R-99-1103~' •
,
RESOLUTION NO. 1103
• A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CLERMONT, FLORIDA, ACCEPTING THE PROPOSAL OF
SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL
ASSOCIATION, TO PROVIDE THE CITY WITH A NOT TO
EXCEED $300,000 LOAN TO FINANCE A PART OF THE
COST OF CERTAIN CAPITAL PROJECTS IN AND FOR THE
CITY, INCLUDING THE ACQUISITION OF NEW FIRE
TRUCKS FOR THE CITY; AUTHORIZING THE
EXECUTION AND DELIVERY OF A LOAN AGREEMENT
WITH SAID BANK PURSUANT TO WHICH THE CITY
WILL ISSUE A NOTE TO SECURE THE REPAYMENT OF
SAID LOAN AND WILL PLEDGE CERTAIN PLEDGED
FUNDS TO SECURE THE REPAYMENT OF SUCH NOTE;
AUTHORIZING THE ISSUANCE OF A NOTE IN AN
AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED
$300,000 PURSUANT TO THE LOAN AGREEMENT TO
SECURE THE REPAYMENT OF SAID LOAN;
DESIGNATING SUCH 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, FLORIDA:
SECTION 1. AUTHORITY FOR THIS RESOLUTION. This Resolution is
adopted pursuant to the provisions of Chapter 166, Part II, Florida Statutes, as amended, and
other applicable provisions of law.
SECTION 2. FINDINGS. It is hereby ascertained, determined and declared:
(A) The City of Clermont, Florida (the "City"), deems it necessary,
desirable and in the best interests of the City that the City undertake certain capital
projects in and for the City, including the acquisition of new fire trucks for the City, as
more particularly described in the Loan Agreement (as defined herein) and all in
accordance with the plans and specifications on file or to be on file with the City, as the
same may be modified from time to time (the "Project").
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(B) The City has obtained a proposal for a not to exceed $300,000 loan
(the "Loan") from SunTrust Bank, Central Florida, National Association (the "Bank"),
• the proceeds of which will be applied to finance a part of the cost of the Project.
(C) The Loan will be secured by the Loan Agreement pursuant to which
the City will issue a note (the "Note") to secure the repayment of the Loan.
(D) The City is advised that due to the present volatility of the market for
municipal debt, it is in the best interest of the City to issue the 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 price, 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 authorized.
(E) The costs of the Project in an amount not to exceed $300,000 will be
financed from the proceeds of the Loan.
(F) The Loan will be repaid solely from the Pledged Funds (as defined in
the Loan Agreement). Such Pledged Funds include, but are not limited to, moneys
budgeted and appropriated pursuant to the Loan Agreement. The ad valorem taxing
power of the City will never be necessary or authorized to pay the amounts due on the
Loan.
• (G)It is not reasonably anticipated that more than $10,000,000 of tax-
exempt obligations under Section 265(b)(3) of the Internal Revenue Code of 1986, as
amended (the "Code") will be issued by the City in calendar year 1999.
SECTION 3. AUTHORIZATION OF THE PROJECT. The City does hereby
authorize the Project.
SECTION 4. ACCEPTANCE OF PROPOSAL. The City hereby accepts the
proposal of the Bank to provide the City with the Loan.
SECTION 5. 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 authorizes the Mayor or the Vice 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 (the "Loan Agreement"), with such
changes, insertions and additions as they may approve, their execution thereof being evidence
of such approval.
SECTION 6. AUTHORIZATION OF NOTE TO FINANCE A PART OF
THE COST OF THE PROJECT. The City does hereby authorize the issuance of a Note in the
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004.181093.1 2
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principal amount of not exceeding $300,000 for the purpose of providing the City with
sufficient funds to finance a part of the cost of the Project. The Mayor and City Clerk are
hereby authorized 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 as provided in the Loan Agreement. The Note shall be issued in the principal amount
(not exceeding $300,000), shall bear interest at the initial interest rate (not exceeding 7.5 %),
shall have a final maturity date (not exceeding ten years from the date of the execution and
delivery of the Loan Agreement authorized herein) and shall have such other terms, all as set
forth in the Loan Agreement and the Note authorized herein and executed and delivered in
connection with Loan.
SECTION 7. DESIGNATION OF NOTE AS QUALIFIED TAX-EXEMPT
OBLIGATIONS. The City hereby designates the Note described 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(G) of this Resolution and the
Mayor is authorized to recertify such finding upon the issuance of the Note. The City
acknowledges that any action which adversely impacts the status of the Note as a "qualified
tax-exempt obligation" will result in an upward adjustment to the interest rate on the Note.
SECTION 8. LIMITED OBLIGATION. 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 Loan Agreement and shall not be deemed a pledge of the faith
and credit or taxing power of the City and such obligation shall not create a lien on any
• property whatsoever of or situated within the City other than the Pledged Funds.
SECTION 9. GENERAL AUTHORIZATION. The Mayor and City Clerk 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 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.
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004.181093.1 3
SECTION 11. EFFECTIVE DATE. This Resolution shall take effect
immediately upon its adoption.
PASSED, APPROVED AND ADOPTED this fourteenth day of December,
1999.
