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R-2016-04 CITY OF CLERMONT RESOLUTION NO. 2016-04 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLERMONT, LAKE COUNTY, FLORIDA, ACCEPTING THE PROPOSAL OF JPMORGAN CHASE BANK, N.A. TO PROVIDE THE CITY WITH A LOAN IN A PRINCIPAL AMOUNT NOT TO EXCEED $5,300,000 FOR THE PURPOSES OF (I) FINANCING ALL OR A PART OF THE COSTS r- OF A CAPITAL PROJECT CONSISTING OF THE ACQUISITION, CONSTRUCTION AND EQUIPPING OF A NEW MUNICIPAL POLICE STATION, AND (II) PAYING THE RELATED CLOSING COSTS; AUTHORIZING SUCH PROJECT; AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT WITH SAID BANK AND AN INFRASTRUCTURE SALES(SURTAX REVENUE NOTE, SERIES 2016 IN A PRINCIPAL AMOUNT EQUAL TO THE PRINCIPAL AMOUNT OF SUCH LOAN; PLEDGING THE INFRASTRUCTURE SALES SURTAX REVENUES RECEIVED BY THE CITY TO SECURE THE PAYMENT OF SUCH SERIES 2016 NOTE; DESIGNATING SUCH SERIES)2016 NOTE FOR THE EXCEPTION TO THE PROVISIONS CONTAINED IN THE INTERNAL REVENUE CODE OF 1986 WHICH DENY FINANCIAL INSTITUTIONS ANY DEDUCTIONS FOR INTEREST EXPENSE ALLOCABLE TO TAX- EXEMPT OBLIGATIONS; AUTHORIZING THE EXECUTION AND DELIVERY OF OTHER DOCUMENTS IN CONNECTION WITH SAID LOAN; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED by the City Council of the City of Clermont, Lake County, Flonda, as follows SECTION 1. AUTHORITY FOR THIS RESOLUTION. This Resolution` is adopted pursuant to the provisions of Chapter 166, Part II, Flonda Statutes, as amended, and other applicable provisions of law SECTION 2. FINDINGS. It is hereby ascertained, determined and declared (A) The City deems it necessary, desirable and in the best interests of the City that the City undertake to (i) finance all or a part of the costs of the acquisition, construction and equipping of a new municipal police station (the "Project"), and (ii) pay related closing costs, as more particularly descnbed in this Resolution and the Loan Agreement (as defined herein) 1 CITY OF CLERMONT RESOLUTION NO. 2016-04 (B) The City has obtained a proposal for a not to exceed $5,300,000 loan (the "Loan") from JPMorgan Chase Bank, N A (the "Bank"), the proceeds of which will be applied to finance all or a part of the costs of the Project and related closing costs (C) The Loan will be secured by a Loan Agreement to be executed and delivered by and between the City and the Bank substantially in the form attached hereto as Exhibit B (the "Loan Agreement"), pursuant to which the City will issue its Infrastructure Sales Surtax Revenue Note, Senes 2016 (the "Note") to secure the repayment of the Loan (D) The costs of the Project and related closing costs will be financed from the proceeds of the Loan (E) Pursuant to Section 212 055(2), Flonda Statutes as amended, the governing authonty of each county in the State of Flonda (the "State") may levy a local government discretionary infrastructure sales surtax (the "Infrastructure Sales Surtax") in accordance with the provisions thereof and subject to an approving referendum of the electors of the county (F) Pursuant to Ordinance No 1987-9 enacted by the Board of County Commissioners of Lake County, Flonda (the "County") and pursuant to an approving referendum of the electors of the County held on November 3, 1987, the County levied a one-percent Infrastructure Sales Surtax, pursuant to Ordinance No 2001-123, enacted by the Board of County Commissioners,of the County and pursuant to an approving referendum of the electors of the County held on November 6, 2001, the Infrastructure Sales Surtax was extended for a term commencing on January 1, 2003 through December 31, 2017, and pursuant to Ordinance No 2015-22 and Ordinance No 2015-41 enacted by the Board of County Commissioners of the County and pursuant to an approving referendum of the electors of the County held on November 3, 2015, the Infrastructure Sales Surtax was extended for a term commencing on January 1, 2018 through December 31, 2032 The proceeds of the Infrastructure Sales Surtax are distnbuted to the County, the School Board of the County and the municipalities within the County in accordance with the provisions of Section 212 055(2) Flonda Statutes, as amended 2 CITY OF CLERMONT RESOLUTION NO. 2016-04 (G) The Infrastructure Sales Surtax proceeds received by the City from / the levy and collection of the Infrastructure Sales Surtax pursuant the provisions of the Section 212 055(2), Flonda Statues, as amended (the "Pledged Revenues"), may be pledged by the City to secure the payment of debt service on indebtedness incurred to finance the cost of capital projects as provided in the Section 212 055(2), Flonda Statutes, as amended (H) The City deems it necessary, desirable and in the best interests of the City to pledge the Pledged Funds (as defined in the Loan Agreement), including the Pledged Revenues, to secure the payment of the principal of and interest on the Note in the manner provided herein and in the Loan Agreement (I) The Loan will be repaid solely from the Pledged Funds as provided in the Loan Agreement The ad valorem taxing power of the City will never be necessary or authonzed to pay the amounts due on the Loan > (J) It is not reasonably anticipated that more than $10,000,000 of tax- exempt obligations under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code") will be issued by or on behalf of the City in calendar year 2016, excluding the City's proposed Public Improvement Refunding Revenue Note, Senes 2016 (K) The City is advised that due to the present volatility of the market for municipal debt, it is in the best interest of the City to issue the Note pursuant to the Loan Agreement by negotiated sale, allowing the City to issue,the Note at the most advantageous time, rather than a specified advertised future date, thereby allowing the City to obtain the best possible pnce, interest rate and other terms for the Note and, accordingly, the City Council of the City hereby finds and determines that it is in the best financial interest of the City that a negotiated sale of the Note pursuant to the Loan Agreement be authonzed SECTION 3. AUTHORIZATION OF THE PROJECT. The City hereby authorizes the Project 3 CITY OF CLERMONT RESOLUTION NO. 2016-04 SECTION 4. ACCEPTANCE OF PROPOSAL. The City hereby accepts the proposal of the Bank to provide the City with the Loan SECTION 5. AUTHORIZATION OF LOAN AGREEMENT The Loan and the repayment of the Loan by the City shall be pursuant to the terms and provisions of a Loan Agreement The City hereby authonzes the Mayor of the City (the "Mayor") and the City Clerk or the Assistant City Clerk of the City (the "City Clerk") to execute and deliver on behalf of the City the Loan Agreement by and between the City and the Bank substantially in the form attached hereto as Exhibit A, with such changes, insertions and additions as they may approve, such approval to be evidenced conclusively by the Mayor's execution thereof SECTION 6. AUTHORIZATION,OF NOTE TO FINANCE THE COST OF THE PROJECT The City does hereby authonze the issuance of the Note in the pnncipal amount of not exceeding $5,300,000 for the purpose of providing the City with sufficient funds to finance all or a part of the cost of the Project and relating closing costs The Mayor and City Clerk are hereby authonzed to execute, seal and deliver on behalf of the City, the Note and other documents, instruments, agreements and certificates necessary or desirable to effectuate the Loan and the Project as provided in the Loan Agreement The Note shall be issued in the pnncipal amount (not exceeding $5,300,000), shall bear interest at the initial interest