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R-1064-03 RESOLUTION NO. 1064-03 A RESOLUTION OF THE MIAMI SHORES VILLAGE COUNCIL, AUTHORIZING THE LOAN OF NOT TO EXCEED, $1,280,000 FROM SUNTRUST BANK FOR THE PURPOSES OF FINANCING ALL OR A PORTION OF THE COSTS OF CERTAIN CAPITAL IMPROVEMENTS AND PURCHASES, OF REFINANCING CERTAIN OUTSTANDING INDEBTEDNESS OF THE VILLAGE, AND OF PAYING COSTS RELATED TO THE ENTRY INTO SUCH LOAN; DETERMINING THAT SUCH LOAN WITH SUNTRUST BANK IS IN THE BEST INTEREST OF THE VILLAGE; PROVIDNG FOR THE TERMS OF SUCH LOAN, AUTHORIZING THE PROPER OFFICIALS AND OFFICERS OF THE VILLAGE TO DO ALL THINGS DEEMED NECESSARY OR ADVISABLE IN CONNECTION WITH THE ENTRY INTO SUCH LOAN; PROVIDING FOR SEVERABILITY; PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the Village Council ("Village Council') of Miami Shores Village, Florida ("the Village') hereby determines that it would be in the best economic interest of the Village to finance through a bank loan the costs of certain capital improvements and purchases, and to refinance certain outstanding indebtedness of the Village; and WHEREAS, the Village staff has determined and the Village Council hereby concurs that SunTrust Bank, a Georgia banking corporation with its designated office in Miami, Florida (the"Bank'] has proposed to lend the Village up to $1,280,000. WHEREAS, pursuant to the provisions of this Resolution, the Village intends to accept the proposal of the Bank; NOW, THEREFORE, BE IT RESOLVED by the Miami Shores Village Council that: Section 1. The recitals contained in the preamble to this Resolution are incorporated by reference herein. Section 2. It is hereby ascertained, determined and declared that, in light of present market conditions, the attractiveness of the terms offered by the Bank, and the nature of the loan, it will be in the best interest of the Village to enter into the loan with the Bank on a negotiated basis pursuant to the terms and provisions of this Resolution. Section 3. The Village hereby approves the terms and conditions of the loan, substantially in the form of the Summary Term Sheet, attached as Exhibit "A" herein. The Village hereby authorizes the Village Manager and the Finance Director to execute and deliver any and all documents and instruments and to do and cause to be done, any and all acts and things necessary or proper for carrying out the transactions contemplated by this Resolution. Section 4. If any section, paragraph, clause or provision of this Resolution shall be held to be invalid or ineffective for any reason, the remainder of this Resolution shall continue in full force and effect, it being expressly hereby found and declared that the remainder of this Resolution would have been adopted despite the invalidity or ineffectiveness of such section, paragraph, clause or provisions. Section S. This Resolution shall take effect immediately upon its adoption and any provisions of any previous resolutions in conflict with the provisions herein are hereby superseded. PASSED AND ADOPTED on this 6th day of May , 2003. ZNMS�-- Jim cCoy, ayor ATTEST: Barbara A. Estep, CMC Village Clerk APPROVED AS TO FORM: 10 t-A&" Richard Sarafan Village Attorney Loanresolution Exhibit "A" Miami Shores Village Summary Term Sheet This proposal should not be deemed a commitment and shall not oblige us to extend credit to you,nor oblige you to borrow from us. Any and all terms and conditions contained within this Term Sheet are subject to change and revision prior to issuing a formal commitment. It is only upon our issuing a formal Commitment Letter that we become obligated. This Term Sheet is made subject to the receipt of additional internal approvals. However, the Bank has had internal discussions with the requisite approval authorities regarding your request and its structure and terms. This Term Sheet has been delivered to you on a confidential basis with the express understanding that neither it,nor its substance,will be disclosed, except to those who maintain a confidential relationship with you, or where such disclosure is required by law. SunTrust Bank will extend the Loan under the following terms and conditions: Borrower: Miami Shores Village (hereinafter referred to as the "Borrower") Loan Amount: Up to $1,280,000.00 which would break down into two series. Series A would be for$950,000. Series B would be for$330,000. Purpose: Series A: Finance the NE 2nd Avenue Project Series B: Refund an existing note with Bank of America for $240,000 and an existing note with SunTrust Bank for $90,000. Collateral: Pledge of 33%of the Local Option Gas Tax and a Covenant to Budget and Appropriate from non-Ad Valorem revenues. Term/Maturity: Series A: 10 years from closing. Series B: 3 years from closing. Repayment: Series A: Level payments of principal and interest shall be due quarterly based on a 10 year amortization. Series B: Level payments of principal plus interest shall be due quarterly. Principal shall be $29,000 per quarter for the first 10 quarters and $20,000 per quarter for the last 2 quarters. Interest Rate: Series A: Tax-exempt bank qualified rate of 3.5%. Series B: Tax-exempt bank qualified rate of 2.5%. These r ates a re effective a s o f 4/4/03 and s ubj ect t o c hange based on market conditions. Fee(s) and Expenses: The Borrower shall be required to pay all reasonable and necessary expenses associated with the contemplated transaction. Expenses shall be capped at $6,000.00 for the Bank's attorney fees. Documentation: At or prior to closing, the Bank shall have received all documents that are typical for transactions of this nature Financial Reporting: The Borrower shall submit audited financial statements and an operating budget for a 11 funds, a s ratified b y t he M ayor a nd City Commission, to the Bank not less than annually. Prior to closing, audited financial statements for FYE 9/31/02 shall be provided to the Bank for satisfactory review. Covenants: 1. The Local Option Gas Tax shall provide a 1.Ox coverage of the annual debt service for Series A. 2. The Bank will require that Available General Fund Revenues of the Borrower for any given fiscal year are always equal at least 2.00x all current and future debt of the Borrower that is secured by a covenant to budget and appropriate from available non-ad valorem revenues. Available Revenues, the numerator,will be defined as non-ad valorem general fund revenues less amounts necessary for"essential government services"less pledged revenues providing up to a 1.0 to 1.0 coverage of other outstanding General Fund Debt plus the portion of ad valorem taxes used to cover"essential government services." The denominator will be all debt service secured by a covenant to budget and appropriate from available non-ad valorem revenues. "Essential government services" are those expenses related to General Government Expenditures and Public Safety. Conditions: Funding of the Loan is contingent upon a satisfactorily legal opinion as to the Borrower's tax-exempt status and authority under its Charter to borrow money, as well to the fact that the Loan constitutes bank-qualified status. The authority to borrow money must be acceptable in form,manner, tenure and purpose. The Bank reserves the right, upon reasonable notice to the Borrower, to change the pricing of the Loan if an adverse change in the tax laws governing the Loan occurs. The Borrower will comply with and agree to such other covenants,terms and conditions that may be reasonably required by the Bank and its counsel and are customary in tax- exempt financing of this nature. These covenants would include,but not be limited to, covenants regarding compliance with laws and regulations,the submission of audited financial statements to the Bank on a timely basis, events of default including failure to make payments, failure to perform any covenant, and the filing of bankruptcy by the Borrower; and remedies in event of default. ............... .............................................. ,,iami Shores Village CONIlVIERCIAL FIXED RATE SunTrust sank PROMISSORY P.O.Box 406400 Fort Lauderdale,FL NDER6400 ;::.;:.:: ;:.:;;:.> :.;;:;:.:.:....:..:.. .:««<:;«::»::>:::::»»::»:<::<:;:;»:::::>»;::<:»:<>:>: �� 4 NOTE 8 70-4814 'LE E . 10050N.E:.:: 2nd Avenue:::::................................................. Miami...Shores......FL.......3,313 8..................................................... (305) 795-2209 59-6000373 0 ro;:>::<a;:a: Ct15T(1lNEB''>:>:<:<::, :»:::i:?`>ifi:?>•:::::< �B�ES�:.::.: .:.:;.:::.::.::..:.:::a�?Ruvi'rrA7,...::::::::.:::.:::. ,::.�::b�.vutN� nfA�xiGR`at?rg;. ;>rtiRNC111C�►71�N>: 'k`g ::::<::> ...........dMQiJN't. �>: :; . ;: :; .:s>::;;:... .:..........DATYS..: : 015120 3.500 $950,000.00 06/02/03 07/01/13 Pu ose:To fund capital improvements PROMISE TO PAY: For value received, Borrower promises to pay to the order of Lender the principal amount of Nine hundred Fi f ty Thousand and no/100 Dollars ($ 950,000.00 )plus interest on the unpaid principal balance at the raten the manner described below, until all amounts owing under this Note are paid in full. Allamounts received by Lender shall be applied first to late es, expenses, accrued unpaid interest, and then to principal, or in any other order as determined by Lender,in Lender's sole discretion,as permitted by law. O INTEREST RATE: Interest shall be computed on the basis of �talmber of da s over 360 da s per year. Interest on this Note shall be calculated and payable at the fixed rate of %per annum. DEFAULTRATE:Ifthere is an Event of Default under this Note, the Lender may, in its discretion, increase the interest rate on this Note to: 2596 or the maximum interest rate Lender is permitted to charge by law,whichever is less. PAYMENTSCHEDULE: Borrower shall pay the principal and interest according to the following schedule: 39 payments of $28,901.95 beginning October 01, 2003 and continuing at quarterly time intervals thereafter. A final payment of the unpaid principal balance plus accrued interest is due and payable on. July 01, 2013. COST FEE: Afee of$ n/a under Fl.Stat. 658.49 has been charged by Lender to reimburse Lender for its costs, which shall not be refunded. PREPAYMENT. This Note may prep in part or in full on or before its maturity date. If this Note contains more than one installment, any partial prepayment will not affect the du date o e amoo at of any subsequent installment, unless agreed to, in writing, by Borrower and Lender. If this Note is prepaid in full,there will be: 0 No / barge or prepayment penalty. ❑ A minimum finance charge of$ ❑ A prepayment penalty of: — LATE CHARGE: If a payment is received more than —ID—days late, Borrower will be charged a late charge of:91 5.00 %of the unpaid portion of the late payment; ❑$ or %of the unpaid portion of the late payment, whichever is ❑greater El less. COLLATE . s Tigfrt;-tr ct 1. ® Ifchecked, the obligations under this Note are also secured by the collateral described in any security instruments executed in connection with this Note, and any collateral described in any other security instruments securing this Note or all of Borrower's obligations to Lender. RENEWAL: ❑ Ifchecked, this Note is a renewal, but not a satisfaction, of Loan Number THE PERSONS SIGNING BELOW ACKNOWLEDGETHATTHEYHAVEREAD,UNDERSTAND,ANDAGREE TO THE TERMS ANDCONDITIONS OF THIS NOTE, INCLUDING THE PROVISIONS ON THE REVERSE SIDE,AND FURTHER ACKNOWLEDGE RECEIPT OF AN EXACT COPY OF THIS NOTE. Dated: June 02, 2003 BORROWEa� Shores Village BORROWER: Miami Shores Village By: J s . Tom Benton Mar Ma atak Village Manager Finance Director TERMS AND CONDITIONS 1.EVENT OF DEFAULT.An Event of Default shall occur under'this Note In the event that Borrower, any guarantor or any other third'party pledging collateral to secure this Note: (a)fails to make any payment on this Note or any other indebtedness to Lender when due; (b)fails to perform any obligation or breaches any warranty or.covenant to Lender contained in this Note; any security Instrument;, or any other present or future written agreement regarding this or any other indebtedness of Borrower to Lender; (c)provides or causes any false or misleading signature or representation to he provided to Lender, (d)sells, conveys, or transfers rights in any collateral securing this Note without the written approval of Lender, or destroys, loses or damages such collateral in any material respect;or subjects such collateral to seizure,confiscation or condemnation. (e)has a garnishment,. judgment, tax levy, attachment or Gen entered or servc4 against Borrower, any guarantor, or any third party pledging collateral to secure this Note or any of their property; (0 dies, becomes legally Incompetent, is dissolved or terminated, ceases to operate its business, becomes insolvent, makes an assignment for the benefit of creditors,falls to pay debts as the kecome due,or becomes the subject of any bankruptcy;insolvency.or debtor relief proceeding; (g)fails to provide Lender evidence of satishpfory ffilancial condition; 2.RIGHTS OF LENDER ON EVENTOF DEFAULT.Ifthere is an Event of Default under this Note,Lender will be entitled to exercise one or more of the following remedies without notice or demand(except as required by law): (a)to declare the principal amount plus accrual interest under this Note and all other present and fhtare obligations of Borrower Immediately due and payable In flail;such acceleration shall be automatic and immediate if the Event of Default is a filing under the Bankruptcy Code; (b)to culled the outstanding obligations of Borrower with or without resorting to judicial process; (c)to cease making advances under this Note or any other agreement between Borrower and Lender; (d)to take possession of any collateral in any manner permitted by law; (e)to require Borrower to deliver and make available to Lender any collateral at a place reasonably convenient to Borrower and Lender; (1) to sell,lease or otherwise dispose of any collateral and colied any deficiency balance with or without resorting to legal process; (g)to set-ofd'Borrower's obligations against any amounts due to Borrower including, but not limited to; monies, instrdments; and deposit accounts maintained with Lender,and (h)to exercise all other rights available to Lender under any other written agreement or applicable law. Lender's rights arc cumulative and may be exercised together, separately, and in any order.