LOAN AGREEMENT BETWEEM RE $98000 LOAN ON VOGEL PROPERTY
It
3 2, 'I - '. ,! ~ ....,
..I- - .,"';
EXHIB[T B
-,
I',
This Loan Agreement cokstitutes an
lnterlocal Agreement Under Chapter
163.01, Florida Statutes
01 iU:C09'lr 0
R F( / 2 '
fb
].., .
HI"
1\i, i-
f' I
Rt~'~
T~jTA~V
LOAN AGREEMENT
between
SUN BANK, NATIONAL ASSOCIATION
as Trustee
OR ~ 9 I 2 PG : 4 9 7
1i
It J./C-LC'a. 'f--u--
1/, 1
/ (,l. UL4 t '-
JACKSON C. TU'M'LE, City Mana~r
acting as Administrator ' 1'1.,)4Q20,)5 \lEl'I 'ri1-\l4-6'J 12 ,'';
THE CITY OF CLEARWATER, FLORIDA
;l1
"i:.~':C?!) II'K~
I':;~::,'")' +'!rfT
TOTAL:
"::;-.;r,fR~j) :
:-H~r~E :
a municipal corporation of the State of Florida
City of Gulf Breeze, Florida
Local Government Loan Program
Series 1985C
.
$980,000 Loan
for
Vogel Property
Dated as of December 1, 1988
v C ,,'1,~ ,-/-0 Q
(t)
':"?
,~
c-
:-::-
:z:
I
en
-0
-
--
o
Prepared h1 & ~~ -It,:
\.. Daniel U. Livermore, Jr.
'" Livermore Klein & Lott, P. A.
1750 Gulf Life Tower
Jack.oaville, Florida 32201
Phone: (904) 399-0500
t
-;; 1 ~.~
c, '~-::
~. .'
':& : :' ,;
,
. .
"
':-:x
:~~;;
'--, =" :-
;::0::;'
>-T1=
V:~~
.:; 33 :.-
==~;;;
:;:=~
~~r
:<<.".\,') >
=:S~
,00-/5'/ -D 0 &
J
TABLE OF CONTENTS
CITY OF GULF BREEZE, FLORIDA
LOCAL GOVERNMENT LOAN PROGRAM
LOAN AGREEMENT
Parties and Recitals ......................................................... 1
Section 1.1
Section 1.2
Section 1.3
Section 1.4
Section 1.5
Section 2.1
Section 3.1
Section 3.2
Section 3.3
Section 3.4
Section 3.5
Section 3.6
Section 3.7
Section 3.8
Section 3.9
Section 3.10
Section 3.11
Section 3.12
ARTICLE I
BACKGROUND AND REPRESENTATIONS
Background .................................................. 1
Representations of Governmental Unit . . . . . . . . . . . . . . . . . . . . . . . . . 2
Sponsor Representations ....................................... 3
Administrator Representations ................................. 3
Trustee Representations ....................................... 3
ARTICLE n
DEFINITIONS
Definitions .................................................. 4
ARTICLE ill
FINANCING THE PROJECT
Making of Loan; Application of Loan Proceeds ....................
Disbursement of Loan; Security Int'erest in
Undisbursed Proceeds .........................................
Repayment of Loan ...........................................
Prepayment of Loan .........'.................................
6
6
6
8
8
9
Administrative Expenses ............ . . . . . . . . . . . . . . . . . . . . . . . . . .
Special Obligation of Governmental Units ........................
Benefit of Bondholders and Enhancement Provider;
Compliance with Trust Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 11
Bonds Not to Become Arbitrage Bonds ........................... 11
Assignment of Sponsor's Rights ................................. 11
Covenant Regarding Pledged Revenues;
Revenue Fund ................................................ 11
Alternate Security for Governmental Unit Note .................. 12
Inter local Agree m ent ......................................... 13
-i-
Section 4.1
Section 4.2
Section 4.3
Section 4.4
Section 4.5
Section 4.6
Section 5.1
Section 5.2
Section 5.3
Section 5.4
Section 5.5
Section 5.6
Section 5.7
Section 6.1
Section 6.2
Section 6.3
Section 6.4
Section 6.5
Section 6.6
Section 6.7
Section 6.8
Section 6.9
Section 6.10
Exhibit "A"
Exhibit "B"
Exhibit "C"
Exhibit "D"
I
ARTICLE IV
I
COVENANTS OF THE GOVERNMENTAL UNIT
Reports and Opinions; Inspections ............................... 14
Immunity of Sponsor .......................................... 14
Compliance with Laws ........................................ 15
Issuance of Other Obligations
Payable from Pledged Revenues ................................ 15
Issuance of Additional Parity Bonds ............................. 16
Additional Covenants ......................................... 17
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
Events of Default ............................................ 18
Acceleration' . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 19
Payment of Loan on Default; Suit Therefor ...................... 19
Other Remedies .............................................. 20
Cumulative Rights............................... .......... ... 21
Discontinuance of Proceedings ................................. 21
Notice of Default ............................................ 21
ARTICLE VI
MISCELLANEOUS
Limitation of Liability ........................................ 22
No Personal Recourse ......................................... 22
22
23
23
23
23
23
23
23
Notices .....................................'................
Illegal or Invalid Provisions Disregarded .........................
Applicable Law ..............................................
Assignments ..................................................
Amendments .................................................
Term of Agreement ...........................................
Headings ....................................................
Superseding Clause
. ............ ...... ...... .... ...... ......
Project Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 27
Promissory Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
General Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 33
Opinion of Governmental Unit Counsel . . . . . . . . . . . . . . . . . . . . . . . .. 39
-ii-
j I
TIllS LOAN AGREEMENT, dated December 1, 1988, between SUN BANK,
NATIONAL ASSOCIATION, Orlando, Florida, as Trustee for the holders of the Bonds (as
defined herein), JACKSON C. TUTILE, City Manager, acting on behalf of City of Gulf
Breeze, Florida (the "Administrator") and THE CITY OF CLEARWATER, FLORIDA, a
municipal corporation organized and duly existing under the laws of the State of Florida
(the "Governmental Unit"), witnesseth as follows:
ARTICLE I
BACKGROUND AND REPRESENTATIONS
SECTION 1.1
BACKGROUND.
(a) The City of Gulf Breeze, a municipal corporation of the State of Florida,
as issuer of the Bonds hereinafter referred to as the "Sponsor", is authorized to exercise
those powers conferred by Chapters 166 and 163, Florida Statutes, as amended.
(b) The Sponsor has issued $100,000,000 aggregate principal amount of its
Local Government Loan Program Floating Rate Demand Revenue Bonds, Series 1985 C
(the "Bonds") the proceeds of which are to be used for the purpose of financing and
refinancing the cost of the acquisition and installation by "Governmental Units", as
hereinafter defined, of qualified Projects as described herein (the "Program"). The Bonds
are issued under and are secured by the Trust Indenture dated as of December 1, 1985, as
amended and restated as of July 1, 1986, as further amended and supplemented (the
"Indenture") between the Sponsor and Sun Bank, National Association, Orlando, Florida, as
Trustee (the "Trustee"). Except as otherwise provided herein, all capitalized terms used
herein which are defined in the Indenture shall have the meanings set forth in the
Indenture.
(c) Pursuant to the Indenture, the Sponsor has caused the net proceeds of
the Bonds to be deposited with the Trustee, to be used to make loans to Governmental
Units for the financing or refinancing of the Projects.
(d) Under the Indenture, the Sponsor has pledged, for the security and
repayment of the Bonds, inter alia, the amounts to be received in repayment of the Loans,
in the manner set forth in the Indenture.
(e) For the additional security for the payment of the principal of the Bonds,
the Sponsor has caused to be delivered to the Trustee a Bond Insurance Policy (the "Credit
Facility") initially issued by Financial Guaranty Insurance Company (which, together with
any issuer of a substitute Credit Facility, is referred to as the "Credit Facility Issuer")
pursuant to which it has agreed to make available funds for the timely payment of the
principal and interest on the Bonds (the Credit Facility and any substitute Credit Facility
as defined in the Indenture hereinafter referred to as the "Credit Facility").
(f) For the purpose of prDviding the Bond Registrar and Paying Agent (as
defined in the Indenture) with funds for the purchase at the principal amount thereof plus
accrued interest on Bonds tendered to it for payment pursuant to the Indenture, and not
remarketed in accordance with the provisions thereof, the Sponsor has entered into a
LKL-1I/16/88-267 AA-2821
Rev.1I/30/88
Rev.I2/07/88
-1-
Standby Bond Purchase aid Revolving Credit Agreement datel as of April 1, 1988 (the
"Liquidity Facility") with COGB Liquidity Corporation and The Bank of Tokyo, Ltd., New
York Agency (collectively, the "Liquidity Facility Issuer") and the Trustee, pursuant to
which the Liquidity Facility Issuer will agree to purchase Bonds at the principal amount
thereof (up to the aggregate principal amount of Bonds outstanding), together with
accrued interest, to the extent that moneys are not otherwise available therefor under the
terms of the Indenture.
(g) The Administrator has approved the Loan and has approved a commit-
ment (the "Commitment") to make a loan in the amount of $980,000 (the "Loan") for the
purpose of financing the original cost of acquisition of the project identified on Exhibit A
attached hereto, which shall hereinafter collectively be referred to as the "Project".
(h) As evidence of the Loan made pursuant to this Agreement, the Govern-
mental Unit will execute and deliver a note in the principal amount of the Loan in the
form attached hereto as Exhibit B (the "Governmental Unit Note"). As security for the
Bonds, the Sponsor is assigning to the Trustee all its right, title and interest in the
Governmental Unit Note and this Agreement (except for the rights reserved by the
Sponsor as described in Section 3.9 hereof). Pursuant to the Indenture, the Governmental
Unit Note and this Agreement may be assigned by the Trustee to the Credit Facility
Issuer under the circumstances set forth therein.
SECTION 1.2
REPRESENTATIONS OF GOVERNMENTAL UNIT.
(a) The Governmental Unit is a municipal corporation of the State of
Florida, with full power and legal right to enter into this Agreement and perform its
obligations hereunder, and to finance the Project in the manner contemplated herein. The
Governmental Unit's actions in making and performing this Agreement have been duly
authorized by all necessary official action and will not violate or conflict with any
applicable provision of the Constitution, or law of the State of Florida or with any
ordinance, governmental rule or regulation, or with any agreement, instrument or other
document by which the Governmental Unit or its funds or properties are bound.
(b) The amount of the Loan, less anticipated investment earnings, does not
exceed the "Cost" of the Project (as defined in the Indenture).
(c) No portion of the proceeds of the Loan will be used to finance any
Project which is used in the trade or business of a person who is not an "exempt person" as
defined in Section 103(b)(3) of the Code.
(d) Immediately after the execution hereof, no Event of Default shall exist
hereunder nor shall there exist any condition which with lapse of time, the giving of
notice, or both, would constitute an Event of Default hereunder.
(e) The Governmental Unit is duly authorized and empowered under the laws
of the State of Florida, particularly Chapter 166, Part II, Florida Statutes, to enter into
this Agreement, to issue the Governmental Unit Note and to pledge the sources
hereinafter mentioned to the repayment thereof, and to apply the proceeds thereof to the
payment of the Costs of the Project.
LKL-ll/16/88-267 AA-2821
-2-
j
I
(f) On December 15. 1988, the Governmental Unit duly enacted Ordinance
No. 4728-88 (the "Authorizing Ordinance") authorizing the borrowing contemplated
hereby, and the terms and provisions of the Authorizing Ordinance are hereby
incorporated by reference.
(g) Neither the Governmental Unit nor any related person to such Govern-
mental Unit will, pursuant to any arrangement, formal or informal, purchase any Bonds in
an amount related to the Loan from the Program to the Governmental Unit.
(h) The Governmental Unit. is in compliance with all covenants and under-
takings in connection with all debt obligations payable from the Pledged Revenues herein
defined, or any part th~reof.
