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96-061 RESOLUTION NO. 96~1 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AVENTURA, FLORIDA AUTHORIZING THE EXECUTION AND DELIVERY OF A LINE OF CREDIT AGREEMENT BETWEEN THE CITY AND BARNETT BANK, N.A., SOUTH FLORIDA, PROVIDING FOR A LINE OF CREDIT OF NOT EXCEEDING $10,000,000; AUTHORIZING DRAWS THEREON AS NEEDED IN ORDER TO FINANCE THE ACQUISITION AND CONSTRUCTION OF VARIOUS CAPITAL IMPROVEMENTS WITHIN THE CITY; AUTHORIZING THE ISSUANCE OF A NOTE TO SECURE THE REPAYMENT OF THE INITIAL DRAW AND ALL FUTURE DRAWS UNDER THE LINE OF CREDIT; AUTHORIZING A PLEDGE OF THE CITY'S UTILITY TAX REVENUES AND PROVIDING FOR A COVENANT TO BUDGET AND APPROPRIATE CERTAIN LEGALLY AVAILABLE NON- AD VALOREM FUNDS TO PAY DEBT SERVICE ON SUCH NOTE; AUTHORIZING THE EXECUTION AND DELIVERY OF OTHER DOCUMENTS IN CONNECTION WITH THE DELIVERY OF THE LINE OF CREDIT AGREEMENT AND THE NOTE; AND PROVIDING FOR AN EFFECTIVE DATE FOR THIS RESOLUTION. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF AVENTURA, FLORIDA: SECTION 1. AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted pursuant to the provisions of Chapter 166, Florida Statutes, Ordinance No. 96-31 duly adopted on December 3, 1996 (the "Ordinance"), Resolution No. 96-58 adopted on December 3, 1996 and other applicable provisions of law. SECTION 2. FINDINGS. It is hereby ascertained, determined and declared: (A) That pursuant to a request for proposals the City requested proposals from banks to provide the City with a $10,000,000 line of credit, the proceeds of which would be applied to finance, refinance or reimburse the costs of various capital improvements within the City in accordance with the terms of the Ordinance. (B) That Barnett Bank, N.A.("the Bank") submitted the most beneficial proposal for the line of credit. (C) That on December 3, 1996, the City adopted a Resolution accepting the proposal of the Bank and authorizing the City Manager to negotiate the appropriate documentation with the Bank. (D) The Bank and representatives of the City have negotiated a Line of Credit Agreement with the Bank substantially in the form of Exhibit A attached hereto and made a part hereof (the "Line of Credit Agreement"). (E) That there is presently a need to acquire and construct certain capital improvements within the City, as more particularly described on Exhibit B attached hereto and all in accordance with the plans and specifications on file or to be on file with the City, as the same may be modified from time to time (the "Project"). (F) That the costs of the Project in an aggregate amount not to exceed $10,000,000 shall be financed from amounts drawn on the line of credit pursuant to this Resolution and the Line of Credit Agreement. (G) That the amounts to be drawn on the line of credit pursuant to this Resolution and the Line of Credit Agreement shall be repaid solely from the Utility Tax Revenues and any Non-Ad Valorem Funds (as defined in the Line of Credit Agreement) budgeted for such purpose, in the manner provided herein, in the Ordinance and in the Line of Credit Agreement. (H) That it is not reasonably anticipated that more than $10,000,000 of tax-exempt obligations under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code") will be issued by the City in calendar year 1996. SECTION 3. DEFINITIONS. Capitalized terms not defined herein shall have the meanings ascribed thereto in the Ordinance and the Line of Credit Agreement. SECTION 4. AUTHORIZATION OF LINE OF CREDIT AGREEMENT. Draws under the line of credit with the Bank and the repayment of such draws by the City shall be pursuant to the terms and provisions of the Line of Credit Agreement. The City hereby authorizes the City Manager and the City Clerk or any designated Deputy City Clerk to execute and deliver on behalf of the City the Line of Credit Agreement by and between the City and the Bank substantially in the form attached hereto as Exhibit A, with such changes, insertions and additions as they may approve, their execution thereof being evidence of such approval. 2 SECTION 5. AUTHORIZATION OF THE PROJECT. The City does hereby authorize the acquisition and construction of the Project. SECTION 6. AUTHORIZATION OF DRAWS ON THE LINE OF CREDIT TO FINANCE A PORTION OF THE COSTS OF THE PROJECT. The City does hereby approve draws on the line of credit in the aggregate principal amount of not exceeding $10,000,000 for the purpose of providing the City with funds to £mance a portion of the costs of the Project. The City Manager and the City Clerk or any designated Deputy City Clerk are hereby authorized to execute, attest, seal and deliver on behalf of the City a Note and other documents, instruments, agreements and certificates necessary or desirable to effectuate such draw, as provided in the Line of Credit Agreement. The draw shall be made at such time or times as shall be determined by the City Manager, or his designee. The Note securing the Draw shall bear interest at the Tax-Exempt Rate (as defined in the Line of Credit Agreement) and shall have a Final Maturity Date of December 30, 1999. SECTION 7. DESIGNATION OF NOTE AS QUALIFIED TAX-EXEMPT OBLIGATION. The City hereby designates the Note as a "qualified tax-exempt obligation" under Section 265(b)(3) of the Code. This designation is based upon the findings of the City set forth in Section 2(H) of this Resolution and the City Manager is authorized to certify such finding upon the issuance of the 1996 Note. The City acknowledges that any action which adversely impacts the status of the 1996 Note securing such draw as a "qualified tax-exempt obligation" will result in an upward adjustment to the interest rate on such 1996 Note. SECTION 8. LIMITED OBLIGATIONS. The obligation of the City to repay all draws authorized hereunder is a limited and special obligation payable solely f~om the Pledged Revenues and Non Ad Valorem Funds (as de£med in the Line of Credit Agreement") in the manner and to the extent set forth in the Line of Credit Agreement and shall not be deemed a pledge of the faith and credit or taxing power of the City and such obligation shall not create a lien on any property whatsoever of or in the City. SECTION 9. GENERAL AUTHORIZATION. The City Manager, Finance Director and City Clerk and other employees or agents of the City are authorized to execute and deliver such documents, instruments and contracts, and are hereby authorized and directed to do all acts and things required hereby as may be necessary for the full, punctual and complete performance of all the terms, covenants, provisions and agreements herein contained, or as otherwise may be necessary or desirable to effectuate the purpose and intent of this Resolution. 3 SECTION10. REPEAL OF INCONSISTENT DOCUMENTS. All ordinances, resolutions or parts thereof in conflict herewith are hereby superseded and repealed to the extent of such conflict. SECTION 11. EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption. The foregoing Resolution was offered by Council member Beskin , who moved its adoption on first reading. The motion was seconded by Cotnc±lmamber and upon being put to a vote, the vote was as follows: Rogers-Libert Councilmember Jay Beskin Councilmember Ken Cohen yes Councilmember Harry Holzberg yes Councilmember Jeffrey Perlow yes Councilmember Patricia Rogers-Libert yes Vice Mayor Arthur Berger yes Mayor Arthur I. Snyder absent PASSED AND ADOPTED this 17th day of December, 1996. TERESA M. SMITH, CMC, CITY CLERK APPROVED AS TO FORM AND LEGAL SUFFICIENCY: CITY RTTOKNEY 4 EXHIBIT A FORM OF LINE OF CREDIT AGREEMENT EXHIBIT B DESCRIPTION OF THE PROJECTS Complete descriptions of the Projects are set forth in the plans, specifications and records of the City. A general description of the Projects is as follows: A. Land. The pumhase of real property within the City to be used for municipal purposes such as (i) parks and recreation and (ii) the location of other City facilities including, without limitation, a City administrative complex and police station. B. Buildings and Other Improvements. The acquisition, construction, equipping and installation of improvements on or to the real property described above including, without limitation, municipal parks and facilities to house City government and police. EXHIBIT A FORM OF LINE OF CREDIT AGREEMENT LINE OF CREDIT AGREEMENT BETWEEN CITY OF AVENTURA, FLORIDA AND BARNETT BANK, N.A. Dated as of December 20, 1996 TABLE OF CONTENTS Page ARTICLE I DEFINITION OF TERMS SECTION 1.01 DEFINITIONS ....................................... 2 SECTION 1.02. INTERPRETATION ................................... 5 SECTION 1.03. TITLES AND HEADINGS .............................. 6 ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS; SECURITY FOR NOTE SECTION 2.01. REPRESENTATIONS BY THE CITY ..................... 7 SECTION 2.02. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BANK .......................... 8 SECTION 2.03. TAX COVENANTS ................................... 8 SECTION 2.04. NOTE NOT TO BE INDEBTEDNESS OF THE CITY OR STATE ..................................... 8 SECTION 2.05. SECURITY FOR NOTE ................................ 9 SECTION 2.06 COVENANT TO BUDGET AND APPROPRIATE ........... 