• Lender's remedies under this paragraph are in addition to those available under common law or any other written agreement or applicable law including,but not limited to,the right of set-om 3.DEMAND FEATURE,❑ if checked, this Note contains a demand feature. Lender's right to demand payment, at any time, and from time to time, shall be in Lender's sole and absolute discretion,whether or not any default has occurred. 4.FINANCIALINFORMATION.Borrower will at all times keep proper books of record and accounts in which full,true and correct entries shall be 180 made in accordance with generally accepted accounting principles and will deliver to Lender; from time to time as requested' by Lender, and within ninety-(48j-days alter the end of each fiscal year of Borrower, a copy of the annual financial statements of Borrower relating to such fiscal year, such statements to Include (i)the balance sheet of Borrower as at the end of such fiscal year and (ii)the related income statement, statement of retained earnings and statement of changes in the financial position of Borrower for such fiscal year;prepared by such certified public accountants as may be reasonably satisfactory to Lender. Borrower also agrees to deliver to Lender within fifteen (15)days afieg-earne, such other financial information with respect to Borrower as Lender ma:Vequest. ktreasoriiab ly 5.MODIFICATIONAND WAIVER.The modification or waiver of any of Borrower's obligations or Lehder's rights under this Note must be contained in a writing•signed by Lender. Leader may perform any of Borrowces obligations or delay or fail to exercise any of its rights without causing a,waiver of those obligations or rights. A w on one occasion will not constitute a waiver on any other occasion. Borrower's obligations under this Note.shall not be affected if Lender am a, co mmisesi exchanges, fails to exercise, impairs or releases any of the obligations belonging io any.Borrower or guarantor or any of its rights ainst y orrower, guarantor; or any collateral securing any of Borrower's obligations. If securing this Note with any property violates any state or f ; r regulation, including, but not limited to, failure to provide any right of rescission when iegaiced, Lender waives the security Interest in that pthat would cause any such violation with reaped to this Note. 6.SEVERABILITY.Ifany provision of this Note violates the law or is unenforceable, the rest of the Note shall remain valid. Notwithstanding anything contained in this Note to the contrary; in no event shall Interest accrue under this Note, before or after maturity, at a rate in excess of the highest rate permitted by applicable law,and if interest (including any charge or fee held to be interest by a court of competent jurisdiction) In excess thereof be paid,any excess shall constitute a payment of,and be applied to,the.principal balance hereof, and if the principal balance has been fully paid, then such excess interest shall he repaid to Borrower. 7.ASSIGNMENT. Borrower agrees not to asap any of Borrower's rights, remedies or obligations described in this Note without the prior written consent of Lender, which consent may be withheld by Lender in its sole discretion. Borrower agrees that Lender is entitled to.assign some or all of Its rights and remedies described in this Note without notice to or the prior consent of Borrower. S.NOTICE. Any notice or other communication to be provided to Borrower or Lender under this Note shall be in writing and mailed to the parties at the addresses described in this Note or such other address as the parties may designate In writing from time to time. 9. APPLICABLELAW.This Note shall be governed by the laws of the state indicated in Lender's address. Unless applicable law provides otherwise; Borrower consents to the jurisdiction and veaut of any court located in such state• selected by Lender, in its discretion, In the event of any legal proceeding under this Note. 10.COLLECTIONCOSTS. To the extent permitted by law;Borrower agrees to pay on demand Lender's reasonable fees and costs; including, but not limited to,fees and costs of attorneys or other agents (Including without limitation, paralegals, clerks and consultants), whether or not such attorney or agent is an employee of Lender, which are Incurred by Lender in collecting any amount due or enforcing or protecting any right or remedy under this Note,whether or not suit is brought, including; but not limited to,all fees and costs insured on appeal, in bankruptcy; and for post judgment collection actions. municipal 11. MISCELLANEOUS.'This Note is being executed primarily for •purposes. Tune is of the essence in the performance of this agreement. -Borrower agrees to makeall payments to Lender at any address,designated by Lender and•in lawful United States currency. Borrower and any person who endorses this Note waives presentment, demand for payment, notice of dishonor -and protest and farther waives any right to require Lender to proceed against anyone else before proceeding against Borrower, or said person. -A_13;w4immess to SlwiMWE6 in titis NeW shall inalude all! ef the paftiee signing We Nets, aftd this Note shall be.bifift open thei heirs, Pereefial f8*66awly . im- If thereis more than one Borrower their obligations under this Note shall be joint and several. This Note represents the complete and integrated understanding between Borrower and Lender regarding the terms hereof. It JURY TRIAL WAIVER.LENDER AND BORROWER HEREBY WAIYEANY RIGHTTO A TRIALBY JURY IN ANY cmLACTIOPTARwNG OUT OF,OR BASED UPON,THIS NOTE OR THE COLLATERAL SECURING TEO NOTE. 14.ADDITIONAL TERMS: ADDENDUM TO$950,000 FIXED RATE PROMISSORY NOTE DATED JUNE 2,2003 FROM MIAMI SHORES VILLAGE IN FAVOR OF SUNTRUST BANK This Addendum shall modify that certain Fixed Rate Promissory Note dated June 2,2003,in the amount of$950,000 from Miami Shores Village, as Borrower, in favor of SunTrust Bank, as Lender. 1. Additional rights and obligations of the Borrower and Lender are set forth in that certain Loan Agreement between Ir rrower and the Lender dated the date hereof. 2. For purposes of this Note,Qe flov * definitions shall apply: (1) "Code"means the Internal Revenue Code of 1986,as amended; (2) "Cost of Funds"means 100 multiplied by a fraction,the numerator of which is equal to the total interest expense of Lender for its immediately preceding tax year and the denominator of which is equal to the average total assets of Lender for such tax year, but not to exceed the cost of Fed Funds. (3) "Fully Taxable Equivalent"means the Interest Rate on this Note multiplied by 1.65, expressed as a number and not as a percentage. (4) "Maximum Corporate Tax Rate" means the maximum Federal income tax rate appli le to corporations,presently 35%. ( " rep&h a Reduction Rate"means the percentage reduction to be applied to the amount allow le deduction under Chapter I of the Code with respect to any financial institution pre erence item(as such term is defined in Section 291(e)of the Code), presently 20%. If this Note is not or ceases to be a "qualified tax-exempt obligation" as defined in Section 265(b) of the Code, the Preference Reduction Rate shall be deemed to increase from twenty percent(20%)to one hundred percent(100%). (6) "TEFRA Adjustment"means an adjustment equal to the product of the Cost of Funds multiplied by the applicable Maximum Corporate Tax Rate multiplied by the applicable Preference Reduction Rate. If for any reason the interest on this Note becomes includable in the gross income of the holder of this Note for Federal income tax purposes(an"Event of Taxability"),this Note shall bear interest from the earliest effective date of such Event of Taxability at 5.33%per annum.In addition to the foregoing,the Borrower shall pay any additions to tax,penalties and interest,and any arrears in interest imposed upon the holder of this Note on account of an Event of Taxability. All such additional interest,additions to tax and penalties shall be paid on the next succeeding Payment Date following the date the holder was advised of such Event of Taxability. {MGM/014536.00341W8024329 3/5272003 0544 PM} , 1 No Event of Taxability shall be deemed to occur unless the Borrower has been given timely written notice of such occurrence by the holder of this Note and,to the extent permitted by law,an opportunity to participate in and seek, at the Borrower's own expense, a final administrative determination by the Internal Revenue Service or determination by a court of competent jurisdiction (from which no further right of appeal exists) as to the dccurrence of such Event of Taxability; provided that the Borrow , at its own expense, delivers to the holder of this Note an opinion of counsel acceptable to s&—h-&her& the effect that such appeal or action for judicial or administrative review is not witholft me�and there is a reasonable possibility that the judgment, order, ruling or decision from which such appeal or action for judicial or administrative review is taken will be reversed,vacated or otherwise set aside. The Interest Rate on this Note shall also be adjusted automatically as of the effective date of any change in the Maximum Corporate Tax Rate or in the Preference Reduction Rate,to the product obtained by multiplying the Interest Rate on this Note by a fraction,the numerator of which is equal to the sum of(i)the product of the Fully Taxable Equivalent times 1 minus the Maximum Corporate Tax Rate in effect as of the date of adjustment,plus (ii)the TEFRA Adjustment in effect as of the date of adjustment,and the denominator of which is equal to the sum of(i)the product of the Fully Taxable Equivalent times 0.65,plus(ii)the TEFRA Adjustment in effect on the date of closing of this Note. A certificate of the Lender as to any such additional amount or amounts and the calculation thereof,in the absence of manifest error,shall be final and conclusive. In determining such amount, the Lender may usany as..onnable averaging and attribution methods. 3. THIS NOTE SHALL NXBE DEEMED TO CONSTITUTE A GENERAL DEBT OR A PLEDGE OF THE FAITH AND CREDIT OF THE BORROWER,NOR A DEBT OR PLEDGE OF THE FAITH AND CREDIT OF THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL, LEGISLATIVE OR CHARTER PROVISION OR LIMITATION, AND IT IS EXPRESSLY AGREED BY THE LENDER THAT IT SHALL NEVER HAVE THE RIGHT, DIRECTLY OR INDIRECTLY, TO REQUIRE OR COMPEL THE EXERCISE OF THE AD VALOREM TAXING POWER OF THE BORROWER NOR ANY OTHER POLITICAL SUBDIVISION OF THE STATE OF FLORIDA OR TAXATION IN ANY FORM ON ANY REAL OR PERSONAL PROPERTY FOR THE PAYMENT OF THE PRINCIPAL OF,PREMIUM, IF ANY,AND INTEREST ON THIS NOTE NOR FOR THE PAYMENT OF ANY OTHER AMOUNTS PROVIDED FOR IN THE LOAN AGREEMENT. June 2, 2003 MIAMI SHO �ILLAGE a By: Tom Benton,Village Manager {MGM/014536.0034/W8024329 35272003 05.44 PM} 2 ....:•:::.::.::::::::.:::.::::.:::.:::::.;:;:•;:.;;................................................:...:.:... ::::::;;::.;.;:::;:•::.;;. Miami Shores Village COM lERCUL FIXED RATE SunTrust Bank PROMISSORY P.O.Box 406400 Fort Lauderdale, - PT. 33340 6400 >;>:::<•<.:..::.....:...:.::. (87'n 470-4814 LENDER' NOTE 1005:0:.;:.N•.:E2nd Avenue:.::::..............:... ............................ Miami...Shore a......FL......33138 .................................................. .................... kTk1(�M1 AION NQ'.:.. (305) 795-2209 59-6000373 ................................ 7+3lNDIN�.:...::•:: ...:1Nrl�JRtTY.. :....:...,CI95TOht�...............,..... ............G4A1!T...:..:..::.:::.:.. ....,:..;<;:<:'::r:;ii..::::r:: ::>;::;:.;•: .:<;::z.i::....:<i. •:,:...:?2i:;;:9; <::�;;:;i�:;::r. ......:...: ° •i:::i�<.;::::: ?': `3ii::......:.....:.�:.::::.::.::: 015120 2.500 % $330,000.00 06/02/03 07/01/06 Purpose:To refund two existing notes PROMISE TO PAY: For value received, Borrow, pro ' toffy tgthg order of Lender the principal amount of Three Hundred Thirty Thousand and no/100 Dollars ($ 330,000.00 )plus interest on the unpaid principal balance at the rate and in the manner described below, until all amounts owing under this Note are paid in full. Allamounts received by Lender shall be applied first to late charges, expenses, accrued unpaid interest, and then to principal, or in any other order as determined by Lender,in Lender's sole discretion,as permitted by law. INTEREST RATE: Interest shall be computed on the basis of the actual number of days over 360 days per year. Interest on this Note shall be calculated and payable at the fixed rate of 2.500 %per annum. DEFAULTRATE:Ifthere is an Event of Default under this Note,the Lender may, in its discretion, increase the interest rate on this Note to: 1896 or the maximum interest rate Lender is permitted to charge by law,whichever is less. PAYMENT SCHEDULE: Borrower shall pay the principal and interest according to the following schedule: 10 principal payments of $29,000,00 plus accrued interest beginning October 1, 2003 and continuing at quarterly time intervals thereafter. 1 principal payment of $20,000.00 plus accrued interest on April 1, 2006. A final payment of the unpaid principal plus accrued interest is due and payable on July 1, 2006. COST FEE: Afee of$ -n/a under Fl.Stat. 658.49 has been charged by Lender to reimburse Lender for its costs, which shall not be refunded. PREPAYMENT. This Note may be prep ' part or in full on or before its maturity date. If this Note contains more than one installment, any partial prepayment will not affect We due date or th un i y subsequent installment, unless agreed to, in writing, by Borrower and Lender. If this Note is prepaid in full,there will be: ©No minimum nam or prepayment penalty. ❑ A minimum finance charge of$ ❑ A prepayment penalty of: LATE CHARGE: If a payment is received more than 10 days late, Borrower will be charged a late charge of:® 5.00 %of the unpaid portion of the late payment; ❑ $ or %of the unpaid portion of the late payment, whichever is ❑greater ❑less. COLLATERAL: t }l OGG-uAts subject to car.penalties if so assigned) tW are nov, ovia 4blo fi-41ifs in ' l. ® If checked, the obligations under this Note are also secured by the collateral described in any security instruments executed in connection with this Note, and any collateral described in any other security instruments securing this Note or all of Borrower's obligations to Lender. RENEWAL: ❑ Ifchecked, this Note is a renewal, but not a satisfaction, of Loan Number THE PERSONS SIGNING BELOW ACKNOWLEDGETHATTHEYHAVEREAD,UNDERSTAND,ANDAGREE TO THE TERMS ANDCONDITIONS OF THIS NOTE, INCLUDING THE PROVISIONS ON THE REVERSE SIDE,AND FURTHER ACKNOWLEDGE RECEIPT OF AN EXACT COPY OF TIM NOTE. Dated: June 02, 2003 BORROWER: Miami Sho es Village BORROWER: Miami Shores Village h Tom Benton Mark Ma atak TERMS AND CONDITIONS I.EVENT OF DEFAULT.An Event of Default shall occur under this Note in the event that Borrower, any guarantor or any other third party pledging collateral to secure this Note: (a)fails to make any payment on this Note or any other indebtedness to Lender when due, (b)fails to perform any obligation or breaches any warranty or covenant to Lender contained in this Note; any security instrument,, or any other present or future written agreement regarding this or any other indebtedness of Borrower to Lender; (c)provides or causes any false or misleading signature or representation to be provided to Lender; (d)sells, conveys, or transfers rights in any collateral securing this Note without the written approval of Lender; or destroys, loses or damages such collateral in any material respect;or subjects such collateral to seizure,confiscation or condemnation. (e)has a garnishment, judgment, tax le , a hment or lien entered or served,against Borrower, any guarantor, or any third party pledging collateral to secure this Note or any of err pro (t) dies, becomes legally incompetent, 1 r ceases to operate its business, becomes insolvent, makes an assignment for the benefit of creditors,fails to pay debts as they become e,or b es the subject of any bankruptcy;insolvency or debtor relief proceeding; (g)fails to provide Lender evidence of satisfactory financial con ' on; the Anjosity owme"hip as es the date 099ho WUMAOR of two agneffiontJ Or r)_W6 r de f d Wetc good a M...M_.....@at 49 f s bl ti d bled "ice 4eoearzn6eeva�m-Sv "j�•resPevasoruvnc-vi•9aaovee.ea.eor 2.RIGHTS OF LENDER ON EVENTOF DEFAULT.Ifthere is an Event of Default under this Note,Lender will be entitled to exercise one or more of the following remedies without notice or demand(except as required by law): (a)to declare the principal amount plus accrued interest under this Note and all other present and future obligations of Borrower immediately due and payable in hull;such acceleration shall be automatic and immediate if the Event of Default is a filing under the Bankruptcy Code, (b)to tolled the outstanding obligations of Borrower with or without resorting to judicial process; (c)to cease making advances under this Note or any other agreement between Borrower and Lender, (d)to take possession of any collateral in any manner permitted by law; (e)to require Borrower to deliver and make available to Lender any collateral at a place reasonably convenient to Borrower and Lender; (f) to sell,lease or otherwise dispose of any collateral and collect any deficiency balance with or without resorting to legal process; (g)to set-off Borrower's obligations against any amounts due to Borrower including, but not limited to,monies, instruments; and deposit accounts maintained with lender;and (h)to exercise all other rights available to Lender under any other written agreement or applicable law. Lender's rights are cumulative and may be exercised together, separately, and in any order. Lender's remedies under this paragraph are in addition to those available under common law or any other written agreement or applicable law Including,but not limited to,the right of set-off. 3.DEMAND FEATURE,❑ Ifchecked, this Note contains a demand feature. Lender's right to demand payment, at any time, and from time to time, shall be in Lender's sole and absolute discretion,whether or not any default has occurred. 4.FINANCIALINFORMATION.Borrower will at all times keep proper books of record and accounts in which full,true and correct entries shall be 180 made in accordance with generally accepted accounting principles and will deliver to Lender; .from time to time as requested by Lender, and within ninety (99)days atter the end of each fiscal year of Borrower, a copy of the annual financial statements of Borrower relating to such fiscal year, such statements to include (I)the balance sheet of Borrower as at the end of such fiscal year and (i)the related income statement, statement of retained earnings and statement of changes in the financial position of Borrower for such fiscal year, prepared by such certified public accountants as may be reasonably satisfactory to Lender. Borrower also agrees to deliver to Lender within fifteen (15)days atle•4iliag-seate, time,such other financial information with respect to Borrower as Lender ma 'L .*reasonably ly 5.MODIFICATIONAND WAIVER. in on or waiver of any of Dorrower's obligations or Lender's rights under this Note must be contained in a writing signed by Lender. Lender y a �rrower's obligations or delay or fail to exercise any of its rights without causing a waiver of those obligations or rights. A waiver o rawt constitute a waiver on any other occasion. Borrower's obligations under this Note.shall not be affected if Lender amends; compromises, ext es, fails to exercise, impairs or releases any of the obligations belonging to any Borrower or guarantor or any of its rights against any Borrower, guarantor, or any collateral securing any of Borrower's obligations. If securing this Note with any property violates any state or federal law,rule, or regulation, including, but not limited to, failure to provide any right of rescission when required, Lender waives the security interest in that part of the property that would cause any such violation with respect to this Note. 6.SEVERABILITY.Ifany provision of this Note violates the law or is unenforceable; the rest of the Note shall remain valid. Notwithstanding anything contained in this Note to the contrary, in no event shall Interest,accrue under this Note, before or after maturity, at a rate in excess of the highest rate permitted by applicable law;and if interest (including any charge or fee held to be interest by a court of competent jurisdiction) in excess thereof be paid, any excess shall constitute a payment of,and be applied to, the principal balance hereof, and if the principal balance has been fully paid, then such excess interest shall be repaid to Borrower. 7.ASSIGNMENT. Borrower agrees not to assign any of Borrower's rights, remedies or obligations described In this Note without the prior written consent of Lender, which consent may be withheld by Lender in its sole discretion. Borrower agrees that Lender is entitled to.assign some or all of its rights and remedies described in this Note without notice to or the prior consent.of Borrower. 8.NOTICE. Any notice or other communication to be provided to Borrower or Lender under this Note shall be in writing and mailed to the parties at the addresses described in this Note or such other address as the parties may designate in writing from time to time. 9. APPLICABLELAW.This Note shall be governed by the laws of the state indicated in Lender's address. Unless applicable law provides otherwise, Borrower consents to the jurisdiction and venue of any court located in such state selected by Lender, in its discretion, in the event of any legal proceeding under this Note. 10.COLLECTIONCOSTS. To the extent permitted by law,Borrower agrees to pay on demand Lender's reasonable fees and costs, Including, but not limited to,fees and costs of attorneys or other agents (including without limitation, paralegals, clerks and consultants), whether or not such attorney or agent is an employee of Lender, which are incurred by Lender in collecting any amount due or enforcing or protecting any right or remedy under this Note,whether or not suit is brought, including, but not limited to,all fees and costs insured on appeal, in bankruptcy, and for post-judgment collection actions. municipal 11. MISCELLANEOUS. This Note is being executed primarily for •purposes. Time is of the essence in the performance of this agreement. Borrower agrees to make all payments to Lender at any address designated by Lender and in lawful United States currency. Borrower and any person who endorses this Note waives presentment, demand for payment, notice of dishonor and protest and further waives any right to require Lender to proceed against anyone else before proceeding against Borrower, or said person. -A 11 refemnson to BeffeW& in this Note sheA inelude all of the patfies siong " Kete, and We Note d" be bindisg upon 66 heirs, Peff I 'I -;", ssiseflaspita ii1d. assigm of Beffemaw and Leader- If there is more than one Borrower their obligations under this Note shall be joint and several. This Note represents the complete and integrated understanding between Borrower and Lender regarding the terms hereof. 