CITY COUNCIL OF THE CITY
OF CLERMONT, FLORIDA
(OFFICIAL SEAL) ~-~
By
Mayor
ATTEST:
i
ity Clerk
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004.181093.1
4
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Exhibit A
•
Loan Agreement
•
•
•
•
LOAN AGREEMENT
BETWEEN
CITY OF CLERMONT, FLORIDA
AND
SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION
Dated as of December , 1999
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004.181 129.1
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CJ
TABLE OF CONTENTS
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Page
ARTICLE 1
DEFINITION OF TERMS
Section 1.1 Definitions ........................................................................... 1
Section 1.2 Interpretation ........................................................................5
Section 1.3 Titles and Headings ................................................................ 6
ARTICLE 2
REPRESENTATIONS, WARRANTIES AND COVENANTS;
SECURITY FOR NOTE; ADDITIONAL OBLIGATIONS
Section 2.1 Representations by the City ...................................................... 6
Section 2.2 General Representations, Warranties and Covenants of the Bank......... 8
Section 2.3 Making of Loan ..................................................................... 8
Section 2.4 Tax Covenants ...................................................................... 8
Section 2.5 Note not to be Indebtedness of the City or State .............................. 8
Section 2.6 Security for Note .................................................................. . 9
Section 2.7 Covenant to Budget and Appropriate ........................................... 9
Section 2.8 Payment Covenant ............................................................... 10
ARTICLE 3
DESCRIPTION OF NOTE; PAYMENT TERMS;
OPTIONAL PREPAYMENT
Section 3.1 Description and Payment Terms of the Note ................................ 10
Section 3.2 Optional Prepayment ............................................................ 11
Section 3.3 Adjustments to Interest Rates .................................................. 12
ARTICLE 4
ISSUANCE OF NOTE
•
Section 4.1 Issuance of Note .................................................................. 15
Section 4.2 Construction Fund ................................................................ 17
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004.181 129.1
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ARTICLE 5
• EVENTS OF DEFAULTS; REMEDIES
Section 5.1 Events of Default ................................................................. 18
Section 5.2 Remedies ........................................................................... 19
ARTICLE 6
•
MISCELLANEOUS
Section 6.1 Amendments, Changes or Modifications to the Agreement .............. 20
Section 6.2 Counterparts ....................................................................... 20
Section 6.3 Severability ........................................................................ 20
Section 6.4 Term of Agreement .............................................................. 20
Section 6.5 Assignment ........................................................................ 20
Section 6.6 Notice of Changes in Fact ...................................................... 21
Section 6.7 Notices ............................................................................. 21
Section 6.8 Applicable Law ................................................................... 21
Section 6.9 Incorporation by Reference ..................................................... 22
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004.181 129.1
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LOAN AGREEMENT
This LOAN AGREEMENT (this "Agreement") is made and entered into as of
December _, 1999, between the City of Clermont, a municipality created and existing under
and by virtue of the laws of the State of Florida (the "City"), and SunTrust Bank, Central
Florida, National Association, Leesburg, Florida, a national banking association and its
successors and assigns (the "Bank");
WITNESSETH:
WHEREAS, the City is authorized pursuant to Chapter 166, Part II, Florida
Statutes, as amended, and other applicable provisions of law to, among other things, (a)
undertake capital projects in and for City (the "Project," as more particularly described in
Exhibit A attached hereto), (b) borrow money to finance the cost of such projects and (c)
pledge the funds and credit of the City for payment of such debts; 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 arrangement pursuant to the terms and provisions of this
Agreement in an aggregate principal amount of $300,000 under which the City may finance or
refinance a part of the cost of the Project.
• NOW, THEREFORE, THIS AGREEMENT WITNESSETH:
That the parties hereto, intending to be legally bound hereby and in
consideration of the mutual covenants hereinafter contained, DO HEREBY AGREE as
follows:
ARTICLE 1
DEFINITION OF TERMS
Section 1.1 Definitions.
The terms defined in this Article 1 shall, for all purposes of this Agreement,
have the meanings specified in this Article 1, unless the context clearly otherwise requires.
"Act" shall mean Chapter 166, Part II, Florida Statutes, as amended, and other
applicable provisions of law.
3.1(d) hereof.
"Additional Amount" shall have the meaning ascribed to such term in Section
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004.1 81 129.1
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"Agreement" shall mean this Loan Agreement dated as of December _, 1999,
between the City and the Bank and any and all modifications, alterations, amendments and
supplements hereto made in accordance with the provisions hereof.
"Authorized Depository" shall mean the State Board of Administration of
Florida or a bank or trust company in the State which is eligible under the laws of the State to
receive funds of the City.
"Authorized Investments" shall mean any of the following which shall be
authorized from time to time by applicable laws of the State of Florida for deposit or purchase
by the City for the investment of its funds:
(a) Direct obligations of (including obligations issued or held in book entry
form on the books of the Department of the Treasury of the United States of America and
stripped and zero coupon obligations), or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America.
(b) Bonds, debentures or notes or other evidences of indebtedness payable in
cash issued by any one or a combination of any of the following federal agencies whose
obligations represent the full faith and credit of the United States of America: Export Import
Bank of the United States, Federal Financing Bank, Farmers Home Administration, Federal
Housing Administration, Maritime Administration, Public Housing Authority and Government
National Mortgage Association.
(c) Certificates of deposit properly secured at all times by collateral security
described in either or both of paragraphs (a) and (b) of this definition or in the collateral
provisions of Chapter 280, Florida Statutes, as amended, and issued by commercial banks,
savings and loan associations or mutual savings banks chartered by the State of Florida or the
United States of America, and bank trust receipts issued by commercial banks or trust
companies chartered by the State of Florida or the United States of America upon any
securities described in paragraph (a) of this definition.
(d) The following investments fully insured by the Federal Deposit
Insurance Corporation: (i) certificates of deposit, (ii) savings accounts, (iii) deposit accounts,
or (iv) depository receipts of a bank, savings and loan association or mutual savings bank.
(e) Commercial paper rated in one of the two highest rating categories by at
least two nationally recognized rating agencies or commercial paper backed by a letter of
credit or line of credit rated in one of the two highest rating categories by Moody's Investors
Service and Standard & Poor's.
(f) Written repurchase agreements with any bank, savings institution or trust
company which is insured by the Federal Deposit Insurance Corporation, or with any
broker-dealer with retail customers which falls under Securities Investors Protection
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004.181 129.1
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Corporation protection, provided that such repurchase agreements are fully secured by
collateral described in (a) above or obligations of any agency or instrumentality of the United
States of America, and provided further that (i) such collateral is held by a bank or trust
company chosen by the City which has no interest in the repurchase agreement during the term
of such repurchase agreement, (ii) such collateral is not subject to liens or claims of third
parties, (iii) such collateral has a market value (determined at least once every 30 days) at least
equal to the amount invested in the repurchase agreement, (iv) the entity holding the collateral
has a perfected first security interest in the collateral for the benefit of the Noteholder, (v) the
agreement shall be for a term not longer than 270 days and (vi) the failure to maintain such
collateral at the level required in (iii) above will require the entity holding the collateral to
liquidate the collateral.
(g) Money market funds rated in the highest rating category by Moody's
Investors Service and Standard & Poor's.
(h) Units of participation in the Local Government Surplus Funds Trust
Fund established pursuant to Chapter 218, Part IV, Florida Statutes, as amended, or any
similar common trust fund which is established pursuant to the law of the State of Florida as a
legal depository of public moneys.
(i) Obligations of state or local government municipal bond issuers that are
rated in one of the two highest rating categories by Moody's Investors Service and Standard &
Poor's.