rate (not exceeding 2 12%, subject to adjustment as provided therein), shall have a final matunty date (not later than sixteen years after the date of issuance thereof) and shall have such other terms, all as set forth in the Loan Agreement and the Note authonzed herein and executed and delivered in connection with Loan The Note shall not be secured by a debt service reserve fund SECTION 7. DESIGNATION OF NOTE AS QUALIFIED TAX- EXEMPT OBLIGATIONS. The City hereby designates the Note descnbed in Section 6 hereof as a "qualified tax-exempt obligation" under Section 265(b)(3) of the, Code This designation is based upon the findings of the City set forth in Section 2(J) of this Resolution and the Mayor is authorized to recertify such findings upon the issuance of the Note 4 CITY OF CLERMONT RESOLUTION NO. 2016-04 SECTION 8. PLEDGE OF PLEDGED FUNDS; LIMITED OBLIGATION The City hereby pledges the Pledged Funds, including the Pledged Revenues, to secure the payment of the principal of and interest on the Note in the manner provided herein and in the Loan Agreement The obligation of the City to pay the Note is a limited and special obligation payable solely from the Pledged Funds in the manner and to the extent set forth in the Bond Resolution and shall not be deemed a pledge of the faith and credit or taxing power of the City and such obligation shall not create a lien on any property whatsoever of or situated within the City other than the Pledged Funds SECTION 9. GENERAL AUTHORIZATION. The Mayor, City Clerk, the City Manager, the Administrative Services Director, the Finance Director, and other employees or agents of the City are authorized to execute and deliver such documents, instruments and contracts, and are hereby authorized and directed to do all acts and things required hereby as may be necessary for the full, punctual and complete performance of the Loan Agreement and the Note and all the terms, covenants, provisions and agreements herein contained, or as otherwise may be necessary or desirable to effectuate the purpose and intent of this Resolution SECTION 10. REPEAL OF INCONSISTENT DOCUMENTS. All ordinances, resolutions or parts thereof in conflict herewith are hereby superseded and repealed to the extent of such conflict SECTION 11. EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption 5 CITY OF CLERMONT RESOLUTION NO. 2016-04 PASSED, APPROVED AND ADOPTED by the City Council of the City of Clermont, Lake County, Flonda, on this 23rd day of February, 2016 CITY OF CLERMONT (OFFICIAL SEAL) t / By ir Gail L Ash, Mayor ATTES . Tracy Ackroyd Howe, City Clerk CITY OF CLERMONT RESOLUTION NO. 2016-04 EXHIBIT A Loan Agreement LOAN AGREEMENT between CITY OF CLERMONT, FLORIDA and JPMORGAN CHASE BANK, N.A. Dated March 3,2016 Relating to: CITY OF CLERMONT, FLORIDA INFRASTRUCTURE SALES SURTAX REVENUE NOTE SERIES 2016 TABLE OF CONTENTS Page ARTICLE 1 DEFINITION OF TERMS Section 1 1 Definitions 1 Section 1 2 Interpretation 4 Section 1 3 Titles and Headings 4 ARTICLE 2 REPRESENTATIONS, WARRANTIES AND COVENANTS; SECURITY FOR NOTE; ADDITIONAL OBLIGATIONS Section 2 1 Representations by the City 4 Section 2 2 General Representations, Warranties and Covenants of the Bank 5 Section 2 3 Making of Loan 5 Section 2 4 Tax Covenants 5 Section 2 5 Note not to be Indebtedness of the City or State 6 Section 2 6 Security for Note 6 Section 2 7 Payment Covenant, Revenue Fund, Debt Service Fund 6 Section 2 8 Audit, Budget and Other Information 7 Section 2 9 Construction Fund 7 Section 2 10 Receipt of Pledged Revenues 8 ARTICLE 3 DESCRIPTION OF NOTE; PAYMENT TERMS; OPTIONAL PREPAYMENT Section 3 1 Descnption and Payment Terms of the Note 9 Section 3 2 Required Coverage Ratio 10 Section 3 3 Issuance of Additional Obligations 10 ARTICLE 4 ISSUANCE OF NOTE Section 4 1 Issuance of Note 11 Section 4 2 Application of Proceeds 12 -1- ARTICLE 5 EVENTS OF DEFAULTS; REMEDIES Section 5 1 Events of Default 12 Section 5 2 Remedies 13 Section 5 3 Waiver of Jury Tnal 13 Section 5 4 Notice of Defaults 13 ARTICLE 6 MISCELLANEOUS Section 6 1 Amendments, Changes or Modifications to the Agreement 13 Section 6 2 Counterparts 13 Section 6 3 Severability 14 Section 6 4 Term of Agreement 14 Section 6 5 Assignment 14 Section 6 6 Notices 14 Section 6 7 Applicable Law 14 Section 6 8 Incorporation by Reference 14 EXHIBIT A - Form of Note ii LOAN AGREEMENT This LOAN AGREEMENT (this "Agreement") is made and entered into on March 3, 2016, between the CITY OF CLERMONT, a municipality created and existing under and by virtue of the laws of the State of Flonda (the "City"), and JPMORGAN CHASE BANK, N A , Orlando, Flonda, a national banking association and its successors and assigns (the "Bank") WITNESSETH: WHEREAS, the City is authonzed pursuant to Chapter 166, Part II, Flonda Statutes, as amended, Section 212 055(2), Flonda Statutes, as amended, and other applicable provisions of law (collectively the "Act"), to, among other things, undertake to (a) finance all or a part of the costs of the Project(as defined herein), and (b)pay related closing costs, and WHEREAS, the City deems it necessary, desirable and in the best interest of the City that the City undertake the Project, and WHEREAS, the Bank is willing to make available to the City, and the City is willing to enter into, a loan pursuant to the terms and provisions of this Agreement in the pnncipal amount of$5,300,000 under which the City may finance all or a part of the costs of the Project and related closing costs NOW,THEREFORE, THIS AGREEMENT WITNESSETH: That the parties hereto, intending to be legally bound hereby and in consideration of the mutual covenants hereinafter contained, DO HEREBY AGREE as follows ARTICLE 1 DEFINITION OF TERMS Section 1 1 Definitions Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Resolution The terms defined in this Article 1 shall, for all purposes of this Agreement, have the meanings specified in this Article 1, unless the context clearly otherwise requires "Act" shall mean Chapter 166, Part II, Flonda Statutes, as amended, Section 212 055(2) Flonda Statutes, as amended, and other applicable provisions of law "Agreement" shall mean this Loan Agreement dated March 3, 2016, between the City and the Bank and any and all modifications, alterations, amendments and supplements hereto made in accordance with the provisions hereof "Authorized City Officer" for the performance on the behalf of the City of any act of the City or the execution of any instrument on behalf of the City shall mean any person authorized by resolution or certificate of the City to perform such act or sign such document "Bank" shall mean JPMorgan Chase Bank, N A , Orlando, Florida, and its successors and assigns "Bond Counsel" shall mean Foley & Lardner LLP, Jacksonville, 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, and duly admitted to practice law before the highest court of any state of the United States of America "Business Day" or "business day" shall mean any day other than a Saturday, Sunday or a day on which banking institutions within the State are authorized or required by law to remain closed "City" shall mean the City of Clermont, Florida "City Clerk" shall mean the City Clerk of the City and such other person as may be duly authorized to act on his or her behalf "Code" shall mean the Internal Revenue Code of 1986, as amended, and applicable rules and regulations thereto and thereunder "Construction Fund" shall mean the Construction Fund established pursuant to Section 2 9 hereof "Costs" when used in connection with the Project, shall mean costs of the Project paid by the