12. JURY TRIALWAIVER.LENDER AND BORROWER HEREBY WAIVEANYRIGHTTO A TRIALBY JURY IN ANY CIVH.ACTIONARISING OUT OF,OR BASED UPON,THIS NOTE OR THE COLLATERAL SECURING THIS NOTE. 14.ADDITIONAL TERMS: ADDENDUM TO$330,000 FIXED RATE PROMISSORY NOTE DATED JUNE 2,2003 FROM MIAMI SHORES VILLAGE IN FAVOR OF SUNTRUST BANK This Addendum shall modify that certain Fixed Rate Promissory Note dated June 2,2003,in the amount of$330,000 from Miami Shores Village, as Borrower, in favor of SunTrust Bank, as Lender. 1. Additional rightsd�a,w�ns of the Borrower and Lender are set forth in that certain Loan Agreement between e`B'orr6we,�6 the Lender dated the date hereof. 2. For purposes of this Note,the following definitions shall apply: (1) "Code"means the Internal Revenue Code of 1986, as amended; (2) "Cost of Funds"means 100 multiplied by a fraction,the numerator of which is equal to the total interest expense of Lender for its immediately preceding tax year and the denominator of which is equal to the average total assets of Lender for such tax year, but not to exceed the cost of Fed Funds. (3) "Fully Taxable Equivalent"means the Interest Rate on this Note multiplied by 1.65, expressed as a number and not as a percentage. (4) 101Umum Corporate Tax Rate" means the maximum Federal income tax rate applicabl to y4lo presently 35%. (5) "Preference Reduction Rate"means the percentage reduction to be applied to the amount allowable as a deduction under Chapter I of the Code with respect to any financial institution preference item(as such term is defined in Section 291(e)of the Code), presently 20%. If this Note is not or ceases to be a "qualified tax-exempt obligation" as defined in Section 265(b) of the Code, the Preference Reduction Rate shall be deemed to increase from twenty percent(20%)to one hundred percent(100%). (6) "TEFRA Adjustment"means an adjustment equal to the product of the Cost of Funds multiplied by the applicable Maximum Corporate Tax Rate multiplied by the applicable Preference Reduction Rate. If for any reason the interest on this Note becomes includable in the gross income of the holder of this Note for Federal income tax purposes(an"Event of Taxability"),this Note shall bear interest from the earliest effective date of such Event of Taxability at 3.81%per annum.In addition to the foregoing,the Borrower shall pay any additions to tax,penalties and interest,and any arrears in interest imposed upon the holder of this Note on account of an Event of Taxability. All such additional interest,additions to tax and penalties shall be paid on the next succeeding Payment Date following the date the holder was advised of such Event of Taxability. {MGM/014536.0034NV8024330 31327)2003 05.43 PM} . 1 No Event of Taxability shall be deemed to occur unless the Borrower has been given timely written notice of such occurrence by the holder of this Note and,to the extent permitted by law,an opportunity to participate in and seek, at the Borrower's own expense, a final administrative determination by the Internal Revenue Service or determination by a court of competent jurisdiction (from which no further right of appeal exists) as to the ®ccurrence of such Event of Taxability; provided that the Borrower, at its own expense, delivers to the holder of this Note an opinion of counsel acceptable to suc a0lZrit�d teffect that such appeal or action for judicial or administrative review is not there is a reasonable possibility that the judgment, order,ruling or decision from which such appeal or action for judicial or administrative review is taken will be reversed,vacated or otherwise set aside. The Interest Rate on this Note shall also be adjusted automatically as of the effective date of any change in the Maximum Corporate Tax Rate or in the Preference Reduction Rate,to the product obtained by multiplying the Interest Rate on this Note by a fraction,the numerator of which is equal to the sum of(i)the product of the Fully Taxable Equivalent times 1 minus the Maximum Corporate Tax Rate in effect as of the date of adjustment,plus (ii)the TEFRA Adjustment in effect as of the date of adjustment,and the denominator of which is equal to the sum of(i)the product of the Fully Taxable Equivalent times 0.65,plus(ii)the TEFRA Adjustment in effect on the date of closing of this Note. A certificate of the Lender as to any such additional amount or amounts and the calculation thereof,in the absence of manifest error,shall be final and conclusive. In determining such amount, the Lender may use any r�.esa able averaging and attribution methods. 3. THIS NOTE SHALLL KNOT ZDEEMED TO CONSTITUTE A GENERAL DEBT OR A PLEDGE OF THE FAITH AND CREDIT OF THE BORROWER,OR A DEBT OR PLEDGE OF THE FAITH AND CREDIT OF THE STATE OF FLORIDA NOR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL, LEGISLATIVE OR CHARTER PROVISION OR LIMITATION, AND IT IS EXPRESSLY AGREED BY THE LENDER THAT IT SHALL NEVER HAVE THE RIGHT, DIRECTLY OR INDIRECTLY,TO REQUIRE OR COMPEL THE EXERCISE OF THE AD VALOREM TAXING POWER OF THE BORROWER NOR ANY OTHER POLITICAL SUBDIVISION OF THE STATE OF FLORIDA OR TAXATION IN ANY FORM ON ANY REAL OR PERSONAL PROPERTY FOR THE PAYMENT OF THE PRINCIPAL OF,PREMIUM,IF ANY,AND INTEREST ON THIS NOTE NOR FOR THE PAYMENT OF ANY OTHER AMOUNTS PROVIDED FOR IN THE LOAN AGREEMENT. June 2,2003 MIAMI SHORES VILLAGE By: / a' Tom Benton,Village Manager {MGM/014536.0034/W8024330_3/5272003 05:43 PM} 2 ai Shores Village SunTrust Bank LOAN P.O.Box 406400 AGREEMENT Fort La FL 33340-6400 .............::::. .:. :::::.::::::.:::.::::: 87 470-4814 f1LE ND R E " 10050 N.L. 2ac1 Avenue Miami Shores, FL 33138 (305j..795-220.9................59-6000373.................................. 1. FINANCING.Subject to the following conditions and execution of promissory notes and other evidences of debt as Leader may require, Leader shall provide Borrower with the advances, loans and/or other financial accommodations identified in Schedule A(which is incorporated into this Agreement by this reference), as amended from time to time,as well as any other advances,loans and/or financial accommodations that Borrower and Lender may agree to in writing. Such advances, loans and/or other financial accommodations shall be evidenced by and, if applicable, guaranteed by Guarantors pursuant to and/or secured by collateral set forth in loan documents that are acceptable to Lender including, but not limited to, the documents identified in Schedule B (which is incorporated into this Agreement by this reference),as amended from time to time(collectively the"Loan Documents"). Borrower shall pay to Lender the principal, interest, fees, expenses and any other amounts pertaining to the advances, loans and/or other financial accommodations as described in this Agreement and the Loan Documents. Borrower acknowledges that it may have paid Lender various loan proposal, loan commitment and/or other fees prior to the execution of this Agreement and that these fees shall not be returned to Borrower or applied against the advances, loans and/or other financial accommodations unless a contrary intention is specifically described in Lender's proposal or commitment letters or the Loan Documents. " fl 1 f f 3. COLLATERAL.® If checked, Borrower shall grant, Lender a lien, security interest or other encumbrance upon the collateral belonging to Borrower, as described in the Loan Documents, to secure the payment and performance of all of Borrower's present and future, joint and/or several, direct and indirect, absolute and contingent, express and implied, indebtedness, liabilities, obligations and covenants to Lender as described in this Agreement and the Loan Documents. If checked, Borrower shall cause the parties listed on the Debtor Schedule attached to this Agreement (collectively "Debtors")to grant Lender a lien,security interest or other encumbrance upon the collateral belonging to Debtors, as described in the Loan Documents, to secure the payment and performance of all of Borrower's present and future,joint and/or several, direct and indirect, absolute and contingent, express and implied indebtedness, liabilities, obligations, and covenants to Lender as described in this Agreement and the Loan Documents. The collateral belonging to Borrower or any of the Debtors shall hereinafter be referred to as"Collateral"in this Agreement. 4. SUPERIOR AND CONTINUINGLIENS AND GUARANTIES.The liens, security interests and other encumbrances granted to Lender shall be superior to any other liens, security interests, encumbrances and claims with respect to the Collateral (unless specifically noted otherwise in the Loan Documents). The guaranties and liens, security interests, and other encumbrances described in the Loan Documents shall continue and not be released until all of the indebtedness, liabilities, obligations and covenants guaranteed or secured thereby shall have been paid and/or performed in full and until Lender shall no longer be obligated to provide any additional advances, loans or other financial accommodations of any kind to or for the benefit of Borrower (or,if applicable, any of the Debtors). S. CONDITIONS PRECEDENT. Lender's obligation to provide Borrower with any advances, loans and/or other financial accommodations shall be subject to the following conditions precedent,all of which shall be satisfied at Borrower's expense: a. Evidence of Existence. Lender shall be provided with such written evidence, as required by Lender, concerning Borrower's, Guarantors' and Debtors' legal names,good standing,and authorization to conduct business; b. Execution and Delivery. Borrower shall execute and deliver this Agreement and the necessary Loan Documents and cause any Guarantors and Debtors to execute and deliver to Lender the necessary Loan Documents and all other documents relating thereto, each in a form and substance acceptable to Lender; C. Authorization. Lender shall be provided with such written evidence, as required by Lender, that the representatives of Borrower and any Guarantors and Debtors are authorized to execute this Agreement and the Loan Documents on behalf of those parties and bind Borrower and any Guarantors and Debtors to the terms and conditions set forth therein; d. Liens. Lender's liens, security interests, and other encumbrances upon the Collateral shall be attached, created, filed, perfected and recorded in accordance with applicable law and notice of such liens, security interests and encumbrances shall be provided to such parties as requited by Lender; f f f f f T—A— -U-ti U- -YA-s@tMPFA&-1 -Ash-essessifletta md Woffiftifieweas — --.:—A U-T—A— -,:.0 f g. Legal Opinions. Upon Lender's request, Lender shall be provided with a signed opinion of counsel for Borrower addressed to Lender (i)to the effect that no litigation is pending or threatened against Borrower, except such as has been disclosed to Lender or is covered by insurance, (d)to the effect that the Loan Documents have been duly and validly authorized, executed and delivered by Borrower and are enforceable, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and except to the extent that general equitable principles may limit the right to obtain specific performance, (iii)the loan transactions entered into pursuant to this Agreement are not usurious, (tv)no registration with,consent of,approval of,or other action by any Federal, State, or other governmental authority or regulatory body to the execution and delivery of the Loan Documents is required by law, or if so required, such registration has been made, and consent or approval given or such other appropriate action taken,and(v)addressing such other matters as the Lender may reasonably request; h. Financial Information. Borrower shall, and shall cause any Guarantors and Debtors to deliver to Lender a copy of annual financial statements, such statements to include (i)the balance sheet as of the end of each fiscal year requested by Lender, and (u)the related income statement, statement of retained earnings and statement of changes in the financial position for each fiscal year, prepared by such certified public accountants in accordance with generally accepted accounting principles ("GAAP")as may be reasonably satisfactory to Lender. Borrower also, agrees, and shall cause any Guarantor and Debtor to agree, eliver to Lender a copy such other financial information with respect to Borrower, or any Guarantor or Debtor,as Lender maequest; *reqsunabl i. Absence of Breach. All of the respective representations and larranties of Borrower, or any Guarantor or Debtor under this Agreement or the Loan Documents shall be true and correct on and as of the date of the execution of those documents or date of any initial advances and/or extensions of the loans and/or other financial accommodations described therein; j. Absence of Events of Default. No Event of Default shall exist under this Agreement or the Loan Documents, nor shall any circumstances exist that would constitute such an event of default except for giving of notice or the passage of time or both on or before the date of execution of those documents or the date of any advances and/or extensions of the loans and/or other financial accommodations described therein; k. Borrower shall have paid or cause to have been paid to Lender all fees and expenses due and payable under this Agreement or any other Loan Document on or before the date of execution of those documents or the date of any advances and/or extensions of the loans and/or other financial accommodations described therein;and 1. Other: MAM19 ©FomiAtion Tecbwimies.I= (21291M OMI 9'17.1799 F 6. REPRESENTATIONS AND WARRANTIES wer represents and warrants to Lender that: a. Tax Identification. The tax identification and/or social security numbers of Borrower are as follows: Miami Shores Village - 59-6000373 *Municipal b. Borrower's Residency. Borrower is r] an individual(s) and a resident of the State of n8 XT= _ration duly organized, validly existing and in good standing under the laws of the State of `Florida ' entification and Residenc . Guarantors �•� "•*•" +••s t+-tee ct�a,zte�al shown -inthe Guarantv Schedule attached to thin Agrepmen+ nti l;r used t- QQU&Ct lmsisloss i8 all e:t 9-� edieBese ie r tax identification and/or sadal secusitf numbess act them A— :_ILD G Meehed ,.