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HomeMy Public PortalAboutRES 12/07RESOLUTION NO. 012 -7 A RESOLUTION OF THE TOWN COMMISSION OF TOWN OF GULF STREAM, FLORIDA SUPPLEMENTING RESOLUTION NO. 011 -12; AUTHORIZING A LOAN IN THE AMOUNT OF $2,427,895.44; AUTHORIZING THE EXECUTION OF A PROMISSORY NOTE AND A LOAN AGREEMENT; PROVIDING A SEVERABILITY CLAUSE, A CONFLICTS CLAUSE AND AN EFFECTIVE DATE; AND FOR OTHER PURPOSES. BE IT RESOLVED BY THE TOWN COMMISSION OF TOWN OF GULF STREAM, FLORIDA (the "Town "): Section 1. Definitions. The following words and phrases shall have the following meanings when used herein: "Authorized Signatory" means the Mayor or Vice -Mayor of the Town, and in their absence or inability to act, any Commissioner of the Town. "Loan Amount" means $2,427,895.44. Section 2. Supplemental Resolution. This Resolution is supplemental to Resolution No. 011 -12. The Loan Agreement and Promissory Note referred to in Section 4 shall have the characteristics described therein, herein and in Resolution No. 011 -12. To the extent of any conflict between the terms of the Loan Agreement and Promissory Note and the terms of Resolution No. 011 -12, the Loan Agreement and Promissory Note shall supersede Resolution No. 011 -12. Section 3. Authorization of Transaction. In order to obtain funds to finance a project to place the electric, cable television and telephone utility facilities that serve the Town and its inhabitants underground, the Town is hereby authorized to obtain a loan (the "Loan ") from and borrow from SunTrust Bank (the "Bank "), the amount of the Loan Amount. Because of the characteristics of the transaction and the need for immediate funding, it is in the best interest of the Town to obtain the loan through negotiation with the Bank. The Town issued a request for proposals for the Loan, and the response of the Bank was the most favorable response. A copy of the response of the Bank is attached hereto as Exhibit B. The Town shall proceed with the Loan having a maturity date of April 1, 2022. Section 4. Loan Agreement and Promissory Note. The Town is authorized to execute a Loan Agreement with the Bank and to make and deliver to the Bank the Promissory Note. The forms and terms of the Loan Agreement and Promissory Note shall be in the forms attached hereto as Exhibit A, with such changes as shall be approved by the Authorized Signatory, and the Authorized Signatory is authorized to execute the same, such approval to be conclusively evidenced by the execution thereof by the Authorized Signatory. The obligations of the Town will be payable solely from the sources provided for in Resolution No. 011 -12. Section 5. Severability. If any provision of this Resolution shall be held or deemed to be or shall, in fact, be illegal, inoperative or unenforceable in any context, the same shall not affect any other provision herein or render any other provision (or such provision in any other context) invalid, inoperative or unenforceable to any extent whatever. Section 6. Applicable Provisions of Law. This Resolution shall be governed by and construed in accordance with the laws of the State of Florida. Section 7. Authorizations. All officials and employees of the Town are authorized and empowered, collectively or individually, to take all action and steps and to execute all instruments, documents, and contracts on behalf of the Town that are necessary or desirable in connection with the completion of the Loan. Section B. Repealer. All resolutions or parts thereof in conflict herewith are hereby repealed. Section 9. Effective Date. This Resolution shall become effective immediately upon its passage. PASSED AND ADOPTED by the Town Commission of the Town of Gulf Stream, Florida, this 28th day of August, 2012. (SEAL) ATTEST: TOWN CLERK / t TOWN OF GULF STREAM, FLORIDA M OR /,> COMMISSIONER ISSIONER COMMISSIONER Exhibit A to Loan Agreement LOAN AGREEMENT This LOAN AGREEMENT (the "Agreement ") is made and entered into as of September 6, 2012, and is by and between Town of Gulf Stream, Florida, a municipal corporation of the State of Florida, and its successors and assigns (the "Town "), and SunTrust Bank, a Georgia banking corporation, and its successors and assigns, as holder(s) of the hereinafter defined Note (the "Bank "). The parties hereto, intending to be legally bound hereby and in consideration of the mutual covenants hereinafter contained, DO HEREBY AGREE as follows: ARTICLE I DEFINITION OF TERMS Section 1.01 Definitions. The words and terms used in this Agreement shall have the meanings as set forth in the recitals above and the following words and terms as used in this Agreement shall have the following meanings: "Agreement" shall mean this Loan Agreement and any and all modifications, alterations, amendments and supplements hereto made in accordance with the provisions hereof. "Available Non Ad Valorem Revenues" means all Non Ad Valorem Revenues other than (i) any revenues which are restricted by a contract in existence on the date hereof, or to the extent restricted by virtue of a pledge thereof to repay indebtedness permitted hereunder which is created subsequent to the date hereof, from being used to pay principal and interest on the Note, (ii) any revenues which are prohibited by a general or special law of the State in existence on the date hereof from being used to pay principal and interest on the Note and (iii) any source of Non Ad Valorem Revenue which is created after the date hereof and which is prohibited by a general or special law of the State from being used to pay principal and interest on the Note. "Budgeted Revenues" means, to the extent provided in Section 3.06 hereof, the Available Non Ad Valorem Revenues. "Business Day" means any day except any Saturday or Sunday or day on which the Principal Office of the Bank is lawfully closed. "Closing Date" means the date so indicated in the Note. "Code" means the Internal Revenue Code of 1986, as amended, and any Treasury Regulations, whether temporary, proposed or final, promulgated thereunder or applicable thereto. "Event of Default" shall mean an event of default specified in Article VI of this Agreement. "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 maybe prescribed by law as the fiscal year of the Town. "Loan" shall mean the loan by the Bank to the Town contemplated hereby. "Loan Amount" means $2,427,895.44. "Loan Documents" means this Agreement and the Note. "Non Ad Valorem Revenues" means all revenues of the Town not derived from ad valorem taxation. "Note" means the Town's Promissory Note in the form attached hereto as Attachment "A." "Notice Address" means, As to the Town: Town of Gulf Stream, Florida 100 Sea Road Gulf Stream, FL 33483 As to the Bank: SunTrust Bank 501 South Flagler Drive 2nd Floor West Palm Beach, FL 33401 or to such other address as either party may have specified in writing to the other using the procedures specified in Section 7.06. "Pledged Revenues" means the revenue received by the Town from the imposition and collection of the Special Assessments. "Principal Office" means, with respect to the Bank, the office located at the Notice Address, or such other office as the Bank may designate to the Town in writing. "Project" means placing the electric, cable television and telephone utility facilities that serve the Town and its inhabitants underground. "Special Assessments" means the special assessments imposed by the Town pursuant to Resolution No. 011 -12 of the Town. "State" means the State of Florida. Section 1.02 Titles and Headings. The titles and headings of the articles and sections of this Agreement 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 -2- hereof, and shall not be considered or given any effect in construing this Agreement or anyprovision hereof or in ascertaining intent, if any question of intent should arise. ARTICLE H REPRESENTATIONS OF THE TOWN The Town represents and warrants to the Bank that: Section 2.01 Powers of Town. The Town is a municipal corporation, duly organized and validly existing under the laws of the State. The Town