12/14/2017 Finance Committee Meeting Packet Finance Committee Agenda
December 14, 2017
County Manager's Front Conference Room
11:00 a.m.
1. Call to order
2. Approval of Agenda (meeting noticed on December 11, 2017)
3. Approval of Minutes from November 30, 2017 Meeting
4. Discussion of proposals for the Water/Sewer Revenue Bonds,Series 2018
5. Other Business
6. Public Comment
7. Adjourn—Next Meeting—TBD
•
Collier County Government rrj, rR
Communication & Customer Relations
3299 Tamiami Trail East, Suite 102 colliergov.net
Naples, FL 34112-5746 twitter.com/CollierPIO
facebook.com/CollierGov
voutube.com/CollierGov
December 11, 2017
FOR IMMEDIATE RELEASE
NOTICE OF PUBLIC MEETING
COLLIER COUNTY FINANCE COMMITTEE
COLLIER COUNTY, FLORIDA
THURSDAY,DECEMBER 14,2017
11:00 A.M.
Notice is hereby given that the Collier County Finance Committee will meet Thursday,December 14, at
11:00 a.m. in the County Manager's Front Conference Room, second floor, Collier County Government
Center, 3299 Tamiami Trail East,Naples, Fla.
About the public meeting:
Two or more members of the Board of County Commissioners may be present and may participate at the
meeting. The subject matter of this meeting may be an item for discussion and action at a future Board of
County Commissioners meeting.
All interested parties are invited to attend, and to register to speak. All registered public speakers will be
limited to three minutes unless permission for additional time is granted by the chairman.
Collier County Ordinance No. 2004-05 requires that all lobbyists shall, before engaging in any lobbying
activities (including, but not limited to, addressing the Board of County Commissioners, an advisory board
or quasi-judicial board), register with the Clerk to the Board at the Board Minutes and Records Department.
Anyone who requires an auxiliary aid or service for effective communication, or other reasonable
accommodations in order to participate in this proceeding, should contact the Collier County Facilities
Management Department located at 3335 Tamiami Trail East,Naples, Florida 34112, or(239) 252-8380 as
soon as possible, but no later than 48 hours before the scheduled event. Such reasonable accommodations
will be provided at no cost to the individual.
For more information, call Mark Isackson at(239) 252-8973.
###
DRAFT
COLLIER COUNTY
FINANCE COMMITTEE MEETING
MINUTES
November 30, 2017, 10:30 A.M.
Board members in attendance: Mark Isackson, Corporate Financial Operations CMO; Crystal Kinzel,
Chief Deputy Clerk; Joe Bellone, Director of Operations Support-Public Utilities; Gene Shue-Growth
Management Operations Support Director;Susan Usher,Senior Budget Analyst OMB.
Other attendees: Derek Johnssen, Clerk of Courts Assistant Finance Director; Jeff Klatzkow, County
Attorney.
Present by phone: Nicklas Rocca from the PFM Group;Steve Miller from Nabors,Giblin & Nickerson.
1. Call to Order: Mark Isackson called the meeting to order at 10:40 a.m.
2. Approval of Agenda: Meeting noticed November 20, 2017. Motion to approve agenda. Joe Bellone
seconded. Unanimously approved.
3. Approval of Minutes from October 3,2017 meeting: Crystal's title changed from Finance Director
to Chief Deputy Clerk. Make the following edit per Joe's request:#4(4th sentence)Add "PFM agreed
to issue RFQ and" in front of"the specific level of savings." Motion to accept minutes with Crystal's
title change and Joe's edit correction. Joe Bellone seconded. Unanimously approved.
4. Discussion of proposals and the Plan of Finance for the 2017 Special Obligation Refunding Note:
Finance Committee Recommendation: Members of the County's Finance Committee after
considering the plan of finance from PFM and discussing proposals received from Pinnacle and
Capital One,voted unanimously after motioned by Mark Isackson and seconded by Susan Usher, in
recommending that the Board accept the proposal of Pinnacle Public Finance, Inc.for the Series
2017 Note in an amount up to$45 million to refinance the outstanding Series 2010 Bonds for net
present value savings.
5. Other Business: None.
6. Public Comment: None
8. Adjourn: Meeting adjourned at 11:25 a.m. Motioned by Mark Isackson and seconded by Joe
Bellone. Unanimously approved. Next meeting 12/14/17.
APPROVED FINAL
COLLIER COUNTY
FINANCE COMMITTEE MEETING
MINUTES
November 30, 2017, 10:30 A.M.
Board members in attendance: Mark Isackson, Corporate Financial Operations CMO; Crystal Kinzel,
Chief Deputy Clerk; Joe Bellone, Director of Operations Support-Public Utilities; Gene Shue-Growth
Management Operations Support Director;Susan Usher,Senior Budget Analyst OMB.
Other attendees: Derek Johnssen, Clerk of Courts Assistant Finance Director; Jeff Klatzkow, County
Attorney.
Present by phone: Nicklas Rocca from the PFM Group; Steve Miller from Nabors,Giblin & Nickerson.
