1bCURRENT BLACK LINES REVISIONS
TO THE AGREEMENT
Ib
LOAN AGREEMENT
This LOAN AGREEMENT (the "Agreement") is made and entered into as of====
+,August 15. 20 I I, and is by and between the City of South Miami, Florida, a municipal
corporation of the State of Florida, and its successors and assigns (the "Issuer"), and SuuTrust
Bauk, a Georgia banking corporation, and its successors and assigns, as holder(s) of the
hereinafter defined Note (the "Bank").
The parties hereto, intending to be legally bound hereby and in consideration of the mutual
covenants hereinafter contained, DO HEREBY AGREE as follows:
ARTICLE I
DEFINITION OF TERMS
Section l.01 Definitions. The words and terms used in capitalized form in this
Agreement shall have the meanings as set forth in the recitals above and the following words and
terms as used in this Agreement shall have the following meanings:
"Act" means Part II, Chapter 166, Florida Statutes, Article VIII, Section 2, Constitution of
the State of Florida, and other applicable provisions of law.
"Agreement" means this Loan Agreement and any and all modifications, alterations,
amendments and supplements hereto made in accordance with the provisions hereof.
"Allocable Portion of Cost of Essential Services" means. for calculating the same for
purposes of Section 3.02(b) hereof. for a Fiscal Year. an amount equal to a percentage of the Cost
of Essential Services. with such percentage calculated by dividing the amount of Non-Ad Valorem
Revenues for such Fiscal Year by the amount of Total General Fund Revenues for such Fiscal
Year.
"Annual Budget" means the budget or budgets, as amended and supplemented from time to
time, prepared by the Issuer for each Fiscal Year in accordance with the laws of the State of
Florida.
"Annual Debt Service" means, as of any particular date of calculation, the annual debt
service requirement for all Debt in each such Bond Year except that with respect to any Debt for
which amortization installments have been established, the amount of principal coming due on the
final maturity date with respect to such Debt shall be reduced by the aggregate principal amount of
such Debt that is to be redeemed or paid from amortization installments to be made in prior Bond
Years.
"Bond Counsel" means any attorney at law or firm of attorneys retained by the Issuer, of
nationally recognized experience in matters pertaining to the validity of, and exclusion from gross
income for federal income tax purposes of interest on, the obligations of states and their political
subdivisions.
"Bond Year" means the annual period beginning on the first day of October of each year
and ending on the last day of September of the _immediately succeeding year; provided
however, that when such term is used to describe the period during which deposits are to be made
to amortize principal and interest on Debt maturing or becoming subject to redemption, including
without limitation, interest and principal maturing or becoming subject to redemption on October
I of any year shall be deemed to mature or become subject to redemption on the last day of
preceding Bond Year.
"Business Day" means any day except any Saturday or Sunday or day on which the
Principal Office of the Bank is lawfully closed.
"Commission" means the Mayor and City Commission of the Issuer.
"Consistent Basis" means, in reference to the application of GAAP, that the accounting
principles observed in the period referred to are comparable in all material respects to those
applied in the preceding period, except as to any changes either required by GAAP or consented to
by the Bank.
"Cost of Essential Services" means the cost of services necessary for the conducting of the
public safety and general governmental operations of the Issuer, as shown in the rows under the
"General Fund" column titled "General Government" and "Public Safety" in the Issuer's audited
financial statements.
"Debt" means as of any date and without duplication, all of the following to the extent that
they are payable in whole or in part from any Non-Ad Valorem Revenues: (i) all obligations of the
Issuer for borrowed money or evidenced by bonds, debentures, notes or other similar instruments;
(ii) all obligations of the Issuer to pay the deferred purchase price of property or services, except
trade accounts payable under normal trade terms and which arise in the ordinary course of
business; (iii) all obligations of the Issuer as lessee under capitalized leases; and (iv) all
indebtedness of other persons to the extent guaranteed by, or secured by Non-Ad Valorem
Revenues of, the Issuer.
"Debt Service Account" means the Taxable Revenue Note, Series 2011 Debt Service
Account established by the Ordinance from which the Issuer shall make payments of the principal
of, interest on and any redemption or prepayment premiums with respect to the Loan under the
Note.
"Event of Default" means an event of default specified in Article VI of this Agreement.
"Fiscal Year" means the period commencing on October 1 of each year and ending on the
succeeding September 30, or such other period of twelve consecutive months as may hereafter be
designated as the fiscal year of the Issuer by general law.
"Loan" means the loan by the Bank to the Issuer contemplated hereby.
"Loan Amount" means $ ----
"Loan Documents" means this Agreement and the Note.
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"Maximum Annual Debt Service" means, as of any particular date of calculation, the
largest Annual Debt Service in any Bond Year.
"Non-Ad Valorem Revenues" means all revenues of the Issuer derived from any source
whatsoever other than ad valorem taxation on real and personal property, including, without
limitation, investment income, which are legally available for the payment by the Issuer of debt
service on the Note or Non-Self-Supporting Revenue Debt, including, without limitation, legally
available non-ad valorem revenues derived from sources subject to a prior pledge thereof for the
payment of other obligations of the Issuer and available after payment of principal and interest on
such other obligations, but excluding revenues derived from the revenues of any enterprise fund of
the Issuer, except to the extent that revenues derived from such sources have been deposited into
the Issuer's General Fund.
"Non-Self-Supporting Revenue Debt" means obligations evidencing indebtedness for
borrowed money, including the Note, (i) the primary security for which is provided by a covenant
of the Issuer to budget and appropriate Non-Ad Valorem Revenues of the Issuer for the payment of
debt service on such obligations, or (ii) primarily secured or payable from another source of funds,
but with respect to which the Issuer has also covenanted to budget and appropriate Non-Ad
Valorem Revenues of the Issuer for the payment of debt service on such obligations, provided that
obligations described in this clause (ii) shall only be considered Non-Self-Supporting Revenue
Debt to the extent the Issuer has included in its budget (by amendment or otherwise) the payment
of such Non-Ad Valorem Revenues pursuant to such covenant to pay debt service on such
obligations. "Non-Self-Supporting Revenue Debt" shall expressly not include indebtedness
payable from the revenues of a utility system, or any other enterprise fund of the Issuer, which are
pledged to the payment of such indebtedness.
"Note" means the Issuer's Taxable Revenue Note, Series 20IOB in the form attached hereto
as Exhibit "B."
"Notice Address" means,
As to the Issuer:
As to the Bank:
City of South Miami
Attn: City Manager
6130 Sunset Drive
South Miami, Florida 33143
Email address: -------
SunTrust Bank
Attn: Steve T. Leth
8699 NW 36 Street
Miami, Florida 33131
Email address:steve.leth@suntrust.com
or to such other address (or e-mail address for electronic communications) as either party may
have specified in writing to the other using the procedures specified in Section 7.06.
"Ordinance" means an Ordinance related to this Agreement and the Note enacted by the
Commission on August , 2011.
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"Person" means an individual, corporation, partnership, joint venture, trust, limited
liability company, unincorporated organization or other judicial entity.