�1.:.. A..wnn enf• . f eD -F•�- -o.i:..4:� :n whiab h it hnain "s is enndurtefi P ht ' tax ideW*,i5 ..t: ...il.. I,--@ 41hem's :r1 the Demos e. Ownership of Collateral. Borrower and any Debtors are and shall remain sole owners of their respective Collateral free of all tax and other liens, security interests, encumbrances and claims of any kind except for those specifically described in this Agreement and the Loan Documents. Without Lender waiving the event of default as a result thereof, Borrower shall take and cause any Debtors to take any action and execute any document needed to discharge any unauthorized liens,security interests,encumbrances and claims; f. Location of Offices. The sole executive offices, places of business, offices where their business records are located, residences and domiciles of Borrower and any Guarantors and Debtors are specifically described in this Agreement and the Loan Documents. Borrower shall immediately advise and cause any Guarantors and Debtors to immediately advise Lender in writing of any change in or addition to the foregoing addresses; g. Location of Collateral. All of Borrower's and any Debtors' property constituting a portion of the Collateral is and shall be located at the locations specifically described in the Loan Documents or at such locations to which Borrower and such Debtors have obtained Lender's prior written consent; h. Enforceability of Certain Collateral. All of Borrower's and any Debtors' accounts, contract rights, chattel paper, documents, general intangibles, instruments, and other rights and agreements constituting a portion of the Collateral are and shall be valid, genuine and legally enforceable obligations and rights belonging to Borrower and such Debtors against one or more third parties and are not and shall not be subject to any claim, defense,setoff or counterclaim of any kind; i. Information. All information that has been provided to Lender by or on behalf of Borrower or any Guarantor or Debtor is true and correct and does not and shall not omit any material fact necessary to make such information not misleading. All information that will be provided to Lender by or on behalf of Borrower or any Guarantor or Debtor shall be true and correct and shall not omit any material fad necessary to make such information not misleading. Neither Borrower nor any Guarantor or Debtor is aware of any fact which has or might have a material and adverse effect on their business operations, financial conditions, or assets or the Collateral or have failed or shall fail to disclose any material facts to Lender that might be relevant to Lender's decision to enter into or continue to advance funds, make loans or provide financial accommodations under this Agreement or any of the Loan Documents; j. Obligations. This Agreement and each Loan Document constitute Borrower's legal and binding obligations to Lender and are fully enforceable in accordance with their respective terms and conditions; k. Conflict of Laws. Borrower's and any Guarantors' and Debtors' execution of this Agreement and the Loan Documents and performance of their respective obligations thereunder does not and shall not conflict with the provisions of any statute, regulation, ordinance, rule of law,contract or other agreement which may now or hereafter be binding on those entities; 1. Default in Other Obligations. Neither Borrower nor any Guarantor nor any Debtor is or shall be in default under any material loan agreement, indenture, mortgage, security agreement or other agreement or obligation to which they are a party or by which any of their respective properties may be bound; in. Litigation and Claims. No action, suit, proceeding, governmental investigation or arbitration is or shall be pending or,to the knowledge of Borrower, threatened against Borrower or any Guarantor or Debtor which might result in any material and adverse change in their respective business operations or financial conditions or materially affect the Collateral and there are and shall be no outstanding judgments against Borrower or any Guarantor or Debtor; n. Solvency. Borrower and any Guarantors and Debtors are Solvent and shall continue to be Solvent after the execution of this Agreement and the Loan Documents and the creation of Lender's security interest in the Collateral. "Solvent"shall mean, with respect to the Borrower and any Guarantor and Debtor, at the time of determination, that the fair market value of its assets is in excess of the total amounts of its liabilities including contingent liabilities, that it is able and shall be able to pay its debts as they mature, and that it has and shall have sufficient capital to conduct its business and other financial transactions; r and other At8 i p. Margin Stock. Neither Borrower nor any Guarantor nor any Debtor is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations G,T,U or X of the Board of Governors of the Federal Reserve System), and no part of the advances, loans and/or other financial accommodations provided by Lender under this Agreement or any of the Loan Documents shall be used to purchase or carry any such margin stock or to extend credit to others for the purpose of purchasing or carrying margin stock. Neither Borrower, any Guarantor nor any Debtor, nor any person aging on their behalf has taken or shall take any action that might cause the transactions contemplated by this Agreement or the Loan Documents to violate Regulations G,T,U or X or to violate the Securities Exchange Act of 1934,as amended; q. Compliance with ERISA. Borrower and any Guarantors and Debtors have complied and shall comply with all applicable minimum funding and other requirements of the Employce Retirement Income Security Act of 1974,as amended ("ERISA"),and there are and shall be no existing conditions that would give rise to liability thereunder including, without limitation, any current or potential withdrawal liability from a multi-employer plan (as defined in Section 3(37) of ERISA). No reportable event (as defined in Section 4043 of ERISA)has occurred or shall occur in connection with any employee benefit plan of those entities that might constitute grounds for the termination thereof by the Pension Benefit Guaranty Corporation or for the appointment of a trustee to administer that plan. Borrower shall immediately notify and cause such Guarantors and Debtors to immediately notify Lender of any fact (including, but not limited to,any "reportable event" as that term is defined in Section 4043 of ERISA)arising in connection with any employee benefit plan belonging to those entities which might constitute grounds for the termination thereof by the Pension Benefit Guaranty Corporation or for the appointment of a trustee to administer that plan and, following such notification, Borrower shall provide or cause such Guarantors and Debtors to provide Lender with any additional information or documents as may be requested by Lender with respect thereto; r. Investment Company. Neither Borrower nor any Guarantor or Debtor is or shall be an "investment company" within the meaning of the Investment Company Act of 1940,as amended; s. Holding Companies and Affiliates. Neither Borrower nor any Guarantor or Debtor is or shall be a "holding company" or a "subsidiary company" of a "holding company" or an "affiliate"of a "holding company" or a "public utility"within the meaning of the Public Utility Holding Company Act of 1935, as amended; t. Compliance with Applicable Environmental Law. Borrower,each Guarantor and Debtor, and their respective properties are and shall be in compliance with all environmental, health and safety laws, rulesd regulations and neither Borrower nor any Guarantor or Debtor is or shall be subject to any liability or obligation for remedial action thereunderNo investigation or inquiry by any governmental authority is or shall be pending or, to the knowledge of Borrower, threatened against Borrowef, ,ny Guarantor or Debtor, or any of their respective properties with respect to any toxic waste, toxic substance or Hazardous Material as defined h -to-An ..havasdaus waste or, auhat 4 iw et..wA t..............4-.i .. .i.... ..ed—�@E4�@ d�€'P-Cji'-$@l�l9e� f�'9rA�@n�i-N1f it pert4es. The term "Hazardous Materials" shall mean any substance, material, or waste which is or becomes regulated by any governmental authority including, but not limited to: (i) petroleum and petroleum related products, (ii)asbestos, (iii)polychlorinated biphenyls, (v)those substances, materials or wastes designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Actor listed pursuant to Section 307 of the Clean Water Actor any amendments or replacements to these statutes, (v)those substances, materials or wastes defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act or any amendments or replacements to that statute or any state equivalents, or(vi)those substances, materials or wastes defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act,or any amendments or replacements to that statute, or (vii)any "hazardous waste," "hazardous material," "hazardous substance" or "chemical substance or mixture" or similarly regulated substances or materials as such phrases are defined in or regulated pursuant to any applicable state or local law,regulation or ordinance governing the eneration,storage,discharge,transportation or disposal of the same; *except as separately disclosed to lender. MAMI&B ® FomiAtton Tec=kees,tui (229/96) (app)997-3799 Page 2 of 6 U. Compliance with Other Laws. Neit rrower nor any Guarantor or Debtor has violated call violate any applicable federal, state, county or municipal statute, regulation or ordina-- which may materially and adversely affect its respa.;dve business operations or financial condition or the Collateral. No Event of Default (or circumstances which, with notice or the passage of time or both, would constitute an Event of Default) has occurred or shall occur under this Agreement'or the Loan Documents; V. Purpose. This Agreement and the Loan Documents and the obligations described herein and therein are executed and incurred for baeiae _@Lh- Kunicipal,avfe� and not.consumer purposes and all proceeds of Lender's advances, loans and/or other financial accommodations to Borrower shall be used exclusively in the Borrower's business and for no other purpose'- *Or for municipal purposes. W. Lender's Influence. Borrower acknowledges and agrees that Lehder has not exercised or attempted to exercise, directly or indirectly, any degree of control or influence of any kind whatsoever over the internal business operations or financial affairs of Borrower, or to the best of Borrower's knowledge, any Guarantor or Debtor. Borrower shall immediately notify and cause any Guarantors and Debtors to immediately notify Lender in writing of any actions that they consider to constitute an exercise or attempt to exercise such control or influence in the future. Borrower acknowledges and agrees that Lender has not acted as a business, investment or financial consultant or advisor to Borrower or any Guarantor or Debtor. Borrower shall notify and cause such Guarantors and Debtors to notify Lender in writing of any attempt by Lender to act as a consultant or advisor to those entities in the future; X. Lender's Duty. Lender does not have and shall not have any fiduciary or similar duty to Borrower,any Guarantor or Debtor; y. Lender's Relationship. Lender has not participated and shall not participate in any type of joint vendee or partnership with Borrower, or any Guarantor or Debtor and the execution and consummation of this Agreement and the Loan Documents and the transactions contemplated therein do not and shall not constitute or amount to a joint venture or partnership; Z. Lender Not an Agent. Except as expressly set forth in this Agreement or the Loan Documents, Lender has not acted and shall not act in any respect as the agent of Borrower or any Guarantor or Debtor for any purpose and no agency relationship has been or shall be created by the execution of this Agreement and the Loan Documents or the consummation of the transactions contemplated thereby; as. Governmental Approvals. Borrower, each Guarantor and Debtor have obtained and will continue to obtain all governmental approvals, including but not limited to,approvals requited by any federal, state, county or municipal statute, regulation or ordinance required to fulfill any obligations required pursuant to this Agreement or the Loan Documents;and ab. Financial Changes. There has been no adverse material financial change to Borrower, Guarantor or any Debtor since the last financial statements were provided to Lender. 