City after November 3, 2015, which are permissible uses of the Pledged Revenues under Section 212 055(2)(d), Florida Statutes, as amended, consisting of(i) the City's costs of physical construction, (1i) costs of acquisition by or for the City of the Project (iii) costs of land and interest therein and the costs of the City incidental to such acquisition, (iv) the cost of any indemnity and surety bonds and premiums for insurance dunng construction, (v) all interest due to be paid on the Note and other obligations related to the Project during the construction period of the Project and for a reasonable period thereafter, (vi) engineering, legal and other consultant fees and expenses, (vii) costs and expenses incidental to the issuance of the Note, (viii) costs of machinery, furnishings or equipment required by the City for the commencement of operation of the Project and (ix) any other costs properly attributable to the issuance of the Note and such construction or acquisition, as determined by generally accepted accounting principles and may include reimbursement to the City of any such items of Costs heretofore paid by the City "Debt Service Fund" shall mean the Debt Service Fund established pursuant to Section 2 7 hereof 2 "Default Rate" shall mean the lesser of[interest rate payable on the Note plus 2%] or the maximum rate of interest permitted by law "Fiscal Year" shall mean the penod commencing on October 1 of each year and continuing through the next succeeding September 30, or such other penod as may be prescnbed by law "Interest Payment Date" shall have the meaning ascnbed thereto in Section 3 1(c) hereof "Mayor" shall mean the Mayor of the City and such other person as may be duly authonzed to act on his or her behalf "Note" shall mean the revenue note authonzed by the Resolution and delivered by the City to the Noteholder in accordance with the requirements set forth in Article 4 hereof "Noteholder" shall mean the Bank as the holder of the Note, or any other registered holder of the Note "Pledged Funds" shall mean the Pledged Revenues and, until applied in accordance with the provisions of the Agreement, the proceeds of the Note and all moneys, including investments thereof, in the Construction Fund, the Revenue Fund and the Debt Service Fund "Pledged Revenues" shall mean the proceeds received by the City from the levy in collection of the local government discretionary infrastructure sales surtax pursuant to Section 212 055(2), Flonda Statutes, as amended "Project" shall mean the acquisition, construction and equipping of a new municipal police station "Register"means the books maintained by the Registrar in which are recorded the name and address of the registered owner of the Note "Registrar" means the Finance Director of the City, as the person maintaining the Register "Resolution" shall mean Resolution No 2016-04 adopted by the City Council of the City on February 23, 2016, which provided for the issuance of the Note and authonzed the execution and delivery of this Agreement, as the same may be amended and supplemented from time to time in accordance with the provisions thereof "Revenue Fund" shall mean the Revenue Fund established pursuant to Section 2 7 hereof "State" shall mean the State of Flonda 3 "Tax Certificate" shall have the meaning ascnbed to such term in Section 2 4 hereof Section 1 2 Interpretation Unless the context clearly requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa This Agreement and all the terms and provisions hereof shall be construed to effectuate the purpose set forth herein and to sustain the validity hereof Section 1 3 Titles and Headings The titles and headings of the articles and sections of this Agreement, which have been inserted for convenience of reference only and are not to be considered a part hereof, shall not in any way modify or restnct 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 anse ARTICLE 2 REPRESENTATIONS, WARRANTIES AND COVENANTS; SECURITY FOR NOTE; ADDITIONAL OBLIGATIONS Section 2 1 Representations by the City The City represents, warrants and covenants that (a) The City is a municipality validly created and existing under the laws of the State Pursuant to the Resolution, the City (i) has duly authonzed the execution and delivery of this Agreement and the performance by the City of all of its obligations hereunder, and (ii) has duly authonzed the Note issued hereunder and the performance by the City of all its obligations relating thereto (b) The City has complied with and will continue to comply with all of the provisions of the Constitution and laws of the State, and has full power and authonty to enter into and consummate all transactions contemplated by this Agreement or under the Note, and to perform all of its obligations hereunder and the transactions contemplated hereby do not conflict with the terms of any statute, order, rule, regulation,judgment, decree, agreement, instrument or commitment to which the City is a party or by which the City is bound (c) The City is duly authonzed and entitled to issue the Note and to enter into this Agreement Each of this Agreement and, when issued in accordance with the terms of this Agreement, the Note will constitute a legal, valid and binding obligation of the City enforceable in accordance with its terms, subject as to enforceability to bankruptcy, insolvency, moratonum, 4 reorganization or other similar laws affecting creditors' nghts generally, or by the exercise of judicial discretion in accordance with general pnnciples of equity (d) There are no actions, suits or proceedings pending or, to the best knowledge of the City, threatened against or affecting the City, at law or in equity, or before or by any governmental authonty, that, if adversely determined, would materially impair the ability of the City to perform the City's obligations under this Agreement or under the Note (e) No authorization, consent, approval, license, exemption of or registration or filing with any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, has been or will be necessary,for the valid execution, delivery and performance by the City of this Agreement, the Note and the related documents, except such as have been obtained, given or accomplished and copies of which have been provided to the Bank (f) Except as disclosed in wasting to the Bank, the City is not in default in the payment when due of any indebtedness of the City (g) The financial statements of the City for the Fiscal Year ending September 30, 2014, copies of which have been furnished to the Bank, have been prepared in accordance with generally accepted accounting pnnciples and present fairly the financial condition of the City as of such date and the results of its operations for the penod then ended Since September 30, 2014, there has been no material adverse change in the financial a cial condition, revenues, properties p or operations of the City Section 2 2 General Representations, Warranties and Covenants of the Bank The Bank hereby represents, warrants and agrees that it is a national banking association authonzed to do business in the State and authonzed to execute and deliver this Agreement and to perform its obligations hereunder,,and such execution and delivery will not constitute a violation of its charter, articles of association or bylaws Section 2 3 Making of Loan Pursuant to the terms and provisions of this Agreement, the Bank agrees to make a loan to the City for the purpose of financing all or a part of the costs of the Project and paying related closing costs Section 2 4 Tax Covenants (a) The City hereby