"Pledged Funds" means (i) the Non-Ad Valorem Revenues budgeted and appropriated and
deposited into the Debt Service Account to pay debt service and other amounts due and payable on
the Note and (ii) all funds on deposit in the Debt Service Account (including all investment
securities on deposit therein) and all investment earnings on any such funds.
"Principal Office" means, with respect to the Bank, the office located at 8699 NW 36
Street, Miami, Florida 33131, or such other office as the Bank may designate to the Issuer in
writing.
"Refunded Loans" means, collectively, the Issuer's Capital Improvement Promissory Note,
Series 2009, a portion of the Issuer's eeligationsloan under the Loan Agreement dated as of
December 1,2006, between the Florida Municipal Loan Council and the Issuer and a portion of the
Issuer's oeligatiens.\Qan under the Loan Agreement dated as of May +7,1. 2002, between the
Florida Municipal Loan Council and the Issuer.
"State" means the State of Florida.
"Total General Fund Revenues" means all revenues of the Issuer, including all Non-Ad
Valorem Revenues (including, without limitation, those derived from enterprise funds) and
revenues derived from ad valorem taxes (other than such taxes imposed pursuant to the
referendum and allocable solely to debt service incurred on Debt approved by such referendum).
Section 1.02 Titles and Headings. The titles and headings of the articles and sections of
this Agreement have been inserted for convenience of reference only and are not to be considered
a part hereof, shall not in any way modify or restrict any of the terms and provisions hereof, and
shall not be considered or given any effect in construing this Agreement or any provision hereof or
in ascertaining intent, if any question of intent should arise.
ARTICLE II
REPRESENTATIONS OF ISSUER
The Issuer represents and warrants to the Bank that:
Section 2.01 Powers ofIssuer. The Issuer is a municipal corporation, duly organized and
validly existing under the laws of the State. The Issuer has the power under the Act to enact the
Ordinance, to borrow pursuant to the Loan Documents the Loan Amount provided for in this
Agreement, to execute and deliver the Loan Documents, to secure the Loan Documents in the
manner contemplated hereby and to perform and observe all the terms and conditions of the Loan
Documents on its part to be performed and observed. The Issuer may lawfully borrow funds
hereunder in order to provide funds to refund the Refunded Loans, to pay amounts owed to the
Internal Revenue Service pursuant to settlementciosing agreements entered into by the Issuer
under its Voluntary Closing Agreement Program and costs related thereto and to pay the costs of
issuance of the Note.
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Section 2.02 Authorization of Loan. The Issuer had, has, or will have on the date of the
Note and at all relevant times, full legal right, power and authority to execute and deliver the Loan
Documents, to make the Note, and to carry out and consummate all other transactions
contemplated hereby, and the Issuer has complied and will comply with all provisions of
applicable law in all material matters relating to such transactions. The Issuer has duly authorized
the borrowing of the Loan Amount provided for in this Agreement, the execution and delivery of
this Agreement, and the making and delivery of the Note to the Bank, and to that end the Issuer
warrants that it will, subject to the terms hereof and of the Note, take all action and do all things
which it is authorized by law to take and to do in order to fulfill all covenants on its part to be
performed and to provide for and to assure payment of the Note. The Note has been duly
authorized, executed, issued and delivered to the Bank. along with this Agreement. and constitutes
the legal, valid and binding obligation of the Issuer enforceable in accordance with the terms
thereof and the terms hereof, and is entitled to the benefits and security of this Agreement, subject
to the provisions of the bankruptcy laws of the United States of America and to other applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting
creditors' rights, heretofore or hereinafter enacted, to the extent constitutionally applicable, and
provided that its enforcement may also be subject to equitable principles that may affect remedies
or other equitable relief, or to the exercise of judicial discretion in appropriate cases. All approvals,
consents, and orders of and filings with any governmental authority or agency which would
constitute a condition precedent to the issuance of the Note or the execution and delivery of or the
performance by the Issuer of its obligations under this Agreement and the Note have been obtained
or made and any consents, approvals, and orders to be received or filings so made are in full force
and effect. NOTWITHSTANDING THE FOREGOING, HOWEVER, OR ANYTHING ELSE
HEREIN OR IN THE NOTE TO THE CONTRARY, NEITHER THIS AGREEMENT NOR THE
NOTE SHALL CONSTITUTE A GENERAL OBLIGATION OR A PLEDGE OF THE FAITH
AND CREDIT OF THE ISSUER, THE STATE OF FLORIDA OR ANY POLITICAL
SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL,
LEGISLATIVE OR CHARTER PROVISION OR LIMITATION, BUT SHALL BE PAYABLE
SOLELY FROM THE PLEDGED FUNDS IN THE MANNER AND TO THE EXTENT
PROVIDED HEREIN AND IN THE ORDINANCE. No holder or owner of the Note shall ever
have the right, directly or indirectly, to require or compel the exercise of the ad valorem taxing
power of the Issuer or any other political subdivision ofthe State of Florida or taxation in any form
on any real or personal property for any purpose, including, without limitation, for the payment of
debt service with respect thereto, or to maintain or continue any activities of the Issuer which
generate user service charges, regulatory fees or other non-ad valorem revenues, nor shall any
holder or owner of the Note be entitled to payment of such principal and interest from any other
funds of the Issuer other than the Pledged Funds, all in the manner and to the extent herein and in
the Ordinance provided.
Section 2.03 No Violation of Law or Contract. +fieExcept with respect to any defaults
resulting from the events described in Section D of the Issuf;.r's Request for Taxable Loan
Proposals dated June 13. 2011. the Issuer is not in default in any material respect under any
agreement or other instrument to which it is a party or by which it may be bound, the breach of
which could result in a material and adverse impact on the financial condition of the Issuer or the
ability of the Issuer to perform its obligations hereunder and under the Note. The making and
performing by the Issuer of this Agreement and the Note will not violate any applicable provision
of law, and will not result in a material breach of any of the terms of any agreement or instrument
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to which the Issuer is a party or by which the Issuer is bound, the breach of which could result in a
material and adverse impact on the financial condition of the Issuer or the ability of the Issuer to
perform its obligations hereunder and under the Note.
Section 2.04 Pending or Threatened Litigation. Except as has been disclosed to the Bank
in writing, including in the Issuer's Request for Taxable Loan Proposals dated June 13.2011. there
are no actions or proceedings pending against the Issuer or affecting the Issuer or, to the
knowledge of the Issuer, threatened, which, either in any case or in the aggregate, might result in
any material adverse change in the financial condition of the Issuer, or which questions the validity
of this Agreement or the Note or of any action taken or to be taken in connection with the
transactions contemplated hereby or thereby.
Section 2.05 Ordinance. The Ordinance has been duly enacted by the Issuer, is in full
force and effect and has not been amended, altered, repealed or revoked in any way since its date of
enactment.
Section 2.06 Financial Information. The financial information regarding the Issuer
furnished to the Bank by the Issuer in connection with the Loan is complete and accurate, and there
has been no material and adverse change in the financial condition of the Issuer from that
presented in such information.