1. Call to Order: Mark Isackson called the meeting to order at 10:40 a.m.
2. Approval of Agenda: Meeting noticed November 20, 2017. Motion to approve agenda. Joe Bellone
seconded. Unanimously approved.
3. Approval of Minutes from October 3,2017 meeting: Crystal's title changed from Finance Director
to Chief Deputy Clerk. Make the following edit per Joe's request:#4(4th sentence)Add "PFM agreed
to issue RFQ and" in front of"the specific level of savings." Motion to accept minutes with Crystal's
title change and Joe's edit correction. Joe Bellone seconded. Unanimously approved.
4. Discussion of proposals and the Plan of Finance for the 2017 Special Obligation Refunding Note:
Finance Committee Recommendation: Members of the County's Finance Committee after
considering the plan of finance from PFM and discussing proposals received from Pinnacle and
Capital One,voted unanimously after motioned by Mark Isackson and seconded by Susan Usher, in
recommending that the Board accept the proposal of Pinnacle Public Finance, Inc.for the Series
2017 Note in an amount up to$45 million to refinance the outstanding Series 2010 Bonds for net
present value savings.
5. Other Business: None.
6. Public Comment: None
8. Adjourn: Meeting adjourned at 11:25 a.m. Motioned by Mark Isackson and seconded by Joe
Bellone. Unanimously approved. Next meeting 12/14/17.
255 Alhambra Circle 305 448-6992
Suite 404 305 448-7131 fax
pfm Coral Gables,FL
www.pfm.com
33134
December 12,2017
Memorandum
To: Collier County,Florida
From: PFM Financial Advisors LLC
Re: Plan of Finance—Series 2018 Bond(Golden Gate Utility System Acquisition)
The purpose of this memorandum is to provide the basis for the recommended plan of finance for acquisition of
the Golden Gate Utility System (the "System") by the Collier County Public Utilities (the "County"), and to
summarize the proposals received for the County's Request for Proposals for the Series 2018 Bond.
PFM Financial Advisors LLC (PFM) is working alongside County officials and the financing team to assist the
County in the acquisition of the System. One component of that acquisition is the refinancing of the System's
outstanding public debt under the umbrella of the County's Water-Sewer District. In addition to the proposed
refinancing, the County will also pay off the System's privately-placed loans with existing cash on hand. In order
to access the capital markets for this refinancing, PFM has determined that a privately-placed bond offering, as
opposed to a public bond offering, would serve to implement the plan of finance in the most effective manner.
This determination is based on the desire to expedite the refinancing in order to capture current market conditions
as well as lock the rate as soon as possible, minimize the administrative requirements compared to a public
offering, and reduce the costs of issuance compared to a public offering.
PFM worked with the County to draft the Request for Quote ("RFQ") for the Series 2018 Bond prior to its release
on November 15th. PFM then emailed the RFQ to a broad pool of financing entities that we know to be active in
the municipal space. The size of the loan (up to approximately $43 million) and average life (approximately 6.7
years) are generally consistent with parameters typically seen in bank bonds, and such parameters would attract
interest from the bank lending community and yield the County with a favorable result. It should also be noted
that proposers were not permitted to quote an amount that is less than the full par amount, since we would expect
that most capable institutions would be able to finance the amount requested. On December 6th, four (4) quotes
were submitted. A summary of the proposing firms, along with the key points from each proposal are included as
an attachment to this memorandum.
After review of the bank offers and discussion among the County's finance team, STI Institutional & Government,
Inc.'s ("SunTrust") proposal was considered the most attractive. At first glance, the proposed interest rate is
higher than a few of the other proposals. However, the proposals that provide a lower interest rate are also
subject to adjustment based on the proposed lowering of the United States corporate tax rate, which at this point
has become a near certainty. When those adjustments are considered, SunTrust provides the lowest rate.
SunTrust also provides the ability to fix the rate for an additional six basis points, which will provide certainty to
the County as they progress through the acquisition. Finally, the County's legal team has reviewed the terms in
the SunTrust proposal and, after clarifying a couple of minor items, is satisfied that they are consistent with the
existing terms and covenants in the County's prior bond resolution.
Based on the quoted rate of 2.35%, plus the lock feature (locking the rate to February 28, 2018), the plan of
finance is expected to produce net present value savings of 9.94%. The actual cash flow savings will materialize
over a number of years, and include periods of dis-savings that are a result of shortening the final maturity on the
GGUA's debt obligations in order to be consistent with the existing term on the County's own obligations. Overall
the refinancing will produce a net positive cash flow to the County of$7.176 million.