has the power to borrow the amount provided for in this Agreement, to execute and deliver the Loan Documents, to levy the Special Assessments, to receive the Non Ad Valorem Revenues, to secure the Note in the manner contemplated hereby and to perform and observe all the terms and conditions of the Loan Documents on its part to be performed and observed. Section 2.02 Authorization of Loan. The Town had, has, or will have, as the case may be, at all relevant times, full legal right, power, and authority to execute the Loan Documents, to make the Note, and to carry out and consummate all other transactions contemplated hereby, and the Town has complied and will comply with all provisions of applicable law in all material matters relating to such transactions. The Town has duly authorized the borrowing of the amount provided for in this Agreement and the Note, the execution and delivery of this Agreement, and the making and delivery of the Note to the Bank and to that end the Town warrants that it will take all action and will do all things which it is authorized by law to take and to do in order to fulfill all covenants on its part to be performed and to provide for and to assure payment of the Note. The Note has been duly authorized, executed, issued and delivered to the Bank and constitutes the legal, valid and binding obligation of the Town enforceable in accordance with the terms thereof and the terms hereof, and is entitled to the benefits and security of this Agreement, subject to the provisions of the bankruptcy laws of the United States of America and to other applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors' rights, heretofore or hereinafter enacted, to the extent constitutionally applicable, and provided that its enforcement may also be subject to equitable principles that may affect remedies or other equitable relief, or to the exercise of judicial discretion in appropriate cases. All approvals, consents, and orders of and filings with any governmental authority or agency which would constitute a condition precedent to the issuance of the Note or the execution and delivery of or the performance by the Town of its obligations under this Agreement and the Note have been obtained or made and any consents, approvals, and orders to be received or filings so made are in full force and effect. Section 2.03 No Violation of Law or Contract. The Town is not in default in any material respect under any agreement or other instrument to which it is a party or by which it may be bound, the breach of which could result in a material and adverse impact on the financial condition of the Town or the ability of the Town to perform its obligations hereunder and under the Note. The making and performing by the Town of this Agreement and the Note and the levy of the Special Assessments will not violate any applicable provision of law, and will not result in a material breach of any of the terms of any agreement or instrument to which the Town is a party or by which the Town is bound, the breach of which could result in a material and adverse impact on the financial -3- condition of the Town or the ability of the Town to perform its obligations hereunder and under the Note. Section 2.04 Pending or Threatened Litigation. There are no actions or proceedings pending against the Town or affecting the Town or, to the knowledge of the Town, threatened, which, either in any case or in the aggregate, might result in any material adverse change in the financial condition of the Town, or which question the validity of this Agreement or the Note or the levying by the Town of the Special Assessments or of any action taken or to be taken in connection with the transactions contemplated hereby or thereby. Section 2.05 Financial Information. The financial information regarding the Town furnished to the Bank by the Town in connection with the Loan is complete and accurate, and there has been no material and adverse change in the financial condition of the Town from that presented in such information. ARTICLE III COVENANTS OF THE TOWN Section 3.01 Affirmative Covenants. For so long as any of the principal amount of or interest on the Note is outstanding or any duty or obligation of the Town hereunder or under the Note remains unpaid or unperformed, the Town covenants to the Bank as follows: (a) Payment. The Town shall pay the principal of and the interest on the Note at the time and place and in the manner provided herein and in the Note. (b) Use of Proceeds. Proceeds from the Note will be used only to pay capital expenditures of the Project (including costs of issuance of the Note). (c) Notice of Defaults. The Town shall within ten (10) days after it acquires knowledge thereof, notify the Bank in writing at its Notice Address 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 Bank with such written notice, a detailed statement by a responsible officer of the Town of all relevant facts and the action being taken or proposed to be taken by the Town with respect thereto. (d) Maintenance of Existence. The Town will take all legal action within its control in order to maintain its existence until all amounts due and owing from the Town to the Bank under this Agreement and the Note have been paid in full. (e) Records and Information. The Town agrees that any and all records of the Town with respect to the Loan shall be open to inspection by the Bank or its representatives at all reasonable times at the offices the Town. The Town will provide the Bank with such information regarding the Town as the Bank shall reasonably request from time to time. -4- (f) Financial Statements and Budget. The Town will cause an audit to be completed of its books and accounts and shall furnish to the Bank audited year -end financial statements of the Town certified by an independent certified public accountant to the effect that such audit has been conducted in accordance with generally accepted auditing standards and stating whether such financial statements present fairly in all material respects the financial position of the Town and the results of its operations and cash flows for the periods covered by the audit report, all in conformity with generally accepted accounting principles applied on a consistent basis. The Town shall provide the Bank with the Town's audited financial statements for each fiscal year ending on or after September 30, 2012 within 270 days after the end thereof. The Town will provide the Bank with a copy of the Town's adopted budget for each fiscal year within 30 days after the adoption thereof. (g) Notice of Liabilities. The Town shall inform the Bank in writing, in a reasonably timely manner, of any actual or potential contingent liabilities or pending or threatened litigation of any amount that could reasonably be expected to have a material and adverse effect upon the financial condition of the Town or upon the ability of the Town to perform its obligation hereunder and under the Note. (h) Insurance. The Town shall maintain such liability, casualty and other insurance as is reasonable and prudent for similarly situated governmental entities of the State of Florida. (i) Compliance with Laws. The Town shall comply with all applicable federal, state and local laws and regulatory requirements, the violation of which could reasonably be expected to have a material and adverse effect upon the financial condition of the Town or upon the ability of the Town to perform its obligation hereunder and under the Note. 0) Payment of Document Taxes. In the event the Note or this Agreement should be subject to the excise tax on documents or the intangible personal property tax of the State, the Town shall pay such taxes or reimburse the Bank for any such taxes paid by it. Section 3.02 Limitation on Borrowings. For so long as any of the principal amount of or interest on the Note is outstanding or any duty or obligation of the Town hereunder or under the Note remains unpaid or unperformed, (i) the Town shall not incur any indebtedness payable from or secured by the Special Assessments, and (ii) the Town