Okaloosa County BOCC — April 1, 2014 — Loan Agreement.2BL — reading text

NGN Draft No.2 3/26/2014 019.14 OKALOOSA COUNTY, FLORIDA and AUBURN WATER SYSTEM, INC. LOAN AGREEMENT DATED AS OF APRIL 1, 2014 The rights of Okaloosa County, Florida hereunder have been assigned to ___________________, as Bond Trustee under a Bond Trust Indenture dated as of April 1, 2014, except for certain unassigned rights described herein.  TABLE OF CONTENTS Page ARTICLE I DEFINITIONS SECTION 1.1. DEFINITIONS ............................................................................................1 ARTICLE II REPRESENTATIONS SECTION 2.1. REPRESENTATIONS BY ISSUER...........................................................3 SECTION 2.2. REPRESENTATIONS AND WARRANTIES BY THE BORROWER ............................................................................................4 ARTICLE III ISSUANCE OF BONDS OF THE ISSUER SECTION 3.1. AGREEMENT TO ISSUE SERIES 2014 BONDS; PROCEEDS OF SERIES 2014 BONDS; ADDITIONAL BONDS ....................................5 SECTION 3.2. MAKING OF THE LOAN..........................................................................6 SECTION 3.3. PAYMENT OF BONDS .............................................................................6 SECTION 3.4 PLEDGE OF THIS LOAN AGREEMENT ................................................6 ARTICLE IV OBLIGATION PAYMENTS, FUND DEPOSITS, PREPAYMENTS AND OTHER PAYMENTS SECTION 4.1. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST; PAYMENTS REQUIRED BY THE TAX EXEMPTION AGREEMENT ..................................................................7 SECTION 4.2. PAYMENTS IN RESPECT OF THE BONDS AND THIS LOAN AGREEMENT ..........................................................................................7 SECTION 4.3. CREDITS ON PRINCIPAL PAYMENTS .................................................7 SECTION 4.4. PREPAYMENT GENERALLY..................................................................7 SECTION 4.5. NOTICE OF PREPAYMENT.....................................................................7 SECTION 4.6. EFFECT OF PARTIAL PREPAYMENT ...................................................7 SECTION 4.7. AMORTIZATION SCHEDULES ..............................................................8 SECTION 4.8. ADDITIONAL PAYMENTS......................................................................8 SECTION 4.9. BORROWER'S OBLIGATIONS UNCONDITIONAL .............................8 ARTICLE V COVENANTS OF THE BORROWER SECTION 5.1. MAINTENANCE OF FACILITIES ...........................................................9 SECTION 5.2. COMPLIANCE WITH ORDERS AND ORDINANCES ..........................9 SECTION 5.3. SUFFICIENT REVENUES.........................................................................9 i SECTION 5.4. ISSUER'S RIGHT TO PERFORM THE BORROWER'S COVENANTS...........................................................................................9 SECTION 5.5. INDEMNITY ............................................................................................10 SECTION 5.6. NOTICE OF DEFAULT ...........................................................................11 SECTION 5.7. MAINTENANCE OF EXISTENCE .........................................................11 SECTION 5.8. FINANCIAL INFORMATION AND REPORTS ....................................11 SECTION 5.9. TAX EXEMPT BONDS ...........................................................................12 SECTION 5.10. INVESTMENTS AND ARBITRAGE......................................................12 SECTION 5.11. DISPOSITION OF PROJECT FUND AND EXPENSE FUND MONEYS................................................................................................12 SECTION 5.12. LIMITATIONS ON ADDITIONAL INDEBTEDNESS..........................12 SECTION 5.13. SUBORDINATED INDEBTEDNESS .....................................................14 SECTION 5.14. OPERATION AND MAINTENANCE ....................................................14 SECTION 5.15. ANNUAL BUDGET .................................................................................15 SECTION 5.16. RATES ......................................................................................................15 SECTION 5.17. BOOKS AND RECORDS ........................................................................15 SECTION 5.18. ANNUAL AUDIT.....................................................................................15 SECTION 5.19. NO MORTGAGE OR SALE OF THE SYSTEM ....................................15 SECTION 5.20. INSURANCE ............................................................................................16 SECTION 5.21. NO FREE SERVICE .................................................................................17 SECTION 5.22. NO IMPAIRMENT OF RIGHTS; NO COMPETING SYSTEM ............17 SECTION 5.23. ENFORCEMENT OF CHARGES............................................................17 SECTION 5.24. CONSULTING ENGINEERS ..................................................................17 ARTICLE VI EVENTS OF DEFAULT AND REMEDIES THEREFOR SECTION 6.1. EVENTS OF DEFAULT AND