9 SECTION 2.07. ISSUANCE OF ADDITIONAL PARITY OBLIGATIONS ..... 10 SECTION 2.08. PAYMENT COVENANT .............................. 10 SECTION 2.09. TAXING POWER NOT PLEDGED ...................... 10 ARTICLE III DESCRIPTION OF NOTE; PAYMENT TERMS; OPTIONAL PREPAYMENT SECTION 3.01. DESCRIPTION AND PAYMENT TERMS OF THE NOTE ... 11 SECTION 3.02. OPTIONAL PREPAYMENT ........................... 12 SECTION 3.03. ADJUSTMENTS TO INTEREST RATES ................. 13 ARTICLE IV CONDITIONS FOR DRAWS SECTION 4.01. CONDITIONS FOR DRAWS ........................... 17 ARTICLE V EVENTS OF DEFAULT; REMEDIES SECTION 5.01. EVENTS OF DEFAULT .............................. 20 SECTION 5.02. REMEDIES ........................................ 20 ARTICLE VI MISCELLANEOUS SECTION 6.01. AMENDMENTS, CHANGES OR MODIFICATIONS TO THE AGREEMENT ...................................... 22 SECTION 6.02. COUNTERPARTS ................................... 22 SECTION 6.03. SEVERABILITY .................................... 22 SECTION 6.04. TERM OF AGREEMENT ............................. 22 SECTION 6.05. ASSIGNMENT ...................................... 22 SECTION 6.06. NOTICE OF CHANGES 1N FACT ....................... 22 SECTION 6.07. NOTICES .......................................... 23 SECTION 6.08. APPLICABLE LAW .................................. 23 SECTION 6.09. NO THIRD-PARTY BENEFICIARIES ................... 23 SECTION 6.10. INCORPORATION BY REFERENCE .................... 23 EXHIBIT A THE PROJECTS ..................................... A- 1 EXHIBIT B FORM OF NOTE .................................... B- 1 ii This LINE OF CREDIT AGREEMENT (the "Agreement") is made and entered into as of December 20, 1996, between City of Aventura, Florida, a municipal corporation duly organized and validly existing under the laws of the State of Florida (the "City"), and Barnett Bank, N.A., a national banking corporation, and its successors and assigns (the "Bank"); WITNESSETH: WHEREAS, the City is authorized by the provisions of Chapter 166, Florida Statutes, the Ordinance (as defined herein), and other applicable provisions of law (the "Act") to, among other things, acquire, construct, equip, own, sell, lease, operate and maintain various improvements and public facilities to promote the welfare and economic prosperity of the residents of the City and to borrow money to finance the acquisition, construction, equipping and maintenance of such improvements and public facilities; and WHEREAS, the City finds it necessary and in the best interests of the City to fmance the acquisition, construction and equipping of certain capital improvements as more particularly described on Exhibit A attached hereto and all incidental costs relating thereto (the "Projects"); and WHEREAS, the City finds that the Projects will serve a public purpose under the Act; and WHEREAS, the Bank is willing to make available to the City, and the City is willing to enter into, a non-revolving line of credit arrangement pursuant to the terms and provisions of this Agreement in an aggregate principal amount of not exceeding $10,000,000 (unless the Bank and the City mutually agree pursuant to Section 4.01(c) hereof to adjust such limit upward) under which the City may draw moneys from time to time to finance, refinance or reimburse itself for the costs of the Projects. NOW, THEREFORE, THIS AGREEMENT WITNESSETH: That the parties hereto, intending to be legally bound hereby and in consideration of the mutual covenants hereinafter contained, DO HEREBY AGREE as follows: ARTICLE I DEFINITION OF TERMS SECTION 1.01 DEFINITIONS. The terms def'med in this Article I shall, for all purposes of this Agreement, have the meanings in this Article I specified, unless the context clearly other, vise requires. "Act" shall mean Chapter 166, Florida Statutes, the Ordinance and other applicable provisions of law. "Agreement" shall mean this Line of Credit Agreement, dated as of December 20, 1996, between the City and the Bank and any and all modifications, alterations, amendments and supplements hereto made in accordance with the provisions hereof. "Bank" shall mean Barnett Bank, N.A., and any successors and assigns. "Bond Counsel" shall mean Nabors, Giblin & Nickerson, P.A., Tampa, Florida or any other attorney at law or firm of attorneys selected by the City with the consent of the Bank, of nationally recognized standing in matters pertaining to the federal tax exemption of interest on obligations issued by states and political subdivisions, and duly admitted to practice law before the highest court of any state of the United States of America. "Business Day" or "business day" shall mean any day other than a Saturday, Sunday or a day on which banking institutions within the State or the City are authorized by law to remain closed. "City" shall mean the City of Aventura, Florida, a municipal corporation duly organized and validly existing under the laws of the State of Florida. "City Manager" shall mean the City Manager of the City of Aventura, Florida and such other person as may be duly authorized to act on his or her behalf. "Clerk" shall mean the City Clerk of the City of Aventura, Florida and such other person as may be duly authorized to act on his or her behalf. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the applicable rules and regulations promulgated thereunder. "Cost" or Costs," as the same relates to all or a portion of the Projects, shall mean (1) the cost of physical construction, reconstruction or completion; (2) the cost of acquisition 2 or purchase; (3) the cost of all labor, materials, machinery and equipment; (4) the cost of land and interests therein, property rights, easements and franchises of any nature whatsoever; (5) the cost of any indemnity and surety bonds and premiums for insurance during construction; (6) all interest due to be paid on the Note and any other obligations relating to a Project during the period of conslxuction and for such period of time subsequent to completion of acquisition and construction as the Council deems appropriate; (7) engineering, fmancial, legal and other consultant fees and expenses; (8) the cost of plans and specifications, constmction plans, surveys and estimates of costs; (9) costs and expenses of audits, fees and expenses of any paying agent, registrar, trustee, issuer of a credit facility or a liquidity facility, insurance company or depository; (10) payments, when due (whether at the maturity of principal or the due date of interest or upon redemption) on any interim or temporary indebtedness incurred for any portion of a Project; (1 I) costs and expenses related to the issuance of the Note or other indebtedness related to a Project; and (12) any other costs and expenses properly attributable to acquisition or construction of a Project, and such other expenses as may be necessary or incidental to the issuance of the Note; and shall include reimbursement to the City or any other person, firm or corporation for any moneys advanced for any costs incurred by the City or such person, finn or corporation in connection with any such items of costs. "Council" shall mean the City Council of the City of Aventura, Florida. "Determination of Taxability" shall mean the circumstance of interest paid or payable on the Note becoming includable for federal income tax purposes in the gross income of the Noteholder as a consequence of any act, omission or event whatsoever and, except as provided in Section 3.03(b)(2) hereof, regardless of whether the same was within or beyond the control of the City. A Determination of Taxability will be deemed to have occurred upon (a) the receipt by the City or the Noteholder of an original or a copy of an Internal Revenue Service Technical Advice Memorandum or Statutory Notice of Deficiency which holds that any interest payable on the Note is includable in the gross income of such Noteholder; (b) the issuance of any public or private ruling of the Internal Revenue Service that any interest payable on the Note is includable in the gross income of the Noteholder; or (c) receipt by the City or the Noteholder of an opinion of Bond Counsel that any interest on the Note has become includable in the gross income of the Noteholder for federal income tax purposes. For all purposes of this definition, a Determination of Taxability will be deemed to occur on the date as of which the interest on the Note is deemed includable in the gross income of the Noteholder; provided, however, the Bank shall in all cases grant the City a reasonable opportunity to contest any memoranda, notice, ruling or opinion described in clauses (a), (b) or (c) above before a Determination of Taxability will be deemed to have occurred, but, if unsuccessful, such Determination of Taxability shall be retroactive to the apphcable date under clauses (a), (b) or (c) above. A Determination of Taxability shall not occur in the event such interest is taken into account in determining adjusted current earnings for the purpose of the alternative minimum income tax imposed on corporations. "Draw" or "Drawing" shall mean a borrowing of money under this Agreement in accordance with Article IV hereof. "Federal Rate" shall mean, at any time, the then-current maximum marginal rate of federal corporate income