2018 Collier County W&S Financing
f m December 12, 2017
Page 2 of 2
The schedule below shows the County's expected annual debt service savings/dis-savings upon completing the
2018 financing:
Present Value
Prior Debt Refunding Debt to 02/28/2018
Date Service Service Savings @ 2.4102617%
07/01/2018 1,796,581 2,084,573 (287,991) (285,643)
07/01/2019 2,520,363 3,402,307 (881,945) (851,198)
07/01/2020 2,519,863 3,402,539 (882,677) (831,715)
07/01/2021 2,516,563 3,401,325 (884,763) (813,739)
07/01/2022 2,524,163 3,408,665 (884,503) (794,158)
07/01/2023 2,522,163 4,569,318 (2,047,156) (1,798,331)
07/01/2024 2,522,163 4,570,449 (2,048,286) (1,756,579)
07/01/2025 2,518,913 4,569,290 (2,050,377) (1,716,607)
07/01/2026 2,521,013 4,565,841 (2,044,829) (1,671,151)
07/01/2027 2,521,763 4,570,103 (2,048,341) (1,634,124)
07/01/2028 2,521,163 4,571,835 (2,050,672) (1,596,987)
07/01/2029 2,522,256 3,231,036 (708,779) (536,316)
07/01/2030 2,766,788 2,766,788 2,062,384
07/01/2031 2,764,713 2,764,713 2,011,781
07/01/2032 2,768,225 2,768,225 1,966,361
07/01/2033 2,766,225 2,766,225 1,918,000
07/01/2034 2,771,325 2,771,325 1,875,736
07/01/2035 2,765,325 2,765,325 1,826,929
07/01/2036 1,477,325 1,477,325 953,333
07/01/2037 1,480,175 1,480,175 932,322
07/01/2038 1,479,450 1,479,450 909,561
07/01/2039 1,480,150 1,480,150 888,198
07/01/2040 1,477,000 1,477,000 865,068
Tota I 53,523,663 46,347,279 7,176,384 1,923,127
The current timeline calls for board approval on January 23rd, with a closing on February 28t • This would ensure
that funds are ready and available for the acquisition event, which is set to occur March 1st. SunTrust will hold
their fixed rate for 90 days, which fits well within the timeframe described here. Please feel free to contact us
should you have any questions or comments prior to the Commission meeting to approve the transaction.
o C
Fa
x
v a m$ 0 vw m m m p u
gvm _. x11ro dc cz, mcn ,TAE cm Ox03-2 + Jm E= ^ t 0== m .2$m E82 EU aO = co or Cn Qm0c` N.
Km 2m Vcaa 0 2 cHm cc 3dEE
N Tc mO ON O O NdY 3r ° 7
� rnW EE
h9mO8 O ' W rNJ Uoali5r d J LmOOrVii: yYJ ApO N N OtL 3N2
pAg0 LLT L O N" O gJJ c cliQLLQO N _ __! yc_A 8"1
^ n o$ � ?y «. >B0 Wil! W WN VOD m CEm. 1:mil tItt (0,NVZ - TLO U O fiU, aS- 51 ?K� v0
oorW iw 0uoccam2 c 9= 2 s" ,7c 12gmc0
n1 n8 ^ o UQ5uEoUcoo ti,', g 02211'5.22.,1-.2:6o q Ja `m O. 6 JNE0On3ppZ_dOOWa„. mpnO my pq ma O PWasEMm ..2 d0
13 swIN o
0 o
O0
- N�
r.
ry Nc m
b a a r o cQ ^mo e El9E 'xd3a m m o , y m ocaa yc 01
d1
n
92v o
OC O N Q
O o- O Z z M
r0a'g".---
w r
NrU y°mTa0 a0>d mc w _
Aft!'
a 218 om 3mEE
y ' 0i1,2” oc3
h 0 oy ?Ozo
AcCr OcUcod' Zm
042-a8=u0« ;.-.0" °
^ a
OcZo mita IM
'a` < gm
ma'1J 0mmQ
mp c°F^ LLd Aom
3 O °c m p 0-m a mp Q w U
m m
e':-JN3a.L.,OMS V dQ
`2
LJ '
�•
r
O
° ^C
ONO a2 N j0 y r
CmO FW3O d n 50amomE2 ` 0 oma
flg
oo 33 K. 200 <y0ZmNLL0r2E 3 = I0N o t?"2WaaO292 Oz °V0- Ct >>0d°C^1L� 0C1N ^S d Etta". W i c3 V Oh yY djOOCVGGO. NO uEOF.JC O 8 O^ V- °_ 10- ONm moOEi d.^qoOWJn OO °° aac io Ea;d Z3 us om `oa ° O_y r C Fula! aCV Z N C0 O( E S LmL9N HJ�A
51 0vm2. v E-5 Oa Z c
RI^d O
mW a O o a m my mL 8 oo a 8 y omWd=ad OO "5 7o1imatysgE.d ~a vmIIm
pgrp68NMVNiy.clNNog(
d O L o U O N c T.
H N a L -L V N1 g W
O
NNVOrota2° %LCW Eg C C
1k !!
flU
a
o Be Jnm2y !ii m9u E-ar E .eou31°c as o J maE1°r >r5o mO O>OaO N «O 2.:p, 22i`Uri mNd O t -e^
1' 21m41 > d7 >V3 gdg5'117.