SECTION 1.3 SPONSOR REPRESENTATIONS. The Sponsor represents
that it is a municipal corporation of the State of Florida duly existing, and with full power
and authority to issue the Bonds and to enter into this Agreement. By proper action the
Sponsor has duly authorized the issuance and sale of the Bonds and the execution and
delivery of this Agreement. In accordance with the Indenture, the Sponsor has appointed
the Administrator t<> execute, undertake and perform the Sponsor's duties hereunder; and
all actions taken by the Administrator on behalf of the Sponsor pursuant to such
appointment shall be deemed to be the action of the Sponsor.
SECTION 1.4 ADMINISTRATOR REPRESENTATIONS. The Administrator
represents that he has duly authorized the execution and delivery of this Agreement. In
accordance with the Indenture, the Sponsor has appointed the Adminstrator to execute,
undertake and perform the Sponsor's duties hereunder either personally or through the
Independent Contractor; and all actions taken by the Administrator or the Independent
Contractor on behalf of the Sponsor pursuant to such appointment shall be deemed to be
the action of the Sponsor.
SECTION 1.5 TRUSTEE REPRESENTATIONS. The Trustee represents
that it is a national banking association duly existing, and with full power and authority to
enter into this Agreement and perform its obligations hereunder on behalf of the holders
of the Bonds. By proper action the Trustee has duly authorized the execution and delivery
of this Agree ment and the Indenture.
LKL-12/07 /88-267 AA-2821
-3-
J
I
ARTICLE IT
DEFINITIONS
SECTION 2.1 DEFINITIONS. The capitalized terms used herein which are
defined in the Indenture and in the Authorizing Ordinance shaH have the meanings
assigned thereto in the Indenture and in the Authorizing Ordinance, unless the context
hereof expressly requires otherwise. In addition, the following terms shall have the
meanings defined as follows:
"Additional Parity Bonds" shall mean Additional Parity Bonds issued under the
terms, conditions and provisions hereof.
Loan.
"Commitment" means the commitment of the Administrator to make the
"Costs and Expenses of the Program" shall mean the fees and expenses of the
Trustee, the Liquidity Facility Issuer, the Credit Facility Issuer, the Remarketing Agent,
the Administrator, the Independent Contractor, the Registrar and Paying Agent, and the
Issuer, including the fees and expenses of general or special counsel to any of the
foregoing, and shall include, without limitation of the foregoing, all amounts provided in
Section 3.5 hereof.
"Cost" or "Costs" in connection with the acquisition and/or construction of any
Project, means any cost incurred or estimated to be incurred by the Governmental Unit
which is reasonable and necessary for carrying out all works and undertakings in providing
and constructing or acquiring such Project for the Governmental Unit, including the
construction of the Project, the cost of necessary studies, surveys, plans and specifica-
tions, architectural, engineering, legal or other special services, including the fees and
expenses of bond counsel, development, construction and reconstruction necessary or
useful in connection with the construction of the Project, the reasonable cost of financing
incurred by the Governmental Unit or the Sponsor in connection with the execution of the
Loan Agreement, or in the course of the acquisition and/or construction of the Project,
including reimbursement to the Administrator for its out-of-pocket expenses and including
capitalized interest on any Loan disbursed in stages, and the cost of such other items as
may be reasonable and necessary for the acquisition and/or construction of the Project.
"Local Credit Enhancement" or "Local Letter of Credit" means a credit
enhancement device acceptable in form and substance to the Credit Facility Issuer
securing timely payment of principal of and interest and premium, if any, on the
Governmental Unit Note.
"Maximum Annual Debt Service" shall mean as of any date, the maximum
amount of principal, interest and other amounts provided for hereunder coming due in any
year on the Loan and on any Additional Parity Bonds. Such amount shall be computed at
the higher of (i) 1096 per annum or (ii)(A) the highest floating rate of interest borne by any
Variable Rate Loan during the preceeding 24 months or (B) if no such Variable Rate Loan
is then outstanding, the component of the Loan interest rate payable in respect of the
Governmental Unit's Pro-Rata Share of interest on the Bonds shall be computed assuming
the highest rate borne by the Bonds during the preceding 24 months. In the case of
LKL-ll/30/88-267 AA-2821
-4-
- I
Additional Parity Bonds 'bearing interest at a variable rate such amount shall be computed
at the higher of (i) 1096 per annum or (ij) the highest variable rate borne by such Bonds
during the preceding 24 months, provided that if no such Bonds are then outstanding, the
highest rate borne by variable rate obligations the interest rate on which is computed
according to the same or a similar index as that to be used for the Additional Parity Bonds
to be issued shall be assumed. For the purpose of this definition, "interest" on the Loan
shall include that .amount payable in respect of the Governmental Unit's Pro-Rata Share
of interest on the Bonds, Non-Asset Bonds amount, and Costs and Expenses of the
Program.
"Pledged Revenues" shall mean the proceeds of the local government half-cent
sales tax, as defined and described in, and distributed to, the Governmental Unit under,
Part VI, Chapter 218, Florida Statutes, securing repayment of the Loan and the
Governmental Unit Note, pursuant to Section 3.6(b) hereof.
"Pro-Rata Share" shall mean the percentage derived by dividing the principal
amount of the Governmental Unit's Loan by the sum of (1) the principal amount of all
loans outstanding plus (2) the amounts on deposit in the Project Loan Fund.
"Recycled Bond Proceeds" shall mean proceeds used to make Loans from the
Loan Repayment Account under the Indenture.
LKL-11/30/88-267 AA -2821
-5-
"
I
I
ARTICLE m
FINANCING THE PROJECT
SECTION 3.1 MAKING OF LOAN; APPLICATION OF LOAN PROCEEDS.
From the amounts, on deposit in the Project Loan Fund created under the Indenture, the
Governmental Unit hereby agrees to borrow and repay the sum of $980,000. The Loan
made hereby shall be repaid in accordance with the Governmental Unit Note and Section
3.3 hereof. The Governmental Unit covenants that it shall use the proceeds of the Loan
solely for the purposes described in Section 1.l(g) hereof and that it shall not use the
proceeds of the Loan in a manner inconsistent with the representations and covenants set
forth in Sections 1.2(c), 1.2(e) and 1.2(f) hereof. '
SECTION 3.2 DISBURSEMENT OF LOAN; SECURITY INTEREST IN UN-
DISBURSED PROCEEDS.
(a) Following the execution and delivery of this Agree ment and the Govern-
mental Unit Note (the "Closing"), the Trustee shall disburse the fees and expenses of bond
counsel and the amount of expenses of the Administrator to be reimbursed from the
proceeds of the Loan to the Expense Account created under the Indenture. The Trustee
shall disburse the balance of the Loan, with the written approval of the Credit Facility
Issuer, to the Governmental Unit in reimbursement for the cost of acquisition of the
Project previously incurred by the Governmental Unit.
(b) The Governmental Unit agrees that, upon request of the Trustee or the
Administrator, it shall supply such documentation as the Trustee, the Administrator or the
Credit Facility Issuer may require to determine that the proceeds of the Loan have been
applied solely to payment of the Costs of the Project.
SECTION 3.3 REPAYMENT OF LOAN. The Loan to be made to the
Governmental Unit for the Project shall be repaid in installments which shall correspond
in time and amount to the payments of principal and interest on the Governmental Unit
" Note and shall bear interest at the rates, and shall be payable at the times payable on the
Governmental Unit Note, as follows:
(a) The principal of the Loan shall be paid in 120 installments on the dates
and in the amounts shown on "Schedule I" attached to the form of the Governmental Unit
Note, which is attached hereto as Exhibit "B", with all remaining principal, together with
any other amounts payable in connection therewith, due on January 1, 1999, or such later
date as the Credit Facility Issuer shall have approved in writing.
(b) The interest on and other amounts due in respect of the Loan shall be
paid commencing on the first day of February, 1989, and on the first day of each month
thereafter. The repayment amounts due in respect of all Loans to Governmental Units
shall be an amount determined by the Financial Advisor on behalf of the Sponsor,
sufficient to retire, over the life of the Loan, the Pro-Rata Share of Non-Asset Bonds, and
an amount sufficient to provide funds, which, as described in the immediately following
paragraph, together with the Governmental Units' Pro-Rata Share of amounts in the
Surplus Fund constituting income from the investment of certain funds established under
LKL-ll/16/88-267 AA-2821
-6-
the Indenture will be slfficient, to pay when due among Jher things, the Costs and'
Expenses of the Program, the estimated interest (including Additional Interest, if any)
becoming due on the Bonds, taking into consideration the fact that such interest on all or
a portion of the Bonds will vary on a weekly basis pursuant to the Indenture; provided,
however, that if an acceleration of the Loan is declared pursuant to Section 5.2 hereof
following the occurrence of an Event of Default hereunder, the interest rate on the Loan
shall be increased ,to a rate per annum equal to the Prime Rate plus 296. Said interest
rate shall be based upon a year equal to 365/366 days for actual days elapsed and shall
change when said Prime Rate shall change. Notwithstanding anything otherwise contained
in this Agreement, the interest rate on the Loan shall not exceed twenty-five percent
(2596) per annum (exclusive of amounts charged for Costs and Expenses of the Program
which are not charges for the use or forbearance of money), or such higher rate as may
from time to time be permitted under applicable law and approved by the Credit Facility
Issuer (the "Maximum Rate"); provided, that, in the event the imposition of such Maximum
Rate shall ever cause the amount payable on the Governmental Unit Note to be less than
the amount of interest which would otherwise Qe computed pursuant to this Section 3.3,
the Governmental Unit Note shall thereafter bear interest at the Maximum Rate until the
earlier of (1) the final maturity of the Governmental Unit Note or (2) such time as the
total amount of interest paid on the Governmental Unit Note shall at such rate equal the
amount of interest which would have been payable on the Governmental Unit Note
pursuant to this Section 3.3 without regard to any Maximum Rate.
The Financial Advisor, on behalf of the Sponsor, shall determine not less often
than each January 1 and July 1 the rate of interest on the Loan and the Pro-Rata Share of
the Costs and Expenses of the Program and the Non-Asset Bonds and shall notify the
Trustee and the Administrator of such determination. The Administrator shall compute
the amount of each Governmental Unit's monthly payment and shall notify the Trustee
and the Governmental Unit, at least ten days prior to the first day of the month in which
the new payment amount is to become effective, of the period (not exceeding six months)
for which such payment amount is to be in effect and the amount of each interest
payment which the Governmental Unit is required to make during such period. However,
if at any time the Trustee determines that such payment amount, together with other
funds available therefor, does not provide sufficient funds to pay interest on all Bonds and
to pay the Non-Asset Bonds, the interest becoming due on the Bonds (including Additional
Interest, if any, together with the annual fees and other amounts, if any, charged for or
due under the Credit Facility and Liquidity Facility, together with other fees and
expenses relating to the Sponsor's multi-governmental loan program, the Trustee shall so
notify the Administrator and the Financial Advisor. The Financial Advisor, on behalf of
the Sponsor shall increase the payment amount on the Loan then in effect by an amount
sufficient to cure such deficiency by giving notice thereof to the Administrator. The
Administrator shall recompute the amount of the Governmental Unit's monthly payments
and shall give the Governmental Unit notice of a revised interest rate at least ten days
prior to the date such revised interest rate is to become effective, stating the period (not
exceeding six months) for which such revised interest rate is or additional payments are to
be in effect, and the amount of each interest payment which the Governmental Unit is
required to make during such period. The Administrator shall send to the Trustee and the
Credit Facility Issuer duplicate copies of each statement to the Governmental Unit
specifying the total payment due from the Governmental Unit for principal and interest
on the Loan, the respective amounts of principal and interest included in such total
payment, and the amount of any fees and expenses billed to the Governmental Unit on a
LKL-l1/30/88-267 AA-2821
-7-
monthly basis pursuant tl Section 3.5 hereof. The Governm4,tal Unit agrees that the
Sponsor has reserved the right to determine the extent to which invest ment income on the
funds established under the Indenture (including any income from the Project Loan Fund
prior to full disbursement of the Loan) may be applied in determining the amount payable
hereunder.