covenants with the holder of the Note that in order to maintain the exclusion from gross income for purposes of federal income taxation of interest on the Note, it shall comply with ,each requirement of the Code applicable to the Note In furtherance of the covenant contained in the preceding sentence, the City agrees to continually 5 comply with the provisions of the Tax Certificate to be executed by the City relating to the Note, as such Certificate may be amended from time to time, as a source of guidance for achieving compliance with the Code (referred to herein as the"Tax Certificate") (b) The City hereby covenants with the holder of the Note that it shall make any and all payments required to be made to the United States Department of the Treasury in connection with the Note pursuant to Section 148(f) of the Code (c) So long as necessary in order to maintain the exclusion from gross income of interest on the Note for federal income tax purposes, the covenants contained in this Section 2 4 shall survive the payment of the Note and the interest thereon, including any payment or defeasance thereof (d) The City hereby covenants with the holder of the Note that it shall not take or permit any action or fail to take any action which would cause the Note (i) to be an "arbitrage bond" within the meaning of Section 148(a) of the Code or (ii) not to be 'a "qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Code Section 2 5 Note not to be Indebtedness of the City or State The Note, when delivered by the City pursuant to the terms of this Agreement, shall not be or constitute an indebtedness of the City, the State or any political subdivision or agency thereof, within the meaning of any constitutional, statutory or charter limitations of indebtedness, but shall be payable from and secured by a lien upon and pledge of the Pledged Funds, in the manner and to the extent provided in the Resolution and herein No Noteholder shall ever have the nght to compel the exercise of the ad valorem taxing power of the City or taxation in any form on any property therein to pay the Note or the interest thereon The Note is a special and limited obligation payable as to pnncipal and interest from the Pledged Funds in the manner and to the extent provided herein Section 2 6 Secunty for Note The Note shall be secured by and payable from the Pledged Funds as provided in the Resolution The City does hereby irrevocably pledge the Pledged Funds to the payment of the Note in accordance with the provisions hereof and of the Resolution The pledge of and lien on the Pledged Funds shall attach at the time of delivery of the Note The Note shall be secured by a lien upon the Pledged Revenues on a panty with the lien upon the Pledged Revenues secunng any additional obligations secured by the Pledged Revenues and shall be of equal rank any such additional obligations Section 2 7 Payment Covenant, Revenue Fund, Debt Service Fund (a) The City covenants that it shall duly and punctually pay from the Pledged Funds the pnncipal of and interest on the Note at the dates and place and in the manner provided 6 herein and in the Note according to the true intent and meaning thereof and all other amounts due under this Agreement (b) There is hereby created a fund entitled "City of Clermont, Flonda Infrastructure Sales Surtax Revenue Fund (the "Revenue Fund") " All Pledged Revenues shall be deposited as received into the Revenue Fund (c) There is hereby created a fund entitled "City of Clermont, Flonda Debt Service Fund (the "Debt Service Fund") There shall be established in the Debt Service Fund a separate subaccount to be used to pay debt service on the Note and a separate subaccount for each other issue of obligations secured by the Pledged Revenues on a panty basis with the Note, which obligations have been issued in accordance with the provisions of Section 3 3 hereof (d) On or before the 25th day of each month, the moneys in the Revenue Fund shall be deposited or credited to each such subaccount in the Debt Service Fund in an amount equal to the debt service accruing on the respective obligations dunng such month to provide for the amount required to timely pay debt service on such respective obligations on the next debt service payment date, plus any deficiencies in any pnor monthly payments to the respective subaccounts The moneys on deposit in the respective subaccounts in the Debt Service Fund shall be applied to pay the debt service on the respective obligations secured by the vanous subaccounts on each date on which such debt service shall be due in payable Each such subaccount in the Debt Service Fund will secure the related obligations with respect to which such subaccount was established The balance of Pledged Revenues remaining in the Revenue Fund after such monthly transfers to the respective subaccounts in the Debt Service Fund shall be transferred at the discretion of the City to any other appropnate fund or account of the City and used by the City for any lawful purpose Section 2 8 Audit, Budget and Other Information The City will furnish to the Bank (i) within 210 days of each Fiscal Year a comprehensive annual financial report of the City for such Fiscal Year, which shall include a balance sheet as of the end of such fiscal year, audited without scope limitations by independent certified public accountants of recognized standing selected by the City and satisfactory to the Bank, (ii) within 30 days of such adoption the annual budget of the City for the upcoming Fiscal Year and (iii) such other information as the Bank may require Reports shall be prepared in accordance with generally accepted accounting pnnciples and provided to the Bank without charge Section 2 9 Construction Fund (a) There is hereby created a fund entitled "City of Clermont, Flonda Infrastructure Sales Surtax Revenue Note, Senes 2016 Construction Fund" (the "Construction Fund"), which shall be used only for the payment of Costs of the Project Moneys in the Construction Fund, until applied in payment of any item of the Cost of the Project in the manner 7 hereinafter provided, shall be held in trust by the City and shall be subject to a lien and charge in favor of the Noteholder and for the further secunty of such Noteholder (b) The City covenants that the acquisition, construction and equipping of the Project will be completed without delay and in accordance with sound engmeenng practices The City shall make disbursements or payments form the Construction Fund to pay the Cost of the Project upon the filing with the Clerk of documents and/or certificates signed by an Authonzed City Officer stating with respect to each disbursement or payment to be made-(0) the item number of the payment, (ii) the name and address of the payee to whom payment is due, (iii)'the amount to be paid, (iv) the purpose by general classification for which payment is to be made and (v) that '(A) each obligation item of cost or expense mentioned therein has been properly incurred, is in payment of a part of the Cost of Project and is a proper charge against the Construction Fund and has not been the basis of any previous disbursement or payment, or (B) each obligation, item of cost or expense mentioned therein has been paid by the City, is a reimbursement of the part of the Cost of the Project, is a proper charge against the Construction Fund, has not been theretofore reimbursed to the City or otherwise been the basis of any previous disbursement or payment and the City is entitled to reimbursement thereof The Clerk shall retain all such documents and/or certificates of the Authonzed City