(j) Such other obligations as shall be permitted to be legal investments of
the City by the laws of the State of Florida.
Rating categories when referred to herein shall be without regard to gradations
within such categories, such as "plus" or "minus."
"Authorized City Officer" for the performance on the behalf of the City of any
act of the City or the execution of any instrument on behalf of the City shall mean any person
authorized by resolution or certificate of the City to perform such act or sign such document.
"Bank" shall mean SunTrust Bank, Central Florida, National Association,
Leesburg, Florida, and its successors and assigns.
"Bond Counsel" shall mean Foley & Lardner, 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.
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004.181 129.1
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"Business Day" or "business day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions within the State are authorized by law to remain
closed.
"City" shall mean the City of 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 4.2 hereof.
"Cost" when used in connection with the Project, shall mean the costs of the
Project described in Section 4.1(b) hereof.
"Determination of Taxability" shall mean the circumstance of interest paid or
payable on a Note becoming includable for federal income tax purposes in the gross income of
the Noteholder as a consequence of any act, omission or event whatsoever and regardless of
whether the same was within or beyond the control of the City. A Determination of Taxability
will be deemed to have occurred upon (a) the receipt by the City or a Noteholder of an
original or a copy of an Internal Revenue Service Technical Advice Memorandum or Statutory
Notice of Deficiency which holds that any interest payable on its 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 m the gross income of the
Noteholder; or (c) receipt by the City or a Noteholder of an opinion of Bond Counsel that any
interest on its 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 solely from
the fact that such interest is taken into account in determining adjusted current earnings for the
purpose of the alternative minimum income tax imposed on corporations.
"Fiscal Year" shall mean the period commencing on October 1 of each year and
continuing through the next succeeding September 30, or such other period as may be
prescribed by law.
"Interest Payment Date" shall have the meaning ascribed thereto in Section
3.1(c) hereof.
"Mayor" shall mean the Mayor of the City and such other person as may be
duly authorized to act on his or her behalf.
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004.181 129.1
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"Non-Ad Valorem Funds" shall mean all legally available funds of the City
derived from any source whatsoever other than ad valorem taxation on real and personal
property, which are legally available to make the payments required herein, but only after
provision has been made by the City for the payment of services and programs which are for
essential public purposes affecting the health, welfare and safety of the inhabitants of the City
or which are legally mandated by applicable law.
"Note" shall mean the revenue note authorized by the Resolution and delivered
by the City to the Noteholder in accordance with the requirements set forth in Article 4 hereof.
"Noteholder" shall mean the Bank as the holder of the Note, or any other
registered holder of or participant in the Note.
"Noteholder's Adjusted Cost of Funds" shall mean the fraction (expressed as a
percentage), determined by the Noteholder, the numerator of which is the total interest
expense of the Noteholder for each calendar year and the denominator of which is the total
average adjusted bases of all assets of the Noteholder during the calendar year as determined
under Section 265(b)(2)(B) of the Code or any successor provision thereto.
"Pledged Funds" shall mean (a) the proceeds of the Note pending the
application thereof and (b) moneys budgeted and appropriated pursuant to Section 2.7 hereof.
"Project" shall refer to the capital projects described generally in Exhibit A
attached hereto, as such Project may be amended from time to time by the City with the prior
written approval of the Bank.
"Resolution" shall mean the resolution adopted by the City on December 14,
1999, amended and supplemented, which among other things authorized the execution and
delivery of this Agreement and the issuance of the Note.
"State" shall mean the State of Florida.
3.1(d) hereof.
hereof.
1.5.
"Taxable Period" shall have the meaning ascribed to such term in Section
"Tax Certificate" shall have the meaning ascribed to such term in Section 2.4
"Taxable Rate" shall mean the interest rate on the applicable Note multiplied by
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
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004.181 129.1
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versa, and words of the singular number shall be construed to include correlative words of the
plural number and vice versa. Any capitalized terms used in this Agreement not herein
defined shall have the meanings ascribed to such terms in the Resolution. This Agreement and
all the terms and provisions hereof shall be construed to effectuate the purpose set forth herein
and to sustain the validity hereof.
Section 1.3 Titles and Headings.
The titles and headings of the articles and sections of this Agreement, which
have been inserted for convenience of reference only and are not to be considered a part
hereof, shall not in any way modify or restrict any of the terms and provisions hereof, and
shall not be considered or given any effect in construing this Agreement or any provision
hereof or in ascertaining intent, if any question of intent should arise.
ARTICLE 2
REPRESENTATIONS, WARRANTIES AND COVENANTS;
SECURITY FOR NOTE; ADDITIONAL OBLIGATIONS
Section 2.1 Representations by the City.
The City represents, warrants and covenants that:
(a) The City is a municipality validly created and existing under the laws of
• the State of Florida. Pursuant to the Resolution, the City (i) has duly authorized the execution
and delivery of this Agreement and the performance by the City of all of its obligations
hereunder, and (ii) shall duly authorize the Note issued hereunder and the performance by the
City of all its obligations relating thereto.
(b) The City has complied with all of the provisions of the Constitution and
laws of the State, and has full power and authority to enter into and consummate all
transactions contemplated by this Agreement or under the Note, and to perform all of its
obligations hereunder and, to the best knowledge of the City, 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 authorized and entitled to issue the Note. 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, moratorium, reorganization or
other similar laws affecting creditors' rights generally, or by the exercise of judicial discretion
in accordance with general principles of equity.
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004.181 129.1
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(d) There are no actions, suits or proceedings pending or, to the best
knowledge of the City, threatened against or affecting the City, at law or in equity, or before
or by any governmental authority, that, if adversely determined, would materially impair the
ability of the City to perform the City's obligations under this Agreement or under the Note.
(e) The City will furnish to the Bank within 180 days of each fiscal year (i)
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 and (ii) the annual budget of the City for the upcoming fiscal year.
Reports shall be prepared in accordance with generally accepted accounting principles.
(f) No authorization, consent, approval, license, exemption of or
registration or filing with any court or governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, has been or will be necessary for the valid
execution, delivery and performance by the City of this Agreement, the Note and the related
documents, except such as have been obtained, given or accomplished and copies of which
have been provided to the Bank.
(g) Except as disclosed in writing to the Bank, the City is not in default in
the payment when due of any indebtedness of the City.