(c) As provided in the Governmental Unit Note, in addition to the above
payments of principal and interest on the Loan and the additional payments provided for
herein, any payment of principal and interest on the Loan which is received later than its
due date shall bear interest at a rate equal to the Prime Rate plus 296 per annum.
SECTION 3.4
PREP A YMENT OF LOAN.
The Governmental Unit may upon any Interest Payment Date on which the
Bonds may be redeemed or converted to another Mode at the option of the Sponsor and,
upon not less than 129 days prior written notice to the Sponsor, the Adm inistrator and the
Trustee, prepay the outstanding principal of the Loan or any portion thereof in accordance
with the requirements of Section 4.04(b) of the Indenture. There shall also be paid as a
prepayment premium an amount equal to any premium payable to the holders of the Bonds
in connection with such prepayment.
SECTION 3.5
ADMINISTRATIVE EXPENSES.
(a) In determining the payments in respect of the Loans which all Govern-
mental Units with non-accelerated Loans shall pay in each month, there shall be included
an amount determined by the Administrator on behalf of the Sponsor to be sufficient to
pay when due the items referred to in Section 3.3, including without limitations:
(1) the annual fees and other amounts, if any, charged for or due (i) in
the case of Variable Rate Loans, under the Credit Facility (including additional surety
bond premiums, if any); (ii) under the Liquidity Facility, and (iii) if this Loan is funded
from Recycled Bond Proceeds the bond insurance premiums and additional surety bond
premiums, if any, related to Recycled Bond Proceeds for the Loan (which shall be paid in
full at Closing);
(2) the annual administrative fees of (i) the Sponsor, the Administra-
tor, and the Independent Contractor, if applicable, and (ii) the Trustee, the Bond Registrar
and Paying Agent and any other Paying Agent or Agents;
(3) the annual fee of the Remarketing Agent;
(4) cost of issuance of the Bonds allocable to the Loan as Non-Asset
Bonds;
(5) the deferred Increased Cost Payments accrued to the date of
Closing of the Loan (which shall be recovered over a 12 month period); and
(6) the Governmental Unit's Pro-Rata Share of any amounts payable
pursuant to the Indenture as Increased Costs or Deferred Increased Costs.
LKL-ll/16/88-267 AA-2821
-8-
The Administrator, on Jdalf of the Sponsor, shall determineLuch amount (concurrently,
with the determination of the interest payments on the Loan pursuant to Section 3.3(b)
hereoO and shall notify the Governmental Unit at least ten days prior to the first day of
the period for which the new payment schedule is to become effective, of the period (not
exceeding six months) for which such payment schedule is to be in effect and the amount
of each payment which the Governmental Unit is required to make during such period.
However, if at any time the Administrator determines that such payments made by all
Governmental Units with non-accelerated Loans will not provide sufficient funds to pay
the amounts described in clauses (1) through (6) above, the Administrator, on behalf of the
Sponsor, shall revise the schedule of payments then in effect by giving the Governmental
Unit notice of revised schedule of payments, at least ten days prior to the date such
revised payment schedule is to become effective, stating the period (not exceeding six
months) for which such payment schedule is to be in effect and the amount of each
payment which the Governmental Unit is required to make during such period.
"
(b) The Governmental Unit shall pay the amounts described in paragraph (a)
above to the Trustee, as the Sponsor's assignee of this Agreement; except as otherwise
provided in Section 3.9 hereof.
(c) Any other amounts due from the Governmental Unit hereunder, including
closing costs related to the Loan and not paid at closing.
SECTION 3.6
SPECIAL OBLIGATION OF GOVERNMENTAL UNITS.
(a) Each. Credit Issuer may share with any other Credit Issuer any informa-
tion given to any of them by the Governmental Unit, including without limitation financial
statements, and may also share such information with any participant of such Credit
Issuer, and any financial institution which is being solicited to become a participant of any
Credit Issuer. To the extent necessary to permit the foregoing, the Governmental Unit
hereby waives any privilege or right to confidentiality, whether arising under statute or
otherwise, it may have which would otherwise prohibit the foregoing sharing of informa-
tion.
(b) The Governmental Unit Note shall be secured by a lien upon and pledge
of the Pledged Revenues, and the Pledged Revenues are hereby pledged to secure
repayment of the Governmental Unit Note, as, set forth in the Authorizing Ordinance.
The Governmental Unit hereby represents and warrants that the pledge of the Pledged
Revenues to secure the Governmental Unit Note is valid, binding and enforceable and that
the Pledged Revenues are not otherwise subject to any pledge, lien or encumbrance, other
than as has been heretofore disclosed to and expressly approved by the Credit Facility
Issuer in writing, such disclosure consisting of a first pledge and lien securing the
repayment of the Governmental Unit's Capital Improvement Revenue Bonds, Series 1984
(the "1984 Bonds") and a second pledge and lien securing repayment of the Governmental
Unit's Loan from the Program in the amount of $415,000 (the "Parity Loan"). The
Governmental Unit covenants that it will not cause or permit to exist any pledge of or
lien or encumbrance upon the Pledged Revenues which is prior in right of payment to that
securing the Governmental Unit Note except as expressly approved by the Credit Facility
Issuer including, specifically, any further debt secured on a parity with the 1984 Bonds.
The Governmental Unit covenants that it will not cause or permit to exist any pledge of
or lien or encumbrance upon the Pledged Revenues, other than the pledge benefitting the
LKL-ll/16/88-267 AA-2821
-9-
Governmental Unit Note, lcePt for any Additional Parity BondJor obligations secured by
a lien subordinate to the lien of the Governmental Unit Note which may be issued in the
manner permitted hereunder.
(c) Prior to each of its fiscal years, the Governmental Unit shall establish a
budget for such fiscal year which allocates a sufficient sum of Pledged Revenues to pay
all amounts reasonably anticipated by the Governmental Unit to be payable hereunder and
all amounts reasonably anticipated to be payable with respect to any Additional Parity
Bonds. In the event that the budgeted amounts prove insufficient to make said payments
the Governmental Unit shall as soon as practicable (but in any event prior to the
expiration of sixty days from such event) amend its budget so as to assure that sufficient
Pledged Revenues are available to at all times make said payments.
(d) The Loan and the Governmental Unit Note, and all payments due with
respect thereto, shall be a special obligation of the Governmental Unit, payable solely
from the Pledged Revenues as herein provided. The Loan and the Governmental Unit
Note do not constitute a general indebtedness of the Governmental Unit, or a pledge of its
faith, credit or taxing power within the meaning of any constitutional or statutory
provision or limitation. Neither the State of Florida nor any political subdivision thereof
nor the Governmental Unit shall be obligated (1) to exercise its ad valorem taxing power
or any other taxing power in any form on any real or personal property in the
Governmental Unit to pay the principal of the Loan and the Governmental Unit Note, the
interest thereon or other payments or costs incident thereto, or (2) to pay the same from
any other funds of the Governmental Unit except from the Pledged Revenues, all in the
manner provided herein. The acceptance of the Governmental Unit Note by the holder
from time to time thereof shall be deemed an agreement between the Governmental Unit
and such holder that the Governmental Unit Note and the indebtedness evidenced thereby
shall not constitute a lien upon any property of the Governmental Unit, but shall
constitute a lien only on the Pledged Revenues, in the manner herein provided.
(e) Subject to the provisions of the Florida Constitution, nothing herein
contained shall preclude the Governmental Unit from using any legally available funds, in
addition to the Pledged Revenues herein provided, which may come into its possession,
including but not limited to the proceeds of the Loan, contributions or grants, for the
purpose of payment of principal of and interest on the Loan.
SECTION 3.7 BENEFIT OF BONDHOLDERS AND ENHANCEMENT
PROVIDER; COMPLIANCE WITH TRUST INDENTURE. This Agreement is executed in
part to induce the purchase by others of the Bonds, the issuance by the Credit Facility
Issuer of the Credit Facility, the issuance of Local Credit Enhancement, if any, and the
execution and delivery by the Liquidity Facility Issuer of the Liquidity Facility and,
accordingly, all covenants, agreements and representations on the part of the Govern-
mental Unit and the Sponsor, as set forth in this Agreement, are hereby declared to be for
the benefit of the holders from time to time of the Bonds, and for the benefit of each
Credit Issuer. The Governmental Unit covenants and agrees to do all things within its
power in order to comply with and to enable the Sponsor to comply with all requirements
and to fulfill and to enable the Sponsor to fulfill all covenants of the Indenture.
LKL-ll/16/88-267 AA-2821
-10-
SECTION 3.1
BONDS NOT TO BECOME ARBITt AGE BONDS.
The Governmental Unit hereby covenants to the Sponsor and the holders of the
Bonds that, notwithstanding any other provision of this Agreement or any other instru-
ment, it will neither make nor cause to be made any investment or other use of the
proceeds of the Loan which would cause the Bonds to be "arbitrage bonds" under Section
103 of the Internal Revenue Code of 1954, as amended, and the regulations issued
thereunder, and that it will comply with the requirements of such Section and regulations
throughout the term of the Bonds.
Section 3.9
ASSIGNMENT OF SPONSOR'S RIGHTS.
(a) As the source of payment for the Bonds, the Sponsor will assign to the
Trustee all the Sponsor's rights under the Governmental Unit Note and this Agreement
(except for the rights of the Sponsor, the Trustee, the Administrator and the Independent
Contractor, if applicable, to receive payment of administrative expenses, reports and
indemnity against claims, and the Sponsor's, Trustee's and Administrator's rights to
enforce remedies pursuant to Section 3.5, 4.1, 4.2 and 5.4 hereof). The Governmental
Unit will make all payments required under Sections 3.3, 3.4, 3.5 and 5.3 hereof directly
to the Trustee without defense or setoff by reason of any dispute between the
Governmental Unit and the Sponsor.
(b) The Indenture requires that the Credit Facility provide for payment of
the principal of and interest on the Bonds when due if other moneys available under the
Trust Indenture are insufficient therefor, and that rights to the payment of any principal
and/or interest paid by the Credit Facility Issuer shall be assigned to the Credit Facility
Issuer. Under certain circumstances provided in the Indenture, this Agreement and the
Governmental Unit Note may be assigned to a Credit Issuer or the issuer of a Local Letter
of Credit.
(c) Notwithstanding anything in this Agreement to the contrary, if amounts
due under the Governmental Unit Note and this Agreement are accelerated as described
in the Indenture, and the full amount of the Loan has not been disbursed pursuant to the
Commitment, the Trustee shall have no obligation to make any further disbursements of
the Loan and shall apply the same to pay the Governmental Unit Note.
SECTION 3.10. COVENANT REGARDING PLEDGED REVENUES; REVENUE
FUND. (a) The Governmental Unit hereby covenants to take all lawful action necessary
or required to collect and receive the Pledged Revenues. The Governmental Unit further
covenants that it has full power to pledge the Pledged Revenues to the payment of the
principal and interest and other amounts becoming due on the Governmental Unit Note.