REMEDIES............................................18 SECTION 6.2. APPLICATION OF PROCEEDS OF REMEDIES ..................................19 SECTION 6.3. REMEDIES CUMULATIVE....................................................................20 SECTION 6.4. DELAY OR OMISSION NOT A WAIVER.............................................20 SECTION 6.5. REMEDIES SUBJECT TO PROVISIONS OF LAW ..............................20 ARTICLE VII SUPPLEMENTS AND AMENDMENTS TO THIS LOAN AGREEMENT SECTION 7.1. SUPPLEMENTS AND AMENDMENTS TO THIS LOAN AGREEMENT ........................................................................................20 ARTICLE VIII DEFEASANCE SECTION 8.1. DEFEASANCE .........................................................................................20 ARTICLE IX MISCELLANEOUS PROVISIONS SECTION 9.1 LOAN AGREEMENT FOR BENEFIT OF PARTIES HERETO ............21 ii SECTION 9.2. SEVERABILITY ......................................................................................21 SECTION 9.3. NOTICES ..................................................................................................21 SECTION 9.4. SUCCESSORS AND ASSIGNS...............................................................21 SECTION 9.5. COUNTERPARTS....................................................................................21 SECTION 9.6. GOVERNING LAW .................................................................................22 SECTION 9.7. IMMUNITY ..............................................................................................22 SECTION 9.8. OBLIGATIONS DUE ON SATURDAYS, SUNDAYS OR HOLIDAYS ............................................................................................22 SECTION 9.9. LIMITATION ON INTEREST.................................................................22 SCHEDULE A LOAN REPAYMENT SCHEDULE.......................................................A-1 iii  LOAN AGREEMENT This is a LOAN AGREEMENT dated as of April 1, 2014 (the "Loan Agreement"), between AUBURN WATER SYSTEM, INC., a Florida non-profit corporation (the "Borrower") and OKALOOSA COUNTY, FLORIDA, a political subdivision of the State of Florida (the "Issuer"). PRELIMINARY STATEMENT The Borrower desires to obtain moneys which will be used, together with certain other moneys to, (i) finance all or a portion of the costs of improvements to the Borrower's existing water system, (ii) refinance certain outstanding indebtedness of the Borrower, and (iii) pay related expenses incurred in connection with the issuance of the Bonds (as hereinafter defined), all as permitted under the Act. Pursuant to the Act, the Issuer is obtaining funds to loan to the Borrower for the purposes aforesaid through the issuance and sale of its Utilities System Revenue Bonds, Series 2014A and 2014B (Auburn Water System, Inc. Project) in the initial aggregate principal amount of $________ (the "Series 2014 Bonds"), which will be issued under and secured by a Bond Trust Indenture dated as of April 1, 2014 (the "Bond Indenture") between the Issuer and _____________________, as bond trustee (the "Bond Trustee"). The Series 2014 Bonds, together with any Additional Bonds issued under the Bond Indenture, are referred to herein as the "Bonds." Pursuant to the Bond Indenture, the Issuer will pledge and assign certain of its rights under this Loan Agreement as part of the security for the Bonds. The Bonds will be payable out of the payments to be made by the Borrower provided for in this Loan Agreement. NOW THEREFORE, in consideration of the foregoing, the mutual covenants, conditions and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby expressly acknowledged, the Borrower and the Issuer hereby covenant and agree as follows: ARTICLE I DEFINITIONS SECTION 1.1. DEFINITIONS. The terms used in this Loan Agreement, unless the context requires otherwise, shall have the same meanings as set forth below or in the Bond Indenture. "Additional Indebtedness" means any Indebtedness incurred by the Borrower after the date of this Loan Agreement. "Annual Audit" means the annual audit prepared pursuant to the requirements of Section 5.18 hereof. "Bond Trustee's Prime Rate" means a fluctuating rate of interest equal to the prime rate established from time to time by the applicable department of the Bond Trustee or the largest commercial bank with which it is affiliated if it does not have a prime rate. The Bond Trustee's Prime Rate shall change simultaneously with any corresponding change or changes in the Bond Trustee's or such affiliated bank's prime rate. "Continuing Disclosure Agreement" means the Continuing Disclosure Agreement, dated as of April 1, 2014, between the Borrower and the Bond Trustee. "Derivative Agreement" means, without limitation, (i) any contract known as or referred to or which performs the function of an interest rate swap agreement, currency swap agreement, forward payment conversion agreement or futures contract related to Indebtedness; (ii) any contract providing for payments based on levels of, or charges or differences in, interest rates, currency exchange rates, or stock or other indices; (iii) any