taxation imposed pursuant to the Code. "Final Maturity Date" shall mean, December 30, 1999, the date on which all of the principal and the final payment of interest on the Note is due and payable. The Final Maturity Date may be extended by the mutual consent of the Bank and the City in accordance with Section 6.04 hereof. "Finance Director" shall mean the Finance Director of the City of Aventura, Florida and such other person as may be duly authorized to act on his or her behalf. "Fiscal Year" shall mean the period commencing on October 1 of each year and continuing through the next succeeding September 30, or such other period as may be prescribed by law. "Non-Ad Valorem Funds" shall mean all revenues of the City for any particular Fiscal Year derived from any source whatsoever other than ad valorem taxation on real or personal property, which are legally available to make the payments required herein, but only after provision has been made by the City for the payment of all essential or legally mandated services in such Fiscal Year. "Note" shall mean the revenue note authorized by Resolution and delivered by the City to the Noteholder in connection with the initial Drawing as modified from time to time to reflect additional Drawings, all in accordance with the requirements set forth in Article IV hereof. "Noteholder," "holder of the Note" or "holder" shall mean the Bank as the holder of the Note, or any other registered holder of or participant in any Note. "Noteholder's Adjusted Cost of Funds" shall mean the fraction (expressed as a percentage), determined by Barnett Banks, Inc., the numerator of which is the total interest expense of the Noteholder for each calendar year and the denominator of which is the total average adjusted bases of all assets of the Noteholder during the calendar year as determined under Section 265(b)(2)(B) of the Code or any successor provision thereto. "Ordinance" shall mean the City's Ordinance No. 96-31 adopted on December 3, 1996. 4 "Pledged Revenues" shall mean with respect to any Project (1) amounts deposited in the funds and accounts established for the benefit of the Noteholder(s), including any investment earnings thereon, other than the rebate account, if any; and (2) the Utility Tax Revenues. "Projects" shall mean those capital improvement projects set forth in the plans and specifications on file or to be on file with the City, as the same may be modified or amended from time to time. A general description of the Projects is provided in Exhibit A attached hereto. "Resolution" shall mean Resolution No. 96- adopted by the City on December 17, 1996, which among other things authorized the execution and delivery of this Agreement. The term "Resolution" shall also include any and all subsequent resolutions of the City adopted for the purpose of authorizing the issuance of Drawings hereunder for the purpose of financing or refinancing a portion of the costs of the Projects. "State" shall mean the State of Florida. "State Rate" shall mean, at any time, the then-current maximum marginal rate of corporate income tax imposed by the State. "Tax-Exempt Rate" shall mean 4.58% per annum. "Tax Certificate" shall mean the Certificate as to Arbitrage and Certain Other Tax Matters, or a similar certificate, to be executed by the City relating to a Note, as such Certificate may be amended from time to time, as a source of guidance for achieving compliance with the Code, as required by Section 2.03 hereof. "Taxable Rate" shall mean 9% per annum. "Utility Tax Ordinance" shall mean City Ordinance 96-03 adopted by the City on May 7, 1996, as amended, and any successor instrument thereto. "Utility Tax Revenues" shall mean the revenues received by the City from the levy of a utility tax on utility and telecommunication services within the City in accordance with Section 166.231, Florida Statutes, and the Utility Tax Ordinance. SECTION 1.02. INTERPRETATION. Unless the context clearly requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be constnted to include correlative words of the plural number and vice versa. Any capitalized terms used in this Agreement not herein defined shall have the meanings ascribed to such 5 terms in the Ordinance. This Agreement and all the terms and provisions hereof shall be construed to effectuate the purposes set forth herein and to sustain the validity hereof. SECTION 1.03. TITLES AND HEADINGS. The rifles and headings of the articles and sections of this Agreement, which have been inserted for convenience of reference only and are not to be considered a part hereof, shall not in any way modify or restrict any of the terms and provisions hereof, and shall not be considered or given any effect in construing this Agreement or any provision hereof or in ascertaining intent, if any question of intent should arise. 6 ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS; SECURITY FOR NOTE SECTION 2.01. REPRESENTATIONS BY THE CITY. The City represents, warrants and covenants that: (a) The City is a municipal corporation duly organized and validly existing under the laws of the State. Pursuant to the Ordinance and the Resolution, the City (i) has duly authorized the execution and delivery of (i) this Agreement, and the performance by the City of all of its obligations hereunder, and (ii) the Note to be issued hereunder, and the performance by the City of all its obligations relating thereto. (b) The City has complied with all of the provisions of the constitution and laws of the State, and has full power and authority to enter into and consummate all transactions contemplated by this Agreement or under the Note, and to perform all of its obligations hereunder and, to the best knowledge of the City, the transactions contemplated hereby do not conflict with the terms of any statute, order, role, regulation, judgment, decree, agreement, instrument or commitment to which the City is a party or by which the City is bound. (c) The City is duly authorized and entitled to issue the Note. The Agreement and, when issued in accordance with the terms of this Agreement, the Note will each constitute legal, valid and binding obligations of the City enforceable in accordance with their respective terms, subject as to enforceability to bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors' rights generally, or by the exercise of judicial discretion in accordance with general principles of equity or public policy. (d) There are no actions, suits or proceedings pending or, to the best knowledge of the City, threatened against or affecting the City, at law or in equity, or before or by any governmental authority, that, ff adversely determined, would materially impair the ability of the City to perform the City's obligations under this Agreement or under the Note. (e) The City will furnish to the Bank within 120 days of each Fiscal Year annual audited financial statements of the City certified by an independent certified public accountant. (f) The City will furnish to the Bank (i) within 30 days after its adoption in each fiscal year a copy of the City's tentative budget, and (ii) within 30 days after its adoption in each fiscal year a copy of the City's final budget. 7 (g) The City will furnish to the Bank such other financial information relating to the Pledged Revenues as may be reasonably requested by the Bank. SECTION 2.02. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF TItE BANK. (a) The Bank hereby represents, warrants and agrees that it is a national banking association authorized to execute and deliver this Agreement and to perform its obligations hereunder, and such execution and delivery will not constitute a violation of its charter, articles of incorporation or bylaws. (b) Pursuant to the terms and provisions of this Agreement, the Bank agrees to establish a line of credit on behalf of the City pursuant to which it will make one or more loans to the City for the purpose of financing, refinancing or reimbursing the Costs of the Projects. SECTION 2.03. TAX COVENANTS. (a) The City hereby covenants with the Noteholder that in order to maintain the exclusion from gross income for purposes of Federal income taxation of interest on the Note, it shall comply with each requirement of the Code applicable to the Note. In furtherance of the covenant contained in the preceding sentence, the City agrees to continually comply with the provisions of the Certificate as to Arbitrage and Other Tax Matters to be executed by the City at the time the Note is issued, as such certificate may be amended from time to time, as a source of guidance for achieving compliance with the Code (herein referred to as the "Tax Certificate"). (b) The City hereby covenants with the holder of the Note that it shall make any and all payments required to be made to the United States Depm'tment of the Treasury in connection with the Note pursuant to Section 148(0 of the Code. (c) So long as necessary in order to maintain the exclusion from gross income of interest on the Note for Federal income tax purposes, the covenants contained in this Section 2.03 shall survive the payments of the Note and the interest thereon, including any pre- payment or defeasance thereof. (d) The City hereby covenants with the holder of the