(h) The financial statements of the City for the fiscal year ending September
30, 1998, copies of which have been furnished to the Bank, have been prepared in accordance
with generally accepted accounting principles and present fairly the financial condition of the
City as of such date and the results of its operations for the period then ended. Since
September 30, 1998, there has been no material adverse change in the financial condition,
revenues, properties or operations of the City.
(i) Any written information, reports and other papers and data prepared by
the City and furnished to the Bank by the City were, at the time the same were so furnished,
complete and correct in all material respects to the extent necessary to give the Bank a true and
accurate knowledge of the subject matter thereof. There is no fact, circumstance or condition
that has not been disclosed to the Bank in writing by the City which materially and adversely
affects or, so far as the City can now foresee, will materially and adversely affect, (i) the
financial condition, revenues, properties or operations of the City or (ii) the validity or
enforceability of, or the authority or ability of the City to perform its obligations under, this
Agreement, the Note and the related documents.
(j) The obligations of the City under this Agreement and the Note are not
subject to any law, rule or regulation of the State of Florida prescribing a maximum rate of
interest, except for Sections 159.825(4), 215.84 and 687.03, Florida Statutes, as amended.
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Section 2.2 General Representations, Warranties and Covenants of the Bank.
The Bank hereby represents, warrants and agrees that it is a national banking
association authorized to execute and deliver this Agreement and to perform its obligations
hereunder, and such execution and delivery will not constitute a violation of its charter,
articles of incorporation or bylaws.
Section 2.3 Making of Loan.
Pursuant to the terms and provisions of this Agreement, the Bank agrees to
make one or more loans to the City for the purpose of financing or refinancing the cost of the
Project.
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
comply with the provisions of the Nonarbitrage and Tax Law Compliance 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(fJ 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 to be
"arbitrage bonds" within the meaning of Section 148(a) 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 herein. No Noteholder shall ever have the
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right to compel the exercise of the ad valorem taxing power of the City or taxation in any form
on any property therein to pay the Note or the interest thereon. The Note is a special and
limited obligation payable as to principal and interest from the Pledged Funds in the manner
and to the extent provided herein.
Section 2.6 Security for Note.
The Note shall be secured by and payable from the Pledged Funds. The City
does hereby irrevocably pledge the Pledged Funds to the payment of the Note in accordance
with the provisions hereof. The pledge of and lien on the Pledged Funds shall attach at the
time of delivery of the Note.
Section 2.7 Covenant to Budget and Appropriate.
(a) Until the Note is paid or deemed paid pursuant to the provisions of this
Agreement, the City hereby covenants to appropriate in its annual budget, by amendment if
necessary, from Non-Ad Valorem Funds lawfully available in each Fiscal Year of the City in
which principal of or interest on the Note becomes due and payable, amounts sufficient,
together with other available moneys, to pay the principal of and interest on the Note, as the
same become due (whether by redemption, at maturity or otherwise). Such covenant and
agreement on the part of the City to budget and appropriate such amounts of Non-Ad Valorem
Funds shall be cumulative to the extent not paid, and shall continue until such Non-Ad
Valorem Funds or other legally available funds in amounts sufficient to make all such required
payments hereunder and under the Note shall have been budgeted, appropriated and actually
• paid. Notwithstanding the foregoing covenant of the City, the City does not covenant to
maintain any services or programs, now provided or maintained by the City, which generate
Non-Ad Valorem Funds.
(b) Except as otherwise provided in Section 2.6 hereof, such covenant to
budget and appropriate does not create any lien upon or pledge of such Non-Ad Valorem
Funds, nor does it preclude the City from pledging in the future its Non-Ad Valorem Funds,
nor does it require the City to levy and collect any particular Non-Ad Valorem Funds, nor
does it give the Noteholder a prior claim on the Non-Ad Valorem Funds as opposed to claims
of general creditors of the City. Such covenant to budget and appropriate Non-Ad Valorem
Funds is subject in all respects to the payment of obligations secured by a pledge of such Non-
Ad Valorem Funds heretofore or hereafter entered into (including the payment of debt service
on bonds and other debt instruments). However, the covenant to budget and appropriate in its
general annual budget for the purposes and in the manner stated herein shall have the effect of
making available for the payment of the principal of and interest on the Note in the manner
described herein Non-Ad Valorem Funds and placing on the City a positive duty to
appropriate and budget, by amendment, if necessary, amounts sufficient to meet its obligations
hereunder; subject, however, in all respects to the restrictions of Section 166.241(3), Florida
Statutes, as amended, which provides that the governing body of each municipality shall make
appropriations for each fiscal year which, in any one year, shall not exceed the amount to be
•
9
004.181 129.1
• •
received from taxation or other revenue sources; and subject, further, to the payment of
services and programs which are essential public purposes affecting the health, welfare and
• safety of the inhabitants of the City or which are legally mandated by applicable law.
Section 2.8 Payment Covenant.
The City covenants that it shall duly and punctually pay from the Pledged Funds
the principal of and interest on the Note at the dates and place and in the manner provided
herein and in the Note according to the true intent and meaning thereof and all other amounts
due under this Agreement.
ARTICLE 3
DESCRIPTION OF NOTE; PAYMENT TERMS;
OPTIONAL PREPAYMENT
Section 3.1 Description and Payment Terms of the Note.
(a) The City shall, pursuant to authority granted under the Resolution, issue
and deliver a Note to the Bank, which Note shall not exceed THREE HUNDRED
THOUSAND AND 00/100 DOLLARS ($300,000) in principal amount. The Note shall be
designated as "City of Clermont, Florida, Capital Improvement Revenue Note, Series 1999".
The text of the Note shall be substantially in the form attached hereto as Exhibit B, with such
omissions, insertions and variations as may be necessary and desirable to reflect the terms of
the Note. 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 principal
amount set forth therein and payable as set forth therein and shall bear interest from its date at
the rate or rates set forth therein or as the same may be adjusted pursuant to Section 3.3
hereof. 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 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
authorized.
(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, 2000.
Principal 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.
• 10
004.181 129.1
• •
(d) In the event of a Determination of Taxability, the interest rate on the
Note shall be changed to the Taxable Rate effective retroactively to the date on which such
• Determination of Taxability was made. Immediately upon a Determination of Taxability, the
City agrees to pay to any holder of the Note the Additional Amount (as defined herein).