shall not incur any indebtedness payable from the Non Ad Valorem Revenues unless either such indebtedness is subordinated to the Note in right to payment from the Non Ad Valorem Revenues pursuant to subordination provisions acceptable to the Bank or the average of the sum of the amount of the Available Non Ad Valorem Revenues, plus the amount of the Special Assessments, received in the two fiscal years of the Town most recently concluded prior to the incurrence of such additional indebtedness equals at least 120% of the maximum principal and interest scheduled to come due on the Note and such additional indebtedness in any fiscal year of the Town. For this purpose, if any indebtedness bears interest at a variable rate, the interest rate on such indebtedness shall be deemed to be the higher of the highest rate borne by such indebtedness on the date of incurrence thereof or at any time since its incurrence and six percent per annum, not to exceed the highest rate such indebtedness is permitted to bear pursuant to its terms. Section 3.03. Automatic Payment Procedure. On the due date thereof, the Town hereby -5- authorizes the Bank to automatically deduct from a bank account of the Town maintained at the Bank and designated to the Bank the amount of any payment due from the Town to the Bank under this Agreement or the Note. If the funds in the account are insufficient to cover any payment, the Bank shall not be obligated to advance funds to cover the payment. The Bank covenants that it shall not debit the Town's account for any amount in excess of the amounts due from the Town to the Bank as the same becomes due. Section 3.04. Registration and Exchange of Note. The Note is owned by SunTrust Bank. The ownership of the Note may only be transferred, and the Town will transfer the ownership of the Note, upon written request of the Bank specifying the name, address and taxpayer identification number of the transferee, and the Town will keep a record setting forth the identification of the owner of the Note. Section 3.05. Note Mutilated, Destroyed, Stolen or Lost. In case the Note shall become mutilated, or be destroyed, stolen or lost, the Town shall issue and deliver a new Note, in exchange and in substitution for such mutilated Note, or in lieu of and in substitution for the Note destroyed, stolen or lost and upon the Bank fiunishing the Town proof of ownership thereof and indemnity reasonably satisfactory to the Town and paying such expenses as the Town may incur. Section 3.06. Payment of Principal and Interest; Limited Obligation. The Town promises that it will promptly pay the principal of and interest on the Note at the place, on the dates and in the manner provided therein, provided that the Town may be compelled to pay the principal of and interest on the Note solely from the Budgeted Revenues and Pledged Revenues, and nothing in the Note or this Loan Agreement shall be construed as pledging any other funds or assets of the Town to such payment or as authorizing such payment to be made from any other source. Nothing herein shall, however, prevent the Town from using any lawfully available funds to pay its obligations hereunder and under the Note. The Town is not and shall not be liable for the payment of the principal of and interest on the Note or for the performance of any pledge, obligation or agreement for payment undertaken by the Town hereunder or under the Note from any property other than the Budgeted Revenues and Pledged Revenues. The Bank shall not have any right to resort to legal or equitable action to require or compel the Town to make any payment required by the Note or this Loan Agreement from any source other than the Budgeted Revenues and Pledged Revenues. The Town covenants that, so long as the Note shall remain unpaid or any other amounts are owed by the Town under this Agreement or the Note, it will appropriate in its annual budget, by amendment, if required, from the Available Non Ad Valorem Revenues and the Special Assessments, amounts sufficient to pay the principal of and interest on the Note and other amounts owed under this Agreement as the same shall become due. In the event that the amount previously budgeted for such purpose is ever insufficient to pay such principal and interest on the Note and other amounts owed under this Agreement, the Town covenants to take action to amend its budget as soon as reasonably practicable so as to budget and appropriate an amount from the Available Non Ad Valorem Revenues and Special Assessments sufficient to pay such debt service on the Note and such other amounts. The covenant to budget and appropriate contained in this paragraph does not create alien upon or pledge of the Non Ad Valorem Revenues, other than the Special Assessments. Such covenants to budget and appropriate from Available Non Ad Valorem Revenues shall be cumulative to the extent not paid and shall continue until Available Non Ad Valorem Revenues sufficient to make all required payments have been budgeted, appropriated and used to pay such debt service on the Note and such other amounts. in Notwithstanding the foregoing covenant, the Town does not covenant to maintain any service or programs now provided or maintained by the Town which generate Non Ad Valorem Revenues. To secure the repayment of the Note and the payment and performance by the Town of its obligations to the Bank hereunder, the Town hereby grants the bank a first lien upon and security interest in the Pledged Revenues. Except for pledges of and liens upon Non Ad Valorem Revenues to secure the repayment of indebtedness permitted hereby, the Town will not take any action which would have the effect of limiting its ability to lawfully use Non Ad Valorem Revenues to pay amounts due hereunder and under the Note. Section 3.07 Officers and Employees of the Town Exempt from Personal Liability. No recourse under or upon any obligation, covenant or agreement of this Loan Agreement or the Note or for any claim based hereon or thereon or otherwise in respect thereof, shall be had against the Mayor or any Commissioner, officer, agent or employee, as such, of the Town past, present or future, it being expressly understood (a) that the obligation of the Town under this Agreement and under the Note is solely a corporate one, limited as provided in the preceding Section 3.06, (b) that no personal liability whatsoever shall attach to, or is or shall be incurred by, the Mayor, Commissioners, officers, agents, or employees, as such, of the Town, or any of them, under or by reason of the obligations, covenants or agreements contained in this Agreement or implied therefrom, and (c) that any and all such personal liability of, and any and all such rights and claims against, the Mayor and every such Commissioner, officer, agent, or employee, as such, of the Town under or by reason of the obligations, covenants or agreements contained in this Agreement and under the Note, or implied therefrom, are waived and released as a condition of, and as a consideration for, the execution of this Agreement and the issuance of the Note on the part of the Town. Section 3.08. Business Days. In any case where the due date of interest on or principal of the Note is not a Business Day, then payment of such principal or interest need not be made on such date but may be made on the next succeeding Business Day, provided that credit for payments made shall not be given until the payment is actually received by the Bank. Section 3.09. Bank Fees and Expenses. The Town hereby agrees to pay the fee of counsel to the Bank in connection with the Loan in the amount of $4,000.00, plus reasonable out -of- pocket expenses, said amounts to be due and payable upon the issuance of the Note. Section 3.10. Tax Representations, Warranties and Covenants of the Town. (a) The Town hereby covenants and represents that it has taken and caused to be taken and shall make and take and cause to be made and taken all actions that may be required of it for the interest on the Note to be and remain excluded from the gross income of the Bank for federal