U2 » amcuv^,; N60maN E MF NgKay =@ ONSm nCo Weiy„a01Mj H TiT.4"6-700- ymv - NOy_vyLYN L me nE uxUp1mm
tLE
ma ` _o 2 , oa ocJo=m3'
2.5,22-2 0o5c; 0u 9"ss 3"m y3nr 1;.5= r� 2 y SamE aErm m $oa
Q 1- 7_0_ S1vv5oiEna aa
m
N N
a
d
U
0
c O y
m Z,c 0 - c `m a
E A E e z
E 01 _ R m E ° J ,o_ °2
Z 1 m a 0 E Q o- 1 o
Q g « r LL
c a O
2.e LL ; 0 d E 1 ° m 0
d �C12
\/�U N N J O. 9°q O W E O. 2 d
Ala"-1221Z
.LO.O O O ^O C N N W y t
c d U 2 LL 1- - K d J O
U N m
Collier County, Florida
Water-Sewer District Water and Sewer
Revenue Bond, Series 2018
December 6,2017
Bank of America
Merrill Lynch
BankofAmerica le"
Merrill Lynch
Summary of Terms and Conditions
Submission date: December 6,2017
Parties to the Transaction
Borrower: Collier County Water-Sewer District(the"Borrower"or the"Issuer")
Bank of America,N.A.or any other subsidiary of Bank of America Corporation
Lender: ("BANA"or the"Bank").
The Facility
Facility: Fully funded term loan
Facility Amount: Not to exceed$43,000,000
Security: Senior,parity pledge of the Net Revenues of the District's county-wide Water
and Sewer System and certain charges imposed by the District on customers (as
further defined in the Resolution)of the District's system.All security language
shall be acceptable to the Bank and its counsel.
Use of Proceeds: The proposed Series 2018 Bond will be used to: (1) refund all or a portion of the
outstanding public debt of the Golden Gate Utility System in order to provide
for the District's acquisition of the System(as further described in the Request
for Quote dated November 15,2017,(2)cash fund a debt service reserve account
and (3)to pay the cost of issuance.
Optional Prepayments and Commitment Reductions:
Prepayments are permitted at any time with three business days' prior notice.
All prepayments will be subject to a prepayment penalty as set forth on Exhibit
A hereto.
Interest Rates:
Interest Rate: An indicative non bank qualified interest rate as of December 6, 2017 is 2.41%.
The actual rate shall be set two business days prior to closing utilizing the sum
of (i) the fixed rate of at 81 month (as determined by linear interpolation)
interest rate swap having a floating rate equal to three month Libor plus 18
basis points.The Bank shall use Bloomberg to establish such rates.
If for any reason swap rates are no longer listed on Bloomberg, the Bank shall
select a comparable platform to determine the interest rate swap rate. The
above pricing formula is valid only if the loan is closed on or before February
28,2018. After February 28,2018,the formula is subject to change at Bank's sole
discretion.
The above interest rate assumes that this is a non bank qualified tax exempt
Page 1 Bank of "-dr
Merrill Lynch
obligation and is subject to a legal opinion acceptable to the Bank and its
counsel.
The Bank will consider allowing for the interest rate to be locked via a rate lock
agreement; however, both the District and the Bank shall have reviewed and
accepted all documents for closing of the subject loan and shall be satisfied that
all conditions necessary to close the loan have been met including all
conditions associated with the acquisition of the Utility. In addition, the final
loan amount and amortization must be determined prior to rate lock. In the
event the loan does not close,the District shall agree to pay the bank a breakage
fee which assumes that the loan has closed and been fully funded on the date
the rate lock agreement is entered into by the County and then subsequently
paid off on the closing date. The breakage fees shall be secured in a manner
acceptable to the bank.
Repayment Terms/ Interest shall be payable semi-annually on January 1 and July 1, commencing
Maturity Date: on July 1, 2018.Principal shall be due annually on July 1, commenicng July 1,
2018.Interest shall be calculated on a 30/360 day count basis. The loan shall
mature on July 1,2029.The amortization is assumed as follows. Modification to
amortization shall be accepted at Bank's sole discretion.
July 1,2018$2,355,000
July 1,2019$2,485,000
July 1,2020$2,545,000
July 1,2021$2,605,000
July 1,2022$2,685,000
July 1,2023$3,940,000
July 1,2024$4,045,000
July 1,2025$4,145,000
July 1,2026$4,250,000
July 1,2027$4,365,000
July 1,2028$4,475,000
July 1,2029$3,195,000
Determination of Upon a Determination of Taxability with respect to the Facility,the Facility will
Taxability: bear interest from the date that taxability commences at a rate equal to the
product of the tax-exempt rate of interest otherwise in effect and the Taxable
Rate Factor(currently 1.54).
Determination of Taxability will only include circumstances resulting from the
action or inaction of the Issuer (e.g., will not include changes to the Internal
Revenue Code).
The Taxable Rate Factor is the amount by which the tax-exempt rate must be
mulitplied to achieve the equivenlant taxable ate given the highest margin
federal corporate tax rate, currently 35%.The Taxable Rate Factore is subject to
change should the highest marginal federal corporate tax rate change.