Section 2.07 Financial Condition. The Fillalleialfinancial statements (which include
combined and combining statements of financial position, activities and cash flows with all
supporting schedules) of the Issuer for the Fiscal Year elldedYears ending as of the dates of such
financial statements, copies of which have been furnished to the Bank, are correct, complete and
fairly present the financial condition of the Issuer as of the date thereof, and the results of its
operations for such periods. The Issuer has no material direct or contingent liabilities as of the date
of this Agreement which are not provided for or reflected in such financial statements, or referred
to in notes thereto. All such financial statements have been prepared in accordance with GAAP
applied on a Consistent Basis maintained throughout the periods involved. There has been no
material adverse change in the business, properties or conditions, financial or otherwise, of the
Issuer since the dates of such financial statements.
Section 2.08. No Immunity from Jurisdiction. The Issuer has no immunity from
jurisdiction of any court of competent jurisdiction or from process or suit therein which could be
asserted in any action to enforce the obligations of the Issuer under this Agreement or any of the
other Loan Documents, or from the rendition, execution or enforcement of any judgment therein.
Section 2.09 No Untrue Statements. Neither this Agreement nor any reports, schedules,
certificates, agreements or instruments hereto or simultaneously with the execution of this
Agreement delivered to the Bank by the Issuer in connection with the Loan contains any material
misrepresentation or untrue statement of fact or omits to state any material fact necessary to make
this Agreement or any such reports, schedules, certificates or instruments not misleading. The
representations and warranties ofthe Issuer in each of the Loan Documents are true and correct in
all material respects on the date hereof and are true and correct as of the date made, if earlier.
Section 2.10 Changes in Law, Etc. To the Issuer's knowledge, there are no proposed or
pending changes in any laws of the State or the United States of America which would have a
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material adverse affect on the ability of the Issuer to perform any of its obligations under any ofthe
Loan Documents.
Section 2.11 Regulation U. No part of the proceeds of the Loan made available to the
Issuer will be or has been used to purchase or carry, or to reduce or retire any loan incurred to
purchase or carry, any margin stocks (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System) or to extend credit to others for the purpose of
purchasing or carrying any such margin stocks. The Issuer is not engaged as one of their important
activities in extending credit for the purpose of purchasing or carrying such margin stocks. In
addition, no part of the proceeds of such loan will be used for the purchase of commodity future
contracts (or margins therefor for short sales), or for any commodity transaction.
Section 2.12 Solvency. The Issuer is now, and after giving effect to any of the other
Loan Documents will be, solvent.
ARTICLE III
COVENANTS OF THE ISSUER
Section 3.01 Affirmative Covenants. For so long as any of the principal amount of or
interest or any redemption or prepayment premium on the Note is outstanding or any duty or
obligation of the Issuer hereunder or under the Note remains unpaid or unperformed, the Issuer
covenants to the Bank as follows:
(a) Payment. The Issuer shall pay the principal of and the interest or any redemption or
prepayment premium on the Note and any other amounts due and payable under this Agreement at
the times and place and in the manner provided herein and in the Note.
(b) Use of Proceeds. Proceeds from the Note will be used only to refund the Refunded
Loans (as sefines in the Orsinance), to pay amounts owed to the Internal Revenue Service
pursuant to settlcll'lclltclosing agreements entered into by the Issuer under the Voluntary Closing
Agreement Program and costs related thereto and to pay costs of issuance of the Loan, except as
otherwise expressly provided hereby.
(c) Notice of Defaults. The Issuer shall within three (3) days after it acquires
kuowledge thereof, notify the Bank in writing at its Notice Address (a) of any change in any
material fact or circumstance represented or warranted by the Issuer in this Agreement or in
connection with the issuance of the Note; (b) of the happening, occurrence, or existence of any
Event of Default, (c) of any event or condition which with the passage of time or giving of notice,
or both, would constitute an Event of Default, and (d) of any litigation or governmental proceeding
pending against the Issuer in excess of $ l(H),()()(),200.000. and in addition shall provide the Bank,
with such written notice, a detailed statement by a responsible officer of the Issuer of all relevant
facts and the action being taken or proposed to be taken by the Issuer with respect thereto.
Regardless of the date of receipt of such notice by the Bank, such date shall not in any way modify
the date of occurrence of the actual Event of Default.
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(d) Maintenance of Existence. The Issuer will take all reasonable legal action within
its control in order to maintain its existence until all amounts due and owing from the Issuer to the
Bank under this Agreement and the Note have been paid in full.
(e) Records. The Issuer agrees that any and all records of the Issuer with respect to the
Loan shall be open to inspection by the Bank or its representatives at all reasonable times and after
receipt by the Issuer of reasonable notice from the Bank at the offices the Issuer.
(f) Financial Statements and Budget. The Issuer will cause an audit to be completed of
its books and accounts and shall furnish electronically to the Bank audited year-end financial
statements of the Issuer, including a balance sheet as of the end of such Fiscal Year and related
statements of revenues, expenses and changes in net assets, certified by an independent certified
public accountant to the effect that such audit has been conducted in accordance with generally
accepted auditing standards and stating whether such financial statements present fairly in all
material respects the financial position of the Issuer and the results of its operations and cash flows
for the periods covered by the audit report, all in conformity with generally accepted accounting
principles applied on a €onsistent basisConsistent Basis. The Issuer shall send to the Bank the
Issuer's audited financial statements for each Fiscal Year ending on or after September 30, 2011,
within 270 days after the end thereof, and shall provide the Bank with a copy of its annual budget
within thirty (30) days after approval thereof by the Board, together with any other information the
Bank may reasonably request. (The documents required by the preceding sentence may be
delivered electronically.)
(g) Insurance. The Issuer shall maintain such liability, casualty and other insurance as,
or shall self-insure in a manner as is reasonable and prudent for similarly situated governmental
entities of the State of Florida.
(h) Compliance with Laws. The Issuer shall comply with all applicable federal, state
and local laws and regulatory requirements, the violation of which could reasonably be expected to
have a material and adverse effect upon the financial condition of the Issuer or upon the ability of
the Issuer to perform its obligation hereunder and under the Note.
(i) Payment of Document Taxes. In the event the Note or this Agreement should be
subject to the excise tax on documents of the State, the Issuer shall promptly upon receipt of the
Bank's written demand for same, pay such taxes or reimburse the Bank for any such taxes paid by
it.
(j) Payment of Obligations. The Issuer will pay when due all of its obligations and
liabilities, except where the same (other than judgments not being <JJlllealed) are being contested in
good faith by appropriate proceedings diligently prosecuted and appropriate reserves for the
accrual of same satisfactory to the Bank are maintained.
(k) Observe all Laws. The Issuer will conform to and duly observe all laws,
regulations and other valid requirements of any governmental or regulatory authority with respect
to this Agreement and the Notes.