7. COVENANTS OF BORROWER. Borrower covenants and agrees with Lender as follows: a. Beneficiaries. Each of the Guarantors and Debtors, if any, by virtue of their interest in or relation to Borrower, shall receive a substantial benefit from Lender's advances, loans and/or other financial accommodations to Borrower and such benefit shall constitute adequate consideration for the obligations assumed by any Guarantor and Debtors under this Agreement and the Loan Documents; b. Change of Name. Borrower shall provide and cause any Guarantors and Debtors to provide Lender with thirty(30)or more days' prior written notice of the nature of any intended change in their respective names,or the use of any tradename,and when such change or use shall become effective; C. Use of Collateral. Borrower shall use and cause any Debtors to use the Collateral solely in the ordinary course of their respective businesses, for the usual purposes intended by the manufacturer (f applicable), with due care, and in compliance with the laws, ordinances, regulations, requirements and rules of all federal, state, county and municipal authorities and insurance policies. Borrower shall not make and shall cause any Debtors to refrain from making any alterations, additions or improvements to the Collateral without the prior written consent of Lender. Without limiting the foregoing, all alterations, additions and improvements made to the Collateral shall be subject to the security interest belonging to Lender, shall not be removed without the prior written consent of Lender, and shall be made at Borrower's and the Debtors' sole expense. Borrower shall take and cause any Debtors to take all actions and make any repairs or replacements needed to maintain the Collateral in good condition and working order; Debtor,or my other persoit shall affeet the right of berAef to be paid the inswanee pteends pertaiiiing to the less at dawAge of 4he cellateffil-, e. Possession of Chattel Paper. Borrower shall provide and cause any Debtors to provide Lender with possession of all chattel paper and instruments constituting a portion of the Collateral and mark such chattel paper and instruments to reflect Lender's security interest therein; f. Collection Practices. Borrower shall continue to apply and cause any Debtors to continue to apply their established credit policies with respect to all future credit transactions. Borrower shall use and cause any Debtors to use their best efforts to collect from their account debtors and other third parties, as and when due, any and all amounts owing under or with respect to each account, contract right, document, general intangible, instrument or other agreement ('including, without limitation, engaging legal assistance to collect delinquent obligations from their account debtors and other third parties)and apply the collected amounts against the outstanding balances on those obligations and agreements; g. Records. Borrower shall maintain and cause any Guarantors and Debtors to maintain complete and accurate books and records of their respective financial conditions, businesses and properties and with respect to the Collateral, and such records shall be maintained in accordance with GAAP consistently applied,and reflecting all financial transactions; h. Financial Information. Borrower will,and shall cause any Guarantors and Debtors to,at all times keep 1po�ier books o rd and account in which f%8 full,true and correct entries shall be made in accordance with "GAAP"and will deliver to Lender, within ninety— -dayater the end of each fiscal year of Borrower, Guarantor, and Debtor a copy of the annual financial statements of Borrower, Guarantor, and Debtor relating to such fiscal year, such statements to include (i)the balance sheet of Borrower, Guarantor, and Debtor as at the end of such fiscal year and (ii)the related income statement, statement of retained earnings and statement of cash flow of Borrower, Guarantor, and Debtor for such fiscal year, prepared by such certified public accountants as may be reasonably satisfactory to Lender. Borrower also agrees to deliver, and shall cause any Guarantors and Debtors to deliver, to Lender within fifteen (15)daysQuangtot's and ' ,such otr financial information.with respect to Borrower,meter and Debtor as Lender may request;*-,K t i. Inspection of Records rrower shall permit and cause any Guarantors and Debtors to permit officers, agents and employees of Lender to examine their business and financial records and properties and the Collateral and to discuss any issues pertaining to their business operations, financial conditions or the Collateral with their officers,employees,accountants and other representatives and agents; j. Repayment. Borrower and any Guarantors and Debtors shall duly and punctually repay the advances, loans and/or other financial accommodations evidenced by this Agreement and the Loan Documents in accordance with the terms of the Loan Documents and perform all of their other respective obligations hereunder or thereunder; k. Lists. At Lender's request, Borrower shall provide and cause any Debtors (who own or will become the owners of any farm products constituting a portion of the Collateral) to provide Lender with a list describing the names and addresses of each buyer, commission merchant or selling agent who has purchased farm products from Borrower or such Debtors during the last three (3)years and the name and address of each buyer, commission merchant or selling agent expected to purchase farm products from Borrower or such Debtors during the next twelve(12)months upon the execution of this Agreement. Borrower shall immediately provide and cause such Debtors to immediately provide Lender with a flat describing the names and addresses of any additional buyers, commission merchants or selling agents who are expected to purchase farm products from Borrower or such Debtors thereafter. Without limiting the foregoing, Borrower shall provide and cause such Debtors to provide Lender with a list describing the names and addresses of each buyer, commission merchant or selling agent who has purchased farm products from Borrower or such Debtors during the past year or who is expected to purchase farm products from Borrower or such Debtors within the next twelve(12)months at the request of Lender on three (3)days' written notice. In addition, if the Collateral is subject to the jurisdiction of a State that has or subsequently implements a central filing system for farm products consistent with the Food Security Act,the Borrower and/or Debtor will comply with the provisions of the central filing system and Lender will be entitled to all the protections under the central filing system; 1. Notification Regarding Events of Default. Without limiting any of the representations, warranties and covenants contained herein, Borrower shall immediately notify and cause any Guarantors and Debtors to immediately notify Lender of: (i) the occurrence of any event of default (or circumstances which, with notice or the passage of time or both, would constitute an event of default) under this Agreement or the Loan Documents, (ii)the commencement of any action, suit, or proceeding or any other matter that might have a material adverse effect on the Borrower, any Guarantor or Debtor,or the Collateral,and(iii)any change in the management of Borrower; in. Borrower's Agreement to Take Action. Borrower shall execute and deliver and cause any Guarantors and Debtors to execute and deliver to Lender any documents and take any actions as may be requested by Lender to carry out the intent and purposes of this Agreement and the Loan Documents and the transactions contemplated thereby and to preserve and perfect Lender's Gens,security interests and other encumbrances on the Collateral; n. Restructuring. Neither Borrower nor any Guarantor or Debtor shall become a party to any restructuring of its form of business or participate in any consolidation,merger,liquidation or dissolution without obtaining Lender's prior written consent thereto; o. Substitution of Certain Collateral. Borrower shall not amend, modify, replace or substitute and shall cause any Debtors not to amend, modify, replace or substitute any account, contract right, chattel paper, document, general intangible, instrument, or other right or agreement constituting the Collateral without the prior written consent of Lender; p. Transfer/Sale of Collateral. Borrower shall not transfer, sell, lease, assign, convey or otherwise dispose of any of the Collateral or the properties or assets used in connection with or incidental to the operation of its business without the prior written consent of Lender except for inventory sold in the ordinary course of its business. No Guarantor, if any, shall transfer, sell,lease, assign, convey or otherwise dispose of any of its properties or assets that would materially and adversely affect its financial condition or ability to satisfy its obligations under this Agreement and the Loan Documents without the prior written consent of Lender. No Debtor, if any, shall transfer, sell,lease, assign, convey or otherwise dispose of any of the Collateral without the prior written consent of Lender except for inventory sold in the ordinary course of its business; **Upon reasonable notice to borrower and during normal business hours. ***reasonably MAST218C © FonnAtlon Teclmnlogies,Inc. (229/96) (800)937-3799 Page 3 of 6 q. Sale of Farm Products. If farm pro may constitute a portion of the Collateral, neither wer nor any Debtor shall sell or otherwise dispose of any farm products in the ordinary of business to a buyer, commission merchant, or g agent not on the list of potential buyers described above(if required)without: (J) Notifying Lender in writing of the identity of the buyer, commission merchant, or selling agent at least 7 days prior to such sale, or accounting to Lender for the proceeds of such sale not later than 10 days after such sale. IF BORROWER FAILS TO PROVIDE LENDER WITH THIS INFORMATIONAND TO PAY OVER THE ENTIREPROCEEDS OF ANYSALE OR OTHER DISPOSITION WITHOUTOFFSET FOR ANYLIENS OR OTHERWISE WITHINTEN(10)DAYS AFTER THE SALE OR DISPOSITION,BORROWER SHALLBE SUBIECT TO A FINE OF$5,000.00 OR 15 PERCENT OF THE VALUEOF OR BENEFIT RECEIVED FROM THE FARM PRODUCTS, WHICHEVER IS GREATER,IN ADDITIONTO ANY OTHER RIGHTS OR REMEDIES AVAILABLE TO LENDER; (ii) Providing Lender with any other information and documents needed to maintain its security interest in the farm products and its right to receive the proceeds thereof under the Food Security Act of 1985,National Wool Act of 1954,and other applicable law;and (iii) Preserving and assigning to Lender all of its trust and lien rights under the Packers and Stockyard Act,Perishable Agricultural Commodities Act and other applicable law. ke s. V. Financial Covenants. ❑ If checked, the Borrower covenants and agrees that from the date hereof, until payment in full of all advances, loans, and/or financial accommodations and the performance of all obligations under the Loan Documents, the Borrower shall, at all times, maintain the financial positions and ratios in accordance with GAAP(unless otherwise specified) as stated on the Financial Covenants Schedule attached to this Agreement. 