"Additional Amount" means (i) the difference between (A) interest on the Note for the period
commencing on the date on which the interest on the Note (or portion thereof) loses its tax-
exempt status and ending on the earlier of the date the Note ceased to be outstanding or such
adjustment is no longer applicable to the Note (the "Taxable Period") at a rate per annum
equal to the Taxable Rate as adjusted from time to time on the same dates and in the same
manner as the interest rate on the Note was or would be adjusted pursuant to the provisions of
the Note, and (B) the aggregate amount of interest payable on the Note for the Taxable Period
under the provisions of the Note without considering the Determination of Taxability, plus (ii)
any penalties and interest paid or payable by the Noteholder to the Internal Revenue Service
by reason of such Determination of Taxability.
(e) All payments of principal of and interest on the Note shall be payable in
any coin or currency of the United States which, at the time of payment, is legal tender for the
payment of public and private debts and shall be made to the Bank (i) in immediately available
funds, (ii) by delivering to the Bank no later than payment date a check drawn on an account
at any bank that is a member of the Federal Reserve system, or (iii) in such other manner as
the City and the Bank shall agree upon in writing.
(f) 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 $1,500) and the legal fees and
costs of Bond Counsel.
Section 3.2 Optional Pre~ayment.
The City may prepay and redeem the Note as a whole or in part, at any time or
from time to time, without penalty or premium, by paying to the Noteholder all or part of the
principal amount of the Note to be prepaid, together with the unpaid interest accrued on the
amount of principal so prepaid to the date of such prepayment. Each prepayment of the Note
shall be made on such date and in such principal amount as shall be specified by the City in a
written notice delivered to the Noteholder not less than five (5) Business Days prior thereto
specifying the principal amount of the Note to be prepaid and the date of such prepayment.
Notice having been given as aforesaid, the principal amount of the Note stated in such notice
or the whole thereof, as the case may be, shall become due and payable on the prepayment
date stated in such notice, together with interest accrued and unpaid to the prepayment date on
the principal amount then being paid; and the amount of principal and interest then due and
payable shall be paid (a) in case the entire unpaid balance of the principal of the Note is to be
prepaid, upon presentation and surrender of the Note at the office of the City on the date
specified for prepayment, and (b) in case only part of the unpaid balance of principal of the
Note is to be paid, upon presentation of the Note at the office of the City for notation thereon
•
11
004.181 129.1
• •
of the amount of principal and interest on the Note then paid. If on the prepayment date
moneys for the payment of the principal amount to be prepaid on the 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 the Note shall cease to accrue. If said moneys shall not have been so paid
on the prepayment date, such principal amount of the Note shall continue to bear interest until
payment thereof at the rate or rates provided for in this Agreement.
Section 3.3 Adjustments to Interest Rates.
(a) The interest rates on the Note shall be subject to adjustment as described
in this Section 3.3 from the date of its issuance. The Bank shall promptly notify the City in
writing of any adjustments for the Note pursuant to this Section 3.3. Such adjustments shall
become effective as of the effective date of the event causing such adjustment. Adjustments
pursuant to this Section 3.3 may be retroactive. The Bank shall certify to the City in writing
the additional amount, if any, due to the Bank as a result of an adjustment pursuant to this
Section 3.3.
(b) Subject to the provisions of Section 3.3(a) above, the interest rate on the
Note shall be adjusted as follows:
(i) Alternative Minimum Tax Where Interest on the Note is a Direct
Tax Preference Item. If the Noteholder or its holding company pays an
alternative minimum tax in any tax year and the interest on the Note is a direct
tax preference item under Section 57(a)(5) or any successor provision of the
Code then the interest rate on the Note for the period during such tax year in
which interest is accruing on the Note shall be increased during such accrual
period by an amount equal to (A - B) x C where:
(A) A equals the interest rate on the Note expressed as a
percentage;
(B) B equals the Noteholder's Adjusted Cost of Funds; and
(C) C equals the maximum marginal rate of the alternative
minimum tax expressed as a decimal (currently .20);
(ii) Alternative Minimum Tax Where Interest on the Note is an
Indirect Tax Preference Item. If the Noteholder or its holding company pays an
alternative minimum tax in any tax year and the interest on the Note is not a
direct tax preference item under Section 57(a)(5) or any successor provision of
the Code, but is an indirect tax preference item because of the application of
Section 56(g) or any successor provision of the Code then the interest rate on
•
12
004.181129.1
•
•
the Note for the period during such tax year in which interest is accruing on the
Note shall be increased during such accrual period by an amount equal to (A -
• B) x C where:
(A) A equals the interest rate on the Note expressed as a
percentage;
(B) B equals the Noteholder's Adjusted Cost of Funds; and
(C) C equals 75 % of the maximum marginal rate of the
alternative minimum tax expressed as a decimal, or, if the
.Code is amended to effectively increase or decrease the
percentage of interest on the Note which is subject to such
indirect alternative minimum tax, then C shall equal the
percentage of such interest which is effectively subject to
such indirect alternative minimum tax.
(iii) Loss of Federal Income Tax Deduction for State Income Taxes.
If the federal income tax deduction for state income taxes paid on the interest
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
AxBxCxDwhere:
• (A) A equals the fraction (expressed as a decimal) of the total
state income tax disallowed as a result of such tax law
change;
(B) B equals the rate of the applicable state income tax
(expressed as a decimal);
(C) C equals the maximum federal corporate tax rate then in
effect for the Noteholder (expressed as a decimal); and
(D) D equals the interest rate on the Note (expressed as a
percentage) .
13
004.181 129.1
LJ
(iv) 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:
(A) A equals the Taxable Rate (expressed as a percentage);
(B) B equals the interest rate on the Note (expressed as a
percentage); and
(C) 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).
(v) 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) through (iv) above or because of a Determination of Taxability), then 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. If the tax laws or regulations are
. amended to increase the yield on the Note to the Noteholder, then the Bank
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) 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 in 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 (v) in Section 3.3(b) apply, then the
interest rate on the Note shall be adjusted in the order in which listed above.
(d) To the extent an adjustment to the interest rate on the Note is not
effected within three (3) months of the event giving rise to the adjustment, the additional
interest due as a result of such adjustment shall be paid with interest thereon compounded
•
14
004.181 129.1
• •
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 ten (10) days after delivery of written notice
of the amount of such adjustment, and shall be paid to the Noteholder of record during the
period to which the adjustment relates. This obligation shall survive the payment and
cancellation of the Note.