(I) Payment of Expenses. The Issuer shall pay the following: (a) upon demand for all
reasonable out-of-pocket expenses (including reasonable attorneys' and paralegals' fees and legal
8
expenses) incurred by the Bank in connection with the negotiation of any amendment or
restructuring, whether or not consummated, of any of the Loan Documents made at the request of
the Issuer, and (b) in the event of the occurrence of any Event of Default, the Bank shall be entitled
to recover from the Issuer, whether suit be brought or not, all reasonable costs, expenses and
reasonable attorneys' fees and paralegals' fees incurred by the Bank in connection therewith,
including those on appeal or in administrative or bankruptcy proceedings.
(m) Accounting. The Issuer will keep proper books of record and account in which full,
true and correct entries shall be made of its transactions in accordance with the GAAP applied on a
COflsistsflseConsistent Basis with those applied in the preparation of the financial statements
described above.
(n) Auditors. The Issuer shall immediately notify the Bank upon any change of the
Issuer's independent public accountants, and such fUliher information as the Bank may reasonably
request concerning the resignation, refusal to stand for reappointment after completion of the
current audit efOr dismissal of such accountants.
(0) Direct Debt. The interest payments on the Loan shall be collected via ACH Direct
Debit from an account with the Bank.
(P) Additional Information, Instruments and Assurances. The Issuer shall provide the
Bank with such other information respecting the business, properties, condition or operations,
financial or otherwise, of the Issuer or as the Bank may from time to time reasonably request. The
Issuer shall execute and deliver to the Bank all such documents and instruments, and do all such
acts and things, as may be necessary or required by the Bank to enable the Bank to exercise and
enforce its rights under this Agreement, and to realize thereof, and record and file and re-record
and re-file all such documents and instruments, at such time or times, in such manner and at such
place or places, all as may be necessary or required by the Bank to validate, preserve and protect
the position of the Bank under this Agreement and the Note.
(q) Notice of Fines. The Issuer shall notify the Bank in writing within fifteen (] 5) days
after receipt of the same of any fine or imposition imposed upon the Issuer by any Governmental
Authority (as such term is defined in the form of the Notet
(r) Restricted Cash Reserves. During the term of the Note. the Issuer shall not repeal.
rescind or modify Ordinance No. [Ordinance that requires restricted cash reserves of
10% of operating budget.!
Section 3.02 Negative Covenants. For so long as any of the principal amount of or
interest on the Note is outstanding or any duty or obligation of the Issuer hereunder or under the
Note remains unpaid or unperformed, the Issuer covenants to the Bank as follows:
(a) No Adverse Borrowings. The Issuer shall not issue or incur any indebtedness or
obligation if such would materially and adversely affect the ability of the Issuer to timely pay debt
service on the Note or any other amounts owing by the Issuer under this Agreement. provided that
compliance with paragraph (b) below shall constitute evidence of compliance with this paragraph
with respect to Non-Self Supporting Revenue Debt.
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(b) Anti-Dilution. Except with respect to Non-Self-Supporting Revenue Debt issued
to refund existing Non-Self-Supporting Revenue Debt where the aggregate debt service of the
refunding Non-Self-Supporting Revenue Debt will not be greater than that for the
Non-Self-Supporting Revenue Debt being refunded, the Issuer may incur additional
Non-Self-Supporting Revenue Debt only if, as set forth in a certificate of the Mayor, the Vice
Mayor or the City Manager executed prior to the issuance thereof~. a copy of which shall be
provided to the Bank. (i) the amount of Non-Ad Valorem Revenues for the Fiscal Year most
recently concluded prior to the proposed incurrence of the Debt for which audited financial
statements are available less the amellHt rssllltiHg frem di'lidiHg SlleB NeH Ad Valersm ReV8HllSS
by Total GSHeral Flllld R"''feHlleS for slleB Fiseal Year aHd mllitiplyillg tBat amollllt by tBe
(Allocable Portion of the Cost of Essential Servicesj for such Fiscal Year, equals or s)(eeed~eeds
1.25 times the Maximum Annual Debt Service in eaell.iill future Bond Year on all outstanding Debt
and the Debt proposed to be issued, and (yjj) the average amount of Non-Ad Valorem Revenues
for the two Fiscal Years for which auqited financial statements are available most recently
concluded prior to the proposed incurrence of the Debt equal or exceed 2.00 times the Maximum
Annual Debt Service in all future Bond Years on all outstanding Debt and the Debt proposed to be
issued.
For purposes of calculating the foregoing, if any Debt bears a rate of interest that is not
fixed for the entire term of the Debt (excluding any provisions that adjust the interest rate upon a
change in tax law or in the tax treatment of interest on the debt or upon a default), then the interest
rate on such Debt shall be assumed to be the higher of (*y) the average rate of actual interest borne
by such Debt during the most recent complete month prior to the date of calculation, (y~ (i) for
Debt the interest on which is excluded from gross income of the holders thereof for federal tax
purposes, The Bond Buyer Revenue Bond Index last published in the month preceding the date of
calculation plus one percent, or (ii) for Debt the interest on which is not excluded from the gross
income of the holders thereoffor federal tax purposes, the yield on a U.S. Treasury obligation with
a constant maturity closest to but not before the maturity date of such Debt, as reported in
Statistical Release I·U5 of the Federal Reserve on the last day of the month preceding the date of
issuance of such proposed Debt, plus three percent; provided, however, that if the Issuer shall have
entered into an interest rate swap or interest rate cap or shall have taken any other action which has
the effect of fixing or capping the interest rate on such Debt for the entire term thereof, then such
fixed or capped rate shall be used as the applicable rate for the period of such swap or cap, and
provided further that if The Bond Buyer Revenue Bond Index or Statistical Release H.15 of the
Federal Reserve is no longer available or no longer contains the necessary data, such other
comparable source of comparable data as selected by the Bank shall be utilized in the foregoing
calculations. For the purpose of calculating the foregoing, "balloon indebtedness" (as defined in
the immediately succeeding sentence) shall be assumed to amortize over a period not to exceed 20
years in substantially equal annual payments at the interest rate set forth in the instrument
evidencing such Debt if the interest rate is fixed and, if the interest rate is not fixed, at the rate
calculated pursuant to the immediately preceding sentence and any put or tender rights of a lender
with respect to any Debt shall be ignored and such Debt shall be assumed to mature as otherwise
provided in the instrument evidencing such Debt. "Balloon indebtedness" is any Debt twenty
percent (20%) or more of the principal amount of which comes due in any single Fiscal Year.
(c) Additional Debt. In addition to the restrictions set forth in paragraphs (a) and (b)
above, Additional Debt shall only be issued if the Issuer shall not be in default in performing any
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of the covenants and obligations assumed under the Loan Documents, and all payments herein
required to have been made into the accounts and funds, as provided herein, shall have been made
to the full extent required.
(d) Financial Urgency. The Issuer shall not declare or submit a resolution to declare a
state of financial urgency under Chapter 447, Florida Statutes. without at least five (5) days prior
written notice to. and the consent of, the Bank, which consent shall not be unreasonably withheld.