(b) There is hereby created and established the City of Clearwater Gulf
Breeze Loan Program Revenue Fund (the "Revenue Fund"). After application for the
benefit of the 1984 Bonds as required under the ordinance authorizing issuance of the 1984
Bonds, all Pledged Revenues received by the Governmental Unit shall be deposited into
the Revenue Fund and held solely for the benefit of the holder of the Governmental Unit
Note and Additional Parity Bonds as provided in this Section 3.10(b). The Revenue Fund
shall constitute a trust fund for the purposes herein provided and shall be kept separate
and distinct from all other funds of the Governmental Unit and used only for the purposes
and in the manner herein provided. Moneys on deposit in the Revenue Fund shall be
invested in obligations in which the Project Loan Fund may be invested under the
LKL-11/16/88-267 AA-2821
-11-
Indenture or as otherw~e may be permitted by the Credl Facility Issuer, and all
investment earnings shall be retained therein and used for the purposes thereof. Revenues
shall be applied and allocated on the fifteenth day of each month (i) first, to a separate
fund, which is hereby created and designated the City of Clearwater Gulf Breeze Loan
Program Sinking Fund (hereinafter called "Sinking Fund") commencing January 1~, 1989,
in such amounts sufficient to pay the principal of and interest and other amounts
becoming due on the Governmental Unit Note on the first day of the following month, (ii)
next, on a parity with the payments to be made pursuant to clause (i), to the payment of
amounts due in connection with any Additional Parity Bonds issued pursuant to the
provisions hereof, (iii) next, to the payment of any junior lien obligations issued pursuant
to the provisions hereof, and (iv) thereafter, to the Governmental Unit for any lawful
purpose of the Governmental Unit. The designation and establishment of the Revenue
Fund and Sinking Fund pursuant to this Section 3.10 shall not be construed to require the
establishment of any completely independent, self-balancing funds as such term is
commonly defined and used in governmental accounting, but rather is intended solely to
constitute an earmarking of certain revenues of the Governmental Unit for certain
purposes and to establish certain priorities for application of such revenues as herein
provided.
SECTION 3.11 ALTERNATE SECURITY FOR GOVERNMENTAL UNIT
NOTE. The Governmental Unit reserves the right to secure the Governmental Unit Note
with a Local Credit Enhancement acceptable in form and substance to the Credit Facility
Issuer and the Administrator, and upon furnishing such Local Credit Enhancement or other
security, the pledge of and lien upon the Pledged Revenues in favor of the Governmental
Unit Note shall be released and discharged, in the manner and to the extent specified by
the Credit Facility Issuer in writing. In addition, the Governmental Unit may provide for
the defeasance of the lien of this Loan Agreement upon the Pledged Revenues at any time
provided it first provides the following to the Trustee and to the Credit Facility Issuer:
(a) Evidence that the Governmental Unit shall have paid, or shall have made
provision for payment of, all amounts payable under this Loan Agreement. For purposes
of the preceding sentence, deposit of direct obligations of the United States of America
which are not subject to redemption prior to maturity at the option of the obligor (or,
with the written approval of the Credit Facility Issuer, deposit of any other securities or
investments which may be authorized by law from time to time and sufficent under such
law to effect such a defeasance) in irrevocable trust with a banking institution or trust
company, for the sole benefit of the Sponsor, the principal of and interest on which will be
sufficient to pay when due all payments under this Loan Agreement, shall be considered
"provision for payment".
(b) An opinion of nationally recognized bond counsel acceptable to the
Sponsor and to the Credit Facility Issuer to the effect that (i) the lien of the Loan
Agreement upon the Pledged Revenues has been defeased and (ii) the transaction resulting
in such defeasance does not adversely affect the exemption from taxation of the interest
on the Bonds.
(c) Verification by an independent certified public accountant of sufficiency
of amounts deposited in escrow pursuant to paragraph (a).
LKL-ll/16/88-267 AA-2821
-12-
I
I
SECTION 3.12 INTERLOCAL AGREEMENT. This Loan Agreement,
together with the Governmental Unit Note incorporated by reference herein, shall be
deemed to be an interlocal agreement with the Sponsor within the meaning of Chapter
163, Part I, Florida Statutes, and shall be filed of record in accordance with the provisions
of the Florida Intergovernmental Cooperation Law.
LKL-ll/16/88-267 AA-2821
-13-
I
I
"
ARTICLE IV
COVENANTS OF THE GOVERNMENTAL UNIT
SECTION (.1
REPORTS AND OPINIONS; INSPECTIONS.
(a) Until all amounts due under this Agreement have been paid in full, the
Governmental Unit shall deliver to the Sponsor, the Trustee and the Credit Issuers, within
ten days of the Governmental Unit's receipt thereof, an annual report prepared in
accordance with generally accepted accounting principles applicable to the Governmental
Unit, and certified by an independent certified public accountant (or accounting firm)
satisfactory to the Sponsor which shall include a balance sheet and income statement for
the prior fiscal year in reasonable detail. In addition, the Governmental Unit shall deliver
to the Sponsor, the Trustee and the Credit Issuers, if requested by them, within 50 days
after the end of each fiscal quarter: (i) a reasonable number of copies of the
Governmental Unit's unaudited financial statements for the prior fiscal quarter including
a balance sheet and income statement; and (ij) a certificate stating that no Event of
Default hereunder has occurred and is continuing.
(b) The Governmental Unit shall deliver to the Sponsor, the Credit Facility
Issuer and the Trustee, not later than the 135th but not earlier than the 128th day
following (i) in the case of a Loan secured by a Local Letter of Credit, the date of each
Loan Payment pursuant to the terms of this Agreement (whether by prepayment or
regularly scheduled payment) or (ii) as to Loans not so secured, upon the final payment
upon the Loan, a certificate of the Governmental Unit, or other evidence in form and
substance satisfactory to the Trustee, to the effect that, during the period ending 128
days following such payment, no bankruptcy, insolvency or similar proceeding has been
commenced by or against the Governmental Unit and that no other event has occurred
which would have constituted an ev.ent of default under Section 5.1(f) of this Agreement
(except such as has been vacated, dismissed or discharged by an order which is not subject
to further appeal). Notwithstanding the payment in full of the Loan, the Governmental
Unit shall pay any charges incurred by the Sponsor or the Trustee in connection with any
payment under the Credit Facility by reason of the Governmental Unit's failure to deliver
such certificate or evidence on a timely basis. In addition, notwithstanding the payment
in full of the Loan, the Governmental Unit shall pay to any Substitute Credit Facility
Issuer an amount, if any, equal to the Credit Issuer Rate per annum on the amount which
was disbursed under the Credit Facility by reason of any payment to the holders of the
Bonds being deemed a Preference P~yment (as defined in the Indenture).
(c) The Governmental Unit agrees to permit the Sponsor, the Trustee and
the Credit Issuers to examine, visit and inspect, at any reasonable time, the Project, and
the Governmental Unit's facilities, and any accounts, books and records, including its
receipts, disbursements, contracts, investments and any other matters relating thereto
and to its financial standing, and to supply such reports and' information as the Sponsor,
the Trustee or the Credit Issuers may reasonably require.
SECTION (.2 IMMUNITY OF SPONSOR. In the exercise of the powers of
the Sponsor and its members, officers, employees and agents under the Indenture or this
Agreement including (without limiting the foregoing) the application of moneys and the
LKL-12/07 /88-267 AA-2821
-14-
I
I
investment of funds, the Sponsor shall not be accountable to the Governmental Unit for
any action taken or omitted with respect to the Project or this Agreement by it or its
members, officers, employees and agents in good faith and believed by it or them to be
authorized or within the discretion or rights or powers conferred under this Agreement.
The Sponsor and its members, officers, employees and agents shall be protected in its or
their acting upon any paper or documents believed by it or them to be genuine, and it or
they may conclusively rely upon the advice of counsel and may (but need not) require
further evidence of any fact or matter before taking any action. No recourse shall be had
by the Governmental Unit for any claims based on the Indenture or this Agreement
against any member, officer, employee or agent of the Sponsor alleging personal liability
on the part of such person unless such claims are based upon the bad faith, fraud or deceit
of such person. The Governmental Unit shall indemnify the Sponsor and any of its
members, officers, employees or agents and save them harmless against any liability
intended to be precluded by this Section resulting from acts or omissions of the
Governmental Unit or from acts or omissions of the Sponsor or any of its members,
officers, employees or agents in connection with any necessary or reasonable acts taken
pursuant to this Agreement, except for fraud, deceit, or acts taken in bad faith or which
are negligent.
SECTION 4.3 COMPLIANCE WITH LAWS. With respect to the Project and
any additions, alterations, or improvements thereto, the Governmental Unit will at all
times comply with all applicable requirements of Federal and state laws and with all
applicable lawful requirements of any agency, board, or commission created under the
laws of the State of Florida or of any other duly constituted public authority; provided,
however, that the governmental unit shall be deemed in compliance with this Section 4.3
so long as it is contesting in goocl faith any such requirement by appropriate legal
proceedings.
SECTION 4.4 ISSUANCE OF OTHER OBLIGATIONS PAYABLE FROM
PLEDGED REVENUES. So long as the Governmental Unit Note remains Outstanding and
unpaid, the Governmental Unit will not issue or consent to the issuance' of any other
Obligations, except under the conditions and in the manner provided herein, payable from
the Pledged Revenues or any portion thereof, nor voluntarily create or cause to be
created any debt, lien, pledge, assignment, encumbrance or other charge, having priority
to or being on a parity with the lien of the Governmental Unit Note and the interest
thereon, upon the Pledged Revenues. Any other obligations issued by the Governmental
Unit in addition to the Governmental Unit Note or Additional Parity Bonds provided for in
Section 4.5 hereof, payable from the Pledged Revenues, shall contain an express
statement that such obligations are junior and subordinate in all respects to the
Governmental Unit Note, as to lien on and source and security for payment from the
Pledged Revenues; provided, however, that the Governmental Unit may also grant to the
provider of a Local Credit Enhancement for the Governmental Unit Note or any provider
of Local Credit Enhancement with respect to any Additional Parity Bonds, a lien upon the
Pledged Revenues commensurate with the lien granted in respect of such Additional
Parity Bonds, provided that the scheduled Maximum Annual Debt Service on the
reimbursement obligation under any such Local Credit Enhancement would meet the
requirements hereof, as appropriate, without regard to the Maximum Annual Debt Service
on such Additional Parity Bonds.
LKL-ll/30/88-267 AA-2821
-15-
"
I I
SECTION 4.5 ISSUANCE OF ADDmONAL PARITY BONDS. No
Additional Parity Bonds, payable on a parity from the Pledged Revenues with the
Governmental Unit Note shall be issued after the issuance of the Governmental Unit
Note, except for the construction and acquisition of capital projects of the Governmental
Unit or for refunding purposes and except upon the conditions and in the manner herein
provided:
(1) There shall have been obtained and filed with the Governmental Unit a
certificate of an independent certified public accountant of suitable experience and
responsibility; (a) stating that the books and records of the Governmental Unit relating to
the collection and receipt of Pledged Revenues have been audited by him; (b) setting forth
the amount of Pledged Revenues, as defined herein, received by the Governmental Unit
for any twelve consecutive months within the eighteen mon"ths immediately preceding the
date of delivery of such Additional Parity Bonds with respect to which the certificate is
made; (c) stating that the Pledged Revenues, received by the Governmental Unit for such
twelve month period equals at least 1.50 times the Maximum Annual Debt Service on (i)
the Governmental Unit Note and all Additional Parity Bonds, if any, then outstanding and
(ii) the Additional Parity Bonds with respect to which the certificate is made. Prior to
retirement or defeasance of the 1984 Bonds, such certificate shall state the amount of
Pledged Revenues received during the immediately preceding fiscal year and shall state
that the amount of such Pledged Revenues received for such fiscal year, less an amount
equal to Maximum Annual Debt Service coming due in any future year on the 1984 Bonds,
shall equal at least 1.50 times the Maximum Annual Debt Service on (i) the Governmental
Unit Note and all Additional Parity Bonds, if any, then outstanding, and (ii) the Additional
Parity Bonds with respect to which the certificate is made.
(2) There shall have been prepared and filed with the Governmental Unit a
certificate of such independent certified public accountant stating that the estimated
revenues budgeted in the annual budget of the Governmental Unit for the current Fiscal
Year in which the Additional Parity Bonds will be issued, adjusted in accordance with
generally accepted accounting principles, will be sufficient to pay all expenses to be
incurred in the operation of the Governmental Unit and to pay the Maximum Annual Debt
Service becoming due on (i) the 1984 Bonds, the Governmental Unit Note and all
.. Additional Parity Bonds, if any, then outstanding and (ii) the Additional Parity Bonds with
respect to which the certificate is made.