(e) 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 exceed an amount which would result in payment of interest at a rate in
excess of (i) the applicable maximum rate of interest allowed by Sections 215.84 and
159.825(4), Florida Statutes, as amended, or (ii) 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.
ARTICLE 4
ISSUANCE OF NOTE
Section 4.1 Issuance of Note.
(a) The Bank shall not be obligated to make any loan under this Agreement
unless at or prior to the date of issuance of the Note the City delivers to the Bank the following
items in form and substance acceptable to the Bank:
(i) A certificate of the City Manager, 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 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 to the effect
that (A) this Agreement and the Note have been duly authorized by the City and
are enforceable obligations in accordance with their terms and the Resolution
•
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004.181 129.1
• •
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), (C) the Note is a "qualified tax-exempt obligation"
under Section 265(b)(3)(B) of the Code and (D) the interest on the Note shall be
exempt from present Florida intangible taxes;
(v) A certificate of the City Manager, 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 Sections 215.84
and 159.825(4), Florida Statutes, as amended;
(vi) The fully executed Note;
(vii) An opinion of counsel to the City regarding the due
authorization, validity and enforceability of this Agreement and the Note and
the due adoption of the Resolution (enforceability may be subject to standard
bankruptcy exceptions and the like); and
(viii) Such additional certificates, instruments and other documents as
• the Bank, or its counsel or Bond Counsel, or counsel to the City, may deem
necessary or appropriate.
(b) The City shall apply the proceeds of the Note to pay for, or reimburse
itself for prior expenditures incurred for, the costs of the Project which shall include but not be
limited to:
(i) The costs of architectural and engineering services related to the
Project, including, without limitation, the costs of preparation of studies,
surveys, reports, tests, plans and specifications;
(ii) The costs of legal, accounting, financial advisory, consulting,
marketing and other special services related to the Project;
(iii) Costs and fees incurred in connection with the issuance of the
Note;
(iv) Fees and charges incurred in connection with applications to
federal, state and local governmental agencies for any requisite approval or
permits regarding the acquisition and construction of the Project;
•
16
004.181 129.1
• •
(v) Costs incurred in connection with the acquisition of the sites for
the Project, including any necessary rights-of--way, easements or other interests
• in real or personal property;
(vi) Costs incurred in connection with the acquisition, construction,
improvement or extension of the buildings, structures and facilities comprising
the Project;
(vii) Costs incurred in connection with the acquisition and installation
of any machines, equipment, fixtures, appurtenances or personal property of
any kind or nature, which are to comprise a part of the Project;
(viii) Interest on the Note accruing prior to the completion date of the
Project; and
(ix) To the extent permitted by law, other costs and expenses relating
to the Project which are incurred for the purpose of providing for the Project,
including the administrative and maintenance costs associated with the
management of the Project, and other facilities functionally related and
subordinate thereto.
Section 4.2 Construction Fund.
The City covenants and agrees to establish a separate fund with an Authorized
Depository to be known as the "City of Clermont, Florida, Capital Improvement Revenue
Note Construction Fund, Series 1999" which shall be used only for payment of the Cost of the
Project. Moneys in the Construction Fund, until applied in payment of any item of the Cost of
a Project in the manner hereinafter provided, shall be held in trust by the City and shall be
subject to a lien and charge in favor of the Noteholder and for the further security of the
Noteholder.
There shall be paid into the Construction Fund the proceeds derived from the
Note simultaneously with the delivery of the Note to the Noteholder, and there may be paid
into the Construction Fund, at the option of the City, any moneys received for or in
connection with the Project by the City from any other source.
The City covenants that the acquisition and construction of the Project will be
completed without delay and in accordance with sound practices. The City shall make
disbursements or payments from the Construction Fund to pay the Cost of the Project upon the
filing with the City Clerk of documents and/or certificates signed by an Authorized City
Officer stating with respect to each disbursement or payment to be made: (a) the item number
of the payment, (b) the name and address of the person to whom payment is due, (c) the
amount to be paid, (d) the purpose, by general classification, for which payment is to be
made, and (e) that (i) each obligation, item of cost or expense mentioned therein has been
n
LJ
17
004.181 129.1
• •
properly incurred, is in payment of a part of the Cost of the Project and is a proper charge
against the Construction Fund and has not been the basis of any previous disbursement or
payment, or (ii) each obligation, item of cost or expense mentioned therein has been paid by
the City, is a reimbursement of a part of the Cost of the Project, is a proper charge against the
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 City Clerk shall retain all such documents and/or certificates of the Authorized Issuer
Officers for seven (7) years from the dates of such documents and/or certificates. The City
Clerk shall make available the documents and/or certificates at all reasonable times for
inspection by the Noteholder or the agent or representative of the Noteholder.
The date of completion of the Project shall be determined by the Authorized
City Officer who shall certify such fact in writing to the City. Promptly after the date of the
completion of the Project, and after paying or making provisions for the payment of all unpaid
items of the Cost of the Project, the City shall deposit any balance of moneys remaining in the
Construction Fund in such other fund or account of the City as shall be determined by the
City, provided the City has received an opinion of Bond Counsel to the effect that such
transfer shall not adversely affect the exclusion, if any, of interest on the Note from gross
income for federal income tax purposes. The Construction Fund shall be continuously secured
in the manner by which the deposit of public funds are authorized to be secured by the laws of
the State of Florida. Moneys on deposit in the Construction Fund may be invested and
reinvested in Authorized Investments maturing not later than the date on which the moneys
therein will be needed.
• Any and all income received by the City from the investment of moneys in the
Construction Fund shall be retained in the Construction Fund.
All investments shall be valued at cost. Nothing contained in this Agreement
shall prevent any Authorized Investments acquired as investments of or security for funds in
the Construction Fund from being issued or held in book-entry form on the books of the
Department of the Treasury of the United States.
ARTICLE 5
EVENTS OF DEFAULTS; REMEDIES
Section 5.1 Events of Default.