Section 3.03 Registration and Exchange of Note. The Note shall initially be owned by
the Bank. The ownership of the Note may only be transferred, other than transfers to assignees or
successors of the Bank, and the Issuer will transfer the ownership of the Note, upon written request
of the Bank to the Issuer specifying the name, address and taxpayer identification number of the
transferee, and the Issuer will keep and maintain at all times a record setting forth the identification
of the owner of the Note. The Person in whose name the Note shall be registered shall be deemed
and regarded the absolute owner thereof for all purposes, and payment of principal and interest on
such Note shall be made only to or upon the written order of such Person. All such payments shall
be valid and effectual to satisfy and discharge the liability upon such Note to the extent of the sum
or sums so paid. The Issuer shall maintain books of registration in connection with the Note. The
Bank acknowledges that any partial transfer by it of the Note will be in minimum amounts of
$100.000.
Section 3.04 Note Mutilated, Destroyed, Stolen or Lost. In case the Note shall become
mutilated, or be destroyed, stolen or lost, the Issuer shall issue and deliver a new Note, in exchange
and in substitution for such tnutilated Note, or in lieu of and in substitution for the Note destroyed,
stolen or lost and upon the Bank furnishing the Issuer proof of ownership thereof, an affidavit of
lost or stolen instrument and indemnity reasonably satisfactory to the Issuer and paying such
expenses as the Issuer may reasonably incur in connection therewith.
Section 3.05 Payment of Principal and Interest; Limited Obligation. The Issuer promises
that it will promptly pay the principal of and interest on the Note, at the place, on the dates and in
the manner provided therein according to the true intent and meaning hereof and of the Note,
provided that the Issuer may be compelled to pay the principal of and interest on with respect to the
Note solely from the Pledged Funds, and nothing in the Note, this Agreement or the Ordinance
shall be construed as pledging any other funds or assets of the Issuer to such payment or as
authorizing such payment to be made from any other source. The Issuer is not and shall not be
liable for the payment of the principal of and interest on the Note with respect to or for the
performance of any pledge, obligation or agreement for payment undertaken by the Issuer
hereunder, under the Note or under the Ordinance from any property other than the Pledged Funds.
The Bank shall not have any right to resort to legal or equitable action to require or compel the
Issuer to make any payment required by the Note or this Agreement from any source other than the
Pledged Funds.
Section 3.06 Covenant to Budget and Appropriate. The Issuer hereby covenants and
agrees, to the extent permitted by and in accordance with applicable law and budgetary processes,
to prepare, approve and appropriate in its Annual Budget for each Fiscal Year, by amendment if
necessary, and to deposit to the credit of the Debt Service Account in a timely manner as needed to
pay debt service on the Note, Non-Ad Valorem Revenues of the Issuer in an amount which is equal
to the debt service with respect to the Note for the applicable Fiscal Year and such other amounts
II
payable under this Agreement and the Note. Such covenant and agreement on the part of the Issuer
to budget and appropriate sufficient amounts of Non-Ad Valorem Revenues shall be cumulative,
and shall continue until such Non-Ad Valorem Revenues in amounts sufficient to make all
required payments hereunder and under the Note as and when due, including any delinquent
payments, shall have been budgeted, appropriated and actually paid into the Debt Service
Account; provided, however, that such covenant shall not constitute a lien, either legal or
equitable, on any of the Issuer's Non-Ad Valorem Revenues or other revenues, nor shall it preclude
the Issuer from pledging in the future any of its NoncAd Valorem Revenues or other revenues to
other obligations, nor shall it give the holder or owner of the Note a prior claim on the Non-Ad
Valorem Revenues. Anything herein to the contrary notwithstanding, all obligations of the Issuer
hereunder shall be secured only by the Non-Ad Valorem Revenues actually budgeted and
appropriated and deposited into the Debt Service Account, as provided for herein. The Issuer is
prohibited by law from expending moneys not appropriated or in excess of its current budgeted
revenues and surpluses. The obligation of the Issuer to budget, appropriate and make payments
hereunder from its Non-Ad Valorem Revenues is subject to the availability of Non-Ad Valorem
....................................... ,R,;e~v:enues after satisfying funding requirements for obligations having an express lien on or pledge
such revenues and after satisfying funding requirements for essential governmental services of
the Issuer. Notwithstanding the foregoing or anything herein to the contrary, the Issuer has not
covenanted to maintain any service or program now provided or maintained by the Issuer which
generates Non-Ad Valorem Revenues.
If at any point in time during a Fiscal Year of the Issuer, the Issuer determines that the
Non-Ad Valorem Revenues are insufficient to satisfy the Issuer's obligation to budget, appropriate
and make payments under this Section 3.06 and to satisfy the Issuer's obligations to pay under any
Non Self-Supporting Revenue Debt, then the Issuer shall, from such point, budget, appropriate and
make payments from the available Non-Ad Valorem Revenues pro-rata among the Note and such
other Non Self-Supporting Revenue Debt.
Section 3.07 Pledge. The payment of the principal of and interest on the Note and any
other amounts due and payable under this Agreement and the Note shall be secured by an
irrevocable lien on the Pledged Funds, all in the manner and to the extent provided herein and in
the Ordinance. The Issuer does hereby pledge such Pledged Funds to the principal of and interest
on the Note and for all other payments provided for herein.
Section 3.08 Debt Service Account. The Issuer shall apply all moneys on deposit in the
Debt Service Account to the timely payment of the principal of and interest on the Note and any
other amounts due and payable under this Agreement and the Note. Funds in the Debt Service
Account may be invested in investments permitted by law and meeting the requirements of the
Issuer's written investment policy and that mature not later than the dates that such funds will be
needed for the purposes of such accounts.
Section 3.09 Officers and Employees of the Issuer Exempt from Personal Liability. No
recourse under or upon any obligation, covenant or agreement of this Agreement or the Note or for
any claim based hereon or thereon or otherwise in respect thereof, shall be had against any officer,
agent or employee, as such, of the Issuer, past, present or future, it being expressly understood (a)
that the obligation ofthe Issuer under this Agreement and under the Note is solely a corporate one,
limited as provided herein, (b) that no personal liability whatsoever shall attach to, or is or shall be
incurred by, the officers, agents, or employees, as such, of the Issuer, or any of them, under or by
12
reason of the obligations, covenants or agreements contained in this Agreement or implied
therefrom, and (c) that any and all such personal liability of, and any and all such rights and claims
against, every such officer, agent, or employee, as such, of the Issuer under or by reason of the
obligations, covenants or agreements contained in this Agreement and under the Note, or implied
therefrom, are waived and released as a condition of, and as a consideration for, the execution of
this Agreement and the issuance of the Note on the part of the Issuer.
Section 3.10 Business Days. In any case where the due date of interest on or principal of
the Note is not a Business Day, then payment of such principal or interest need not be made on
such date but may be made on the next succeeding Business Day, provided that credit for
payments made shall not be given until the payment is actually received by the Bank.