Officers for seven (7) years from the dates of such,documents and/or certificates The Clerk shall make available the documents and/or certificates at all reasonable times for inspection by the Noteholder or the agent or representative of the Noteholder (c) The date of completion of the Project shall be determined by an Authonzed City Officer who shall certify such fact in wnting to the City Council Promptly after the date of the completion of the Project, and after paying for making provisions for all unpaid items of the Cost of the Project, .the City shall transfer the balance of any moneys remaining in the Construction Fund to such fund or account of the City as shall be determined by the City Council for application to the payment of any legally permissible cost, provided the City has received an opinion of Bond Counsel to the effect that such transfer shall not adversely affect the exclusion of interest on the Note from gross income for federal income tax purposes (d) Moneys on deposit in the Construction Fund may be invested in Section 2 10 Receipt of Pledged Revenues The City covenants to do all things necessary on its part to maintain its eligibility to continue to receive the Pledged Revenues The City will not take any action which will jeopardize its eligibility to receive'such funds which may adversely affect its undertakings as provided in this Agreement The City will not take any action or enter into any agreement that will result in reducing the level of Pledged Revenues distributed to the City from that prevailing at the time the City takes such action or enters into such agreement ARTICLE 3 8 DESCRIPTION OF NOTE; PAYMENT TERMS; OPTIONAL PREPAYMENT Section 3 1 Descnption and Payment Terms of the Note (a) The City shall, pursuant to authonty granted under the Resolution, issue and deliver the Note to the Bank, in°the pnncipal amount of Five Million Three Hundred Thousand and 00/100 Dollars ($5,300,000) The Note shall be designated, as "City of Clermont, Flonda, Infrastructure Sales Surtax Revenue Note, Senes 2016 " The text of the Note shall be substantially in the form attached hereto as Exhibit A, with such omissions, insertions and vanations as may be necessary and desirable to reflect the terms of this Agreement The provisions of the form of the Note are hereby incorporated in this Agreement (b) The Note shall be dated the date of its delivery, shall be in the pnncipal amount set forth therein and payable as set forth therein, shall bear interest from its date at the rate or rates set forth therein and shall be subject to prepayment as provided therein The Note shall be executed in the name of the City by the manual signature of the Mayor and the official seal of the City shall be affixed thereto and attested and countersigned by the manual signature of the City Clerk In case any one or more of the officers, who shall have signed or sealed the Note, shall cease to be such officer of the City before the Note so signed and sealed shall have been actually delivered, the Note may nevertheless be delivered as herein provided and may be issued as if the person who signed or sealed the Note had not ceased to hold such office The Note may be signed and sealed on behalf of the City by such person who at the actual time of the execution of the Note shall hold-the proper office, although at the date the Note is actually delivered, such person may not have held such office or may have been so authonzed (c) Interest on the Note shall be payable semi-annually on June 1 and December 1 of each year (the "Interest Payment Date"), commencing on June 1, 2016 Pnncipal of the Note shall be payable at the times and,in the manner set forth therein Interest on the Note shall be calculated on the basis of twelve 30-day months over a 360-day year (d) All payments of pnncipal of and interest on the Note shall be payable in any coin or currency of the United States which, at the time of payment, is legal tender for the payment of public and pnvate debts and shall be made to the Bank by ACH direct debit from a bank account mutually agreeable to Bank and City (e) There will be no Bank-fees to maintain the Loan and the Note The Bank shall pay for all of its costs relating to servicing the Loan and the Note The City agrees to pay the legal fees and costs of counsel to the Bank (not exceeding $6,500) and the legal fees and costs of Bond Counsel (f) The Note shall not be subject to a book-entry system of registration and transfer and such transfer and registration of the Note shall be governed by the provisions of this paragraph The Registrar shall be responsible for maintaining the Register The person in whose name ownership of the Note is shown on the Register shall be deemed the owner thereof by the 9 City and the Registrar, and any notice to the contrary shall not be binding upon the City or the Registrar The City and the Registrar may treat the registered owner as the absolute owner of the Note for all purposes, whether or not the Note shall be overdue, and shall not be bound by any notice to the contrary Ownership of the Note may be transferred in whole and only upon the Register Upon surrender to the Registrar for transfer of the Note accompanied by an assignment duly executed by the registered owner or its attorney duly authorized in writing, the Registrar shall deliver in the name of the transferee a new fully registered Note for the aggregate principal amount of the Note surrendered The Note may only be transferred to an "accredited investor" under Rule 144A promulgated under the Secunties Act of 1933, as amended, or a "qualified institutional buyer" under Regulation D promulgated under the Securities Act of 1933, as amended The Noteholder, and any subsequent transferee of the Note, shall notify the City of any assignment, transfer, distribution or sale of such Note at least five (5) days in advance of such transfer Section 3 2 Required Coverage Ratio The City covenants that the ratio of the amount of Pledged Revenues collected during each Fiscal Year of the City divided by the combined annual debt service on all obligations secured by the Pledged Revenues during such future Fiscal Year will be at least equal to 1 25 Section 3 3 Issuance of Additional Obligations The City will not issue any additional obligations secured by the Pledged Revenues unless (a) after the issuance of such obligations the ratio of the amount of(i) Pledged Revenues collected during the immediately preceding Fiscal Year,of the City for which audited financial statements are available divided by (ii) the maximum amount, during the then current or any future Fiscal Year, of the combined annual debt service on all obligations secured by the Pledged Revenues, will equal at least,l 25, (b) no Event of Default exists hereunder, and (c) the other covenants of the City contained herein will continue to be met For purposes of determining compliance with (a) above, the interest rate on any obligations which bear interest at a variable rate will be deemed to be the greater of (i) the rate of interest borne by such obligations for the immediately preceding 52 weeks (or such shorter period as such indebtedness was outstanding) plus 50 basis points and if not outstanding based on the SIFMA Index plus 50 basis points for tax-exempt obligations, or for taxable obligations, an index of U S Treasury obligations, for a similar period, plus 50 basis points, or (u) four percent (4%) per annum For purposes of this Section 3 3 (i) "SIFMA" shall mean the Securities Industry & Financial Markets Association (formerly The Bond Markets Association), and