income tax purposes to the extent set forth in the Code, and that to the best of its knowledge it has not taken or permitted to be taken on its behalf, and covenants that to the best of its ability and within its control, it shall not make or take, or permit to be made or taken on its behalf, any action which, if made or taken, would adversely affect such exclusion under the provisions of the Code. The Town acknowledges that the continued exclusion of interest on the Note from gross income -7- for federal income tax purposes depends, in part, upon compliance with the arbitrage limitations imposed by Sections 103(b)(2) and 148 of the Code. The Town hereby acknowledges responsibility to take all reasonable actions necessary to comply with these requirements. The Town hereby agrees and covenants that it shall not permit at any time or times any of the proceeds of the Note or other funds of the Town to be intentionally used, directly or indirectly, to acquire or to replace funds which were used directly or indirectly to acquire any higher yielding investments (as defined in Section 148 of the Code), the acquisition of which would cause the Note to be an arbitrage bond forpurposes of Sections 103(b)(2) and 148 of the Code. The Town further agrees and covenants that it shall do and perform all acts and things necessary in order to assure that the requirements of Sections 103(b)(2) and 148 of the Code are met. Specifically, without intending to limit in any way the generality of the foregoing, the Town covenants and agrees: (1) to pay to the United States of America at the times required pursuant to Section 148(f) of the Code, the excess of the amount earned on all non - purpose investments (as defined in Section 148(f)(6) ofthe Code) (other than investments attributed to an excess described in this sentence) over the amount which would have been earned if such non - purpose investments were invested at a rate equal to the yield on the Note, plus any income attributable to such excess (the "Rebate Amount "); (2) to maintain and retain all records pertaining to and to be responsible for making or causing to be made all determinations and calculations of the Rebate Amount and required payments of the Rebate Amount as shall be necessary to comply with the Code; and (3) to comply with all representations and restrictions contained in any Certificate as to Arbitrage and Other Tax Matters executed by the Town in connection with the Note. The Town understands that the foregoing covenants impose continuing obligations on it to comply with the requirements of Section 103 and Part IV of Subchapter B of Chapter 1 of the Code so long as such requirements are applicable. (b) The Town will comply with, and timely make or cause to be made all filings required by, all effective rules, rulings or regulations promulgated by the Department of the Treasury or the Internal Revenue Service. (c) The Town will not use, invest, direct or permit the investment ofthe proceeds ofthe Note or any investment earnings thereon in a manner that will result in the Note becoming a "private activity bond" within the meaning of Sections 141 and 145 of the Code. (d) The Town will not use or permit to be used more than ten percent (10 %) of the proceeds of the Note (including any amounts used to pay costs associated with issuing the Note), including all investment income earned on such proceeds directly or indirectly, in any trade or business carried on by any person who is not the Town or a state or political subdivision or instrumentality thereof as those terms are used in Section 103 of the Code (an "Exempt Person"). (e) The Town will not use or permit the use of any portion of the proceeds of the Note, including all investment income earned on such proceeds, directly or indirectly, to make or finance loans to persons who are not Exempt Persons. (f) The Town has not entered into, and will not enter into, any arrangement with any person or organization (other than an Exempt Person) which provides for such person or organization to manage, operate, or provide services with respect to more than 10% of the property financed with the proceeds of the Note (a "Service Contract "), unless the guidelines set forth in Revenue Procedure 97 -13 (or the guidelines set forth in Revenue Procedure 93 -19, to the extent applicable, or any new, revised or additional guidelines applicable to Service Contracts) (the "Guidelines "), are satisfied, except to the extent it obtains a private letter ruling from the Internal Revenue Service or an opinion of nationally recognized Bond Counsel which allows for a variation from the Guidelines. (g) The Town will not cause the Note to be treated as "federally guaranteed" for purposes of Section 149 of the Code, as may be modified in any applicable rules, rulings, policies, procedures, regulations or other official statements promulgated or proposed by the Department of the Treasury or the Internal Revenue Service with respect to "federally guaranteed" obligations described in Section 149 of the Code. For purposes of this paragraph, the Note shall be treated as "federally guaranteed" if (i) all or any portion ofthe principal or interest is or will be guaranteed directly or indirectlyby the United States of America or any agency or instrumentality thereof, or (ii) 5% or more of the proceeds of the Note will be (A) used in making loans the payment of principal or interest with respect to which is to be guaranteed in whole or in part by the United States of America or any agency or instrumentality thereof, or (B) invested directly or indirectly in federally insured deposits or accounts, and (iii) such guarantee is not described in Section 149(b)(3) of the Code. The terms "debt service," "gross proceeds," "net proceeds," "proceeds," and "yield" have the meanings assigned to them for purposes of Section 148 of the Code. Section 3.11. Section 265 Designation of Note. The reasonably anticipated amount of tax- exempt obligations (other than obligations described in clause (ii) of Section 265(b)(3)(C) of the Code), which have been or will be issued by the Town and all entities which are subordinate to or which issue obligations on behalf of the Town during 2012 does not exceed $10,000,000, and the Town hereby designates the Note as a "qualified tax- exempt obligation" ( "QTEO ") for purposes of Section 265(b)(3)(B)(i) of the Code, and the Town covenants and agrees not to take any action or to fail to take any action if such action or failure would cause the Note to no longer be a QTEO. Section 3.12. Special Assessment Covenants. The Town will levy and assess Special Assessments in amounts sufficient to pay the principal of and interest on the Note as the same become due and payable. The Town shall utilize the uniform method for the collection of the Special Assessments authorized by Section 197.3632, Florida Statutes, will cooperate with the tax collector in any enforcement proceedings, and will take no action that would impair the collection of the Special Assessments. The Town will use the proceeds of Special Assessments solely to pay principal of and interest on the Note. ARTICLE IV CONDITIONS OF LENDING The obligations of the Bank to lend hereunder are subject to the following conditions precedent: Section 4.01 Representations and Warranties. The representations and warranties set forth in this Agreement and the Note are and shall be true and correct on and as of the date hereof. Section 4.02 No Default. On the date hereof, the Town shall be in compliance with all the terms and provisions set forth in this Agreement and the Note on its part to be observed or performed, and no Event of Default nor any event that, upon notice or lapse of time or both, would constitute such an Event of Default, shall have occurred and be continuing at such time. Section 4.03 Supporting Documents. On or prior to the date hereof, the Bank shall have received the following supporting documents, all of which shall be satisfactory in form and substance to the Bank (such satisfaction to be evidenced by the purchase of the Note by