jr.,
Vice President
FOR USE AND RELIANCE ONLY
BY THE CITY OF OCOEE, FLORIDA
APPROVED AS TO FORM AND LEGALITY
THIS DAY OF , 1996
Foley & Lardner
By:
City Attorney
APPROVED BY THE OCOEE CITY COMMISSION
AT A REGULAR MEETING HELD ON
1996 UNDER AGENDA ITEM
J:\BONDS\4133\LA2I 11/25/96I GED I R
23
•
EXHIBIT A
FORM OF NOTE
No. R-1 $4,840,000.00
UNITED STATES OF AMERICA
STATE OF FLORIDA
COUNTY OF ORANGE
CITY OF OCOEE
CAPITAL IMPROVEMENT REVENUE PROMISSORY NOTE, SERIES 1996
MATURITY DATE: 1, DATED DATE: , 1996
Registered Owner: SunTrust Bank, Central Florida, National Association
Principal Amount: Four Million Eight Hundred Forty 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 1,
1, 1, and 1 commencing 1, 199_from the interest payment
date to which interest has been provided for or, in the case of interest to be paid
1, 199_ from , 199 .
The Interest Rate borne by this Note shall be:
(i) initially 4.55% until December 31, 1997, and thereafter in accordance
with the debt service schedule attached hereto as Exhibit C through December 31,2007 and
subject to the interest rate being recalculated by using the formula set forth in Section 3.2(b)
to become effective on the Conversion Date;
subject to the adjustments set forth in the Agreement upon the
occurrence of the events referred to therein;
A-1
(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 in the manner required by the Agreement
described below.
This Note is authorized in the aggregate principal amount of $4,840,000, 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- duly adopted by the City on
, 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 the Non-Ad Valorem Revenues, and the moneys in
the Reserve Fund pursuant to the Agreement in the manner provided in the Agreement.
Reference is made to the Agreement for more complete definition and description of the
Project and the Non-Ad Valorem 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 Project, or any part
thereof, or on any other property of or in the City.
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
A-2
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 day of , 1996.
CITY OF OCOEE, FLORIDA
(SEAL)
Mayor
ATTESTED AND COUNTERSIGNED:
Clerk
FOR USE AND RELIANCE ONLY
BY THE CITY OF OCOEE, FLORIDA
APPROVED AS TO FORM AND LEGALITY
THIS DAY OF , 1996
Foley &'Lardner
By:
City Attorney
A-3
CERTIFICATE OF AUTHENTICATION
This Note is one of the Notes issued under the provisions of the within mentioned
Resolution.
SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION, Registrar,
as Authenticating Agent
Date of Authentication:
, 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]
A-4
EXHIBIT A TO PROMISSORY NOTE
NOTE PAYMENT SCHEDULE
Debt Annual Debt
Period Ending Principal Coupon Interest Service Service
•
A-1
EXHIBIT B
PROJECT DESCRIPTION
Construction of Fire Station (District 3) $ 850,000
Construction of Fire Station (District 4) $ 700,000
Construction of Gymnasium and Recreation Improvements $ 1,500,000
Construction of Public Works Facility $ 1,350,000
TOTAL $ 4,400,000
B-1
EXHIBIT C
DEBT SERVICE SCHEDULE
C-1
13-Nov-96 1:53 pm Prepared by DBC Finance EXHIBIT C (Finance Lite 2.300 (9/20/95) DBC:OCOEE-1996A) Page 1
BOND DEBT SERVICE
City of Ocoee - 15 yr amortization
City of Ocoee - 15 yr amort Stepped Coupon
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
Dec 27, 1996 - - - - -
Apr 1, 1997 - - 57,501.89 57,501.89 -
Jul 1, 1997 - - 55,055.00 55,055.00 -
Oct 1, 1997 - - 55,055.00 55,055.00 -
Jan 1, 1998 245,000.00 4.550% 55,055.00 300,055.00 467,666.89
Apr 1, 1998 - - 53,416.88 53,416.88 -