The Borrwer is also responsible for payment of any interest,penalties or charges
owed by the Lender as a result of interest on the Facility that accrues from
becoming includable in the gross income fo the Lender, together with any and
all attorneys' fees, court costs, or other out-of-pocket cost ncurred by th4e
Page 2 Bank of America
g Merrill Lynch
Lender in connection therewith.
A change in the interest rate due to this provision will NOT trigger an
exception for the prepayment penalty provision.
Default Rate: During the continuance of any default under the Facility, the interest rate shall
be increased to the maximum rate allowed under law.
Other Fees and Expenses
Bank Counsel: Fixed at$10,000 plus disbursements
Timing of Payments: All fees are non-refundable and are payable at closing in immediately available
funds.
Other Standard Provisions
Indemnification: To the extent permitted by law,the Borrower will indemnify and hold harmless
BANA and its respective affiliates and its partners, directors, officers,
employees, agents and advisors from and against all losses, claims, damages,
liabilities and expenses arising out of or relating to the Facility, the Borrower's
use of loan proceeds or the commitment including, but not limited to,
reasonable attorneys' fees (including on appeal and including the allocated cost
of internal counsel) and settlement costs.This indemnification shall survive and
continue for the benefit of all such persons or entities. In the event of any
litigation,the prevailing party shall be entitle to recover its attorney's fees.
Assignment and BANA will be permitted to make assignments to other financial institutions and
Participations: sell participations without the consent of the Borrower.
Waivers/ Amendments and waivers of the provisions of the Agreement and other
Amendments: definitive credit documentation will require the approval of BANA.
Choice of Law/Jury Trial/Venue
Governing Law: This Proposed Term Sheet and any other documents to which the Bank shall
become a party will be governed by the laws of the State of Florida.
Jury Trial: The Issuer agrees, to the extent permitted under applicable law, to waive any
right to a trial by jury in any action or proceeding with respect to any dispute or
controversy under the Loan Documents.
Venue: Any litigation involving the Bank shall be brought in the appropriate Florida or
United States court having jurisdiction over the matter.
Description of the Basic Documentary Terms and Conditions
Representations and Warranties:
Standard for this type of facility subject to review and acceptance by Bank and
its counsel.
Page 3 BankofAmerica .�
Merrill Lynch
Covenants: Usual and customary for transactions of this type subject to review and
acceptance by Bank and its Counsel.
Financial Covenants: The District shall comply with the Rate Covenant as defined in Section 5.04 of
the Composite First Amended and Restated Water and Sewer Bond Resolution.
In addition, the District shall satisfy the coverage requirements for all
subordinate debt obligations.
The District shall comply with section 6.02 of the Composite First Amended and
Restated Water and Sewer Bond Resolution for the issuance of additional senior
obligations or obligations on parity with the proposed Series 2018 bonds.
Obligations to be issued as subordinate obligations to the proposed Series 2018
bonds shall be subject to Section 6.01 of the Composite First Amended and
Restated Water and Sewer Bond Resolution.
All final covenant definitions are subject to review and acceptance by Bank and
its counsel.
Reporting Within 270 days after the close of each fiscal year of the Borrower,the Borrower
Requirements: shall provide complete audited financial statements of the Borrower. In addition
upon request by BANA, the Borrower shall provided the board authorized
budget and any such other information as the BANA may reasonable request.
Events of Default Usual and customary in transactions of this type including, without limitation,
the following: (i) nonpayment of principal, interest, fees or other amounts; (ii)
failure to perform or observe covenants set forth in the loan documentation; (iii)
any representation or warranty proving to have been incorrect when made or
confirmed; (iv) cross-default to other parity debt or senior debt secured by
Pledge Revenues(v)bankruptcy,insolvency,debt moratorium,etc.;(vi)actual or
asserted invalidity or impairment of any loan documentation
Remedies: The Bank may, among other things, cause the Default Rate to apply to all
outstanding obligations of the Borrower to the Bank and pursue any other
remedies to which it is entitled under the Agreement, at law or in equity. For
any payment that is more than 15 days late, the Bank may impose a late fee
equal to 4% of the amount of the late payment.
Downgrade below Baa3/BBB-/BBB- (or the equivalent) by Moody's, S&P or
Fitch, respectively shall trigger the default rate but shall not be an event of
default.