Section 3.11 Taxable Note. Interest on the Note shall not be excluded from gross income
of the holders and owners of the Note for federal income tax purposes.
Section 3.12 Application of Proceeds of the Note. The net proceeds of the Note (after
amounts withheld by the Bank to pay the fees of its counsel ($7,500.00» shall be applied as
follows:
(1) shall be withheld by the Bank for the repayment of the 2009 Loan (as
defined in the Ordinance).
(2) $ shall be transferred by the Bank to FMLC for the repayment of the
FMLC Loans (as such terms are defined in the Ordinance).
(3) The remainder of the proceeds of the Note shall be transferred to the Issuer and
used to pay the amounts due and owing by the Issuer to the Internal Revenue Service pursuant to
the settlement agreements entered into by the Issuer and the costs related thereto and the costs of
issuance of the Loan and the remainder after paying the aforementioned costs shall be deposited
into the Debt Service Account for payment of principal and interest next coming due on the Note.
ARTICLE IV
CONDITIONS OF LENDING
The obligations of the Bank to lend hereunder are subject to the following conditions
precedent:
Section 4.01 Representations and Warranties. The representations and warranties of the
Issuer set forth in this Agreement and the Note are true and correct on and as of the date hereof.
Section 4.02 No Default. On the date hereof, the Issuer shall be in compliance with all
the terms and provisions set forth in this Agreement and the Note on its part to be observed or
performed, and no Event of Default or any event that, upon notice or lapse oftime or both, would
constitute such an Event of Default, shall have occurred and be continuing at such time.
Section 4.03 Supporting Documents. On or prior to the date hereof, the Bank shall have
received the following supporting documents, all of which shall be satisfactory in form and
substance to the Bank (such satisfaction to be evidenced by the purchase of the Note by the Bank):
13
(a) The opinion of the attorney for the Issuer and/or Squire, Sanders & Dempsey (US)
LLP, regarding the due authorization, execution, delivery, validity and enforceability of the
Ordinance authorizing this Agreement and the Note, and such other items as the Bank shall
reasonably request;
(b) A certified copy of the Ordinance; and
(c) Such additional supporting documents as the Bank may reasonably request.
ARTICLE V
FUNDING THE LOAN
Section 5.01 The Loan. The Bank hereby agrees to lend to the Issuer the Loan Amount
to provide funds for the purposes described herein upon the terms and conditions set forth in this
Agreement. The Issuer agrees to repay the principal amount borrowed plus interest thereon upon
the terms and conditions set forth in this Agreement and the Note.
Section 5.02 Description and Payment Terms of the Note. To evidence the obligation of
the Issuer to repay the Loan, the Issuer shall make and deliver to the Bank the Note in the form
attached hereto as Exhibit "A." Prepayment of principal may be made only as provided in the Note
and the rate of interest on the Note, including any adjustments thereto, shall be as provided in the
Note.
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01 General. An "Event of Default" shall be deemed to have occurred under
this Agreement if:
(a) The Issuer shall fail to make any payment of the principal of, premium, if any, or
interest on the Loan when the same shall become due and payable, whether by maturity, by
acceleration at the discretion ofthe Bank as provided for in Section 6.02, or otherwise; or
(b) The Issuer shall default in the performance of or compliance with any term or
covenant contained in this Agreement or the Note, other than a tenn or covenant a default in the
perfonnance of which or noncompliance with which is elsewhere specifically dealt with in this
Section 6.01, which default or non-compliance shall continue and not be cured within thirty (30)
days after (i) written notice thereof to the Issuer by the Bank, or (ii) the Bank is notified of such
noncompliance or should have been so notified pursuant to the provisions of Section 3.01(c) of this
Agreement, whichever is earlier; or
(c) Any representation or warranty made in writing by or on behalf of the Issuer in this
Agreement or the Note shall prove to have been false or incorrect in any material respect on the
date made or reaffinned; or
14
(d) The Issuer admits in writing its inability to pay its debts generally as they become
due or files a petition in bankruptcy or makes an assignment for the benefit of its creditors or
consents to the appointment of a receiver or trustee for itself; or
(e) The Issuer is adjudged insolvent by a court of competent jurisdiction, or it is
adjudged a bankrupt on a petition in bankruptcy filed by the Issuer, or an order, judgment or decree
is entered by any court of competent jurisdiction appointing, without the consent of the Issuer, a
receiver or trustee of the Issuer or of the whole or any part of its property, and if the aforesaid
adjudications, orders,judgments or decrees shall not be vacated or set aside or stayed within ninety
(90) days from the date of entry thereof; or
(f) The Issuer shall file a petition or answer seeking reorganization or any arrangement
under the federal bankruptcy laws or any other applicable law or statute of the United States of
America or the State; or
(g) The Issner shall be in default in the payment of principal or interest (giving effect to
any applicable grace periods) of any obligation under any other agreement evidencing or securing
any other indebtedness of the Issuer to the Bank; or
(h) If the validity or enforceability of the Loan Documents shall be contested by the
Issuer; or if the Issuer shall deny that it has any or further liability or obligations hereunder or
thereunder; or
(i) The Issuer shall declare er sUBmit a resolutioa Ie declare a state of finaneial
urgeasy uader Chapter 44 7, Florida Statutes; orG) A judgment or order shall be rendered
against the Issuer for the payment of money in excess of $ !()Q,QQQ200,000 which is not covered by
insurance and such jUdgment or order shall continne unsatisfied or unstayed for a period of more
than 30 days,
Section 6.02 Effect of Event of Default. Immediately and without notice, upon the
occurrence of any Event of Default, the Bank may declare all obligations of the Issuer under this
Agreement and the Note to be immediately due and payable without further action of any kind and
upon such declaration the Note and the interest accrued thereon shall become immediately due and
payable. Upon the occurrence of any Event of Default, the Bank may seek enforcement of and
exercise all remedies available to it under any applicable law. All payments made on the Note,
after an Event of Default, shall be first applied to accrued interest then to any reasonable costs or
expenses, including reasonable legal fees and expenses, that the Bank may have incurred in
protecting or exercising its rights under the Loan Documents and the balance thereof shall apply to
the principal sum due.
ARTICLE VII
MISCELLANEOUS
Section 7.01 No Waiver; Cumulative Remedies. No failure or delay on the part of the
Bank in exercising any right, power, remedy hereunder or under the Note shall operate as a waiver
of the Bank's rights, powers and remedies hereunder, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof, or the exercise of any
15
other right, power or remedy hereunder or thereunder. The remedies herein and therein provided
are cumulative and not exclusive of any remedies provided by law or in equity.
Section 7.02 Amendments, Changes or Modifications to the. Agreement. This
Agreement shall not be amended, changed or modified except in writing signed by the Bank and
the Issuer. The Issuer agrees to pay all of the Bank's costs and reasonable attorneys' fees incurred
in modifying and/or amending this Agreement at the Issuer's request or behest.
Section 7.03 Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when so executed and delivered, shall be an original; but such
counterparts shall together constitute but one and the same Agreement, and, in making proof of
this Agreement, it shall not be necessary to produce or account for more than one such counterpart.