Jul 1, 1998 - - 53,416.88 53,416.88 -
Oct 1, 1998 - - 53,416.88 53,416.88 -
Jan 1, 1999 250,000.00 4.650% 53,416.88 303,416.88 463,667.52
Apr 1, 1999 - - 52,140.00 52,140.00 -
Jul 1, 1999 - - 52,140.00 52,140.00 -
Oct 1, 1999 - - 52,140.00 52,140.00 -
Jan 1, 2000 255,000.00 4.800% 52,140.00 307,140.00 463,560.00
Apr 1, 2000 - - 50,102.50 50,102.50 -
Jul 1, 2000 - - 50,102.50 50,102.50 -
Oct 1, 2000 - - 50,102.50 50,102.50 -
Jan 1, 2001 265,000.00 4.900% 50,102.50 315,102.50 465,410.00
Apr 1, 2001 - - 48,290.63 48,290.63 -
Jul 1, 2001 - - 48,290.63 48,290.63 -
Oct 1, 2001 - - 48,290.63 48,290.63 -
Jan 1, 2002 270,000.00 5.050% 48,290.63 318,290.63 463,162.52
Apr 1, 2002 - - 46,215.00 46,215.00 -
Jul 1, 2002 - - 46,215.00 46,215.00 -
Oct 1, 2002 - - 46,215.00 46,215.00 -
Jan 1, 2003 280,000.00 5.200% 46,215.00 326,215.00 464,860.00
Apr 1, 2003 - - 43,803.13 43,803.13 -
Jul 1, 2003 - - 43,803.13 43,803.13 -
Oct 1, 2003 - - 43,803.13 43,803.13 -
Jan 1, 2004 290,000.00 5.350% 43,803.13 333,803.13 465,212.52
Apr 1, 2004 - - 41,043.75 41,043.75 -
Jul 1, 2004 - - 41,043.75 41,043.75 -
Oct 1, 2004 - - 41,043.75 41,043.75 -
Jan 1, 2005 300,000.00 5.500% 41,043.75 341,043.75 464,175.00
Apr 1, 2005 - - 37,925.63 37,925.63 -
Jul 1, 2005 - - 37,925.63 37,925.63 -
Oct 1, 2005 - - 37,925.63 37,925.63 -
Jan 1, 2006 315,000.00 5.650% 37,925.63 352,925.63 466,702.52
Apr 1, 2006 - - 34,365.00 34,365.00 -
Jul 1, 2006 - - 34,365.00 34,365.00 -
Oct 1, 2006 - - 34,365.00 34,365.00
Jan 1, 2007 2,370,000.00 5.800% 34,365.00 2,404,365.00 2,507,460.00
4,840,000.00 1,851,876.97 6,691,876.97 6,691,876.97
13-Nov-96 1:53 pm Prepared by DBC Finance (Finance Lite 2.300 (9/20/95) DBC:OCOEE-1996A) Page 2
BOND SUMMARY STATISTICS
City of Ocoee - 15 yr amortization
City of Ocoee - 15 yr amort Stepped Coupon
Dated Date 12/27/1996
Delivery Date 12/27/1996
Last Maturity 1/01/2007
Arbitrage Yield 5.035437%
True Interest Cost (TIC) 5.035437%
Net Interest Cost (NIC) 5.057179%
All-In TIC 5.035437%
• Average Coupon 5.057179%
Average Life (years) 7.566
Duration of Issue (years) 6.243
Par Amount 4,840,000.00
Bond Proceeds 4,840,000.00
Total Interest 1,851,876.97
Net Interest - 1,851,876.97
Total Debt Service 6,691,876.97 •
Maximum Annual Debt Service 2,507,460.00
Average Annual Debt Service 668,444.98
Underwriter's Fees (per $1000)
Average Takedown -
Other Fee -
Total Underwriter's Discount -
Bid Price 100.000000
Par Average Average
Bond Component Value Price Coupon Life
City of Ocoee - 15 yr amortiza 4,840,000.00 100.000 5.057% 7.566
4,840,000.00 7.566
•
All-In Arbitrage
TIC TIC Yield
Par Value - 4,840,000.00 4,840;000.00 4,840,000.00
+ Accrued Interest - - -
+ Premium (Discount) - -- Underwriter's Discount -- Cost of Issuance Expense- Other Amounts - - -
Target Value 4,840,000.00 4,840,000.00 4,840,000.00
Target Date 12/27/1996 12/27/1996 12/27/1996
Yield 5.035437% 5.035437% 5.035437%
13-Nov-96 1:53 pm Prepared by DBC Finance (Finance Lite 2.300 (9/20/95) DBC:OCOEE-1996A) Page 3
BOND SOLUTION
City of Ocoee - 15 yr amortization
City of Ocoee - 15 yr amort Stepped Coupon
Period Proposed Proposed Total Adj
Ending Principal Debt Service Debt Service
Jan 1, 1996 - - -
Jan 1, 1997 - - -
Jan 1, 1998 245,000 467,667 467,667
Jan 1, 1999 250,000 463,668 463,668
Jan 1, 2000 255,000 463,560 463,560
Jan 1, 2001 265,000 465,410 465,410
Jan 1, 2002 270,000 463,163 463,163
Jan 1, 2003 280,000 464,860 464,860
Jan 1, 2004 290,000 465,213 465,213
Jan 1, 2005 300,000 464,175 464,175
Jan 1, 2006 315,000 466,703 466,703
Jan 1, 2007 2,370,000 2,507,460 2,507,460
4,840,000 6,691,877 6,691,877
A7