Contacts
Bank of America,N.A.(BANA):
Name: Holly Kuhlman
Title: Senior Vice President
Address: 9128 Strada Place,Suite 10110
Naples,Florida 34103
Page 4 Bank of America
g Merrill Lynch
Telephone: (239)598-8805
Email: Holly.kuhlman@baml.com
Name: Sherry Burd
Title: Senior Vice President
Address: 3303 South Tamiami Trail
Telephone Sarasota, Florida 34239
Email: (941) 812-5267
sherry.a.burd(abaml.c om
Bank Counsel:
Bank Counsel: Mark Raymond
Address: 4360 Northlake Blvd,Suite 204
Palm Beach Gardens,Florida33418
Telephone: (561)775-8440
email: Mark.raymond@mraymondlaw.com
Proposed Terms and Conditions Subject to Certain Events
This Summary of Terms is intended only as an outline of certain of the material terms of the Facility and does not
purport to summarize all of the conditions, covenants, representations, warranties and other provisions that would
be contained in definitive documentation for the Facility contemplated hereby. This Summary of Terms is not a
commitment.It represents a willingness on the part of BANA to seek approval to provide the commitment indicated
herein and consummate a transaction based upon the terms and conditions outlined in this term sheet and is subject
to:
Final credit approval(see"Credit Process Timeframe"below),
Absence of any material adverse change in the financial condition,operations or
prospects of the Borrower, or in any law, rule or regulation (or their
interpretation or administration), that, in each case, may adversely affect the
consummation of the transaction, to be determined in the sole discretion of
BANA,
Such additional due diligence as the Lender may require,and
Agreement as to all final terms and conditions and satisfactory documentation
thereof(including satisfactory legal opinions).
Credit Process: The credit process will take 10 business days from the point at which the Bank is
officially awarded the transaction and has in its possession all materials
necessary to undertake a full credit analysis.
Expiration: Consideration of a financing based on the terms and conditions presented in this
term sheet shall automatically expire 15 days from the date hereof unless the
Bank has received this terms sheet executed by the County.
If the Bank issues a commitment,the Bank reserves the right to terminate,reduce
or otherwise amend its commitment if the subject transaction is not closed by
March 30,2018.
Page 5 Bank of America' .�T
Merrill Lynch
Future The terms,conditions,pricing levels and fees (including legal fees and expenses)
Modifications: cited herein reference the financing and the Facility Amount as described in this
Summary of Terms and Conditions and are subject to revision in the event that
(i) the Facility Amount changes, (ii) the security or transaction structure is
modified, (iii) the transaction deviates materially from what was initially
described in the RFP or in conjunction therewith, (iv) the proposed financing
does not close by March 30,2018.
No Advisory or Fiduciary Role
This proposal is submitted in response to your Request for Proposals dated
November 15, 2017. The contents of this proposal and any subsequent
discussions between us, including any and all information, recommendations,
opinions, indicative pricing, quotations and analysis with respect to any
municipal financial product or issuance of municipal securities, are provided to
you in reliance upon the exemption provided for responses to requests for
proposals or qualifications under the municipal advisor rules (the"Rules")of the
Securities and Exchange Commission(Rule 15Bal-1 et seq.).
In submitting this proposal, we are not undertaking to act as a "municipal
advisor" to you or any other person within the meaning of Section 15B of the
Securities Exchange Act of 1934 and the Rules. In connection with this proposal
and the transactions described herein,we are not acting as a financial advisor or
municipal advisor to you or any other person, and are not subject to any
fiduciary duty to you or to any other person. We understand that you will
consult with and rely on the advice of your own municipal, financial, tax, legal
and other advisors in connection with your evaluation of this proposal and the
transactions described herein.
The Issuer acknowledges and agrees that: (i) the transaction contemplated by
this Summary of Terms and Conditions is an arm's length, commercial
transaction between the Issuer and the Bank in which the Bank is acting solely as
a principal and for its own interest; (ii) the Bank is not acting as a municipal
advisor or financial advisor to the Issuer; (iii) the Bank has no fiduciary duty
pursuant to Section 15B of the Securities Exchange Act of 1934 to the Issuer with
respect to the transaction contemplated hereby and the discussions,
undertakings and procedures leading thereto (irrespective of whether the Bank
has provided other services or is currently providing other services to the Issuer
on other matters);(iv)the only obligations the Bank has to the Issuer with respect
to the transaction contemplated hereby expressly are set forth in this Summary
of Terms and Conditions;and(v) the Bank is not recommending that the District
take an action with respect to the transaction contemplated by this Summary of
Terms and Conditions, and before taking any action with respect to the
contemplated transaction, Issuer should discuss the information contained
herein with its own legal, accounting, tax, financial and other advisors, as it
deems appropriate. If Issuer would like a municipal advisor in this transaction
that has legal fiduciary duties to Issuer, Issuer is free to engage a municipal
advisor to serve in that capacity. This Summary of Terms and Conditions is
provided to Issuer pursuant to and in reliance upon the "bank exemption"
provided under the municipal advisor rules of the Securities and Exchange
Commission,Rule 15Bal-1 et seq.
Pa e 6 BankofAmerica .
g Merril Lynch
Agreement by the Borrower
The Borrower hereby agrees to engage Bank of America to provide the Facility,
which is the subject hereof,pursuant to the terms and conditions stated herein.
Please evidence your agreement with the foregoing by signing and returning a
copy of the document to Bank of America.
Accepted and Agreed to:
COLLIER COUNTY WATER-SEWER DISTRICT
By: Date:
Page 7 BankofAmerica' . '
Merrill Lynch
Exhibit A
The Borrower may prepay the credit in full or in part at any time.