Section 7.04 Severability. If any clause, provision or section of this Agreement shall be
held illegal or invalid by any court, the invalidity of such clause, provision or section shall not
affect any other provisions or sections hereof, and this Agreement shall be construed and enforced
to the end that the transactions contemplated hereby be effected and the obligations contemplated
hereby be enforced, as if such illegal or invalid clause, provision or section had not been contained
herein.
Section 7.05 Term of Agreement. Except as otherwise specified in this Agreement, this
Agreement and all representations, warranties, covenants and agreements contained herein or
made in writing by the Issuer in connection herewith shall be in full force and effect from the date
hereof and shall continue in effect until as long as the Note is outstanding.
Section 7.06 Notices. All notices, requests, demands and other communications which
are required or may be given under this Agreement shall be in writing and shall be deemed to have
been duly given when received if personally delivered; when transmitted if transmitted by
telecopy, electronic telephone line facsimile transmission, e-mail or other similar electronic or
digital transmission method (provided customary evidence of receipt is obtained); the day after it
is sent, if sent by overnight common carrier service; and five days after it is sent, if mailed,
certified mail, return receipt requested, postage prepaid. In each case notice shall be sent to the
Notice Address.
Section 7.07 . Applicable Law; Venue. This Agreement shall be construed pursuant to
and governed by the substantive laws of the State. The Issuer and the Bank waive any objection
either might otherwise have to venue in any judicial proceeding brought in connection herewith
lying in Miami-Dade County, Florida.
Section 7.08 Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the successors in interest and permitted assigns of the parties. The Issuer
shall have no rights to assign any of its rights or obligations hereunder without the prior written
consent of the Bank.
Section 7.09 No Third Party Beneficiaries. It is the intent and agreement of the parties
hereto that this Agreement is solely for the benefit of the parties hereto and no person not a party
hereto shall have any rights or privileges hereunder.
16
Section 7.1 0 Attorneys Fees. To the extent legally permissible and subject to Section
6.02 hereof, the Issuer and the Bank agree that in any suit, action or proceeding brought in
connection with this Agreement or the Note (including any appeal(s», the prevailing party shall be
entitled to recover costs and reasonable attorneys' fees from the other party.
Section 7 .11 Entire Agreement. Except as otherwise expressly provided, this Agreement
and the Note embody the entire agreement and understanding between the parties hereto and
supersede all prior agreements and understandings relating to the subject matter hereof.
Section 7.12 Further Assurances. The paJiies to this Agreement will execute and deliver,
or cause to be executed and delivered, such additional or further documents, agreements or
instruments and shall cooperate with one another in all respects for the purpose of carrying out the
transactions contemplated by this Agreement.
Section 7.13 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE
NOTE AND ANY DOCUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION
HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS
AGREEMENT.
Section 7.14 Dodd-Frank Act. The Issuer acknowledges and agrees that (i) the
transaction contemplated by this Agreement is an arm's length, commercial transaction between
the Issuer and the Bank in which the Bank is acting solely as a principal and is not acting as a
municipal advisor, financial advisor or fiduciary to the Issuer; (ii) the Bank has not assumed any
advisory or fiduciary responsibility to the Issuer with respect to the transaction contemplated
hereby and the discussions, undertakings and procedures leading thereto (irrespective of whether
the Bank has provided other services or is currently providing other services to the Issuer on other
matters); (iii) the only obligations the Bank has to the Issuer with respect to the transaction
contemplated hereby expressly are set forth in this Agreement; and (iv) the Issuer has consulted its
own legal, accounting, tax, financIal and other advisors, as applicable, to the extent it has deemed
appropriate.
Section 7.15 Patriot Act. The Bank hereby notifies the Issuer that pursuant to the
requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 signed into law October 26,
2001), the Bank may be required to obtain, verify and record information that identifies the Issuer,
which information includes the name and address of the Issuer and other information that will
allow the Bank to identify the Issuer in accordance with the Act. The Issuer is in compliance, in all
material respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign
assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter
V, as amended) and any other enabling legislation or executive order relating thereto, and (ii) the
Uniting And Strengthening America By Providing Appropriate Tools Required To Intercept And
Obstruct Terrorism (USA Patriot Act of2001). No part of the proceeds of the Loan will be used,
directly or indirectly, for any payments to any governmental official or employee, political party,
official of a political party, candidate for political office, or anyone else acting in an official
17
capaci1y, in order to obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended.
[Signature page follows]
18
IN WITNESS WHEREOF, the parties have executed this Agreement to be effective
between them as of the date of first set forth above.
CITY OF SOUTH MIAMI, FLORIDA
ATTEST:
By:=-:--cc-...,-, ________ _
~City Manager
B y:-=--:--::-:---::-:----:::-:---:--:-:::_:-=:--:-:-_
Clerk of the City of South Miami, Florida
READ AND APPROVED AS TOFORM AND SUFFICIENCY: FORM. READ AND
M.!'ROVED AS TO FORM
LANGUAGE AND EXECUTION THEREOF: AND LEGALITY:
By: By:
City Attorney Authorized Legal Representative
# 1 0482566 j!;I;
622301-87
SUNTRUST BANK
By: Titl-e-: ------------
EXHIBIT "A"
FORM OF NOTE
TAXABLE REVENUE NOTE, SERIES 2011
CITY OF SOUTH MIAMI, FLORIDA (the "Issuer"), a municipal corporation of the State
of Florida created and existing pursuant to the Constitution and the laws of the State of Florida, for
value received, promises to pay, but solely from the sources hereinafter provided, to the order of
SunTrust Bank or registered assigns (together with any other registered owner of this Note,
hereinafter, the "Bank"), the principal sum of No/IOO
Dollars ($ ) or such lesser amount as shall be outstanding hereunder, together with
interest on the principal balance outstanding at the Interest Rate (defined below) (subject to
adjustment as hereinafter provided), calculated based upon actual days elapsed in a year of 360
days consisting of twelve 30-day months, such amounts to be payable as provided herein. This
Note is issued pursuant to a Ordinance No. of the Issuer enacted on ,2011 (the
"Ordinance") and in conjunction with a Loan Agreement, dated as of 1, 2011, between
the Issuer and the Bank (the "Loan Agreement") and is subject to all the terms and conditions of
the Loan Agreement. All terms used herein in capitalized form and not otherwise defined herein
shall have the meanings ascribed thereto, or referenced, in the Loan Agreement. In addition, the
following terms shall have the meanings set forth below:
"Change in Law" means the occurrence, after the date of this Note, of any of the following:
(a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in law, rule,
regulation or treaty or in the administration, interpretation, implementation or application thereof
by any Governmental Authority, or (c) the making or issuance of any request, rule, guideline or
directive (whether or not having the force of law) by any Governmental Authority; provided that
notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, guidelines or directive thereunder or issued in
connection therewith and (ii) all requests, rules, guidelines or directives promUlgated by the Bank
for International Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or, pursuant to the accord commonly referred to as "Basel III," by the United
States or foreign regulatory authorities, shall in each case be deemed to be a "Change in Law,"
regardless of the date enacted, adopted or issued.