the Bank): (a) the opinion of bond counsel for the Town, regarding the due authorization, execution, delivery, validity and enforceability of the Resolution, the Special Assessments, this Agreement and the Note; and (b) the opinion of bond counsel to the Town to the effect that, (1) the interest on the Note is excluded from gross income for federal income tax purposes and the Note is not an item of tax preference under Section 57 of the Code, (2) the Note and the income thereon are exempt from the Florida excise tax on documents and intangible personal property tax and (3) the Note is a QTEO; and (C) such additional supporting documents as the Bank may reasonably request. ARTICLE V FUNDING THE LOAN Section 5.01 The Loan. On the Closing Date, the Bank hereby agrees to Loan to the Town, and the Town agrees to borrow from the Bank, an amount equal to the Loan Amount upon the terms and conditions set forth in this Agreement. The Town agrees to repay the principal amount borrowed plus interest thereon, upon the terms and conditions set forth in this Agreement and the Note. Section 5.02 Description and Payment Terms of the Note. To evidence the obligation of the Town to repay the Loan, the Town shall on the Closing Date make and deliver to the Bank the Note in the form attached hereto as Attachment A. -10- ARTICLE VI EVENTS OF DEFAULT Section 6.01 General. An "Event of Default" shall be deemed to have occurred under this Agreement if: (a) The Town shall fail to make any payment of the principal of or interest on the Loan when the same shall become due and payable, whether by maturity, by acceleration at the discretion of the Bank as provided for in Section 6.02, or otherwise; or (b) The Town shall default in the performance of or compliance with any term or covenant contained in this Agreement or the Note, other than a term or covenant a default in the performance of which or noncompliance with which is elsewhere herein specifically dealt with, which default or non - compliance shall continue and not be cured within thirty (30) days after (i) written notice thereof to the Town by the Bank, or (ii) the Bank is notified of such noncompliance or should have been so notified pursuant to the provisions of Section 3.01(c) of this Agreement, whichever is earlier; or (c) Any representation or warranty made in writing by or on behalf of the Town in this Agreement or the Note shall prove to have been false or incorrect in any material respect on the date made or reaffirmed; or (d) The Town admits in writing its inability to pay its debts generally as they become due or files a petition in bankruptcy or makes an assignment for the benefit of its creditors or consents to the appointment of a receiver or trustee for itself; or (e) The Town is adjudged insolvent by a court of competent jurisdiction, or it is adjudged a bankrupt on a petition in bankruptcy filed by or against the Town, or an order, judgment or decree is entered by any court of competent jurisdiction appointing, without the consent of the Town, a receiver or trustee of the Town or of the whole or any part of its property, and if the aforesaid adjudications, orders, judgments or decrees shall not be vacated or set aside or stayed within ninety (90) days from the date of entry thereof, or (f) The Town shall file a petition or answer seeking reorganization or any arrangement under the federal bankruptcy laws or any other applicable law or statute of the United States of America or the State; or (g) The Town shall default in the due and punctual payment or performance of covenants related to (i) any obligation for the payment of money to the Bank or any other subsidiary or affiliate of SunTrust Bank or (ii) any obligation for the repayment of borrowed money in an amount in excess of $100,000 to any other obligee. Section 6.02 Effect of Event of Default. Immediately and without notice, upon the occurrence of any Event of Default, the Bank may declare all obligations of the Town under this Agreement and the Note to be immediately due and payable without further action of any kind and upon such declaration the Note and the interest accrued -11- thereon shall become immediately due and payable. In addition, and regardless whether such declaration is or is not made, the Bank may also seek enforcement of and exercise all remedies available to it under any applicable law. ARTICLE VII MISCELLANEOUS Section 7.01 No Waiver; Cumulative Remedies. No failure or delay on the part of the Bank in exercising anyright, power, remedyhereunder or under the Note shall operate as a waiver of the Bank's rights, powers and remedies hereunder, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof, or the exercise of any other right, power or remedy hereunder or thereunder. The remedies herein and therein provided are cumulative and not exclusive of any remedies provided by law or in equity. Section 7.02 Amendments, Changes or Modifications to the Agreement. This Agreement shall not be amended, changed or modified except in writing signed by the Bank and the Town. The Town agrees to pay all of the Bank's costs and reasonable attomeys' fees incurred in modifying and/or amending this Agreement at the Town's request or behest. Section 7.03 Counterparts. This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original; but such counterparts shall together constitute but one and the same Agreement, and, in making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart. Section 7.04 Severability. If any clause, provision or section of this Agreement shall be held illegal or invalid by any court, the invalidity of such clause, provision or section 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 7.05 Term of Agreement. Except as otherwise specified in this Agreement, this Agreement and all representations, warranties, covenants and agreements contained herein or made in writing by the Town in connection herewith shall be in full force and effect from the date hereof and shall continue in effect until as long as the Note is outstanding. Section 7.06 Notices. All notices, requests, demands and other communications which are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given when received if personally delivered; when transmitted if transmitted by telecopy, electronic telephone line facsimile transmission or other similar electronic or digital transmission method (provided customary evidence of receipt is obtained); the day after it is sent, if sent by overnight common carrier service; and five days after it is sent, if mailed, certified mail, return receipt requested, postage prepaid. In each case notice shall be sent to the Notice Address. Section 7.07 Applicable Law; Venue. This Agreement shall be construed pursuant to and governed by the substantive laws of the State. The Town and the Bank waive any objection either might -12- otherwise have to venue of any action lying in Palm Beach County, Florida. Section 7.08 Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the successors in interest and permitted assigns of the parties. The Town shall have no rights to assign any of its rights or obligations hereunder without the prior written consent of the Bank. Section 7.09 No Third Party Beneficiaries. It is the intent and agreement of the parties hereto that this Agreement is solely for the benefit of the parties hereto and no person not a party hereto shall have any rights or privileges hereunder. Section 7.10 Attomeys Fees. To the extent legally permissible, the Town and the Bank agree that in any suit, action or proceeding brought in connection with this Agreement or the Note (including any appeal(s)), the prevailing party shall be entitled to recover costs and attorneys' fees from the other party. Section 7.11 Entire Agreement. Except as otherwise expressly provided, this Agreement and the Note embody the entire agreement and understanding between the parties hereto and supersede all prior agreements and understandings relating to the subject matter hereof. Section 7.12 Further Assurances. The parties to this Agreement will execute and deliver, or cause