(3) The Governmental Unit shall not be in default in performing any of the
covenants and obligations assumed hereunder, and all payments herein required to have
been made into the accounts and funds, as provided hereunder, shall have been made to
the full extent required.
(4) No Additional Parity Bonds bearing interest at a variable rate shall be
issued while any portion of the Governmental Unit Note shall remain outstanding without
the prior written consent of the Credit Facility Issuer.
(5) Notwithstanding the foregoing, the Parity Loan, being made contempor-
aneously with the Loan made hereunder, shall for all purposes be deemed an Additional
Parity Bond, without compliance with any of the terms of this Section 4.5.
LKL-ll/30/88-267 AA-2821
-16-
I
I
"
SECTION 4.6
ADDITIONAL COVENANTS.
(A) NO PRrV A TE USE. The Governmental Unit will take no action, or
permit or suffer any action or event, which will cause the Governmental Unit Note or the
Bonds to be an "Industrial Development Bond" or a "Consumer Loan Bond" within the
meaning of the Internal Revenue Code of 1954, as amended. No portion of the Project
will be used in the trade or business of any Person (including any governmental body or
public instrumentality) except the Governmental Unit, by lease, license or management
contract or otherwise. In this regard the Governmental Unit further certifies that (i) not
in excess of ten percent (1096) of the net proceeds of the Governmental Unit Note will be
used for Private Business Use if, in addition, the payment of more than ten percent (1096)
of the principal or ten percent (1096) of the interest due on such Governmental Unit Note
during the term thereof is, under the terms of such Governmental Unit Note or any
underlying arrangement, directly or indirectly, secured by any interest in property used or
to be used for a Private Business Use or in payments in respect of property used or to be
used for a Private Business Use or is to be derived from payments, whether or not to the
Governmental Unit, in respect of property or borrowed money used or to be used for a
Private Business Use; and (ii) that, in the event that both (A) in excess of five percent
(596) of the Net Proceeds of such Governmental Unit Note are used or have been used for
a Private Business Use, and (B) an amount in excess of five percent (596) of the principal
or five percent (596) of the interest due on such Governmental Unit Note during the term
thereof is, under the terms of such Governmental Unit Note or any underlying arrange-
ment, directly or indirectly, secured by any interest in property used or to be used for said
Private Business Use or in payments in respect of property used or to be used for said
Private Business Use or is to be derived from payments, whether or not to the
Governmental Unit, in respect of property or borrowed money used or to be used for said
Private Business Use, then said excess over said five percent (596) of Net Proceeds of the
Governmental Unit Note used for a Private Business Use has been or shall be used for a
Private Business Use related to the governmental use of the System.
The term "Private Business Use" means use directly or indirectly in a trade or
business' carried on by a natural person or in any activity carried on by a person other than
a natural person, excluding, however, use by a state or local governmental unit and use as
a member of the general public.
LKL-ll/16/88-267 AA-2821
-17-
1
ARTICLE V
1
'.
EVENTS OF DEFAULT AND REMEDIES
SECTION 5.1 EVENTS OF DEFAULT. Each of the following events is
hereby defined as, s.nd declared to be and shall constitute, an "Event of Default":
(a) failure by the Governmental Unit to make any payment required to
be made pursuant to Section 3.3 or 3.5(a) or (b) hereof on or before the date the same is
due; or
(b) failure by the Governmental Unit to make any payment required to
be made pursuant to Section 3.5(c) hereof within 30 days after the same is due; or
(c) with the exceptions of those covenants set forth in Sections 3.3 and
3.5 hereof, failure by the Governmental Unit to observe and perform any other covenant,
condition or agreement on its part to be observed or performed under this Agreement for
a period of 30 days after written notice specifying such failure and requesting that it be
remedied is given to the Governmental Unit by the Sponsor, the Credit Facility Issuer or
the Trustee; or
(d) if any of the representations, warranties or certifications of the
Governmental Unit under Section 1.2 hereof or otherwise made or delivered in connection
herewith or pursuant to the Indenture shall prove to be false or misleading in any material
respect; or
(e) (1) the Governmental Unit shall make an assignment for the
benefit of creditors, (2) the Governmental Unit shall apply for or seek, the appointment of
a receiver, custodian, trustee, examiner, liquidator or similar official for it or any
substantial part of its property, (3) the Governmental Unit shall fail to file an answer or
other pleading denying the material allegations of any proceeding filed against it
described under Section 5.1(f)(2), (4) the Governmental Unit shall take any action to
authorize or effect any of the actions set forth in Sections 5.1(e) or 5.1(f) or (5) fail to
contest in good faith any appointment or proceeding described in Sections 5.1(e) or 5.1(f),
(6) without the application, or approval or consent of the Governmental Unit, a receiver,
trustee, examiner, liquidator, or similar official shall be appointed for any substantial part
of the Governmental Unit's property and such appointment shall continue undischarged or
such proceedings shall continue undismissed or unstayed for a period of 30 consecutive
days, or (7) the Governmental Unit shall be in a state of financial emergency as defined in
Section 218.503, Florida Statutes, as amended, or any successor statute thereto; or
(f) (1) the Governmental Unit shall be adjudicated a bankrupt or
become subject to an order for relief under federal bankruptcy law, (2) the Governmental
Unit shall institute any proceedings seeking an order for relief under federal bankruptcy
law or seeking to be adjudicated a bankrupt or insolvent, or seeking dissolution, winding
up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts
under any law relating to bankruptcy or insolvency, (3) there shall be appointed a receiver,
liquidator or similar official for the Governmental Unit under any law relating to
bankruptcy or insolvency, or (4) without the application, approval or consent of the
LKL-ll/16/88-267 AA-2821
-18-
Governmental Unit, a re1ceiver, trustee, examiner, liquidator lor similar official shall be'
appointed for the Governmental Unit, or a proceeding described in Section 5.1(f)(2) shall
be instituted against the Governmental Unit and such appointment continues undischarged
or such proceeding continues undismissed or unstayed for a period of 30 consecutive days;
the mere declaration of a state of financial emergency under Section 218.503, Florida
Statutes, as amended, shall not, in and of itself, constitute a default under this Section
S.l(f); or
"
(g) the failure of the Governmental Unit to provide a replacement for any
Local Letter of Credit required with respect to the Loan, which replacement has been
approved in writing by the Credit Facility Issuer, by the 15th day prior to the expiration
or non-renewal of the existing Local Letter of Credit.
SECTION 5.2 ACCELERATION. If an Event of Default as defined in
Section 5.1(a), (b), (e) or (f) hereof shall have occurred, or upon the 10th day prior to the
expiration, termination, or non-renewal of a Local Letter pursuant to Section 5.1(g)
hereof, the Loan and all other sums which the Governmental Unit is obligated to pay
under this Agreement shall, upon direction of the Credit Facility Issuer, become due and
payable immediately, and the Commitment shall terminate, without further notice to the
Governmental Unit. If any other Event of Default shall have occurred, the Trustee (as the
Sponsor's assignee, or any assignee of the Trustee or Co-Trustee, as may be the case)
shall, but only upon direction of the Credit Facility Issuer, by notice in writing to the
Governmental Unit, declare the Loan and all other sums which the Governmental Unit is
obligated to pay hereunder to be due and payable immediately, and terminate the
Commitment. Upon any such acceleration whether automatically or by declaration,
anything in this Agreement contained to the contrary notwithstanding, there shall become
immediately due and payable, in addition to any other amounts then due from the
Governmental Unit hereunder, the sum of: (i) the outstanding principal of the Loan or pro
rata portion thereof, as the case may be; (ii) accrued and unpaid interest on the Loan or
pro rata portion thereof, as the case may be; and (iii) all amounts which would be payable
in excess of the sum of: (x) the unpaid principal balance of the Governmental Unit Note
or pro rata portion thereof, as the case may be plus (y) accrued and unpaid interest
thereon, in the event the Governmental Unit Note had been prepaid in accordance with
Section 3.4(b) hereof on the date of acceleration pursuant to this Section 5.2.
SECTION 5.3
PAYMENT OF LOAN ON DEFAULT; SUIT THEREFOR.
(a) The Governmental Unit covenants that, in case default shall occur
in the payment of any sum payable by the Governmental Unit under Section 3.3 of this
Agreement as and when the same shall become due and payable, whether at maturity or
by acceleration or otherwise, then, upon demand of the Sponsor, the Credit Facility Issuer
or the Trustee, but only upon direction of the Credit Facility Issuer, the Governmental
Unit will pay to the Trustee (or its assignee) an amount equal to the sum of: (1) the
amount described in Section 5.2 hereof; (ii) all accrued interest on the Loan to the date
such payment is made; (Hi) all other amounts which the Governmental Unit is obligated to
pay under this Agreement; and (iv) such further amount as shall be sufficient to cover the
costs and expenses of collection, including a reasonable compensation to the Sponsor, the
Trustee, their agents, attorneys and counsel, and any expenses or liabilities incurred by
the Sponsor or the Trustee other than through gross negligence or bad faith.
LKL-ll/16/88-267 AA-2821
-19-
........
'.
I I
(b) In case the Governmental Unit shall fall forthwith to pay such
amounts upon such demand, the Sponsor or the Trustee (or its assignee) shall be entitled
and empowered but only upon direction of the Credit Facility Issuer, to institute any
actions or proceedings at law or in equity for the collection of the sums so due and unpaid,
and may prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Governmental Unit and collect in
the manner provided by law.
(c) In case any proceedings shall be pending for the bankruptcy or for
the reorganization of the Governmental Unit under the Federal bankruptcy laws or any
other applicable law, or in case a receiver or trustee shall have been appointed for the
property of the Governmental Unit, or in case any other similar judicial proceedings shall
be pending relating to the Governmental Unit or to the creditors or property of the
Governmental Unit, the Trustee (or its assignee) shall be entitled and empowered, by
intervention in such proceedings or otherwise, to file and prove a claim or claims for the
whole amount of the Loan made to the Governmental Unit pursuant to this Agreement and
for interest owing and unpaid in respect thereof and to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to prosecute the claims of
the Trustee (or its assignee) in any such judicial proceedings relating to the Governmental
Unit, its creditors, or its property, and to collect and receive any moneys or other
property payable or deliverable on any such claims, and to distribute the same after the
deduction of its charges and expenses. Any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized to make such payments to the Trustee (or its
assignee), and to pay to the Trustee (or its assignee) any amount it requires for
compensation and expenses, including counsel fees it has incurred up to the date of such
distribution.
SECTION 5.4
OTHER REMEDIES.
(a) Whenever any Event of Default hereunder shall have occurred and
be continuing, whether or not all sums which the Governmental Unit is obligated to pay
under this Agreement shall have been declared to be immediately due and payable
pursuant to this Agreement, the Sponsor or the Trustee (or its assignee) shall, but only if
directed by the Credit Facility Issuer, take whatever action at law or in equity as may
appear necessary or desirable to collect the amounts payable by the Governmental Unit
hereunder, then due and thereafter to become due, or to enforce performance and
observance of any obligation, agreement or covenant of the Governmental Unit under this
Agreement, including the application of any undisbursed Loan proceeds to the reduction of
the outstanding balance of such Loan.
(b) Whenever any Event of Default hereunder shall have occurred and
be continuing, before or after declaring an acceleration pursuant to Seeton 5.2 hereof, the
Sponsor or the Trustee (or its assignee) may, but shall not be obligated to, perform for the
account of the Governmental Unit any covenant or obligation in the performance of which
the Governmental Unit is in default, in which event the Governmental Unit shall
immediately reimburse the Sponsor or the Trustee (or its assignee), as the case may be,
upon demand for all expenses incurred by the Sponsor or the Trustee (or its assignee), as
the case may be, in the course of such performance, including reasonable counsel fees,
with interest from the date of such expenditure at the Prime Rate of the Liquidity
Facility Issuer then in effect.