any successor thereto, and (ii) "SIFMA Index" shall mean a rate determined on the basis of the seven-day high grade market index of tax-exempt variable rate demand obligations, as produced by Municipal Market Data and published or made available by SIFMA (formerly The Bond Markets Association) or any entity acting in cooperation with or under the sponsorship of SIFMA 10 ARTICLE 4 ISSUANCE OF NOTE Section 4 1 Issuance of Note The Bank shall not be obligated to make any loan under this Agreement unless at or pnor to the date of issuance of the Note the City delivers to the Bank the following items in form and substance acceptable to the Bank (i) a certificate of the City Clerk, dated as of the date of issuance of the Note, to the effect that the representations and warranties of the City contained in Section 2 1 hereof are true and correct as of such date and that there is currently no Event of Default or event that with notice or lapse of time or both would become an Event of Default under the Resolution or hereunder, (ii) a fully executed Tax Certificate relating to the Note, (iii) a copy of a completed and executed Form 8038-G relating to the Note to be filed with the Internal Revenue Service, (iv) an opinion of Bond Counsel in form and substance acceptable to the Noteholder, including opinions to the effect that (A) this Agreement and the Note have been duly authonzed by the City and are enforceable obligations in accordance with their terms, and the Resolution has been duly adopted and is enforceable in accordance with its terms (enforceability of such instruments may be subject to standard bankruptcy exceptions and the like), (B) interest on the Note shall be excluded from gross income for federal income tax purposes and shall not be treated as a preference item for purposes of computing the alternative minimum tax imposed by Section 55 of the Code (however, the interest on the Note owned by corporations may be subject to the federal alternative minimum tax which is based in part on adjusted current earnings), and (C) the Note is a "qualified tax-exempt obligation"under Section 265(b)(3)(B) of the Code, (v) a certificate of the City Clerk, dated the date of issuance of the Note, to the effect that the interest rate on the Note is in compliance with the applicable maximum interest rate provisions contained in Section 215 84, Flonda Statutes, as amended, (vi) the fully executed Note, (vii) an opinion of counsel to the City in form and substance acceptable to the Noteholder regarding, among other things, the due authorization, execution, delivery, validity and enforceability of this Agreement and the Note and the due 11 adoption of the Resolution (enforceability may be subject to standard bankruptcy exceptions and the like), and (viii) such additional certificates, instruments and other documents as the Bank, or its counsel or Bond Counsel, or counsel to the City, may deem necessary or appropnate Section 4 2 Application of Proceeds , Simultaneously with the delivery of the Note to the Bank, the proceeds of the Note shall be deposited into the of the Construction Fund established pursuant to Section 2 9 hereof The proceeds of the Note deposited into the Construction Fund shall only be disbursed to pay the Costs of the Project, as provided in Section 2 9 hereof and as otherwise provided therein ARTICLE 5 EVENTS OF DEFAULTS; REMEDIES Section 5 1 Events of Default The following events shall each constitute an"Event of Default"under (a) Default shall be made in the payment of the principal of or interest on the Note, or any other payment obligations hereunder when due (b) There shall occur the dissolution or liquidation of the City, or the filing by the City of a voluntary petition in bankruptcy, or the commission by the City of any act of bankruptcy, or adjudication by the City as bankrupt, or assignment by the City for the benefit of its creditors, or appointment of a receiver for the City, or the entry by the City in an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to the City in any proceeding for its reorganization instituted under the provisions of the Federal Bankruptcy Act, as amended, or under any similar act in any jurisdiction which may now be in effect or hereinafter enacted (c) The City shall default in the due and punctual performance of any other of the covenants, conditions, agreement 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 a period of thirty (30) days after the earlier of the date (i) written notice of such default shall have been received by the City, or (ii) the City was required to have notified the Noteholder in accordance with the terms hereof, unless the Noteholder shall agree in writing to an extension of such time pnor to its expiration 12 Section 5 2 Remedies If any such Event of Default shall have occurred, the Noteholder may seek enforcement of all remedies available to it hereunder and under applicable law Any amounts due on the Note which shall remain unpaid past the scheduled payment dates, shall bear interest at the Default Rate until all amounts then due under the Note are paid in full The Bank shall be entitled to its reasonable costs and expenses (including reasonable fees and expenses of counsel) incurred in enforcing any of its rights under this Agreement upon the occurrence of an Event of Default Section 5 3 Waiver of Jury Trial The City knowingly, voluntanly, and intentionally waives any right it may have to a trial by Jury, with respect to any litigation or legal proceedings based on or arising out of this Agreement or the Note, including any course of conduct, course of dealings, verbal or written statement or actions or omissions of any party which in any way relates to this Agreement or the Note Section 5 4 Notice of Defaults The City shall within five (5) days after it acquires knowledge thereof, notify the Noteholder in writing upon the happening, occurrence, or existence of any Event of Default and any event or condition which with the passage of time or giving of notice, or both, would constitute an Event of Default, and shall provide the Noteholder, with such written notice, a detailed statement by a responsible officer of the City of all relevant facts and the action being taken or proposed to be taken by the City with respect thereto Regardless of the date of receipt of such notice by the Noteholder, such date shall not in any way modify the date of occurrence of the actual Event of Default ARTICLE 6 MISCELLANEOUS Section 6 1 Amendments, Changes or Modifications to the Agreement This Agreement shall not be amended, changed or modified except by wntten instrument executed by the Bank and the City Section 6 2 Counterparts This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an onginal, 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 13 Section 6 3 Severability If any clause, provision or section of this Agreement shall be held illegal or invalid by any court, the invalidity of such provisions or sections shall not affect any other provisions or sections hereof, and this Agreement shall be construed and enforced to the end that the transactions contemplated hereby be effected and the obligations contemplated hereby be enforced, as if such illegal or invalid clause, provision or section had not been contained herein Section 6 4 Term of Agreement This Agreement shall be in full force and effect from the date hereof and shall continue in effect as long as the Note is outstanding Section 6 5 Assignment The Bank acknowledges that it presently intends to hold the Note through its final matunty date, however, the Bank may transfer