The prepayment will be applied to the most remote payment of principal due under this Agreement. Each
prepayment,whether voluntary,by reason of acceleration or otherwise,will be accompanied by the amount of
accrued interest on the amount prepaid and a prepayment fee calculated by the Bank.
The prepayment fee will be equal to the present value(discounted by the Reinvestment Rate)of the difference, if
positive, between:
(a)the sum of the interest payments that would have accrued on each prepaid installment of principal at a fixed
interest rate for such installment equal to X** plus 25 basis points,as if the prepayment had not been made, less
(b)the sum of the interest payments that would have accrued on each prepaid installment of principal at a fixed
interest rate for such installment equal to the Reinvestment Rate,as if the prepayment had not been made.
The following definitions will apply to the calculation of the prepayment fee:
(i) "Reinvestment Rate" means with respect to each prepaid installment of principal,the Swap Rate on the date
the prepayment fee is calculated by the Bank for a term corresponding to the period of time remaining until such
principal installment was scheduled to be paid, interpolated on a linear basis,if necessary,and
(ii) "Swap Rate" means,as of any date,the offered U.S. Dollar interest rate swap rate that a fixed rate receiver
would receive in return for paying a floating rate equal to the three month Libor determined by the Bank on such
date by reference to the Bloomberg service or such other similar data source then used by the Bank for
determining such rate.
**X will approximate the Swap Rate for a swap with a scheduled notional amount at all times equal to the
scheduled principal of the Certificates determined on the date the interest rate was fixed by Bank.This rate is
provided by the Bank prior to closing of the transaction and is not subject to future modification.
0 Page 1 BankofAmerica
g Merrill Lynch
December 6, 2017
J P.Morgan
CREDIT FACILITY PROPOSAL
Direct Purchase of a Non-Bank Qualified Tax-Exempt Bond, Series 2018 issued by
Collier County Water& Sewer District in the amount of up to$43,000,000
J.P.Morgan
Via Email
December 6,2017
Joseph Bellone
Collier County Water& Sewer District
j osephbellone@colliergov.net
Dear Joseph:
On behalf of JPMorgan Chase Bank, N.A. ("JPMorgan"), we are pleased to propose for discussion
indicative terms to Collier County Water & Sewer District for a Tax Exempt Non-Bank Qualified Direct
Purchase Bond in an initial estimated amount of$43,000,000, subject to the following terms and conditions
described herein(the"Proposal").
The proposed indicative terms included in the enclosed Summary of Terms and Conditions are for
discussion purposes only and do not represent an offer or commitment to lend on the part of JPMorgan and
would be subject to due diligence, credit analysis and approval, and documentation of detailed terms and
conditions satisfactory to JPMorgan and its legal counsel. Should any of the enclosed terms and conditions
conflict with Collier County Water& Sewer District's structuring parameters, we would be happy to discuss
mutually acceptable alternatives.
Should you have any questions regarding any of the indicative terms, please do not hesitate to
contact either of us at the numbers set forth below:
Ralph Hildevert Taylor Kennedy
Relationship Executive Senior Underwriter
1450 Brickell Ave,Floor 33 450 S.Orange Avenue,Suite 1000
Miami,FL 33131 Orlando,FL 32801
Phone:(305)579-9320 Tel:(407)236-5381
ralph.hildevert@jpmorgan.com taylor.kennedy@jpmorgan.com
JPMorgan has been the market leader in public finance credit for over 35 years and ranks among the
largest providers of credit facilities in the municipal market today. Our deep familiarity with this sector is
viewed as a strong benefit by the municipal clients with whom we do business. We believe that our
experience in providing direct purchase bond financing, coupled with our long experience in deal execution,
would ensure an efficient,cost-effective transaction. Client references are available upon request.
JPMorgan Chase Bank,
N.A.Credit Ratings: Moody's S&P Fitch
Outlook: Stable Stable Stable
Long Term Issuer Ratings: Aa3 A+ AA-
Short Term Issuer Ratings: P-1 A-1 F1+
Annual Report: JPMorgan Chase& Co.'s most recent annual report may be accessed via the following
website:
Confidential
httns://www.i pmorganchase.com/corporate/investor-relations/annual-report-nroxy.htm
We look forward to further discussions with Collier County Water& Sewer District and its financing
team regarding this proposal.
Yours sincerely,
JPMORGAN CHASE BANK,N.A.
By: By:
Ralph Hildevert Taylor Kennedy
Relationship Executive Senior Underwriter
Cc: Mark Isackson markIsacksona,colliergov.net
Sergio Masvidal masvidalsna,pfm.com
Pete Varona varonapapfm.com
J P.Morgan
2
Confidential
Collier County Water & Sewer District
Direct Purchase Non Bank Qualified Tax Exempt Bond, Series 2018
Summary of Terms and Conditions
December 6,2017
This Summary of Terms and Conditions (the "Term Sheet") is confidential and is intended as a statement of
indicative terms only,and is provided to facilitate additional discussion. It is a proposal for your consideration only and
not a commitment by JPMorgan Chase Bank,NA or its affiliates("JPMorgan")to provide the financing described in this
Term Sheet or any other financing. The rates and fees set forth in this proposal are indicative and are subject to market
conditions at all times until JPMorgan would commit to in writing and, in any event should not be regarded as
indicative after the date of this Term Sheet. The terms in this proposal expire on February 28,2018
SECTION I DESCRIPTION OF THE BONDS
Issuer: Collier County Water&Sewer District(the"Issuer")
Purchaser: JPMorgan Chase Bank,N.A.and its successors and assigns(the"Purchaser"or the"Bank").