Note that it shall not take or permit any action or fail to take any action which would cause the Note to be "arbitrage bonds" within the meaning of Section 148(a) of the Code. SECTION 2.04. NOTE NOT TO BE INDEBTEDNESS OF TIlE CITY OR STATE. The Note, when delivered by the City pursuant to the terms of this Agreement, shall not be or constitute an indebtedness of the City, the State of Florida or any political subdivision or agency thereof; within the meaning of any constitutional, statutory or charter limitations of indebtedness, but shall be payable solely as herein provided. No Noteholder shall ever have the right to compel the exercise of the ad valorem taxing power of the City, 8 or taxation in any form on any property therein to pay the Note or the interest thereon. The Note are special and limited obligations payable as to principal and interest from the Pledged Revenues and Non Ad Valorem Funds in the manner and to the extent provided herein. SECTION 2.05. SECURITY FOR NOTE. The Note shall be secured by a lien on and pledge of the Pledged Revenues and the City hereby grants such lien and pledge for the benefit of the Noteholder. The pledge of and lien on the Pledged Revenues shall attach at the time of delivew of the Note. SECTION 2.06 COVENANT TO BUDGET AND APPROPRIATE. (a) Until the Note is fully paid or deemed paid pursuant to the provisions of this Agreement, the City hereby additionally covenants to appropriate in its annual budget, by amendment if necessary, from Non-Ad Valorem Funds lawfully available in each fiscal year of the City in which principal or interest on the Note becomes due and payable, amounts sufficient, together with other available moneys, to pay the principal of and interest on the Note, as the same become due (whether by redemption, at maturity or otherwise) to the extent the Pledged Revenues are not otherwise sufficient for such purpose. Such covenant and agreement on the part of the City to budget and appropriate such amounts of Non-Ad Valorem Funds shall be cumulative to the extent not paid, and shall continue until such Non- Ad Valorem Funds or other legally available funds in amounts sufficient to make all such required payments hereunder and under the Note shall have been budgeted, appropriated and actually paid. Notwithstanding the foregoing covenant of the City, the City does not covenant to maintain any senrices or programs, now provided or maintained by the City, which generate Non-Ad Valorem Funds. (b) Such covenant to budget and appropriate does not create any lien upon or pledge of such Non-Ad Valorem Funds, nor does it preclude the City from pledging in the future its Non-Ad Valorem Funds, nor does it require the City to levy and collect any particular Non-Ad Valorem Funds, nor does it give the Noteholder a prior claim on the Non- Ad Valorem Funds as opposed to claims of general creditors of the City. Such covenant to budget and appropriate Non-Ad Valorem Funds is subject in all respects to the payment of obligations secured by a pledge of such Non-Ad Valorem Funds heretofore or hereinafter entered into (including the payment of debt service on bonds and other debt instruments). Such covenant to budget and appropriate Non-Ad Valorem Funds shall not in any way detract fromthe pledge ofandlien onthe Pledged Revenues provided herein. However, the covenant to budget and appropriate in its general annual budget for the purposes and in the manner stated herein shall have the effect of making available for the payment of the principal of and interest on the Note in the manner described herein Non-Ad Valorem Funds and placing on the City a positive duty to appropriate and budget, by amendment, if necessary, amounts sufficient to meet its obligations hereunder; subject, however, in all respects to the restrictions of Section 166.241(3), Florida Statutes, which provides, in part, that the governing body of each municipality make appropriations for each fiscal year which, 9 in any one year, shall not exceed the amount to be received from taxation or other revenue sources; and subject, further, to the payment of services and programs which are for essential public purposes affecting the health, welfare and safety of the inhabitants of the City or which are legally mandated by applicable law. SECTION 2.07. ISSUANCE OF ADDITIONAL PARITY OBLIGATIONS. The City hereby covenants to not issue any additional obligations that are payable from Utility Tax Revenues on a parity with the Note without the prior written consent of the Bank, which consent shall not be unreasonably withheld. The City may issue obligations that are payable in whole or in part from Utility Tax Revenues and which may be secured by a pledge of such Utility Tax Revenues; provided, however, that such pledge shall be, and shall be expressed to be, subordinated in all respects to the pledge of the Utility Tax Revenues created by this Agreement. SECTION 2.08. PAYMENT COVENANT. The City covenants that it shall duly and punctually pay from the Pledged Revenues the principal of and interest on the Note at the dates and place and in the manner provided herein and in the Note according to the true intent and meaning thereof and all other amounts due under this Agreement. The City covenants to maintain a ratio of (x) Utility Tax Revenues to (y) the interest portion only of annual debt service on the Note, in each Fiscal Year of not less than 1.0 to 1.0. SECTION 2.09. TAXING POWER NOT PLEDGED. The Note and any other obligations of the City hereunder shall not be deemed to constitute a pledge of the faith and credit of the City, but shall be payable solely from the Pledged Revenues in the manner provided herein. The issuance of the Note shall not directly, indirectly or contingently obligate the City to levy or to pledge any form of ad valorem taxation whatever therefore. The holder of the Note shall never have the right to compel any exercise of the ad valorem taxing power on the part of the City to pay the Note or any other obligations hereunder or the interest thereon against any property of the City, nor shall the Note constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, except the Pledged Revenues. 10 ARTICLE III DESCRIPTION OF NOTE; PAYMENT TERMS; OPTIONAL PREPAYMENT SECTION 3.01. DESCRIPTION AND PAYMENT TERMS OF THE NOTE. (a) In connection with the initial Draw pursuant to Article IV of this Agreement, the City shall, pursuant to authority granted under the Act and the Resolution, issue and deliver the Note to the Bank, which Note shall evidence the City's obligation to pay all of the principal of and interest on all Drawings hereunder and to pay all other amounts due and owing by the City hereunder or under the Note. All Drawings hereunder shall not exceed TEN MILLION AND 00/100 DOLLARS ($10,000,000) in aggregate principal amount; provided, however, the Bank and the City may mutually agree to increase such maximum amount pursuant to Section 4.01(c) hereof. Any payment or prepayment of principal on the Note shall not increase or reinstate any amounts available to be drawn hereunder. The Note shall be designated as "City of Aventura, Florida Line of Credit Revenue Note (Barnett Bank, N.A.)." The text of the Note shall be substantially m the form attached hereto as Exhibit B, with such omissions, insegions and variations as may be necessary and desirable to reflect the terms of the Note. The provisions of the form of the Note are hereby incorporated in this Agreement. (b) The Note shall be dated the date of its initial delivery and shall bear interest fxom its date at the Tax-Exempt Kate, or as the same may be adjusted pursuant to Section 3.01(f) or 3.03 hereofi The Note shall be executed in the name of the City by the manual signature of the City Manager and the official seal of the City shall be affixed thereto and attested by the manual signature of the Clerk or any designated Deputy City Clerk. In case any one or more of the officers, who shall have signed or sealed the Note, shall cease to be such officer of the City before the Note so signed and sealed shall have been actually delivered, such Note may nevertheless be delivered as herein provided and may be issued as if the person who signed or sealed such Note had not ceased to hold such office. The Note may be signed and sealed on behalf of the City by such person who at the actual time of the execution of the Note shall hold the proper office, although at the date the Note shall actually be delivered, such person may not have held such office or may have been so authorized. (c) Interest on the Note shall be payable semi-annually, on July 1 and January 1 of each year, and on its Final Maturity Date, commencing on July 1, 1997. Principal of the Note shall be payable upon presentment of the Note by the Bank to the City at the Final Maturity Date or earlier prepayment. Interest on a Note shall be calculated on the basis of a 360-day year, actual number of days elapsed. 