LKL-ll/16/88-267 AA-2821
-20-
I I
(c) No action taken pursuant to this Section 5.4 shall relieve the
Governmental Unit from its obligations pursuant to Sections 3.3, 3.5 and 5.3 hereof, all of
which shall survive any such action. The Sponsor or the Trustee (or its assignee) may, and
upon direction of the Credit Facility Issuer, shall take whatever action at law or in equity
as may appear necessary and desirable to collect the amounts then due and thereafter to
become due, or to enforce the performance and observance of any obligation, agreement
or covenant of the ,Governmental Unit hereunder.
"
(d) Except as to the Sponsor's rights to indemnity and reports from the
Governmental Unit hereunder, the Sponsor shall not be deemed to have an exclusive right
to enforce the remedies described in this Section 5.4.
SECTION 5.5 CUMULATIVE RIGHTS. No remedy conferred upon or
reserved to the Sponsor, the Credit Facility Issuer or the Trustee (or its assignee) by this
Agreement is intended to be exclusive of any other available remedy or remedies, but
each and every such remedy shall be cumulative and shall be in addition to every other
remedy given under this Agreement or now or hereafter existing at law or in equity or by
statute. No waiver by the Sponsor, the Credit Facility Issuer or the Trustee (or its
assignee) of any breach by the Governmental Unit of any of its obligations, agreements or
covenants hereunder shall be deemed a waiver of any subsequent breach, or a waiver of
any other obligation, agreement or covenant, and no delay or failure by the Sponsor, the
Credit Facility Issuer or the Trustee (or its assignee) to exercise any right or power shall
impair any such right or power or shall be construed to be a waiver thereof, but any such
right and power may be exercised by the Sponsor, the Credit Facility Issuer or the Trustee
(or its assignee) from time to time and as often as may be deemed expedient.
SECTION 5.6 DISCONTINUANCE OF PROCEEDINGS. In case the
Sponsor, the Credit Facility Issuer or the Trustee (or its assignee) shall have proceeded to
enforce any right under this Agreement and such proceedings shall have been discontinued
or abandoned for any reason or shall have been determined adversely to the Sponsor, the
Credit Facility Issuer or the Trustee (or its assignee), then and in every such case the
Governmental Unit, the Sponsor, the Credit Facility Issuer and the Trustee (or its
assignee) shall be restored respectively to their several positions and rights hereunder, and
all rights, remedies and powers of the Govermental Unit, the Sponsor, the Credit Facility
Issuer and the Trustee (or its assignee) shall continue as though no such proceeding had
been taken.
SECTION 5.7 NOTICE OF DEFAULT. The Governmental Unit shall give
the Trustee, the Credit Facility Issuer, the Liquidity Facility Issuer, each Local Credit
Enhancement Issuer or provider of any Local Letter of Credit and the Sponsor, a prompt
written notice of any condition or occurrence which constitutes an Event of Default under
Section 5.1 hereof immediately upon becoming aware of the existence thereof.
LKL-ll/16/88-267 AA-2821
-21-
I
I
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 LIMITATION OF LIABILITY. In the event of any default by
the Sponsor hereunder, the liability of the Sponsor or the Credit Facility Issuer to the
Governmental Unit shall be enforceable only out of its interest under this Agreement and
there shall be no other recourse for damages by the Governmental Unit against the
Sponsor, the Credit Facility Issuer, its officers, members, agents and employees, or
against any of the property now or hereafter owned by it or them.
In the event of any default by the Governmental Unit hereunder, the liability
of the Governmental Unit shall be enforceable only out of the Pledged Revenues, and
there shall be no other recourse for damages by the Sponsor or the Credit Facility Issuer
against the Governmental Unit, its officers, members, agents and employees.
SECTION 6.2 NO PERSONAL RECOURSE. Neither any member nor any
officer, employee or agent of the Governmental Unit nor any person executing the Loan
Agreement or Governmental Unit Note shall be personally liable on the Loan or the Bonds
by reason of the issuance thereof.
SECTION 6.3 NOTICES. Notice hereunder shall be effective upon receipt
and shall be given by certified mail, return receipt reques~ed, to:
As to the Sponsor:
City Manager
City of Gulf Breeze
P.O. Box 640
Gulf Breeze, Florida 32561
As to the Trustee:
Sun Bank, National Association
225 E. Robinson Street, Suite 350
Orlando, Florida 32801
Attn: Corporate Trust
As to the Governmental Unit:
City of Clearwater
112 S. Osceola Avenue
Clearwater, Florida 33518
A ttn: City Manager
LKL-11/16/88-267 AA-2821
-22-
J
I
As to the Credit Facility Issuer:
Financial Guaranty Insurance Company
175 Water Street, 15th Floor
New York, New York 10038
A ttn: President
As to the Liquidity Facility Issuer:
COGB Liquidity Facility and
Blount Building
3 West Garden Street
Pensacola, Florida 32501
The Bank of Tokyo, Ltd.,
New York Agency
100 Broadway
New York, New York 10005
SECTION 6.4 ILLEGAL OR INY ALID PROVISIONS DISREGARDED. In
case any provision of this Agreement shall for any reason be held invalid, illegal or
unenforceable in any respect, this Agreement shall be construed as if such provision had
never been contained herein.
SECTION 6.5 APPLICABLE LAW. This Agreement shall be deemed to be
a contract made in Florida and governed by Florida law.
SECTION 6.6 ASSIGNMENTS. The Governmental Unit shall not assign this
Agreement or any interest of the Governmental Unit herein, either in whole or in part.
The Administrator on behalf of the Sponsor hereby assigns this Agreement and the
Governmental Unit Note attached hereto to the Trustee as provided in Section 3.9 hereof.
Except as provided in Section 3.9 hereof this Agreement shall be binding upon and shall
inure to the benefit of the successors and assigns of the parties hereto.
SECTION 6.7 AMENDMENTS. This Agreement may not be amended
except by an instrument in writing signed by the parties and with the consent of each
provider of a Local Letter of Credit, if any, and the Credit Facility Issuer, and, if such
amendment occurs after the issuance of the Bonds, with consent of the Trustee if required
by Section 8.03 of the Indenture.
SECTION 6.8 TERM OF AGREEMENT. This Agreement and the respect-
ive obligations of the parties hereto shall be in full force and effect from the date hereof
until the principal of and all interest on the Loan shall have been paid in full and the
Governmental Unit shall have complied with Section 4.1(b) hereof.
SECTION 6.9 HEADINGS. The captions or headings in this Agreement are
for convenience of reference only and shall not control or affect the meaning or
construction of any provision hereof.
SECTION 6.10 SUPERSEDING CLAUSE. This Agreement is the entire final
agreement between the respective parties and supersedes all other agreements, whether
written or oral, except that this Agreement is not intended to supersede or displace any
interlocal agreement previously recorded in the public records of the Sponsor and the
Governmental Unit except to the extent this Agreement is inconsistent therewith.
LKL-ll/30/88-267 AA-2821
-23-
I
I
'.
IN WlTNK88 WHERBOF. the parti.. hereto, intending to be leplly bound, have
caused this Agreement to be executed and deUvered u of the date tint written above.
JACKSON C. Tu'l-n.aX, City Manager
Admlniltrator
O~/$~
/
WITNESSa
//tdZ/L_;--<,7 R ~~
~~ ~(?~
LKL.1l/16/88-267 AA-2821
.24-
I
(SEAL)
Attest:
') c' U
BY:.~Yv~ <,',' ..-J:...k-~
City fierk
Approved as to Form and Correctness:
~~
City Attorney .
LKL-ll/16/88-267 AA-2821
-25-
I
CITY OF CLEARWATER, FLORIDA
Governmental Unit
Br- jJ}k
By:
4 ?L -62.L
City Manager
-
Attest:
By:'
Vice President
I
/""
/
\ ~.
.. I'j \.
~ V '\__j
\
..
LKL-l1/16/88-Z6SAA-2822
. SUN BANK, HAboNAL ASSOClA'nON
Trustee
Byz ~ L C( , j l-('>Jlz-
Corporate Trust O~f1eer
-28-
I
I
EXHIBIT A
$980,000 Loan Project
park land.
The acquisition of 15.61 acres of land known as the "Vogel Property" for use as
LKL-ll/16/88-267 AA-2821
-27-
I
I
EXHIBIT B
PROMISSORY NOTE
For value received, the City of Clearwater, Florida, a municipal corporation
organized and existing under the laws of the State of Florida (the "Governmental Unit")
hereby promises to pay to the holder hereof or to its order, solely from the Pledged
Revenues hereafter mentioned the principal sum of Nine Hundred Eighty Thousand Dollars
($980,000) and to pay, solely from such sources, interest thereon from the date hereof, as
follows:
(a) The principal hereof shaU be paid in monthly instaUments on the
dates and in the amounts shown on "Schedule I" attached hereto; and the entire unpaid
principal balance hereof, together with accrued interest thereon as provided below, shall
be due and payable in full as set forth on said "Schedule I"; and
(b) Interest on the unpaid principal balance hereof shall be paid on the
first day of February, 1989, and on the first day of each month thereafter, at a rate
determined from time to time by the Financial Advisor as defined in, and as described in
the Loan Agreement of even date herewith between the City of Gulf Breeze, Florida (the
"Sponsor") and the Governmental Unit (the "Loan Agreement"); provided, however, that (i)
if an acceleration of the Loan made pursuant to the Loan Agreement is declared following
the occurrence of an event of default under the Loan Agreement, the interest rate hereon
shall be increased to a rate per annum equal to the Prime Rate (as defined in the Loan
Agreement) plus 296. Said rate shall be based upon a 365/366 day year for the actual days
elapsed and shall change when and as said Prime Rate shall change. Notwithstanding
anything otherwise contained in this Note, the interest rate on this Note (excluding any
amounts which do not represent charges for the use or forebearance of money) shall not
exceed twenty-five percent (2596) per annum or such higher rate as may from time to
time be permitted under applicable law; provided, that, in the event the imposition of
such Maximum Rate shaU ever cause the amount payable on this Note to be less than the
amount of interest which would otherwise be computed pursuant to the Loan Agreement,
this Note shall thereafter bear interest at the Maximum Rate until the earlier of (1) the
final maturity of this Note or (2) such time as the total amount of interest paid on this
Note shall at such rate equal the amount of interest which would have been payable on
this Note pursuant to Section 3.3 of the Loan Agreement without regard to any Maximum
Rate.
The interest rate on this Note may be converted to a fixed rate under certain
circumstances described in the Loan Agreement.
In addition to the above payments of principal and interest, late payments of
any amount due under this Note will bear interest at a rate per annum equal to the Prime
Rate plus 296. The payments described in paragraph (b), above, will include an amount
determined by the Administrator to be sufficient to pay certain fees described in Section
3.5(a) of the Loan Agreement.
All payments made hereunder shall be applied first to payment of accrued
interest on the unpaid principal balance hereof at the aforesaid rate, and then to
LKL-l1/30/88-267 AA-2821
-28-
I
I
reduction of principal. In the event the full amount of this Note is not disbursed, the
payments of principal due hereunder shall be reduced ratably to reflect such reduction in
the principal amount due hereunder.
The principal hereof and interest hereon shall be paid at such place as the
holders hereof may designate in writing.
This Note evidences a loan made to the Governmental Unit pursuant to the
Loan Agreement dated as of December 1, 1988, to finance or refinance the Governmental
Unit's cost of acquisition and installation of the Project described in the Loan Agreement
(the "Project") and the Governmental Unit has executed this Note to secure all payments
due under said Loan Agreement. Such loan is being made by the City of Gulf Breeze,
Florida (the "Sponsor"), from the proceeds of its Local Government Loan Program
Floating Rate Demand Revenue Bonds, Series 1985A (the "Bonds"). The Bonds are issued
under a Trust Indenture dated as of December 1, 1985, as amended and restated as of July
1, 1986, as further amended and supplemented (the "Indenture") between the Sponsor and
Sun Bank, National Association, as Trustee. The Governmental Unit's obligations
hereunder are limited, special obligations payable solely from the Pledged Revenues in the
manner set fortn in the Loan Agreement.