to be executed and delivered, such additional or further documents, agreements or instruments and shall cooperate with one another in all respects for the purpose of out the transactions contemplated by this Agreement. Section 7.13 Waiver of Jury Trial. (a) This Section 7.13 concerns the resolution of any controversies or claims between the parties, whether arising in contract, tort or by statute, that arise out of or relate to: (i) this Agreement (including any renewals, extensions or modifications); or (ii) the Note (collectively a "Claim "). For the purposes of this provision only, the term "parties" shall include any parent corporation, subsidiary or affiliate of the Bank involved in the servicing, management or administration of any obligation described or evidenced by this Agreement. (b) The parties irrevocably and voluntarily waive any right they may have to a trial by jury in respect of any Claim. This provision is a material inducement for the parties entering into this Agreement. -13- IN WITNESS WBEREOF, the parties have executed this Agreement to be effective between them as of the date of first set forth above. TOWN OF GULF STREAM, FLORIDA By: Name: Title: Mayor SUNTRUST BANK By. Name: Leslie Downs Title: Vice President -14- ATTACHMENT A TO LOAN AGREEMENT PROMISSORY NOTE KNOW ALL MEN BY THESE PRESENTS that the undersigned maker, Town of Gulf Stream, Florida (the "Town "), a political subdivision and municipality created and existing pursuant to the Constitution and the laws of the State of Florida, for value received, promises to pay from the sources hereinafter provided, to the order of SunTrust Bank, or registered assigns (hereinafter, the 'Bank "), the principal sum of $2,428,000.00 or such lesser amount as shall be outstanding hereunder, together with interest on the principal balance outstanding at the rate of [10 year term:2.09 %] [15 year term: 2.17 %] per annum (subject to adjustment as hereinafter provided) based upon a year of 365/366 days for the actual number of days elapsed. This Note is issued in conjunction with a Loan Agreement, dated of even date herewith, between the Town and the Bank (the "Loan Agreement ") and is subject to all the terms and conditions of the Loan Agreement. Principal of and interest on this Note are payable in immediately available funds constituting lawful money of the United States of America at such place as the Bank may designate to the Town. The Town will pay the Bank the accrued interest hereon and installments of principal hereof in equal annual payments of $ , due on April 1, 2013 and on the first day of each April thereafter. The entire unpaid principal balance, together with all accrued and unpaid interest hereon, shall be due and payable in full on April 1, [2022] [2027] (the "Maturity Date "). In the event that the interest rate home hereby is adjusted as provided herein, then the payments due hereon will be adjusted so that the principal and interest hereon is repaid in equal annual installments due on each April 1 after the date of such interest rate adjustment through and including the Maturity Date. All payments by the Town pursuant to this Note shall apply first to accrued interest, then to other charges due the Bank, and the balance thereof shall apply to the principal sum due. As used in this Note, the following terms have the following meanings: "Code" means the Internal Revenue Code of 1986, as amended, and any Treasury Regulations, whether temporary, proposed or final, promulgated thereunder or applicable thereto. "Determination of Taxability" means a final decree or judgment of any Federal court or a final action of the Internal Revenue Service determining that interest paid or payable on this Note is or was includable in the gross income of the Bank for Federal income tax purposes; provided, that no such decree, judgment, or action will be considered final for this purpose, however, unless the Town has been given written notice and, if it is so desired and is legally allowed, has been afforded the opportunity to contest the same, either directly or in the name of the Bank, and until the conclusion of any appellate review, if sought. [15 YEAR TERM ONLY: "Margin Rate Factor" shall mean the fraction the numerator of which is equal to one (1) minus the Maximum Federal Corporate Tax Rate on the date of calculation and the denominator of which is 0.65. The Margin Rate Factor shall be 0.65/0.65 or 1.0 so long as the Maximum Federal Corporate Tax Rate shall be 35 %, and thereafter shall increase from time to time effective as of the effective date of any decrease in the Maximum Federal Corporate Tax Rate.] [ 15 YEAR TERM ONLY: "Maximum Federal Corporate Tax Rate" shall mean the maximum rate of income taxation imposed on corporations pursuant to Section I I(b) of the Code, determined without regard to tax rate or tax benefit make -up provisions such as the last two sentences of Section 11(b)(1) of the Code, as in effect from time to time (or, if as a result of a change in the Code the rate of income taxation imposed on corporations shall not be applicable to the Holder, the maximum statutory rate of federal income taxation which could apply to the Holder). The Maximum Federal Corporate Tax Rate on the date of execution of this Note is 35 %.} "Taxable Period" shall mean the period of time between (a) the date that interest on this Note is deemed to be includable in the gross income of the owner thereof for federal income tax purposes as a result of a Determination of Taxability, and (b) the date of the Determination of Taxability. "Taxable Rate" shall mean, upon a Determination of Taxability, the interest rate per annum that shall provide the Bank with the same after tax yield that the Bank would have otherwise received had the Determination of Taxability not occurred, taking into account the increased taxable income of the Bank as a result of such Determination of Taxability. The Bank shall provide the Town 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 Town. This Note may be pre -paid at the option of the Town in whole or in part on any date subject to the terms hereof and upon at least two Business Days' prior written notice from the Town to the Bank specifying the amount of prepayment. The Town shall, at the time of such prepayment, pay to the Bank the interest accrued to the date ofprepayment on the principal amount being prepaid plus an additional fee or redemption premium equal to the present value of the difference between (1) the amount that would have been realized by the Bank on the prepaid amount for the remaining term of the loan at _% (the Federal Reserve H.15 Statistical Release rate for fixed -rate payers in interest rate swaps for a term corresponding to the term of the Note, interpolated to the nearest month, if necessary, that was in effect three Business Days prior to the date hereof), and (2) the amount that would be realized by the Bank by reinvesting such prepaid funds for the remaining term of the loan at the Federal Reserve H.15 Statistical Release rate for fixed -rate payers in interest rate swaps, interpolated to the nearest month, that was in effect three Business Days prior to the repayment date; both discounted at the same interest rate utilized in determining the applicable amount in (2). Should the present value have no value or a negative value, the Town may prepay with no additional fee or redemption premium. Should the Federal Reserve no longer release rates for fixed -rate payers in interest rate swaps, the Bank may substitute the Federal Reserve H.15 Statistical Release with another similar index. The Bank shall provide the Town with a written statement explaining the calculation of the premium due, which statement shall, in absence of manifest error, be conclusive and binding. The application of such fee or prepayment premium is not intended to, and shall not be deemed to be, an increase in the interest rate. Upon the occurrence of a Determination of Taxability and for as long as the same shall be applicable to this Note, the interest rate on the Note shall be