11 (d) All payments of principal of and interest on the Note shall be payable in any coin or currency of the United States which, at the time of payment, is legal tender for the payment of public and private debts and shall be made to the Bank (i) in immediately available flmds, (ii) by delivering to the Bank no later than each payment date a check drawn on an account at any bank that is a member of the Barnett Bank, Inc. system, or (iii) in such other manner as the City and the Bank shall agree upon in writing. (e) In the event the maturity of the Note is accelerated or prepaid in accordance with the provisions hereof, then such amounts that constitute payments of interest, together with any costs or considerations which constitute interest under the laws of the State of Florida, may never exceed an amount which would result in payment of interest at a rate in excess of the nonusurious interest allowed by the laws of the State of Florida or the United States to the extent applicable, as presently in effect and to the extent an increase is allowable by such laws; and excess interest, if any, shall be cancelled automatically as of the date of such acceleration, or, if theretofore paid, shall be credited on the principal amount of the Note unpaid, but such crediting shall not cure or waive any default under this Agreement. (f) hi the event of a Determination of Taxability, the interest rate on the Note shall be changed to the Taxable Rate effective retroactively to the date on which such Determination of Taxability was made. Immediately upon a Determination of Taxability, the City agrees to pay to the Noteholder subject to such Determination of Taxability the Additional Amount (as defined herein). "Additional Amount" means (i) the difference between (A) interest on the Note for the period commencing on the date on which the interest on the Note (or portion thereof) loses its tax-exempt status and ending on the earlier of the date such Draw ceased to be outstanding or such adjustment is no longer applicable to such Draw (the "Taxable Period") at a rate per annum equal to the Taxable Rate as adjusted from time to time on the same dates and In the same manner as the interest rate on the Note was or would be adjusted pursuant to the provisions of the Note, and (B) the aggregate amount of interest payable on the Note for the Taxable Period under the provisions of the Note without considering the Determination of Taxability, plus (ii) any penalties and interest paid or payable by the Noteholder to the Internal Revenue Service by reason of such Determination of Taxability. (g) There will be no Bank fees to maintain the line of credit and no draw fees thereunder. The Bank shall pay for all of its costs relating to servicing the line of credit. The City agrees to pay the Bank legal fees in an amount not to exceed $2,500 plus actual documented expenses not to exceed $500, within 30 days from the date the first Draw is made hereunder. SECTION 3.02. OPTIONAL PREPAYMENT. The City may prepay and redeem the Note as a whole or in part, at any time or from time to time, without penalty or 12 premium, by paying to the Noteholder ail or part of the principal amount of the Note to be prepaid, together with the unpaid interest accrued on the amount of principal so prepaid to the date of such prepayment. Each prepayment of the Note shall be made on such date and in such principai amount as shail be specified by the City in a written notice delivered to the Noteholder not less than five (5) Business Days prior thereto specifying the principai amount of the Note to be prepaid and the date of such prepayment. Notice having been given as aforesaid, the principai amount of the Note stated in such notice or the whole thereof, as the case may be, shall become due and payable on the prepayment date stated in such notice, together with interest accrued and unpaid to the prepayment date on the principai amount then being paid; and the amount ofprincipai and interest then due and payable shail be paid (a) in case the entire unpaid baiance of the principai of the Note is paid, the Bank shail return the Note to the City marked "Paid" upon receipt of payment from the City of all amounts due and owing hereunder on the date specified for prepayment, and (b) in case only part of the unpaid baiance ofprincipai of any Note is to be paid, the Bank shail make a notation on the Note of the amount of principai and interest then prepaid by the City on such prepayment date. If on the prepayment date moneys for the payment of the principai amount to be prepaid on the Note, together with interest to the prepayment date on such principal amount, shall have been paid to the Noteholder as above provided and if notice of prepayment shall have been given to the Noteholder as above provided, then from and after the prepayment date interest on such principai amount of the Note shail cease to accrue. If said moneys shall not have been so paid on the prepayment date, such principal amount of the Note shall continue to bear interest until payment thereof at the rate or rates provided for in this Agreement. The provisions of this Agreement establish a "non-revolving" line of credit, i.e., amounts that are drawn hereunder and subsequently repaid may not be reborrowed unless the parties hereto agree to increase the borrowing limit pursuant to Section 4.01(c) hereof. SECTION 3.03. ADJUSTMENTS TO INTEREST RATES. (a) The interest rate on the Note shail be subject to adjustment as described in this Section from the date of its issuance. The Bank shall promptly notify the City in writing of any adjustments for Note pursuant to this Section. Any adjustments under this Section 3.03 may be made only after the Bank has provided the City 30 days written notice of such adjustments. The adjustments shail be retroactive. (b) Subject to the provisions of Section 3.03(a) above, the interest rate on the Note shall be adjusted as follows: (1) Change in Tax Laws Regarding Deductions. If the portion of the interest expense incurred or deemed to have been incurred because the Noteholder holds the Note (the "Related Interest") and which would on the date of issuance of the Note be allowable as a deduction to the Noteholder during any period is decreased 13 below 80% because of any change in the tax laws or regulations, or because the Note is not or ceases to be qualified as a "qualified tax-exempt obligation" under Section 265(b)(3)(B) of the Code, then the interest rate on the Note otherwise applicable during such period shall be increased each calendar year by a percentage amount equal to (A - .20) x B x C where: (a) A equals the fraction (expressed as a decimal) of the Related Interest not allowable as a deduction to the Noteholder after the effective date of the change or loss of "qualified" status; (b) B equals the maximum corporate tax rate then in effect (expressed as a decimal); (c) C equals the Noteholder's Adjusted Cost of Funds. (2) Alternative Minimum Tax Where Interest on the Note is a Direct Tax Preference Item..If the Noteholder or its parent holding company pays an alternative minimum tax in any tax year and the interest on the Note is a direct tax preference item under section 57(a)(5) or any successor provision of the Code then the interest rate on the Note for the period during such tax year in which interest is accruing on the Note shall he increased during such accrual period by an amount equal to (A - B) x C where: (i) A equals the interest rate on the Note expressed as a percentage; (ii) B equals the Noteholder's Adjusted Cost of Funds; and (iii) C equals the maximum marginal rate of the alternative minimum tax expressed as a decimal (currently .20); (3) Alternative Mil~imum Tax Where Interest on the Note is an Indirect Tax Preference Item. If the Noteholder or its holding company pays an alternative mimmum tax in any tax year and the interest on the Note is not a direct tax preference item under section 57(a)(5) or any successor provision of the Code, but is an indirect tax preference item because of the application of section 56(g) or any successor provision of the Code then the interest rate on the Note for the period during such tax year in which interest is accruing on the Note shall be increased during such accrual period by an amount equal to (A - B) x C where: (i) A equals the interest rate on the Note expressed as a percentage; (ii) B equals the Noteholder's Adjusted Cost of Funds; and 14 (iii) C equals 75% of the maximum marginal rate of the alternative minimum tax expressed as a decimal, or, if the Code is amended to effectively increase or decrease the percentage of interest on the Note which is subject to such indirect alternative minimum tax, then C shall equal the percentage of such interest which is effectively subject to such indirect alternative minimum tax; provided, however, that no such increase will be paid by the City if such circumstances relate primarily to changes in holdings of the Noteholder or its parent holding company. (4) LOSS of Federal Income Tax Deduction for State Income Taxes. If the federal income tax deduction for state income taxes paid on the interest payments received under the Note during any period is reduced because of any change in the tax laws or regulations and the Noteholder is then subject to payment of state income tax on the interest on the Note then the interest rate on the Note shall be increased during such period by an amount equal to A x B x C x D where: (i) A equals the fraction (expressed as a decimal) of the total state income