This Note may be paid prior to maturity in the manner and with the penalties
specified in Section 3.4 of the Loan Agreement.
This Note, and all payments due in this Note does not constitute a general
indebtedness of the Governmental Unit, or a pledge of its faith, credit or taxing power
within the meaning of any constitutional or statutory provision or limitation. Neither the
State of Florida nor any political subdivision thereof nor the Governmental Unit shall be
obligated (1) to exercise its ad valorem taxing power or any other taxing power in any
form on any real or personal property in the Governmental Unit to pay the principal of
this Note, the interest thereon or other payments or costs incident thereto, or (2) to pay
the same from any other funds of the Governmental Unit except from the Pledged
Revenues. This Note and the indebtedness evidenced thereby shall not constitute a lien
upon any property of the Governmental Unit, but shall constitute a lien only on the
Pledged Revenues, in the manner provided in the Loan Agreement.
The Governmental Unit shall be in default hereunder upon: (i) the nonpayment
on or before the date the same is due of any payment described in paragraph (a) or (b) of
this Note, or (ii) upon the occurrence of any other Event of Default described in the Loan
Agreement which is not corrected within the applicable period therein specified, if any,
and after the giving of any required notice.
In the event of such default hereunder, the holder hereof shall have the
following rights or remedies: (i) the entire unpaid amount of the principal of this Note
and all other amounts which the Governmental Unit is obligated to pay under the Loan
Agreement, .including but not limited to, those sums payable under Section 5.2 of the Loan
Agreement, shall become immediately due and payable in full without notice to or demand
on the Governmental Unit of any kind and without presentation, demand or protest, all of
which are hereby waived; and (ii) the holder may at its option exercise from time to time
any and all rights and remedies available to it under the Loan Agreement. No failure of
the holder hereof to exercise any right hereunder shall be construed as a waiver of the
right to exercise the same or any other right at any other time.
LKL-12107 /88-267 AA-2821
-29-
I I
In addition to all other rights it may have, the holder hereof shall have the
following rights, each of which may be exercised at any time: (i) to pledge, transfer or
assign this Note in the manner prescribed therein and any renewals, extensions and
modifications hereof, assigning therewith its rights in the Loan Agreement in accordance
with the terms thereof and any such pledgee, transferee or assignee shall have all the
rights of the holder hereof with respect to this Note and any renewals, extensions and
modifications hereof and of the Loan Agreement so assigned therewith, and the holder
hereof making such pledge, transfer or assignment shall be thereafter relieved from any
and all liability with respect to the Loan Agreement so assigned; (ii) to notify the
Governmental Unit or any other persons obligated under the Loan Agreement to make
payment to the holder of this Note any amounts due or to become due thereon; and (iii) to
apply any amounts received under or pursuant to the Loan Agreement against the
principal of and interest on and other amounts payable under this Note.
Upon the request of the holder hereof, this Note may be converted to a
registered obligation and the Governmental Unit shall maintain books for the registration
of the transfer and exchange of this Note in compliance with the Florida Registered
Public Obligations Act.
The terms and conditions of the Loan Agreement are made a part of this Note
as fully as if set forth in full herein. Except as otherwise provided herein, all capitalized
terms used herein which are defined in the Loan Agreement shall have the meanings set
forth in the Indenture.
LKL-1l/16/88-267 AA-2821
-30-
I
I
IN WITNESS WHEREOF, the City of Clearwater, Florida has caused this Note
to be executed in its name, and its corporate seal to be affixed hereto and attested, by its
duly authorized officers, this _ day of , 198_
CITY OF CLEARWATER, FLORIDA
By:
Mayor-Co m miss ioner
(SEAL)
Attest:
By:
City Manager
By:
City Clerk
Approved as to Form and Correctness:
City Attorney
LKL-ll/16/88-267 AA-2821
-31-
J
"Schedule 1"
I
The principal amount of $8,166.67 shall be due on February 1, 1989 and on the
first day of each month thereafter through and including December 1, 1998, and all unpaid
principal shall be due on January 1, 1999.
LKL-1l/16/88-267 AA-2821
-32-
I
I
EXHIBIT C
GENERAL CERTIFICATE
This certificate is made by the City of Clearwater, Florida (the
"Governmental Unit") to City of Gulf Breeze, Florida (the "Sponsor"), Sun Bank, National
Association, as Trustee and to Financial Guaranty Insurance Company (the "Credit
Facility Issuer"), and to their respective c0unsel and bond counsel to the Sponsor, in
connection with a loan from the Sponsor to the Governmental Unit in the amount of
$980,000 (the "Loan") from the proceeds of the Sponsor's $100,000,000 aggregate principal
amount Local Government Loan Program Floating Rate Demand Revenue Bonds, Series
1985C (the "Bonds"). The Loan is evidenced by the Governmental Unit's promissory note
of even date herewith (the "Governmental Unit Note"). The Sponsor is making the Loan to
the Governmental Unit for the purpose of financing or refinancing the Governmental
Unit's cost of the acquisition and installation of certain qualified projects (the "Project"),
as more particularly described in Exhibit "A" attached to the Loan Agreement of even
date herewith (the "Loan Agreement") between the Sponsor and the Governmental Unit.
The Governmental Unit, by the undersigned officers, hereby certifies that:
1. The Governmental Unit is a municipal corporation duly organized and
validly existing under the laws of the State of Florida. The Governmental Unit has full
power and legal right to enter into, and perform its obligations under, the Loan
Agreement and the Governmental Unit Note of even date herewith between the Sponsor
and the Governmental Unit.
2. Attached hereto as Exhibit "A-I" is a true, correct and complete
certified copy of Ordinance No. 4728-88 of the City Commission of the Governmental
Unit, approving and authorizing the execution and delivery of the Governmental Unit Note
and the Loan Agreement (the "Ordinance"). Such Ordinance was duly enacted in
accordance with all procedural rules as specified in Chapter 166, Florida Statutes and, if
applicable, the Charter of the Governmental Unit. Said Ordinance has not been amended,
modified or repealed and is in full force and effect on the date hereof.
3. The names of the members of the governing body of the Governmental
Unit, their respective offices and the dates of expiration of their respective terms of
office are as follows:
Name Title Term Begins Term Ends
Rita Garvey Mayor-Commissioner April, 1987 April, 1990
James L. Berfield Co m missioner April, 1986 April, 1989
Lee Regulski Co m missioner April, 1987 April, 1990
Don Winner Commissioner April, 1987 April, 1990
William Nunamaker Commissioner April, 1987 April , 1989
4. Such of the above persons as are required by law to file oaths of office
and bonds or undertakings have duly filed such oaths and filed such bonds or undertakings
in the amount and manner required by law.
LKL-12/07/88-267 AA-2821
-33-
I I
5. Each of the below named individuals which have executed the Loan
Agreement and the Governmental Unit Note, and which will execute requisitions for
disbursement of the Loan, has been duly elected as a member of the governing body of the
Governmental Unit, in the case of the Mayor, or has been duly appointed as City Manager
by the governing body of the Governmental Unit, in the case of the City Manager, and is
authorized to act for and on behalf of the Governmental Unit in connection with the
execution of such documents, and the signature set opposite the name of such officer is a
genuine specimen of such officer's signature:
Name
Specimen Silnlature
Office
Rita Garvey
Mayor
Ron H. Rabun
City Manager
6. We further certify that on , 1988, the Governmental Unit
Note was executed by the manual signatures of the undersigned Mayor and City Manager,
and attested by the City Clerk, of the Governmental Unit.
7. We further certify that at the date of the Governmental Unit Note, and
on this date, such officers were and are the duly chosen, qualified and acting officers
authorized to execute the Governmental Unit Note.
8. The undersigned did, on , 1988, duly execute and attest,
respectively, on behalf of the Governmental Unit and deliver to the other parties thereto,
the Loan Agreement.
9. The Pledged Revenues described in the Loan Agreement have not been
pledged in whole or in part, directly or indirectly, for the benefit of any obligations
previously issued by the Governmental Unit and are not subject to any other encumbrance,
other than as has been disclosed to and approved by the Credit Facility Issuer pursuant to
the Loan Agreement.
10. (a) The portion of the Loan financing the original cost of the
Governmental Unit's acquisition of the Project listed in Exhibit "A" attached to the Loan
Agreement, together with the estimated interest earnings on the undisbursed portion of
the Loan, does not exceed the actual cost of such acquisition.
(b) The Project identified in Exhibit "A" attached to the Loan Agree-
ment was acquired by the Governmental Unit prior to the date hereof, but the funds used
for such acquisition were loaned from other temporarily available surplus funds of the
Governmental Unit, and at the time such acquisition was authorized, the governing body
of the Governmental Unit expressly contemplated and intended that such temporary funds
be replenished from the proceeds of a longer-term permanent loan such as the Loan.
(c) No portion of the Loan will be used to finance any Project which is
used in the trade or business of a person who is not an "exempt person" as defined in
Section 103(b)(3) of the Internal Revenue Code of 1954, as amended (as in effect on
LKL-12/07 /88-267 AA-2821
-34-
I
I
December 31, 1985). In this regard the Governmental Unit further certifies that (i) not in
excess of ten percent (1096) of the net proceeds of the Governmental Unit Note will be
used for Private Business Use if, in addition, the payment of more than ten percent (1096)
of the principal or ten percent (1096) of the interest due on such Governmental Unit Note
during the term thereof is, under the terms of such Governmental Unit Note or any
underlying arrangement, directly or indirectly, secured by any interest in property used or
to be used for a Private Business Use or in payments in respect of property used or to be
used for a Private Business Use or is to be derived from payments, whether or not to the
Governmental Unit, in respect of property or borrowed money used or to be used for a
Private Business Use; and (ii) that, in the event that both (A) in excess of five percent
(596) of the Net Proceeds of such Governmental Unit Note are used or have been used for
a Private Business Use, and (B) an amount in excess of five percent (596) of the principal
or five percent (596) of the interest due on such Governmental Unit Note during the term
thereof is, under the terms of such Governmental Unit Note or any underlying arrange-
ment, directly or indirectly, secured by any interest in property used or to be used for said
Private Business Use or in payments in respect of property used or to be used for said
Private Business Use or is to be derived from payments, whether or not to the
Governmental Unit, in respect of property or borrowed money used or to be used for said
Private Business Use, then said excess over said five percent (596) of Net Proceeds of the
Governmental Unit Note used for a Private Business Use has been or shall be used for a
Private Business Use related to the governmental use of the Project.
The term "Private Business Use" means use directly or indirectly in a trade or
business carried on by a natural person or in any activity carried on by a person other than
a natural person, excluding, however, use by a state or local governmental unit and use as
a member of the general public.
11. The Governmental Unit is not in breach of or in default under any
existing law, court or administrative regulation, decree, order, agreement, indenture,
mortgage, lease, sublease or other instrument to which it is a party or by which it is
bound, and no event has occurred or is continuing which, with the passage of time or the
giving of notice, or both, would constitute a default or an event of default thereunder,
except for such minor breaches, defaults or potential defaults or events of default, if any,
" which individually and in the aggregate would have no material adverse effect on the
Governmental Unit's financial condition, operations or properties.
12. The execution and delivery, receipt and due performance by the Govern-
mental Unit of the Loan Agreement, the Governmental Unit Note, and the Loan
Documents hereafter described and compliance with the provisions thereof, do not and
will not conflict with or result in the breach of any of the terms, conditions or provisions
of, or constitute a default under the Charter, any existing resolution or ordinance of the
Governmental Unit, any existing law, court or administrative regulation, decree, order or
any agreement, indenture, lease or other instrument to which the Governmental Unit is a
party or by which it or any of its properties is bound.