converted to the Taxable Rate. In addition, upon a Determination of Taxability, the Town shall pay to the Bank (i) an additional amount equal to the difference between (A) the amount of interest actually paid on the Note during the Taxable Period and (B) the amount of interest that would have been paid during the Taxable Period had the Note borne interest at the Taxable Rate, and (ii) but only from lawfully available revenues not derived from ad valorem taxation, 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 Bank as a result of the Determination of Taxability. [ 15 YEAR TERM ONLY. If at any time that a Determination of Taxability is not in effect and the Maximum Federal Corporate Tax Rate is less than 35 %, then during such time the interest rate otherwise borne hereby shall be equal to the interest rate otherwise borne hereby multiplied by the Margin Rate Factor.] If at any time that a Determination of Taxability is not in effect, it is determined that the Note is not a "qualified tax exempt obligation" within the meaning of Section 265(b)(3)(C) of the Code, then the interest rate borne by the Note will increase to % per annum, effective as of the date that the Note is not a qualified tax exempt obligation. Any additional accrued interest due on a retroactive basis shall be paid by the Town within thirty days after demand therefor by the Bank and interest on a prospective basis shall then be paid at the increased rate on the same dates as interest is otherwise due. Such non bank qualified interest rate will be subject to further adjustment as provided herein. Upon the occurrence of an Event of Default (as deemed in the Loan Agreement) then the Bank may declare the entire debt then remaining unpaid hereunder immediately due and payable; and in any such 2 default and acceleration, the Town shall also be obligated to pay, but only from the Pledged Revenues and the Budgeted Revenues, as part of the indebtedness evidenced by this Note, all costs of collection and enforcement hereof, including such fees as may be incurred on appeal or incurred in any proceeding under bankruptcy laws as they now or hereafter exist, including specifically but without limitation, claims, disputes and proceedings seeking adequate protection or relief from the automatic stay. Interest at the maximum lawful rate per annum shall be payable on the entire principal balance owing hereunder from and after the occurrence of and during the continuation of a default described in the preceding paragraph, irrespective of a declaration of maturity. The Town to the extent permitted by law hereby waives presentment, demand, protest and notice of dishonor. All terms, conditions and provisions of the Loan Agreement are by this reference thereto incorporated herein as a part of this Note. Terms used herein in capitalized form and not otherwise defined herein shall have the meanings ascribed thereto in the Loan Agreement. This Note may be exchanged or transferred but only as provided in the Loan Agreement. This Note was validated by j udgment of the Circuit Court of the Fifteenth Judicial Circuit of Florida, in and for Palm Beach County, Florida rendered on November 29, 2011. It is hereby certified, recited and declared that all acts, conditions and prerequisites required to exist, happen and be performed precedent to and in the execution, delivery 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 is in full compliance with and does not exceed or violate any constitutional or statutory limitation. IN WITNESS WHEREOF, the Town has caused this Note to be executed in its name as of the date hereinafter set forth. The date of this Promissory Note is September 6, 2012. TOWN OF GULF STREAM, FLORIDA By: Name: Title: Mayor 3 Leslie Downs First Vice President Exhibit B StWIPRUST Re: Town of Gulf Stream 2012 Special Assessment Bonds By Email: bthrasher(a_)gulf- stream.orq mark.raymond(a)mraymondlaw.com Dear Mr. Thrasher: SunTrust Bank 501 S. Flagler Dr Suite 200 West Palm Beach, Fl 33401 Leslie.downs@suntrust.com On behalf of SunTrust Bank (the "Bank "), I am pleased to present this commitment to the Town of Gulfstream (the "Borrower') in the amount of up to Two Million four hundred twenty eight thousand dollars and 00/100 dollars ($2,428,000.00). It is our understanding that the proceeds from the Special Assessment Bond, Series 2012 will be used to install underground electric, cable and telephone. This commitment is subject to: (i) the preparation, execution and delivery of mutually acceptable loan documentation, including a note incorporating substantially the terms and conditions set forth in the Term Sheet; (ii) the absence of a material adverse change in the business, condition (financial or otherwise), results of operations, properties or prospects of the Borrower and its subsidiaries (if any) as reflected in its financial statements as of September 31, 2011; (iii) the accuracy of all representations which you have made or will make to the Bank and all information that you furnish to us and your compliance with the terms of this Commitment Letter; and (iv) a closing of the Facility on or prior to September 18, 2012. Although the following provisions, terms and conditions are intended to be comprehensive, they are not necessarily inclusive of all the anticipated terms that will be applicable to the credit and does not purport to summarize all of the conditions, covenants, definitions, representations, warranties, events of default or other provisions that may be contained in documents required to consummate this financing. All of such terms will be set forth in the final, definitive loan documents, and all such terms must be acceptable to the Bank and its counsel. This financing proposal is contingent upon the accuracy of all facts, statements and financial information submitted to the Bank by the Borrower and is conditioned upon the terms outlined in the attached Term Sheet. The Borrower hereby agrees to pay, or reimburse the Bank on demand for, all reasonable costs and expenses incurred by the Bank (whether before or after the date hereof) in connection with this Commitment Letter and the transactions contemplated hereunder (regardless of whether any of the transactions contemplated hereby are consummated), including without limitation the reasonable costs and expenses of the Bank's counsel (including in -house counsel), and all reasonable costs and expenses of the Bank, including, without limitation, reasonable costs and expenses of the Bank's counsel (including in -house counsel), incurred in connection with the enforcement of its rights and remedies hereunder. Your obligation in respect of such costs and expenses shall survive the expiration or termination of this Commitment Letter. This Commitment Letter shall constitute a binding obligation of the Bank for all purposes immediately upon the acceptance hereof by the Borrower in the manner provided herein. Notwithstanding any other provision of this Commitment Letter, the Bank's commitments and undertakings as set forth herein shall not be or become effective for any purpose unless and until this Commitment Letter shall have been accepted by the Borrower in the manner specified below. If you are in agreement with the foregoing, please sign and return the enclosed copy of this Commitment Letter at closing. Unless the Bank receives such copy of this Commitment Letter duly executed by an authorized officer of the Borrower prior to 5:00 p.m. (EST), on September 18, 2012, the Bank's obligations hereunder shall terminate on such date. In no event shall the Bank have any obligation to make the Facility available unless the closing shall have occurred on or prior to September 18, 2012. In addition to the foregoing, this Commitment Letter may be terminated at any time by mutual agreement. This Commitment Letter is solely for the benefit of the Borrower and the Bank, and no provision hereof shall be deemed to confer rights on any other person or entity. This Commitment Letter may not be assigned by the Borrower to any other person or entity, but the obligations of the