tax disallowed as a result of such tax law change; (ii) B equals the rate of the applicable state income tax (expressed as a decimal); (iii) C equals the maximum federal corporate tax rate then in effect for the Noteholder (expressed as a decimal); and (iv) D equals the interest rate on the Note (expressed as a percentage). (5) Partial Taxabili .ty. If the interest payments received under the Note during any period become partially taxable to the extent not otherwise taxable on the date of issuance thereof because of any change in the tax laws or regulations, then the interest rate on the Note shall be increased during such period by an amount equal to (A - B) x C where: (i) A equals the Taxable Rate (expressed as a percentage); (ii) B equals the interest rate on the Note (expressed as a pementage); and (iii) C equals the fraction of the interest rate on the Note which has become taxable as the result of such tax change (expressed as a decimal). (6) Other Changes in Tax Laws. If the tax laws or regulations are amended to decrease the Federal Rate, to cause the interest on the Note to become taxable to 15 the extent not otherwise taxable on the date of issuance thereof, to be subject to a minimum tax or an alternative minimum tax or to otherwise decrease the yield on the Note to the Noteholder (directly or indirectly, other than a change described in (1) through (5) above or because of a Determination of Taxability) then the interest rate on the Note shall be adjusted to cause the yield on the Note, to equal what the yield on the Note would have been in the absence of such change or amendment in the tax laws or regulations. If the tax laws or regulations are amended to increase the effective after-tax yield on this Note to the Noteholder (including by way of an increase in the Federal Rate) then the interest rate on the Note will be decreased to cause the effective after-tax yield on this Note to equal what the yield would have been in the absence of such change or amendment in the tax laws or regulations. As set forth in Section 3.01(0 hereof, upon a Determination of Taxability, the interest rate applicable to the Note shall be the Taxable Rate. (c) The above adjustments shall be cumulative, but in no event shall the interest rate on a Note exceed the maximum rate permitted by law. Adjustments to the interest rate on Note made pursuant to this Section 3.03 shall not become effective until after notice has been given pursuant to Section 3.03(a) hereof. Interest on the Note and all other tax rates and interest rates are expressed as annual rates. However, proper partial adjustment shall be made if the tax law change is effective after the first day of the Noteholder's tax year or if interest on a Note does not accrue for the entire tax year of the Noteholder. Adjustments which create a circular calculation because the interest rate on a Note is affected by the calculation shall be carried out sequentially, increasing the interest rate on the Note accordingly in each successive rate on the Note, until the change on the interest rate on the Note caused by the next successive calculation of the adjustment is de minirnis. If more than one of paragraphs numbered (1) through (6) in Section 3.03(b) apply, then the interest rate on the Note shall be adjusted in the order in which listed above. (d) To the extent an adjustment to the interest rate on a Note is not effected within three (3) months of the event giving rise to the adjustment, the additional interest due as a result of such adjustment shall be paid with interest thereon compounded monthly at the rate which is equal to the interest rate on the Note; provided, however, in no event shall such interest rate exceed the maximum rate permitted by law. Subject to the provisions of Section 3.03(a) hereof, all unpaid amounts determined to be owing as a result of such calculation shall be due and payable within thirty (30) days after delivery of written notice of the amount of such adjustment, and shall be paid to the Noteholder of record during the period to which the adjustment relates. This obligation shall survive the payment and cancellation of the Note. 16 ARTICLE IV CONDITIONS FOR DRAWS SECTION 4.01. CONDITIONS FOR DRAWS. (a) In connection with a Draw, the Bank shall not be obligated to make any loan under this Agreement unless at or prior to the date specified for the making thereof the City delivers to the Bank: (i) Except in the case of the initial Draw, notice of the City's intention to make a Draw at least five (5) Business Days prior to the date specified for such Draw. Such notice shall state (A) the amount of the proposed Draw, which amount must be in an amount at least equal to $50,000, (B) the Project or Projects and costs associated therewith to be £manced with the proceeds of the Draw, and (C) instructions to the Bank with respect to the manner of payment of such Drawing; (ii) A certificate of the City Manager or Finance Director, dated as of the date of such Draw, to the effect that the representations and warranties of the City contained in Section 2.01 hereof are true and correct as of such date; (iii) A certificate of the City Manager or Finance Director, dated as of the date of such Draw, setting forth the aggregate principal amount of all Draws of the City which have been made hereunder after such Draw is made and stating that there is currently no Event of Default or event that with notice or lapse of time or both would become an Event of Default hereunder; (iv) With respect to the initial Draw, a fully executed Tax Certificate relating to the Note; (v) With respect to the initial Draw, a copy of a completed and executed Form 8038-G relating to the Note to be filed with the Internal Revenue Service; (vi) With respect to the initial Draw, an opinion of Bond Counsel in form and substance to the effect that (A) the Agreement and the Note have been duly authorized by the City and are enforceable obligations in accordance with their terms; the Ordinance and Resolution have been duly adopted and are enforceable in accordance with their respective terms (enforceability of such instruments may be subject to standard bankruptcy exceptions and the like), (B) interest on the Note shall be excluded from gross income for federal income tax purposes and will not be treated as a preference item for purposes of computing the alternative minimum tax imposed by Section 55 of the Code (however, the interest on the Note owned by corporations may be subject to the Federal alternative minimum tax which is based 17 in part on adjusted current earnings), (C) the interest on the Note shall be exempt from Florida intangible taxes and documentary stamp taxes; and (vii) With respect to the initial Draw, a fully executed Note, dated the date of the initial Draw, in the principal amount of such Draw subject to such principal amount being increased to reflect all future Draws. (b) On or before the execution of this Agreement, the City shall have caused to be delivered to the Bank the following items in form and substance acceptable to the Bank: (i) An opinion of the City Attorney regarding the due authorization, validity and enforceability of this Agreement, the due adoption of the Ordinance and the Resolution (enforceability may be subject to standard bankruptcy exceptions and the like) (such opinion may, however, be delivered at the time of the initial Draw); and (ii) Such additional certificates, insmunents and other documents as the Bank, the City Attorney or Bond Counsel or counsel to the City, may deem necessary or appropriate. (c) Upon satisfaction of the conditions set forth in paragraphs (a) and (b) above, the City may borrow up to $10,000,000 from the Bank pursuant to one or more Draws. After such time as $10,000,000 in cumulative principal amount (irrespective of any prepayments on the principal balance then outstanding) of Draws shall have been issued hereunder, the Bank shall not be required to honor any further Draws; provided, however, that if the Bank and the City agree in writing to increase the amount available to be drawn by the City on the line of credit provided by the Bank pursuant to this Agreement, such $10,000,000 limitation shall be increased to such agreed upon amount. The date the last Draw can be made under this Agreement shall be July 1, 1998. The City shall apply the proceeds of each Draw to pay for, or reimburse itself for prior expenditures incurred for, the costs of the Projects which shall include but not be limited to: (i) The costs of architectural and engineering services related to the Projects, including, without limitation, the costs of preparation of studies, surveys, reports, tests, plans and specifications; (ii) The costs of legal, accounting, financial advisory, consulting, marketing and other special services related to the Projects; (iii) Costs and fees incurred in connection with the issuance of the Note; 18 (iv) Fees and charges incurred in connection with applications to federal, state and local governmental agencies for any requisite approval or permits regarding the acquisition and construction of the Projects; (v) Costs incurred in connection with the acquisition of the sites for the Projects, including any necessary rights-of-way, easements or other interests in real or personal property; (vi) Costs incurred in connection with the acquisition, construction, improvement or extension of the buildings, structures and facilities comprising the Projects; (vii) Costs incurred in connection with the acquisition and installation of any machines, equipment, fixtures, appurtenances or personal property of any kind or nature, which are to comprise a part of the Projects; (viii) Interest on the Note accm'mg prior to the completion date of the Projects; and (ix) To the extent permitted by law, other costs and expenses relating to the Projects which are incurred for the purpose of providing for the Projects, including the administrative and maintenance costs associated with the management of the Projects, and other facilities functionally related and subordinate thereto. (d) The Bank shall make a notation on the Note after each Drawing to reflect the principal mount and date of such Drawing and any additional mounts due and payable by the City as a result of such Drawing. 