13. There is no action, suit, proceeding, inquiry or investigation at law or in
equity before or by any court, public board or body pending or, to the knowledge of the
Governmental Unit after due inquiry, threatened against or affecting the Governmental
Unit, which has not been disclosed in writing to the Credit Facility Issuer, contesting the
due organization of the Governmental Unit, or wherein an unfavorable decision, ruling or
LKL-12/07/88-267 AA-2821
-35-
I I
finding (i) would have a material adverse effect on the financial condition of the
Governmental Unit, the operation by the Governmental Unit of the Project, its facilities
and its other properties, or an adverse effect on the functioning of the Governmental Unit
or payment by the Governmental Unit of the amounts due under the Loan Agreement in
the manner and time required thereby, or the tax-exempt status of the Governmental Unit
or the Governmental Unit Note, or (ii) would have an adverse effect on the validity or
enforceability of the Governmental Unit Note, the Loan Agreement, or the Ordinance of
the Governmental Unit authorizing the Governmental Unit Note and the execution of
other documents in connection therewith (the "Loan Documents").
14. No final judgment for the payment of money has been rendered against
the Governmental Unit, unless within 60 days from the entry thereof, (i) such judgment
has been discharged or (ii) the Governmental Unit has taken and is diligently prosecuting
an appeal therefrom, or from the order, decree or process, upon which or pursuant to
which such judgment was granted or entered, and has caused the execution or levy under
such judgment, order, decree or process or the enforcement thereof to be stayed pending
the determination of such appeal, or (iii) the Governmental Unit has provided for the
payment or securing of such judgment in a manner satisfactory to the Credit Facility
Issuer.
15. The Governmental Unit has duly performed and complied with all the
obligations, agreements and conditions on its part to be performed or complied with at or
prior to the closing. Each of the representations, warranties and other information
contained in the the Governmental Unit's loan application is true and correct and does not
contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements in such documents, in light of
the circumstances under which they were made, not misleading and has not changed since
the date of the Governmental Unit's loan application. The Governmental Unit has
authorized, by all necessary action, the execution, delivery, receipt and due performance
of the Governmental Unit Note, the Loan Documents and any and all such other
agreements and documents as may be required to be executed, delivered and received by
the Governmental Unit to carry out, give effect to and consummate the transactions
contemplated by the Loan Agreement relating to the Governmental Unit Note, and such
authorization has not been modified, amended or repealed.
16. The Governmental Unit Note has been duly authorized pursuant to the
Loan Agreement and the Ordinance in the forms delivered by the Governmental Unit in
connection with the issuance of the Governmental Unit Note on the date hereof. The
Ordinance was duly enacted in accordance with all procedural rules applicable to the
Governmental Unit, and has not been the subject of repeal or modification since the date
of its enactment and is in full force and effect as of the date hereof.
17. To the best of our knowledge, no event affecting the Governmental Unit
has occurred since the date of the Governmental Unit's loan application which either
makes untrue or incorrect in any material respect as of the date of Closing any statement
or information contained in the Governmental Unit's loan application, and all of such
information contained in the Governmental Unit's loan application, including all financial
information contained therein, is true and correct as of the date hereof.
LKL-12/07/88-267 AA-2821
-36-
18. We furler certify that the seal impressed !pon this certificate is the
legally adopted, proper and only official seal of the Governmental Unit; and that the seal
has been impressed or imprinted upon the Governmental Unit Note.
19. The representations and warranties pertaining to the Governmental Unit
as contained in the Loan Documents and any other documents incident to the transaction
described therein are true and correct as of the date hereof; no default has occurred with
regard to any of the obligations of the Governmental Unit, and no event has occurred as
of the date hereof which would bring about or constitute any such default.
20. We have no knowledge of any legislation adopted by the 1988 Session of
the Florida Legislature that restricts or otherwise adversely affects the Governmental
Unit's power to issue the Governmental Unit Note or its ability to provide for the payment
of the principal thereof and interest thereon in the manner provided in the Loan
Agreement or the Indenture.
LKL-12/07/88-267 AA-2821
-37-
I I
IN WITNESS WHEREOF, the below-named officers of the Governmental Unit
have hereunto set their respective signatures as such officers and have affixed the
corporate seal of the Governmental Unit this _ day of December, 1988.
(SEAL)
CITY OF CLEARWATER, FLORIDA
Governmental Unit
ATTEST:
By:
City Clerk
By:
Mayor
By:
City Manager
Approved as to form and correctness:
City Attorney
LKL-12/07l88-267 AA-2821
-38-
I
I
EXlllBIT D
(Letterhead of Governmental Unit Counsel)
December _' 1988
City of Gulf Breeze
Gulf Breeze, Florida
Livermore Klein &. Lott, P.A~
Jacksonville, Florida
Sun Bank, National Association
Orlando, Florida
Financial Guaranty Insurance
Company
New York, New York
Re: $980,000 Loan from City of Gulf Breeze, Florida, Local Government
Loan Program to City of Clearwater, Florida
Ladies and Gentlemen:
As counsel for the City of Clearwater, Florida (the "Governmental Unit"), I am
delivering this opinion to you in connection with the consummation of a loan by City of
Gulf Breeze, Florida (the "Sponsor") to the Governmental Unit in the amount of $980,000
(the "Loan") from the proceeds of the Sponsor's $100,000,000 Local Government Loan
Program Floating Rate Demand Revenue Bonds, Series 1985C (the "Bonds"). The Loan is
being made pursuant to a Loan Agreement of even date herewith (the "Loan Agreement")
between the Sponsor, the Governmental Unit, Sun Bank, National Association (the
"Trustee"), and Jackson C. Tuttle, City Manager (the "Administrator") to finance the
Governmental Unit's cost of the acquisition of certain qualified projects of the
Governmental Unit (the "Project"). The Loan is evidenced by the Governmental Unit's
promissory note in the principal amount of $980,000 (the "Governmental Unit Note"). As
provided in the Loan Agreement, the Loan Agreement and the Governmental Unit Note
may be assigned to a credit facility issuer for the Bonds (the "Credit Facility Issuer")
under certain circumstances.
It has been represented to me that: (i) the Bonds were issued pursuant to
Chapter 125, Florida Statutes as amended, Chapter 166, Florida Statutes, as amended,
Chapter 163, Florida Statutes, as amended, Chapter 159, Part I, as amended, and other
applicable provisions of law for the purpose of financing and refinancing the cost of the
acquisition and installation of qualified projects in the State of Florida; (ii) the Sponsor
intends to lend the proceeds of the Bonds to eligible governmental units by entering into a
loan agreement with each participating governmental unit; (iii) it is intended that such
agreements, in the aggregate, will provide for the payment by the governmental units of
amounts sufficient to pay the principal of and interest on the Bonds and other costs
incurred in connection with the Sponsor's loan pool program; and (iv) the Bonds are
secured by an assignment and pledge to Sun Bank, National Association, Orlando, Florida,
as trustee under a Trust Indenture dated as of December 1, 1985, as amended and restated
as of July 1, 1986, as further amended and supplemented (the "Indenture") of certain of
the Sponsor's rights under such loan agreements, including the Loan Agreement, and by a
pledge of the notes given by the governmental units evidencing such loans, including the
Governmental Unit Note.
LKL-12107/88-267 AA-2821
-39-
...
At a closing i~eld tod.ay, the Governmental Unit. hall executed and delivered to
the Sponsor, the Loan A~eement and the Governmental UnIt ~ute.
As counsel for the Governmental Unit, I have examined the originals or
certified copies of each of the agreements and instruments referred to above and
Ordinance No. 4728-88 duly enacted by the City Commission of the Governmental Unit on
December 15, 1988 (collectively, the "Ordinance"). I have also examined such other
documents and certificates, made such inquiries of officers and employees of the
Governmental Unit and others and considered such other matters of fact and questions of
law as I deemed necessary for the purpose of giving this opinion.
Based on the foregoing, I am of the opinion that:
1. The Governmental Unit is validly existing as a municipal corporation of
the State of Florida and has full power and authority to conduct its operations, to enact
the Ordinance, to enter into, execute and deliver the Loan Agreement and the
Governmental Unit Note, and to perform all acts necessary to effectuate and consummate
the transactions contemplated thereby.
2. The Ordinance has been duly enacted, and the Loan Agreement and the
Governmental Unit Note have been duly authorized, executed and delivered by the
Governmental Unit and constitute binding and enforceable agreements of the Governmen-
tal Unit in accordance with their respective terms (SUbject as to enforcement of remedies
to any applicable bankruptcy, reorganization, insolvency, moratorium or other laws or
equitable principles affecting the enforcement Ot" of creditors' rights generally from time
to time in effect.)
3. The Governmental Unit is not in breach of or in default under any
existing law, court or administrative regulation, decree, order, agreement, indenture,
mortgage, lease, sublease or other instrument to which it is a party or by which it is
bound, and no event has occurred or is continuing which, with the passage of time or the
giving of notice, or both, would constitute a default or an event of default thereunder,
except for such minor breaches, defaults or potential defaults or events of default, if any,
which individually and in the aggregate would have no material adverse effect on the
Governmental Unit's financial condition, operations or properties.
4. The execution and delivery of the Loan Agreement and the Governmen-
tal Unit Note and compliance with the provisions thereof, do not and will not conflict with
or result in the breach of any of the terms, conditions or provisions of, or constitute a
default under, the enabling legislation and Charter of the Governmental Unit, any existing
ordinance or resolution of the governing body of the Governmental Unit, any existing law,
court or administrative regulation, decree, order or any agreement, indenture, lease or
other instrument to which the Governmental Unit is a party or by which it or any of its
properties is bound.
5. All requirements imposed by Section 163.01, Florida Statutes, as
amended, as preconditions to the effectiveness of the Loan Agreement as an interlocal
agreement under such section have been met and the Loan Agreement constitutes a valid,
binding and enforceable interlocal agreement under the provisions of such Section.
LKL-12/07/88-267 AA-2821
-40-
I tl
6. There is no action, suit, proceeding, inquiry or investigation at law or in
equity before or by any court, public board or body pending or, to our knowledge,
threatened against or affecting the Governmental Unit which has not been disclosed in
writing to the Credit Facility Issuer, nor, in our opinion is there any meritorious basis
therefor, contesting the due organization of the Governmental Unit, or wherein an
unfavorable decision, ruling or finding (i) would have a material adverse effect on the
financial condition of the Governmental Unit, the operation by the Govern(T\i:~ntal Unit of
the Project, its facilities and its other properties, or an adverse effect on tilt functioning
of the Governmental Unit or payment by the Governmental Unit of the amounts due under
the Loan Agreement in the manner and time required thereby, or (ii) would have an
adverse effect on the validity or enforceability of the Governmental Unit Note or the
Loan Agreement.
"
, ~
7. No final judgment for the payment of money has been rendered against
the Governmental Unit, unless within 60 days from the entry thereof, (i) such judgment
has been discharged or (ii) the Governmental Unit has taken and is diligently prosecuting
an appeal therefrom, or from the order, decree or process, upon which or pursuant to
which such judgment was granted or entered, and has caused the execution or levy under
such judgment, order, decre~ or process or the enforcement thereof to be stayed pending
the determination of such appeal, or (Hi) the Governmental Unit has provided for the
payment or securing of such judgment in a manner satisfactory to the Credit Facility
Issuer.
8. The Pledged Revenues described in the Loan Agreement have not been
pledged in whole or in part, directly or indirectly, for the benefit of any obligations
previously issued by the Governmental Unit, except as specifically described in the Loan
Agreement, and are not subject to any other encumbrance, except as specifically
described in the Loan Agreement.
9. We have no knowledge of any legislation adopted by the 1988 Session of
the Florida Legislature that restricts or otherwise adversely affects the Governmental
Unit's power to issue the Governmental Unit Note or its ability to provide for the payment
of the principal thereof and interest thereon in the manner provided in the Loan
Agreement and the Indenture.
Very truly yours,
M. A. Galbraith, Jr.
LKL-12/07/88-267 AA-2821
-41-
tI4