8. OTHER REPRESENTATIONS,WARRANTIES AND COVENANTS. In addition to the other representations, warranties and covenants contained herein, Borrower represents and warrants to Lender and covenants and agrees with Lender as follows: 9. SPECIAL PROVISIONS FOR FARM PRODUCTS. If farm products constitute a portion of the Collateral, Borrower hereby authorizes and shall cause any Debtors (who own or will become the owners of any farm products constituting a portion of the Collateral) to authorize Lender to provide oral or written notice of its security interest in the farm products constituting a portion of the Collateral to any potential buyer, commission merchant or selling agent of the farm products or to any other person where the Lender, in its sole discretion, deems such notice to be reasonably necessary to protect its security interest and to execute and record written notices of its security interest in such farm products in the recording system established by any state pursuant to the Food Security Act of 1985 and in any recording system established by any state pursuant to the Uniform Commercial Code. Borrower shall assign to Lender and cause any Debtors (who own or will become the owners of any farm products constituting a portion of the Collateral) to assign to Lender all of their respective trust and lien rights under the Packers and Stockyard Act,Perishable Agricultural Commodities Act and other applicable law upon the request of Lender. Borrower shall take and cause such Debtors to take all actions and execute all documents to preserve and assign the trust and lien rights as required by Lender. 10. PRESENTMENT,DEMAND AND NOTICES. Borrower hereby waives and shall cause any Guarantors and Debtors to waive all of their respective rights to diligence, presentment, demand, protest, and notice (including, but not limited to, notice of dishonor, default, non-payment, and the creation, existence and extension of any and all indebtedness and obligations under this Agreement and the Loan Documents and of any security and collateral therefor) to the maximum extent permitted by law. 11. EVENT OF DEFAULT.An Event of Default shall occur under this Agreement and the Loan Documents, in the event that Borrower, any Guarantor, any Debtor,or any other party guarantying or securing the advances,loans and/or other financial accommodations described therein: a. fails to pay any obligation to Lender when due, b. fails to perform or observe any term, condition, or covenant contained in this Agreement or the Loan Documents, or any warranty or representation by or on behalf of Borrower should prove to be false or misleading in any material respect; C. sells, conveys, or transfers rights in any Collateral without the written approval of Lender; destroys, loses or damages such Collateral in any material respect;or subjects such Collateral to seizure,confiscation or condemnation; d. seelAp revoke,terminate or otherwise limit its liability to Lender; *material e. has aNamishment,judgment,tax levy,attachment or lien entered or served against Borrower,any Guarantor,or any Debtor or any of their property; f. dies, becomes legally incompetent, or files a petition in voluntary bankruptcy or seeking relief under any provision of any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law,or consents to the filing of any petition against such entity under such law,or a petition is filed against such entity under any such law,or such entity admits insolvency or bankruptcy or becomes insolvent or bankrupt or makes an assignment for the benefit of creditors, or a custodian (including, without limitation, a receiver, liquidator or trustee) of such entity or any of its property is appointed by court order or takes possession thereof, g. has furnished prior to the execution of or pursuant to the terms of this Agreement any report, certificate, financial statement or other document which proves to be false or misleading in any material respect; h. fails to provide Lender evidence of satisfactory financial condition; i causes L=dec to dem i4selt insecam duc to a significant declina in the *2141c of tha C-011:14mal or.Lmd", in good fWal, beliwas the PC-9speet e; 12. RIGHTS OF LENDER ON EVENT OF DEFAULT.If there is an Event of Default under this Agreement or any of the Loan Documents, Lender shall be entitled to exercise one or more of the following remedies without notice,presentment or demand(except as required by law): a. Acceleration -to declare Borrower's and any Guarantors' or Debtors' indebtedness and obligations to Lender to be immediately due and payable in full,(such acceleration shall be automatic and immediate if the Event of Default is a filing under the Bankruptcy Code); I MAS1218D ©FmmAtim Tectmologles,Tae. (224/96) (800)937.3799 Page 4 of 6 b. Collection-to collect Borrower's and arantors'or Debtors'outstanding obligations to Lend or without resorting to judicial process; C. Delivery of Collateral -to require Borro..r and any Debtor to deliver and make available to Le..4.er any Collateral at a place reasonably convenient to Lender and those entities; d. 1%ke Possession to take immedift poss trt and contm!of die eellateral withetA seeking,the appoi t---t nf sa rerAyw—j 9 the abligagens of these eMNes to Eender,or the exiffbenee of my waft te the g. Foreclosure-to foreclose any deed to secure debt,mortgage,lien,security interest or other encumbrance on the Collateral; h. Setoff -to setoff Borrower's and any Guarantors' and Debtors' obligations to Lender against any amounts due to those entities including, but not limited to,Borrower's and Guarantors'and Debtors'monies,instruments,and deposit accounts maintained with Lender, i. Additional Collateral -require Borrower or Guarantor or any Debtor to pledge additional collateral to Lender from Borrower's or Guarantors' or any Debtors'assets,the acceptability and sufficiency of such collateral to be determined in Lender's sole discretion;and j. Lender's Contractual Rights -to exercise all other rights available to Lender under the Loan Documents, any other written agreement, or applicable law. Lender's rights and remedies are cumulative and may be exercised together, separately, and in any order. , he etmed to transfer We sewdewes WA #to mme of Leader of its de*ftee and to vote 4W . or Debters,Berrewer hereby waives and shall effuse Debtors to urflive the peffft of,efly bond wMah W&e 11 � 1 . 13. BORROWING CERTIFICATE.Q If checked, every request for an advance made by Borrower shall be made by mailing or telecopying to Lender a completed Borrowing Certificate in the form attached hereto as Exhibit A. In addition to the Borrowing Certificate, Borrower shall submit to Lender such other documents, certifications and other information as may be required by Lender from time to time. Lender is hereby authorized by Borrower to make advances upon the receipt of a Borrowing Certificate executed by an individual purporting to be an authorized representative of Borrower, unless Lender has actual knowledge that the individual executing such Borrowing Certificate is not so authorized. 14. HOLDHARMi ES,S AND INDEEMNIFICATION.Lender shall not be responsible for the performance of any of Borrower's or any Debtors' obligations with respect to the Collateral under any circumstances. , and shall enese my GiwafftrR and Debbors bo fl R f fbut mtf INN"Aals), sh-11 isamedistely provide md eemse my GvaraWmrs mid ReWbers to immediaWy pro-ndle- Lender mis-h mw-Wen a-agea efany seek Gj" B- affewof, open the Fe"ed of f6two,ftsf and pity the a#mftteys' few, 15. REIMBURSEMENT FOR EXPENSES. Upon demand, Borrower shall immediately reimburse or cause any Guarantors and Debtors to immediately reimburse Lender for all amounts (including all out-of pocket expenses of Lender, such as, attorney and paralegal fees, disbursements and costs, fees and costs of appraisers, engineers, investment bankers, environmental consultants or other experts retained by Lender) expended by Lender, to the extent permitted by applicable law,in the: (i)negotiation, preparation, amendment, extension, modification, replacement or substitution of this Agreement or any of the Loan Documents, (ii)attachment, creation, filing,perfection, and recording of Lender's liens, security interests, and other encumbrances in the Collateral or any UCC and other searches and title or insurance policies in connection therewith, (iii)defense of the validity and priority of Lender's liens, security interests and other encumbrances against the Collateral, (iv) enforcement or defense of any obligation or the exercise of any right or remedy described in this Agreement or the Loan Documents, and (v)refinancing or restructuring of the advances, loans and/or other financial accommodations provided under this Agreement in the nature of a "work out" or in any insolvency or bankruptcy proceedings. These sums shall bear interest at the lower of the highest rate described in any of the Loan Documents or the highest rate allowed by law from the date of payment until the date of reimbursement and be secured by the Collateral. Lender has no duty to take any action to protect the value of the Collateral or to exercise any rights of the Borrower or Debtor with respect to the Collateral. 16. APPLICATIONOF MONIES. Allpayments to Lender made by or on behalf of Borrower or any Guarantors and Debtors or monies received by Lender from the Collateral or otherwise may be applied against any amounts paid by Lender in connection with the exercise of its rights or remedies described in this Agreement and the Loan Documents (including attorneys' fees and legal expenses together with interest at the rate described in the foregoing paragraph) and then to the payment of the remaining obligations under this Agreement and the Loan Documents in . 12 I!OMZR. CW A=Q--R-N-E:9.Reffewo-P hereby appoints wrd sW1 evest M Gmarantms and Debtor., jaindy =d sevurAty, to appoint fxndem as theft a 18. MODIFICATIONAND WAIVER.The modification or waiver of any of Borrower's or any Guarantors' or any Debtors' obligations or Lender's rights under this Agreement or the Loan Documents must be contained in a writing signed by Lender. Lender may perform any of Borrower's or any Guarantors' or any Debtors' obligations or delay or fail to exercise any of its rights without causing a waiver of those obligations or rights. A waiver on one occasion shall not constitute a waiver on any other occasion. Borrower's and any Guarantors' and Debtors' obligations to Lender under this Agreement and the Loan Documents shall not be affected if Lender amends, compromises, exchanges, fails to exercise, impairs or releases any of the obligations belonging to any co-borrower, Guarantor or obligor or any of its rights against any Borrower,Guarantor,Debtor,Collateral,or any other property securing the obligations. 19. SUCCESSORS AND ASSIGNS. This Agreement and the Loan Documents shall be binding upon and inure to the benefit of Borrower, Lender, and their respective successors,assigns,trustees,receivers,administrators,personal representatives,heirs,legatees and devisees. 20. ASSIGNMENT AND PARTICIPATIONS. Borrower and any Guarantors and Debtors shall not be entitled to assign any of their rights, remedies or obligations described in this Agreement or the Loan Documents without the prior written consent of Lender, which consent may be withheld by Lender in its sole discretion. Lender shall be entitled to grant participations in or assign some or all of its rights and remedies described in this Agreement and the Loan Documents without notice to or the prior consent of Borrower or any Guarantors or any Debtors. 21. NOTICES. Any notice or other communication to be provided under this Agreement or the Loan Documents shall be in writing and mailed to the parties at the addresses described in this Agreement or the Loan Documents or such other address as the parties may designate in writing from time to time. 22. SEVERABILITY.If any provision of this Agreement or the Loan Documents violates the law or is unenforceable, the rest of this Agreement shall remain valid. 23. CHOICE OF LAW AND CONSENT TO JURISDICTION AND VENUE. This Agreement shall be governed by the laws of the state indicated in Lender's address. Unless applicable law provides otherwise, Borrower consents to the jurisdiction and venue of any court located in such state selected by Lender in the event of any legal proceeding under this Agreement. 