19 ARTICLE V EVENTS OF DEFAULT; REMEDIES SECTION 5.01. EVENTS OF DEFAULT. An "Event of Default" shall be deemed to have occurred under this Agreement if: (a) The City shall fail to make payment of principal or interest then due on any Note; (b) Any representation or warranty of the City contained in Article II of this Agreement or any ce~ificate provided the Bank under Article IV shall prove to be untrue in any material adverse respect; (c) Failure by the City to observe and perform any covenant, condition or agreement on its pa~t to be observed or performed by it under this Agreement or the Resolution other than as referred to in clause (a) of this Section, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied has been given to the City, unless the Bank shall agree in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, then such time will automatically be extended if corrective action is instituted by the City within the applicable period and diligently pursued until the default is corrected; or (d) There shall occur the dissolution or liquidation of the City, or the filing by the City of a voluntary petition in baulcruptcy, or the commission by the City of any act of bankruptcy, or adjudication of the City as a bankrupt, or assignment by the City for the benefit of its creditors, or appointment of a receiver for the City, or the entry by the City into an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to the City in any proceeding for its reorganization instituted under the provisions of the Federal Bankruptcy Act, as amended, or under any similar act in any jurisdiction which may now be in effect or hereafter amended. SECTION 5.02. REMEDIES. If any such Event of Default shall have occurred, the Noteholder may seek enforcement of all remedies available to it under law. The Noteholder may declare the Note to be immediately due and payable. Any amounts due on the Note which shall remain unpaid past the scheduled payment dates, shall bear interest at the lesser of the Taxable Rate or the maximum rate of interest permitted by law until all amounts then due under the Note are paid in full. Occurrence of an Event of Default or notice of any event described in Section 5.01(c) above shall suspend the obligation of the Bank to honor additional Draws until such time as such Event of Default or item giving rise 20 to the notice under Section 5.01(c) above has been cured to the satisfaction of the Bank. The Bank shall be entitled to its reasonable and properly documented costs and expenses (including reasonable fees and expenses of counsel) incurred in enforcing any of its rights under this Agreement after an Event of Default. 21 ARTICLE VI MISCELLANEOUS SECTION 6.01. AMENDMENTS, CHANGES OR MODIFICATIONS TO THE AGREEMENT. This Agreement shall not be amended, changed or modified without the prior written consent of the Bank and the City. SECTION 6.02. 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 necessmy to produce or account for more than one such counterpart. SECTION 6.03. SEVERABILITY. If any clause, provision or section of this Agreement shall be held illegal or invalid by any court, the invalidity of such provisions or sections shall not affect any other provisions or sections hereof, and this Agreement shall be construed and enforced to the end that the transactions contemplated hereby be effected and the obligations contemplated hereby be enforced, as if such illegal or invalid clause, provision or section had not been contained herein. SECTION 6.04. TERM OF AGREEMENT. This Agreement shall be in full force and effect from the date hereof and shall continue in effect as long as the Note is outstanding or the Bank has any commitment to make advances thereunder. SECTION 6.05. ASSIGNMENT. The Bank acknowledges and agrees that it presently intends to hold the Note through the Final Maturity Date. The Bank shall not assign the Note or its obligations hereunder without first obtaining the written consent of the City (other than to other subsidiaries of Barnett Banks, Inc.). Notwithstanding the foregoing, however, the Bank may (i) assign the Note or its obligations hereunder; provided, however, the Bank shall give the City ten (10) Business days prior written notice of any such assignment and (ii) grant one or more f'mancial institutions the opportunity to participate in the Note; provided further, in each case the Bank shall comply with any and all applicable securities laws at the time of such assignment. SECTION 6.06. NOTICE OF CHANGES IN FACT. Promptly after the City becomes aware of the same, the City will notify the Bank of (a) any change in any material fact or circumstance represented or warranted by the City in this Agreement or in connection with the issuance of the Note, and (b) any default or event which, with notice or lapse of 22 time or both, could become a default under the Agreement. specifying in each case the nature thereof and what action the City has taken, is taking and/or proposed to take with respect thereto. SECTION 6.07. NOTICES. Any notices or other communications required or permitted hereunder shall be sufficiently given if delivered personally or sent registered or certified mail, postage prepaid, to the City of Aventura, Florida, 2999 N.E. 191st Street, Suite 500, Aventura, Florida 33180, Attention: City Manager; Barnett Bank, N.A., 701 Brickell Avenue, Miami, Florida, 33131, Attention: Roberto Pelaez, or at such other address as shall be furnished in writing by any such party to the other, and shall be deemed to have been given as of the date so delivered or deposited in the United States mail. SECTION 6.08. APPLICABLE LAW. The substantive laws of the State of Florida shall govern this Agreement. SECTION 6.09. NO THIRD-PARTY BENEFICIARIES. There are no third- party beneficiaries to or of this Agreement. No provision of this Agreement shall be construed as conferring any right or benefit upon any party other than the City, the Bank, or any subsequent Noteholder. SECTION 6.10. INCORPORATION BY REFERENCE. All of the terms and obligations of the Ordinance and the Resolution are hereby incorporated herein by reference as if said Ordinance and Resolution were fully set forth in this Agreement. 23 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first set forth herein. CITY OF AVENTURA, FLORIDA (SEAL) By: City Manager ATTEST: By:. City Clerk APPROVED AS TO FORM AND LEGAL SUFFICIENCY City Attorney BARNETT BANK, N.A. By: Title: 24 Schedule 1 Amortization Schedule for Debt Service Coverage Ratio EXHIBIT A THE PROJECTS Complete descriptions of the Projects are set forth in the plans, specifications and records of the City. A general description of the Projects is as follows: A. Land. The purchase of real property within the City to be used for municipal purposes such as (i) parks and recreation and (ii) the location of other City facilities including, without limitation, a City administrative complex and police station. B. Buildings and Other Improvements. The acquisition, construction, equipping and installation of improvements on or to the real property described above including, without limitation, municipal parks and facilities to house City government and police. A~I EXHIBIT B UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF AVENTURA, FLORIDA Line of Credit Revenue Note (Barnett Bank, N.A.) Principal Interest Date of Final Stun Rate Issuance. Maturi .ty Date Not to exceed 4.58% December 30, 1996 December 30, 1999 $10,000,000 (Subject to adjustment as provided below) CITY OF AVENTURA, FLORIDA (the "CITY"), for value received, hereby promises to pay, solely from the Pledged Revenues and Non Ad Valorem Funds, described in the within mentioned Agreement, to the order of Barnett Bank, N.A., Miami, Florida, or its successors or assigns (the "Noteholder"), the principal sums advanced pursuant to that certain Line of Credit Agreement by and between Barnett Bank, N.A., and the City, dated as of December 20, 1996 (the "Agreement"), and to pay interest on such principal sums from the date such amounts are advanced or from the most recent date to which interest has been paid at the Interest Rate per annum identified above (subject to adjustment as hereinafter provided) on