An "Event of Default" shall be deemed to have occurred under this Agreement
if:
(a) The City shall fail to make payment of principal or interest then due on
the Note; or
18
004.181 129.1
• •
(b) Failure by the City to observe and perform any covenant, condition or
agreement on its part to be observed or performed by it under this Agreement or the
• Resolution other than as referred to in clause (a) of this Section, for a period of forty-five (45)
days after written notice specifying such failure and requesting that it be remedied has been
given to the City, unless the Noteholder shall determine in good faith that the delay would
materially impair its likelihood of full repayment; and during such period, the City shall cure
the default or provide to the Noteholder a written plan for curing such default, which may be
accepted or rejected in the Noteholder's discretion; or
(c) There shall occur the dissolution or liquidation of the City, or the filing
by the City of a voluntary petition in bankruptcy, or the commission by the City of any act of
bankruptcy, or adjudication of the City as a bankrupt, or assignment by the City for the benefit
of its creditors, or appointment of a receiver for the City, or the entry by the City into an
agreement of composition with its creditors, or the approval by a court of competent
jurisdiction of a petition applicable to the City in any proceeding for its reorganization
instituted under the provisions of the Federal Bankruptcy Act, as amended, or under any
similar act in any jurisdiction which may now be in effect or hereafter amended; or
(d) Any representation or warranty made by the City in connection with the
transactions contemplated hereunder proves to be untrue in any material respect as of the date
made or deemed made; or
(e) Default shall occur in the payment of the principal of or interest on any
obligation of the City for borrowed money, as and when the same shall become due, and
• which payment is not subsequently made within ten (10) days after the scheduled payment
date, unless the City shall be contesting its liability therefor in good faith; or
(f) Any judgment in an amount in excess of $1,000,000 shall be entered or
filed against the City and remains unvacated, unpaid, unbonded or unstayed for a period of
thirty (30) days.
Section 5.2 Remedies.
If any such Event of Default shall have occurred, the Noteholder may seek
enforcement of all remedies available to it under law. The holder of a defaulted Note may
declare the Note to be immediately due and payable. Any amounts due on the Note which
shall remain unpaid past the scheduled payment dates, shall bear interest at the lesser of the
Taxable Rate or the maximum rate of interest permitted by law until all amounts then due
under the Note are paid in full. The Bank shall be entitled to its reasonable costs and expenses
(including reasonable fees and expenses of counsel) incurred in enforcing any of its rights
under this Agreement after an Event of Default.
•
19
004.181 129.1
•
ARTICLE 6
• MISCELLANEOUS
Section 6.1 Amendments, Changes or Modifications to the Agreement.
This Agreement shall not be amended, changed or modified without the prior
written consent of the Bank and the City.
Section 6.2 Countemarts.
This Agreement may be executed in any number of counterparts, each of which,
when so executed and delivered, shall be an original; but such counterparts shall together
constitute but one and the same Agreement, and, in making proof of this Agreement, it shall
not be necessary to produce or account for more than one such counterpart.
Section 6.3 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. Notwithstanding the other provisions set
forth herein, to the extent any law or regulation enacted subsequent to the termination of this
Agreement retroactively reduces the Bank's yield on the Note, the provisions regarding
adjustments to interest rates shall survive the repayment of the Note hereunder for a period not
to exceed two (2) years after such repayment.
Section 6.5 Assignment.
The Bank acknowledges and agrees that it is treating the transactions
contemplated hereunder as loan transactions and not as the sale and purchase of securities.
The Bank further acknowledges and agrees that it presently intends to hold the Note through
its final maturity date. The Bank may assign the Note or its obligations hereunder; provided,
however, the Bank shall give the City ten (10) days prior written notice of any such
assignment and, provided further, the Bank shall comply with all applicable securities laws at
the time of such assignment.
c:
20
004.181129.1
• •
Section 6.6 Notice of Changes in Fact.
• Promptly after the City becomes aware of the same, the City will notify the
Bank of (a) any change in any material fact or circumstance represented or warranted by the
City in this Agreement or in connection with the issuance of the Note, and (b) any default or
event which, with notice or lapse of time or both, could become a default under the
Agreement, specifying in each case the nature thereof and what action the City has taken, is
taking and/or proposed to take with respect thereto.
Section 6.7 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, 1 Westgate Plaza, P.O. Box 120219, Clermont, Florida 34712-
0219, Attention: Mayor, and to the Bank, SunTrust Bank, Central Florida, National
Association, 8th Floor, 800 North Magnolia Avenue, Orlando, Florida 32803, Attention: Bart
Bishop, 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 6.8 Applicable Law.
The substantive laws of the State of Florida shall govern this Agreement.
•
•
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004.181 129.1
• •
Section 6.9 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.
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
(OFFICIAL SEAL)
ATTEST:
By
City Clerk
•
ATTEST:
By
Title:
By
Mayor
SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION
By
Title:
22
•
004.181 12 9.1
•
Exhibit A
•
The Project
•
The Project consists of certain capital projects in and for the City of Clermont,
Florida, all in accordance with the plans and specifications on file or to be on file with the
City, including, but not limited to, the acquisition of new fire trucks for the City.
004.181 129.1
• •
•
•
•
Exhibit B
Form of Note
004.181 129.1
•
UNITED STATES OF AMERICA
STATE OF FLORIDA
• CITY OF CLERMONT
CAPITAL IMPROVEMENT REVENUE NOTE, SERIES 1999
Principal Interest
Sum Rate Date of Issuance
$300,000 % December , 1999
CITY OF CLERMONT, FLORIDA (the "City"), for value received, hereby promises
to pay, solely from the Pledged Funds described in the within mentioned Agreement, to the
order of SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION,
Leesburg, Florida, or its successors or assigns (the "Noteholder"), the Principal Sum specified
above loaned to the City pursuant to that certain Loan Agreement by and between SunTrust
Bank, Central Florida, National Association, and the Ciry, dated as of December _, 1999 (the
"Agreement"), and to pay interest on such Principal Sum from the Date of Issuance specified
above or from the most recent date to which interest has been paid at the Interest Rate per
annum specified above (subject to adjustment as hereinafter provided) on June 1 and December
1 of each year, commencing June 1, 2000, until such Principal Sum shall have been paid. The
Principal Sum hereof shall be payable in ten (10) annual installment payments on the dates and
in the amounts as follows:
Payment Date
(December 1) Payment Amount
2000 $
2001
2002
2003
2004
2005
2006
2007
2008
2009
Such Principal Sum and interest is payable in any coin or currency of the United States of
America which, at the time of payment, is legal tender for the payment of public and private
debts .
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This Note is authorized to be issued in the aggregate principal amount of $300,000
under the authority of and in full compliance with the Constitution and laws of the State of
• Florida, including, particularly, Chapter 166, Part II, Florida Statutes, as amended, and other
applicable provisions of law, and a resolution duly adopted by the City on December 14, 1999
(the "Resolution"), as such resolution may be amended and supplemented from time to time,
and is subject to all terms and conditions of the Resolution and the Agreement. Any term used
in this Note and not otherwise defined shall have the meaning ascribed to such term in the
Agreement.