or assign the Note and this Loan Agreement as provided in Section 3 1(f) hereof Section 6 6 Notices Any notices or other communications required or permitted hereunder shall be sufficiently given if delivered personally or sent registered or certified mail, postage prepaid, to the City, City of Clermont, 685 W Montrose Street, 3rd Floor, Clermont, Flonda 34712, Attention Mayor, and to the Bank, JPMorgan Chase Bank, N A Business Banking Government & Not-for-Profit, 3424 Peachtree Road NE, 6th floor, GA1-6603, Atlanta, Georgia 30326-1118, Attention Senior Vice President, or at such other address as shall be furnished in writing by any such party to the other, and shall be deemed to have been given as of the date so delivered or deposited in the United States mail Section 6 7 Applicable Law The substantive laws of the State of Flonda shall govern this Agreement Section 6 8 Incorporation by Reference All of the terms and obligations of the Resolution are hereby incorporated herein by reference as if said Resolution was fully set forth in this Agreement [Remainder Of Page Intentionally Left Blank, Signature Page Follows] 14 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first set forth herein CITY OF CLERMONT, FLORIDA (SEAL) By � Gail L Ash, M o ATTESTED AND,COUNTERSIGNED: Tracy Ackroyd, C ty Clerk [Signature Page to Loan Agreement] JP MORGAN CHASE BANK, N.A. By Name Title [Signature Page to Loan Agreement] EXHIBIT A Form of Note THIS NOTE IS SUBJECT TO TRANSFER RESTRICTIONS MORE FULLY DESCRIBED HEREIN AND IN THE LOAN AGREEMENT REFERRED TO HEREIN. UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF CLERMONT INFRASTRUCTURE SALES SURTAX REVENUE NOTE SERIES 2016 Pnncipal Sum Interest Rate Date of Issuance Final Matunty Date $ 2 12% March 3, 2016 December 1, 2030 (subject to adjustment) The CITY OF CLERMONT (the "City"), a municipality created and existing under and by virtue of the laws of the State of Flonda, for value received, hereby promises to pay, solely from the Pledged Funds described in the within mentioned Agreement, to the order of JPMorgan Chase Bank, N A , Orlando, Flonda, or its successors or assigns (the "Noteholder"), the Pnncipal Sum specified above loaned to the City pursuant to that certain Loan Agreement by and between JPMorgan Chase Bank, N A and the City, dated March 3, 2016 (the "Agreement"), and to pay interest on the outstanding balance of such Pnncipal Sum from the Date of Issuance specified above or from the most recent date to which interest has been paid at the Interest Rate per annum specified above on June 1 and December 1 of each year, commencing June 1, 2016, until such Pnncipal Sum shall have been paid The Pnncipal Sum hereof shall be payable in fifteen (15) annual installment payments on the dates and in the amounts as follows Payment Date Pnncipal Amount Payment Date Pnncipal Amount 12/1/2016 12/1/2024 12/1/2017 12/1/2025 12/1/2018 12/1/2026 12/1/2019 12/1/2027 12/1/2020 12/1/2028 12/1/2021 12/1/2029 12/1/2022 12/1/2030 12/1/2023 Such Pnncipal Sum and interest is payable in any coin or currency of the United States of Amenca which, at the time of payment, is legal tender for the payment of public and pnvate debts This Note(the "Note") is authonzed to be issued under the authonty of and in full compliance with the Constitution and laws of the State of Flonda, including, particularly, Chapter 166, Part II, Flonda Statutes, as amended, Section 212 055(2), Flonda Statutes, as amended, and other applicable provisions of law, and a resolution duly adopted by the City on February 23, 2016, as amended and supplemented from time to time (the "Resolution"), and is subject to all covenants, terms and conditions of the Resolution and the Agreement Any term used in this Note and not otherwise defined herein shall have the meaning ascnbed to such term in the Agreement This Note is being issued to finance the cost of a capital project as described in the Agreement and the Resolution This Note is secured by and shall be payable from the Pledged Funds as descnbed in and in accordance with the Resolution and the Agreement on a panty with any other additional obligations secured by the Pledged Revenues from time to time, in the manner and to the extent provided in the Resolution This Note is not secured by the Reserve Account established under the Resolution This Note shall bear interest from its Date of Issuance at the Interest Rate per annum specified above on the basis of twelve 30-day months over a 360-day year The interest rate on this Note shall be subject to adjustment as hereinafter provided In the event of a Determination of Taxability (as defined below), the interest rate payable hereunder shall be increased to the Taxable Rate (as defined below) and this adjustment shall survive payment on this Note until such time as the Federal statute of limitations under which interest on this Note shall be deemed taxable under the Code shall have expired In addition, upon a Determination of Taxability, there shall be payable hereunder to the Noteholder subject to such Determination of Taxability the Additional Amount (as defined in the next sentence) upon demand "Additional Amount" means for purposes of this paragraph (i) the difference between (a) interest on this Note for the penod commencing on the date on which the interest on this Note ceased to be excludable from gross income for federal income tax purposes and ending on the earlier of the date this Note ceased to be outstanding or such adjustment is no longer applicable to this Note (the "Taxable Penod") at a rate per annum equal to the Taxable Rate, and (b) the aggregate amount of interest paid on this Note for the Taxable Penod under the provisions of this Note without considering the Determination of Taxability, plus (ii) interest, penalties on overdue interest and additions to tax (as referred to in Subchapter A of Chapter 68 of the Code) paid or payable by such Noteholder to the Internal Revenue Service by reason of such Determination of Taxability As used herein, "Determination of Taxability" means the issuance of a final decree or judgment of any federal court or a final action of the Internal Revenue Service or of the United States Treasury Department or an opinion of nationally recognized bond counsel selected by the City and approved by the Noteholder determining that any interest payable on this Note is includable in the gross income of the Noteholder No such decree,judgment, action, or opinion shall be considered final for the purposes of this paragraph unless the City has been given wntten notice thereof and, if it is so desired by the City and is legally permissible, the City has been afforded the opportunity to contest the same, either directly or in the name of the Noteholder, and until the conclusion of any appellate review, if sought "Taxable Rate" shall mean the interest rate per annum that shall provide the Noteholder with the same after tax yield that the Noteholder would have otherwise received had the Determination of Taxability not occurred, taking into account the increased taxable income of the Noteholder as a result of such Determination of Taxability The Noteholder shall provide the City with a written statement explaining the calculation of the Taxable Rate, which statement shall, in the absence of manifest error, be conclusive and binding on the City So long as no Determination of Taxability shall have occurred, upon the occurrence of a Loss of BQ Status (as defined below) and for as long as this Note remains outstanding, the Interest Rate on the Note shall be converted to the Adjusted BQ Rate (as defined below) In addition, upon a Loss of BQ Status, the City shall pay to the Noteholder(i) an additional amount equal to the difference between (A) the amount of interest actually paid on this Note during the period of time from the date of issuance of this Note and the next succeeding interest payment date, and (B) the amount of interest that would have been paid during the penod in clause (A) had this Note borne interest at the Adjusted BQ Rate, and (ii) an amount equal to any interest, penalties on overdue interest and additions to tax (as referred to in Subchapter A of Chapter 68 of the Code) owed by the Noteholder as a result of the Loss of BQ Status "Adjusted BQ Rate" shall mean, upon a Loss of BQ Status, the interest rate per annum that shall provide the Noteholder with the same after tax yield that the Noteholder would have otherwise received had the Loss of BQ Status not occurred, taking into account the increased taxable income of the Noteholder as a result of such Loss of BQ Status The Noteholder shall provide the City with a written statement explaining the calculation of the Adjusted BQ Rate, which statement shall, in the absence of manifest error, be conclusive and binding on the City "Loss of BQ Status" shall mean a determination by the Noteholder that this Note is not a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Code (or any successor provision) Notwithstanding any provision in this Note to the contrary, in no event shall the interest contracted for, charged or received in connection with this Note (including any other costs or considerations that constitute interest under the laws of the State of Flonda which are contracted for, charged or received) exceed the maximum rate of interest allowed under the State of Flonda as presently in effect All payments made by the City hereon shall apply first to accrued interest, and then to the principal amount then due on this Note This Note may not be prepaid and redeemed by the City pnor to December 1, 2020 On and after December 1, 2020, the City may prepay and redeem this Note in whole or in part at any time upon two Business Days' prior written notice to the Noteholder at a redemption pnce equal to the pnncipal amount of this Note to be prepaid, plus accrued interest thereon to the prepayment date Such prepayment notice shall specify the amount of the prepayment which is to be made Notwithstanding anything herein or in the Agreement to the contrary, the Noteholder shall not be required to (i) surrender or cancel this Note until it has received all amounts owing and due thereunder and under the Agreement, or (ii) surrender this Note for prepayment or principal installment payments Each partial prepayment of this Note shall be applied and credited to the unpaid annual principal installments payable on this Note in inverse order of maturity treating each annual pnncipal installment as a maturity In connection with any such partial prepayment of this Note, the Noteholder shall attach to this Note an allonge signed by the City and the Noteholder which sets forth the new amounts of the unpaid annual pnncipal installments payable on this Note over the remaining term of this Note, provided, however, the Noteholder may keep such records electronically and absent manifest error such records shall be conclusive on both the Noteholder and the City Any amounts repaid hereunder may not be re-borrowed Notice having been given as aforesaid, the portion of the outstanding balance of the Principal Sum of this Note stated in such notice or the whole thereof, as the case may be, shall become due and payable on the prepayment date stated in such notice, together with interest accrued and unpaid to the prepayment date on the principal amount then being paid, and the amount of principal and interest then due and payable shall be paid In the event that the entire unpaid balance of the principal of this Note is to be prepaid, such prepayment shall be made upon presentation and surrender of this Note at the office of the Noteholder If on the prepayment date moneys for the payment of the principal amount to be prepaid on this Note, together with interest to the prepayment date on such principal amount shall have been paid to the Noteholder as above provided and if notice of prepayment shall have been given to the Noteholder as above provided, then from and after the prepayment date interest on such principal amount of this Note shall cease to accrue If said moneys shall not have been so paid on the prepayment date, such principal amount of this Note shall continue to bear interest until payment thereof at the rate or rates provided for in the Agreement This Note is transferable by the Noteholder hereof, in whole, only in the manner and subject to the restnctions and limitations set forth in the Agreement The City may deem and treat the registered owner hereof as the absolute owner hereof for the purposes hereof This Note may only be transferred to an "accredited investor" under Rule 144A promulgated under the Securities Act of 1933, as amended, or to a "qualified institutional buyer" under Regulation D promulgated under the Securities Act of 1933, as amended This Note, when delivered by the City pursuant to the terms of the Agreement and the Resolution, shall not be or constitute an indebtedness of the City or of the State of Florida or any political subdivision or agency thereof, within the meaning of any constitutional, statutory or charter limitations of indebtedness, but shall be payable solely from the Pledged Revenues, as provided in the Agreement and the Resolution The Noteholder shall not have the right to compel the exercise of the ad valorem taxing power of the City or the State of Flonda, or taxation in any form on any property therein to pay this Note or the interest thereon The Noteholder shall have such remedies as descnbed in the Resolution and the Agreement If any amounts due on this Note shall remain unpaid past any scheduled payment date, this Note shall bear interest at the Default Rate (as defined in the Agreement) until all amounts then due under this Note are paid in full The City hereby waives demand, protest and notice of dishonor No obligation under the Agreement or this Note shall be or be deemed to be an obligation of any member of the City Council or any officer, employee or agent of the City in his or her individual capacity, and none of such persons executing the Agreement or this Note shall be liable personally thereon or hereon by reason thereof It is certified, recited and declared that all acts, conditions and things required to exist, happen and be performed precedent to and in connection with the execution and delivery of the Agreement and the issuance of this Note do exist, have happened and have been performed in due time, form and manner as required by law, and that the issuance of this Note, together with all other obligations of the City under the Agreement, does not exceed or violate any constitutional or statutory limitation [Remainder of Page Intentionally Left Blank, Signature Page Follows] IN WITNESS WHEREOF, the City of Clermont, Flonda, caused this Note to be signed by the manual signature of its Mayor and its official seal to be affixed hereto or imprinted or reproduced hereon, and attested and countersigned by the manual signature of its City Clerk, and this Note to be dated the Date of Issuance set forth above CITY OF CLERMONT, FLORIDA (SEAL) By �._ /� i �L/ Gail L Ash, Mayor ATTESTED: �i // ,/ Tracy Ackroyd Howe, City Clerk [Signature Page of Infrastructure Sales Surtax Revenue Note, Senes 2016]