Borrower hereunder shall be binding upon the successors of the Borrower. THIS COMMITMENT LETTER WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE BORROWER AND THE BANK HEREBY WAIVES JURY TRIAL IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS COMMITMENT LETTER OR ANY OTHER DOCUMENTS CONTEMPLATED HEREBY. This Commitment Letter may be executed in any number of separate counterparts, each of which shall collectively and separately, constitute one agreement. Upon acceptance by you as provided herein, this Commitment Letter shall supersede all understandings and agreements between the parties hereto in respect of the transactions contemplated hereby. Sincerely, Leslie L. Downs SunTrust Bank Institutional & Governmental Banking Group First Vice President BORROWER ACCEPTS THE COMMITMENT: Date Term Sheet Borrower. The Town of Gulf Stream Bank: SunTrust Bank Contact: Leslie L. Downs First Vice President SunTrust Bank 501 S Flagler Drive 2nd Floor West Palm Beach, FL 33401 Phone: 561.835.2677 Facility Type: Bank Qualified Loan in the form of a tax - exempt bond (the "Bond "). The Bond must be a "qualified tax exempt obligation" under Section 265(b)(3) of the Internal Revenue Code. Purpose The proceeds from the Special Assessment Bond Series 2012 will be used to place electric, telephone, and cable underground. Amount: Up to $2,428,000 Terms: Interest and principal shall be payable annually on April 1 of each year commencing April 1, 2013 based upon a mortgage style amortization. Security: The Loan will be secured by a pledge of special assessments levied for the purpose of paying the cost of the Project. The Town will also covenant to budget and appropriate from lawfully available non ad valorem revenues amounts sufficient to pay the principal and interest on the loan as it comes due to the extent not paid by the assessments. Interest Rate: Option A: Maturity Date of 411122 The interest rate on the loan will be a tax exempt bank qualified fixed loan rate of 2.09 % based upon an actual /actual interest rate calculation and including a standard make whole provision. Option B: Maturity Date of 411127 The interest rate on the loan will be a tax exempt bank qualified fixed loan rate of 2.17% based upon an actual /actual interest rate calculation and including a standard make whole provision. The interest rate will be locked until September 17, 2012, Maturity Date: Option A: April 1, 2023 Option B: April 1, 2028 Prepayment The Town may prepay the Loan at anytime upon two Business Days' prior written notice to SunTrust. Such prepayment notice shall specify the amount of the prepayment which is to be applied. In the event of prepayment of the After -Tax Yield Maintenance Note, the Borrower may be required to pay SunTrust an additional fee (a prepayment charge) determined in the manner provided below, to compensate SunTrust for all losses, costs and expenses incurred in connection with such prepayment. The fee shall be equal to the present value of the difference between (1) the amount that would have been realized by SunTrust on the prepaid amount for the remaining term of the loan at the Federal Reserve H.15 Statistical Release rate for fixed -rate payers in interest rate swaps for a term corresponding to the term of the Note, interpolated to the nearest month, if necessary, that was in effect three Business Days prior to the origination date of the Note and (2) the amount that would be realized by SunTrust by reinvesting such prepaid funds for the remaining term of the loan at the Federal Reserve H.15 Statistical Release rate for fixed -rate payers in interest rate swaps, interpolated to the nearest month, that was in effect three Business Days prior to the loan repayment date; both discounted at the same interest rate utilized in determining the applicable amount in (2). Should the present value have no value or a negative value, the Borrower may repay with no additional fee. Should the Federal Reserve no longer release rates for fixed -rate payers in interest rate swaps, SunTrust may substitute the Federal Reserve H.15 Statistical Release with another similar index. SunTrust shall provide the Borrower with a written statement explaining the calculation of the premium due, which statement shall, in absence of manifest error, be conclusive and binding. For Option B only (the 4/1/28 maturity) , the interest rate quoted herein take into consideration a marginal maximum federal corporate tax rate of 35 %. In the event of a decrease in the marginal maximum corporate tax rate, the Bank shall have the right to adjust the interest rate upwards in order to maintain the same after tax yield for the Bank. For Options A and B: If a determination of taxability event occurs the rate will be adjusted upwards to a rate determined necessary by Bank to maintain the same after -tax yield. Upon an occurrence of a Determination of Taxability, the Borrower hereby agrees to pay to the Bank (i) an additional amount equal to the difference between (A) the amount of interest paid on the Bonds during the Taxable Period and (B) the amount of interest that would have been paid on the Bonds during the Taxable Period had the Bonds borne interest at the Taxable Rate, plus (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 Bank as a result of the occurrence of a Determination of Taxability. If it is determined that the Bond does not qualify as BQ, the rate will be adjusted to a fixed rate (non -BQ) as determined by Bank as of the date it is determined that the loan does not qualify as BQ. Legal Fees: Our proposed bank counsel is Ed Vogel of Holland and Knight in Fees for our counsel will be $4,000.00 if our counsel reviews documentation prepared by the counsel to the Town. Covenants and Conditions A) All matters relating to this loan, including all instruments and documents required, are subject to the Bank's policies and procedures in effect, applicable governmental regulations and /or statutes, and approval by the Bank and the Bank's Counsel. B) Borrower shall submit annual financial statements within 270 days of fiscal year end, together with an annual budget within 30 days of adoption, together with any other information the Bank may reasonably request. C) No other debt may be issued secured by the pledged special assessments. In order to issue additional parity bonds secured by non -ad valorem revenues, the average pledgeable net non ad valorem revenues and pledged special assessments for the two most recent fiscal years must equal at least 1.2x the projected maximum annual debt service on the existing and proposed debt. D) A written opinion from Borrower's Counsel, in form and substance acceptable to the Bank and Bank's Counsel, that all documents are valid, binding and enforceable in accordance with their terms, that execution and delivery of said documents has been duly authorized, and addressing such other matters as the Bank and the Bank's Counsel deem appropriate. E) The Borrower shall comply with and agree to such other covenants, terms, and conditions that may be reasonably required by the Bank and its counsel and are customary in taxable financings of this nature. These covenants would include, but are not to be limited to, covenants regarding compliance with laws and regulation, remedies in the event of default. F) The "Bank- Qualified" interest rate quoted herein assumes the obligations is a "qualified tax - exempt obligation" as defined in Section 265(b)(3) of the Internal Revenue Service Code. Receipt of opinions from Borrower's counsel and Bond Counsel in each case in form and substance satisfactory to the Bank, which shall include, without limitation, opinions that the financing is tax - exempt and that the Bond is a qualified tax - exempt obligation under Section 265 (b)(3) of the Internal Revenue Code. The City will covenant to take all steps necessary for the Bond to be treated as a qualified tax - exempt obligation under Section 265(b)(3) of the Internal Revenue Code. G) The Borrower shall agree to have the interest payments collected via ACH Direct Debit out of a SunTrust bank account.