This Note is being issued to finance or refinance a part of the cost of certain capital
projects in and for the City, including the acquisition of new fire trucks for the City, as
described in the Agreement and the Resolution. This Note is secured by and shall be payable
from the Pledged Funds as described in and in accordance with the Agreement.
Pursuant to the Agreement, the City has covenanted to appropriate in its annual budget,
by amendment, if necessary, from Non-Ad Valorem Funds lawfully available amounts
sufficient, together with other available moneys, to pay the principal of and interest on the
Note, as the same become due (whether by redemption, at maturity or otherwise). Such
covenant and agreement on the part of the City to budget and appropriate such amounts of
Non-Ad Valorem Funds shall be cumulative to the extent not paid, and shall continue until
such Non-Ad Valorem Funds or other legally available funds in amounts sufficient to make all
such required payments under the Note shall have been budgeted, appropriated and actually
paid. Notwithstanding the foregoing, the City has not covenanted to maintain any services or
• programs, now provided or maintained by the City, which generate Non-Ad Valorem Funds.
Such covenant and agreement on the part of the City to budget and appropriate such amounts
of Non-Ad Valorem Funds is subject, however, in all respects to certain appropriation
constraints contained in Section 166.241(3), Florida Statutes, as amended, and to the payment
of services and programs which are for essential public purposes affecting the health, welfare
and safety of the inhabitants of the City or which are legally mandated by applicable law.
This Note shall bear interest from its Date of Issuance at the Interest Rate specified
above on the basis of twelve 30-day months over a 360-day year. The Interest Rate specified
above is subject to adjustment as provided in Section 3.1(d) of the Agreement in the event of a
Determination of Taxability. In addition, this Note is subject to adjustment in accordance with
the provisions in Section 3.3 of the Agreement. The Noteholder shall provide to the City upon
request such documentation to evidence the amount of interest due on this Note.
Notwithstanding any provision in this Note to the contrary, in no event shall the interest
contracted for, charged or received in connection with this Note (including any other costs or
considerations that constitute interest under the laws of the State of Florida which are
contracted for, charged or received) exceed the maximum rate of interest allowed under the
State of Florida as presently in effect. In the event the maturity of this Note is accelerated or
prepaid in accordance with the provisions hereof or of the Agreement, then such amounts that
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004.181152.1
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constitute payments of interest, together with any costs or considerations which constitute
interest under the laws of the State of Florida, may never exceed an amount which would result
in payment of interest at a rate in excess of (a) the applicable maximum rate of interest allowed
by Sections 215.84 and 159.825(4), Florida Statutes, as amended, or (b) the nonusurious
interest allowed by the laws of the State of Florida or the United States, to the extent
applicable, as presently in effect and to the extent an increase is allowable by such laws; and
excess interest, if any, shall be cancelled automatically as of the date of such acceleration, or,
if theretofore paid, shall be credited on the principal amount of this Note unpaid, but such
crediting shall not cure or waive any default under this Agreement.
All payments made by the City hereon shall apply first to accrued interest, and then to
the principal amount then due on this Note.
.The City may prepay this Note as a whole or in part, at any time or from time to time,
without premium, by paying to the Noteholder all or part of the Principal Sum of the Note,
together with the unpaid interest accrued on the amount of principal so prepaid to the date of
such prepayment. Each prepayment of this Note shall be made on such date and in such
principal amount as shall be specified by the City in a written notice delivered to the
Noteholder not less than five (5) Business Days prior thereto. Notice having been given as
aforesaid, the Principal Sum of this Note stated in such notice or the whole thereof, as the case
may be, shall become due and payable on the prepayment date stated in such notice, together
with interest accrued and unpaid to the prepayment date on the principal amount then being
paid; and the amount of principal and interest then due and payable shall be paid (a) in case the
• entire unpaid balance of the principal of this Note is to be paid, upon presentation and
surrender of this Note at the office of the City, and (b) in case only part of the unpaid balance
of principal of this Note is to be paid, upon presentation of this Note at the office of the City
for notation thereon of the amount of principal and interest on this Note then paid. If on the
prepayment date moneys for the payment of the principal amount to be prepaid on this Note,
together with interest to the prepayment date on such principal amount, shall have been paid to
the Noteholder as above provided and if notice of prepayment shall have been given to the
Noteholder as above provided, then from and after the prepayment date interest on such
principal amount of this Note shall cease to accrue. If said moneys shall not have been so paid
on the prepayment date, such principal amount of this Note shall continue to bear interest until
payment thereof at the rate or rates provided for in the Agreement.
This Note, when delivered by the City pursuant to the terms of the Agreement and the
Resolution, shall not be or constitute an indebtedness of the City or of the State of Florida or
any political subdivision or agency thereof, within the meaning of any constitutional, statutory
or charter limitations of indebtedness, but shall be payable solely from the Pledged Funds, as
provided in the Agreement and the Resolution. No Noteholder shall ever have the right to
compel the exercise of the ad valorem taxing power of the City or the State of Florida, or
taxation in any form on any property therein to pay this Note or the interest thereon.
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004.181 152.1
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Upon the occurrence of an Event of Default relating to this Note, the Principal Sum of
this Note may become or be declared due and payable before the maturity date hereof in the
• manner, with the effect and subject to the conditions set forth in the Agreement and the
Resolution. The Noteholder shall also have such other remedies as described in the
Agreement.
If this Note shall be declared to be immediately due and payable or any amounts due on
this Note shall remain unpaid past any scheduled payment date, this Note shall bear interest at
the lesser of the Taxable Rate (as defined in the Agreement) or the maximum rate permitted by
law until all amounts then due under this Note are paid in full.
The City hereby waives demand, protest and notice of dishonor.
No obligation under the Agreement or this Note shall be or be deemed to be an
obligation of any member of the City 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.
• IN WITNESS WHEREOF, the City of Clermont, Florida, caused this Note to be
signed by the manual signature of its Mayor and its official seal to be affixed hereto or
imprinted or reproduced hereon, and attested by the manual signature of its City Clerk, and
this Note to be dated the Date of Issuance set forth above.
CITY OF CLERMONT, FLORIDA
(OFFICIAL SEAL)
By /~.~
ayor
ATTEST:
Clerk
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004.181 152.1