24. MISCELLANEOUS. Time is of the essence in the performance of this Agreement. All references to Borrower shall refer to all of the parties signing below except Lender. Ifthere is more than one Borrower signing below, their obligations to Lender shall be joint and several. This Agreement, the Loan Documents and other documents delivered in connection therewith represent the entire complete and integrated understanding between Borrower, any Guarantors and Debtors, and Lender pertaining to the terms and conditions of those documents and the advances, loans and/or other financial accommodations described therein and supersedes all prior agreements and commitments, written and oral, relating to the subject matter hereof. If a conflict arises between the provisions of this Loan Agreement and any other Loan Document the provision most favorable to Lender will prevail. 25. WAIVEROF JURY TRIAL.BORROWER AND LENDER HEREBY WAIVEANYRIGHT TO A TRIALBYJURY IN ANYCIVILACTIONARISING OUT OF OR BASED UPON, THIS LOAN AGREEMENT. 26. ADDITIONAL TERMS: See attached addendum. MAM18E © F—Ati-Teelmologies,Ino. (20196) (SOD)937.3799 Page 5 of 6 ..................................... ..................................... ..................................... c ..... �Icr ............:: ±Gtt: :::: ::;;::;;;:aC :.....:....:...:....... 2.500 TERM::;.>:.; 33.00.0.00.00.6::.._.2037;;;:::;. 3.500% $950,000.00 06/02/03 07/01/13 TERM ..................................... ..................................... » TC}IL< 3 ....:.......... ................................ ..... ...................... BORROWER ACKNOWLEDGES THAT BORROWER HAS READ,UNDERSTANDS, AND AGREES TO THE TERMS AND CONDMONS OF THIS AGREMIENT. BORROWER ACKNOWLEDGES RECEIPT OF AN EXACT COPY OF THIS AGREEMENT. Dated: June 02, 2003 LENDER: SunTrus nk B Kimrey Newli First Vice Pres BORROWER Sh res Village BORROWER: Miami Shores Village h Bys � By. Tom Benton Mark Ma ata Village Manager Finance Director BORROWER: BORROWER: BORROWER: BORROWER: BORROWER: BORROWER: MAM18F 0 FwMAflon TerlmnWes,Inc. (224196) (80D)937-3799 Page 6 of 6 ADDENDUM TO LOAN AGREEMENT DATED JUNE 2.2003 BETWEEN MIAMI SHORES VILLAGE AND SUNTRUST BANK This Addendum shall modify that certain Loan Agreement dated June 2,2003,from Miami Shores Village, as Borrower, and SunTrust Bank, as Lender, relating to the Borrower's $950,000 Fixed Rate Promissory Note (the "2003A Note") and $330,000 Fixed Rate Promissory Note (the "2003B Note" and collectively with the 2003A Note,the"Notes"). SECTION 1. DEFINITIONS. As used herein, unless the context otherwise requires: 1. So long as the Notes shall remain outstanding,the Borrower shall maintain and keep books for the registration and transfer of the Notes.The Notes shall be in substantially the form attached as Exhibit"A"to the Loan Agreement. 2. The Notes shall not be or constitute general obligations or indebtedness of the Borrower within the meaning of the Constitution of Florida,but shall be payable from and secured solely by the Collateral described in this Addendum,in the manner and to the extent in this Loan Agreement provided. The Lender shall never have the right to compel the exercise of the ad valorem taxing power of the Borrower or taxation in any form on any real or personal property to pay the Notes or the interest thereon,nor shall the Lender be entitled to payment of such principal and interest from any funds of the Borrower other than the Collateral. The Lender shall have no lien upon any real or tangible personal property of the Borrower. 3. Payment of the principal of and interest on the 2003A Note shall be secured forthwith equally and ratably by an irrevocable lien on and pledge of one third (1/3) of the Local Option Fuel Tax revenues received by the Borrower in each of its fiscal years pursuant to Section 336.025, Florida Statutes(the"Pledged Local Option Fuel Tax"),prior and superior to all other liens or encumbrances on the Pledged Local Option Fuel Tax, and the Borrower hereby irrevocably pledges the Pledged Local Option Fuel Tax to the payment of the principal of and interest on the 2003A Note as the same shall become due. Such pledge of the Pledged Local Option Fuel Tax shall be cumulative to the extent not paid, and shall continue until the 2003A Note has been paid in full. The Borrower represents that the Pledged Local Option Fuel Tax will not be pledged or encumbered in any manner,except for the payment of the 2003A Note.The Borrower represents that the proceeds of the 2003A Note will be used for"transportation expenditures"as defined in Section 336.025(7), Florida Statutes. 4. In addition to the pledge of the Pledged Local Option Fuel Tax , the Borrower hereby covenants to budget and appropriate in its annual budget for each of its fiscal years,by amendment if necessary, from Legally Available Non-Ad Valorem Revenues, sufficient moneys to pay the principal of and interest on the Notes,until the Notes are paid in full. Such covenant and agreement on the part of the Borrower shall be cumulative to the extent not paid, and shall continue until Legally Available Non-Ad Valorem Revenues or other available funds in amounts sufficient to make all required payments shall have been budgeted,appropriated and actually paid. Notwithstanding the 1 {MGM/014536.0034/W8024331_4,5/25/2003 0233 PM} foregoing covenant of the Borrower, the Borrower does not covenant to maintain any services or programs now provided or maintained by the Borrower,which generate Non Ad-Valorem Revenues. "Legally Available Non-Ad Valorem Revenues"means all revenues of the Borrower derived from any source whatsoever, other than ad valorem taxation on real and personal property, which are legally available to make the payments of principal and interest on the Notes,but only after provision has been made by the Borrower for payment of services and programs which are for essential public purposes affecting the health, welfare and safety of the inhabitants of the Borrower, or which are legally mandated by applicable law. Such covenant to budget and appropriate does not create any lien upon or pledge of such Legally Available Non-Ad Valorem Revenues, nor, except as provided elsewhere herein, does it preclude the Borrower from pledging in the future a particular source or sources of Non Ad- Valorem Revenues. Such covenant to budget and appropriate Legally Available Non-Ad Valorem Revenues is subject in all respects to the payment of obligations heretofore or hereafter(but only to the extent permitted hereby)entered into,including but not limited to the payment of debt service on bonds and other debt instruments. However,the covenant to budget and appropriate in its Annual Budget for the purposes and in the manner stated herein shall have the effect of making available in the manner described herein Legally Available Non-Ad Valorem Revenues and placing on the Borrower a positive duty to budget and appropriate,by amendment if necessary,amounts sufficient to meet its obligations hereunder. The Borrower represents that upon its receipt of the proceeds of the 2002B Note and application of the proceeds thereof to repay the Borrower's existing notes in favor of Bank of America(approximately$240,000)and SunTrust Bank(approximately$90,000)(the"Prior Notes"), there will be no debt for borrowed money of the Borrower secured by or payable from the Legally Available Non-Ad Valorem Revenues other than the Notes and that certain line of credit dated September 5, 2002, from the Bank in an amount not to exceed$500,000. 5. The Priority Local Option Fuel Tax received by the Borrower in each of its fiscal years shall be equal to at least 100% of the annual debt service on the 2003A Note. 6. For each fiscal year of the Borrower while the Notes are outstanding,the Available Revenues of the Borrower must always be equal to at least 200%of the annual debt service on all obligations of the Borrower that are secured by a covenant to budget and appropriate from Legally Available Non-Ad Valorem Revenues. For purposes of this paragraph, "Available Revenues"means (a) all non ad valorem general fund revenues of the Borrower, less (i) amounts used to pay expenses for General Government Expenditures and Public Safety,as such items are set forth as line items in the audited financial statements of the Borrower(`Essential Services Expenditures"),and(ii)an amount equal to the annual debt service on all obligations of the Borrower that are secured by a pledge of a particular source of non ad valorem revenues, plus (b) the portion of ad valorem taxes of the Borrower used to pay Essential Services Expenditures.For purposes of this paragraph,the portion of ad valorem taxes of the Borrower used to pay Essential Services Expenditures shall be calculated by multiplying the ratio of total ad valorem taxes to total General Fund Revenues times the Borrower's Essential Services Expenditures. 2 {MGM/014536.00341W8024331 4/5252003 0233 PM} 7. Before the first day of each of its fiscal years the Borrower shall prepare,approve and adopt in the manner prescribed by law, a detailed annual budget. Such annual budget shall provide for revenues sufficient to comply with the Borrower's obligations hereunder,including any unsatisfied obligations from prior fiscal years.The Borrower shall annually provide the Lender with a copy of its annual budget within thirty(30)days of its adoption. 8. The Borrower agrees not to issue any obligations or incur any liability payable from or secured by the Priority Local Option Fuel Tax having a right to payment therefrom that is prior to the right to payment therefrom of the 2003A Note.The Borrower also agrees not to issue any obligations or incur any liability payable from or secured by the Priority Local Option Fuel Tax or by a covenant to budget and appropriate from Legally Available Non-Ad Valorem Revenues unless (a) after the issuance of such debt the tests set forth in the paragraph 4 and 5 of this addendum will continue to be met, (b) no Event of Default exists under this Loan Agreement or the Notes and (c) the other covenants of the Borrower contained in this Loan Agreement will continue to be met.For purposes of determining compliance with(a)above,the interest rate on any obligation or liability which bears interest at a variable rate will be deemed to be the greater of(a)the projected initial rate of interest to be borne by such obligation or liability or(ii) six percent(6.00%)per annum. 9. It is the intention of the Borrower and all parties under its control that the interest on the Notes be and remain excluded from gross income for federal income tax purposes and to this end the Borrower hereby represents to and covenants with the Lender that it will comply with the requirements applicable to it contained in Section 103 and Part IV of Subchapter B of Chapter 1 of the Internal Revenue Code of 1986,as amended(the"Code")to the extent necessary to preserve the exclusion of interest on the Notes issued hereunder from gross income for federal income tax purposes. Specifically, without intending to limit in any way the generality of the foregoing, the Borrower covenants and agrees: a) to refrain from using proceeds from the Notes in a manner that might cause the Notes to be classified as a private activity bond under Section 141(a) of the Code; and b) to refrain from taking any action that would cause the Notes to become arbitrage bonds under Section 148 of the Code. The Borrower understands that the foregoing covenants impose continuing obligations of the Borrower that will exist as long as the requirements of Section 103 and Part IV of Subchapter B of Chapter 1 of the Code are applicable to the Notes. 10. No covenant, stipulation,obligation or agreement contained in this Loan Agreement or the Notes shall be a covenant, stipulation, obligation or agreement of any present or future member, agent, officer or employee of the Borrower or its governing body in his or her individual capacity, and neither the members or officers of the governing body of the Borrower nor any official executing the Notes shall be liable personally on the Notes or shall be subject to any personal liability or 3 {MGM/014536.0034/W8024331 4/5/25/2003 0233 PM} accountability by reason of the issuance or the execution of the Notes by the Borrower or such members thereof. 11. Venue in any legal proceeding brought under or with respect to this Loan Agreement or the Notes shall be a court of appropriate jurisdiction in Miami-Dade County, Florida. MIAMI SHORES VILLAGE By: �J -Al Tom Benton,Village Manager SUNTRUST B By: Name: i' Title:_ �� -- 4 {MGM/014536.0034/W8024331 4/5/252003 0233 PM}