"Governmental Authority" shall mean the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Interest Rate" means a per annum rate equal to 4.55%, and subject to adjustment in
accordance with the terms set forth herein.
Principal of and interest on this Taxable Revenue Note, Series 2011 (the "Note") are
payable in immediately available funds constituting lawful money ofthe United States of America
at the Principal Office or such other place as the Bank may designate in writing to the Issuer.
The Issuer shall pay the Bank interest on the outstanding principal balance of this Note in
arrears, on each April I and October I, commencing October 1,2011. The principal amount of
this Note shall be payable in annual installments in the amounts and on the dates set forth on
Schedule A hereto, commencing on October I, 2012, and with the final principal installment
payable October 1,2026. Ifany date for the payment of principal or interest is not a Business Day,
such payment shall be due on the next succeeding Business Day.
All payments by the Issuer pursuant to this Note shall apply first to accrued interest, then to
other charges due the Bank, and the balance thereof shall apply to the principal sum due; provided,
however, in an Event of Default, payment shall be applied in accordance with Section 6.02 of the
Loan Agreement.
If, after the date of this Note, the Bank shall have reasonably determined that a Change in
Law shall have occurred that has or would have the effect of reducing the rate of return on the
Bank's capital, on this Note or otherwise, as a consequence of its ownership of this Note to a level
below that which the Bank could have achieved but for such adoption, change or compliance
(taking into consideration the Bank's policies with respect to capital adequacy) by an amount
deemed by the Bank to be material, then from time to time, promptly upon demand by the Bank,
the Issuer shall, and hereby agrees to, pay the Bank such additional amount or amounts as will
compensate the Bank for such reduction, provided that at such time the Bank shall generally be
assessing such amounts on a non-discriminatory basis against borrowers having loans similar to
the loan hereunder. A certificate of the Bank claiming compensation under this paragraph and
setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive absent
manifest error. In determining any such amount, the Bank may use any reasonable averaging and
attribution methods. The Bank shall notify the Issuer in writing of any adjustments pursuant to this
paragraph. Payments of principal or interest hereunder not paid within ten (10) days of the due
date shall be subject to a late payment charge of two percent (2%) of the amount of the late
payment and any amount not paid within thirty (30) days of when due shall bear interest at a rate
equal to the Interest Rate otherwise due hereunder plus four percent (4%) per annum until paid, but
in no event shall the rate of interest payable hereunder exceed the maximum lawful rate.
Notwithstanding any provision of this paragraph or any other provision hereofto the contrary, in
no event shall the Interest Rate on this Note exceed the maximum rate permitted by applicable law.
The principal amount of this Note may be prepaid in whole or in part at any time at the
option of the Issuer upon three (3) Business Days' prior written notice by the Issuer to the Bank
specifYing the amount of the prepayment which is to be applied, such prepayment to be in an
amount equal to the principal amount to be prepaid plus accrued interest thereon to the date of
prepayment and with a redemption premium equal to the present value of the difference between
(I) the amount that would have been realized by the Bank on the prepaid amount for the remaining
term of the loan at the Federal Reserve H.IS Statistical Release rate for fixed-rate payers in interest
rate swaps for a term corresponding to the term of this Note, interpolated to the nearest month, if
necessary, that was in effect three Business Days prior to the origination date of this Note and (2)
the amount that would be realized by the Bank by reinvesting such prepaid funds for the remaining
term of the loan at the Federal Reserve H.IS Statistical Release rate for fixed-rate payers in interest
rate swaps, interpolated to the nearest month, that was in effect three Business Days prior to the
loan repayment date; both discounted at the same interest rate utilized in determining the
applicable month in clause (2) above. Should the present value have no value or a negative value,
B-2
the Issuer may repay with no additional fee. Should the Federal Reserve no longer release rates for
fixed-rate payers in interest rate swaps, the Bank may substitute the Federal Reserve I-1.I5
Statistical Release with another similar index. The Bank shall provide the Issuer with a written
statement explaining the calculation of the premium due, which statement shall, in absence of
manifest error, be conclusive and binding.
The Issuer to the extent permitted by law hereby waives presentment, demand, protest and
notice of dishonor.
This Note is payable solely from the Pledged Funds to the extent provided in the Loan
Agreement and subject to the pledge of the Pledged Funds as more specifically provided in the
Ordinance and the Loan Agreement. Notwithstanding any other provision of this Note, the Issuer
is not and shall not be liable for the payment of the principal of and interest on this Note or
otherwise monetarily liable in connection herewith from any property other than as provided in the
Loan Agreement and the Ordinance.
NOTWITHSTANDING ANYTHING HEREIN OR IN THE LOAN AGREEMENT OR
THE ORDINANCE TO THE CONTRARY, THIS NOTE AND THE INTEREST HEREON
DOES NOT AND SHALL NOT CONSTITUTE A GENERAL INDEBTEDNESS OF THE
ISSUER BUT SHALL BE PAYABLE SOLELY FROM THE MONEYS AND SOURCES
DESIGNATED THEREFOR PURSUANT TO THE LOAN AGREEMENT AND THE
ORDINANCE. NEITHER THE FAITH AND CREDIT NOR ANY AD VALOREM TAXING
POWER OF THE ISSUER IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR
INTEREST ON THIS NOTE OR OTHER COSTS INCIDENTAL HERETO.
All terms, conditions and provisions of the Loan Agreement are by this reference thereto
incorporated herein as a part of this Note.
This Note may be exchanged or transferred but only as provided in the Loan Agreement.
It is hereby certified, recited and declared that all acts, conditions and prerequisites
required to exist, happen and be performed precedent to and in the execution, delivery and the
issuance of this Note do exist, have happened and have been performed in due time, form and
manner as required by law, and that the issuance of this Note is in full compliance with and does
not exceed or violate any constitutional or statutory limitation.
[Remainder of page intentionally left blank]
B-3
IN WITNESS WHEREOF, the Issuer has caused this Note to be executed in its name as of
the date hereinafter set forth.
The date of this Note is ______ , 20 II.
(SEAL)
Name:
Thle+
ATTEST: City Manager
By:-::;::--;--:;-;--;::::c--::-::;--;-:-;;---;-:::;--::-;--
Clerk of the City of South Miami, Florida
CITY OF SOUTH MIAMI, FLORIDA
By: ____________ _
READ AND APPROVED AS T04F:J,,0(,!1RM~. __ ~R;;gE;;!;.AMDekA~N~D:J,AMP;J;P£lR~O:d:VJ;;E~D:J,A;),,;S~T,blO~FO\,bRM~.
FORM AND SUFFICIENCY
LANGUAGE AND EXECUTION THEREOF: AND LEGALITY:
By: By:
City Attorney Authorized Legal Representative
B-4
Payment Date
(October 1)
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
TOTAL
SCHEDULE A
Principal Amount
$
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