January 1 and July 1 of each year, commencing July 1, 1997 until such principal sums shall have been fully paid. The principal sum hereof shall be payable upon the Final Maturity Date or earlier prepayment upon presentation hereof. Such principal sums and interest is payable in any coin or currency of the United States of America which, at the time of payment, is legal tender for the payment of public and private debts. This Note is authorized to be issued in the aggregate principal amount of not exceeding $10,000,000 issued under the authority of and in full compliance with the Constitution and statutes of the State of Florida, including, particularly, Chapter 166, Florida Statutes, Ordinance No. 96-31 of the City adopted on December 3, 1996 (the "Ordinance") and other applicable provisions of law, and Resolution No. 96- duly adopted by the City on December 17, 1996 (the "Resolution"), and is subject to all terms and conditions of the Ordinance, the Resolution and the Agreement. Any term used in this Note and not otherwise defined shall have the meaning ascribed to such term in the Agreement. B-1 This Note shall bear interest from its Date of Issuance at the Interest Rate identified above on the basis of a 360-day year, actual number of days elapsed. The Interest Rate is subject to adjustment as provided in Section 3.01(0 of the Agreement in the event of a Determination of Taxability. In addition, this Note is subject to adjustment in accordance with the provisions in Section 3.03 of the Agreement. The Noteholder shall provide to the City upon request such documentation to evidence the amount of interest due on the Note. Notwithstanding any provision in this Note to the contra, w, in no event shall the interest contracted for, charged or received in connection with this Note (including any other costs or considerations that constitute interest under the laws of the State of Florida which are contracted for, charged or received) exceed the maximum rate of interest allowed under the State of Florida as presently in effect. In the event the maturity of this Note is accelerated or prepaid in accordance with the provisions hereof or of the Agreement, then such amounts that constitute payments of interest, together with any costs or considerations which constitute interest under the laws of the State of Florida, may never exceed an amount which would result in payment of interest at a rate in excess of the nonusurious interest allowed by the laws of the State of Florida or the United States to the extent applicable, as presently in effect and to the extent an increase is allowable by such laws; and excess interest, if any, shall be cancelled automatically as of the date of such acceleration, or, if theretofore paid, shall be credited on the principal amount of the Note unpaid, but such crediting shall not cure or waive any default under the Agreement, the Ordinance or the Resolution. All payments made by the City hereon shall apply first to accrued interest, and then to the principal amount then due on this Note. This Note is being issued to finance, refinance or reimburse a portion of the costs of acquiring, constructing and equipping certain capital improvements within the City. This Note is secured by and shall be payable from the Pledged Revenues, as described in the Agreement. Pursuant to the Agreement, the City has also covenanted to appropriate in its annual budget, by amendment, if necessary, from Non-Ad Valorem Funds lawfully available amounts sufficient, together with other available moneys, to pay the principal of and interest on this Note, as the same become due (whether by redemption, at maturity or otherwise). Such covenant and agreement on the part of the City to budget and appropriate such amounts of Non-Ad Valorem Funds shall be cumulative to the extent not paid, and shall continue until such Non-Ad Valorem Funds or other legally available funds in amounts sufficient to make all such required payments under this Note shall have been budgeted, appropriated and actually paid. Notwithstanding the foregoing, the City has not covenanted to maintain any services or programs, now provided or maintained by the City, which generate Non-Ad Valorem Funds. Such covenant and agreement on the part of the City to budget and appropriate such amounts of Non-Ad Valorem Funds is subject, however, in all respects to B-2 the certain budgetary restrictions contained in Section 166.241(3), Florida Statutes, and to the payment of services and programs which are for essential public proposes affecting the health, welfare and safety of the inhabitants of the City or which are legally mandated by applicable law. The City may prepay this Note as a whole or in part, at any time or from time to time, without premium, by paying to the Noteholder all or part of the Principal Sum of the Note, together with the unpaid interest accrued on the amount of principal so prepaid to the date of such prepayment. Each prepayment of a Note shall be made on such date and in such principal amount as shall be specified by the City in a written notice delivered to the Noteholder not less than five (5) Business Days prior thereto. Notice having been given as aforesaid, the Principal Sum of the Note stated in such notice or the whole thereof, as the case may be, shall become due and payable on the prepayment date stated in such notice, together with interest accrued and unpaid to the prepayment date on the principal amount then being paid; and the amount of principal and interest then due and payable shall be paid (i) in case the entire unpaid balance of the principal of the Note is paid, the Noteholder shall return the Note to the City marked "Paid" upon receipt of payment from the City of all amounts due and owing under the Note, and (ii) in case only part of the unpaid balance of principal of the Note is to be paid, the Noteholder shall make a notation thereon of the amount of principal and interest on such Note then paid. If on the prepayment date moneys for the payment of the principal amount to be prepaid on such Note, together with interest to the prepayment date on such principal amount, shall have been paid to the Noteholder as above provided and if notice of prepayment shall have been given to the Bank as above provided, then from and after the prepayment date interest on such principal amount of such Note shall cease to accrue. If said moneys shall not have been so paid on the prepayment date, such principal amount of such Note shall continue to bear interest until payment thereof at the rate or rates provided for in the Agreement. This Note, when delivered by the City pursuant to the terms of the Agreement, the Ordinance and the Resolution, shall not be or constitute an indebtedness of the City or of the State of Florida, within the meaning of any constitutional, statutory or charter limitations of indebtedness, but shall be payable solely from the Pledged Revenues, as provided in the Agreement, the Ordinance and the Resolution. No Noteholder shall ever have the right to compel the exercise of the ad valorem taxing power of the City or the State, or taxation in any form of any property therein to pay this Note or the interest hereon. Upon the occurrence of an Event of Default relating to this Note, the principal sum of this Note may become or be declared due and payable before the Final Maturity Date in the manner, with the effect and subject to the conditions set forth in the Agreement. The Noteholder shall also have such other remedies as described in the Agreement. If this Note shall be declared to be immediately due and payable or any amounts due on the Note shall B-3 remain unpaid past any scheduled payment date, the Note shall bear interest at the lesser of the Taxable Rate or the maximum permitted by law until all amounts then due under this Note are paid in full. IN WITNESS WHEREOF, the City caused this Note to be signed by the manual signature of the City Manager of the City of Aventura, Florida, and the seal of the City to be affixed hereto or imprinted or reproduced hereon, and attested by the manual signature of the City Clerk of the City of Aventura, Florida, and this Note to be dated the Date of Issuance set forth above. CITY OF AVENTURA, FLORIDA (SEAL) By:. City Manager ATTEST: City Clerk APPROVED AS TO FORM AND LEGAL SUFFICIENCY By: City Attorney B-4 EXHIBIT 1 TO NOTE SCHEDULE OF DRAWINGS Principal Aggregate Bank Officer Draw Date Amount Project Draws* Notation 12/30/96 $3.200.000 Land Acquisition $3,200,000 *In no event to exceed $10,000,000. EXHIBIT B DESCRIPTION OF THE PROJECTS Complete descriptions of the Projects are set forth in the plans, specifications and records of the City. A general description of the Projects is as follows: A. Land. The purchase of real property within the City to be used for municipal purposes such as (i) parks and recreation and (ii) the location of other City facilities including, without limitation, a City administrative complex and police station. B. Buildings and Other Improvements. The acquisition, construction, equipping and installation of improvements on or to the real property described above including, without limitation, municipal parks and facilities to house City government and police.