Facility/Amount: Up to$43,000,000 Non-Bank Qualified Tax-Exempt Direct Purchase Bond,Series 2018(the
"Bond"or the"Facility")issued as a single maturity Bond subject to mandatory annual
sinking fund redemption.
The Bond would be purchased at 100%of Par on an'all or none'basis.
The Bond would not be designated by the Issuer as a"qualified tax-exempt obligation"under
Section 265(b)(3)of the Internal Revenue Code.
The Bond shall not be rated by any rating agency, shall not be initially registered to
participate in DTC,shall not contain a CUSIP number and shall not be marketed during any
period in which the Bond is held by the Purchaser pursuant to any Official Statement,
Offering Memorandum or any other disclosure documentation. The Purchaser shall take
physical delivery of the Bond at closing.
Purpose: Proceeds of the Bond would be used to (1)refund all or a portion of the outstanding public
debt of the Golden Gate Utility System in order to provide for the District's acquisition of the
System,(2)cash-fund a debt service reserve account,and(3)to pay the cost of issuance.
Bond Maturity Date: July 1,2029
SECTION II INTEREST RATES,PAYMENTS AND FEES
Fixed Interest Rate: The Bond would accrue interest at a fixed rate per annum as set forth below, based upon the
tenor selected by the Issuer. The following fixed interest rates are indicative as of December
3
Confidential
6,2017 and are subject to change daily until a written rate lock letter agreement is executed
between the Issuer and the Bank:
Maturity Date Optional Redemption Date* Indicative Fixed Rate**
July 1,2029 N/A 2.48%
July 1,2029 July 1,2023 2.58%
*The Bond is callable at par on or after the Optional Redemption Date.
** Should the Issuer request removal of the `Change in Tax Rate' provision referenced on
page 5 of this Term Sheet,then the Indicative Fixed Rate shall be multiplied by 1.23.
Bond Payments/
Amortization: Interest would be payable semi-annually commencing on January 1 and July 1, beginning
July 1,2018.
Principal would be payable annually commencing on July 1,beginning on July 1,2018.
/Unruly Amortization
Date Schedule
7/1/2018 2,355,000
711/2019 2,485,000
7/1/2020 2,545,000
7/1/2021 2,605,000
7/1/2022 2.685,000
7/1/2023 3,940,000
7/1/2024 4,045;000
7/1/2025 4;145,000
7/1/2026 4.250000
711/2027 4,365,000
7112028 4;476,000
7/1/2029 3,195,000
Total: 41,090,000,
Average Life:61 Years
Notwithstanding the foregoing, the Bond would be required to be repaid in full at maturity.
Upon an Event of Default, interest would then be computed at the Default Rate (defined
below).
Prepayment: The Bond may be prepaid in whole or in part,without premium or penalty,on any Optional
Redemption Date as defined above. Any prepayment on any date other than those provided
for above is subject to breakage costs payable by the Issuer.
Day Basis/Year: 30/360
Base Rate: The higher of(i)the Bank's Prime Rate and(ii)2.5%plus the one month Adjusted LIBOR
Rate,as such terms would be more particularly described in the related bond documents.
Default Rate: Base Rate+4.00%
SECTION III OTHER BOND TERMS AND PROVISIONS
Security: Pledge and assignment of Net Revenues of the Water and Sewer System and certain charges
imposed by the Borrower. The Bond will be on a senior parity basis, as defined in the
Resolution.
Drawdown: The proceeds of the Bond would be fully drawn on the date of issuance.
Required Documents: The terms of this financing would be evidenced by agreements, instruments and documents
(collectively, the "Bond Documents") that are usual and customary for a Direct Purchase
4
Confidential
Bond transaction. The required documentation would include, but not limited to, the terms
and conditions outlined herein as well as the Bank's standard provisions with respect to
representations and warranties, covenants, events of default,remedies, conditions precedent,
right of set-off,waiver of jury trial, compliance with anti-corruption laws,and other general
provisions that the Purchaser and its counsel deem necessary and would otherwise be
satisfactory in form and substance to the Purchaser and its counsel. Bond documents to be
prepared by Bond Counsel or Issuer Counsel as appropriate.
Conditions Precedent: Usual and customary representations and warranties and other conditions prior to the
issuance of the Bond for like situated issuers and for the type and term of the Facility,
including absence of default, absence of material litigation and absence of material adverse
change from the Issuer's financial conditions and operations as reflected in the financial
statements of the Issuer as of September 30,2016.
Additional conditions precedent would include delivery of acceptable bond documentation
and legal opinions,including an opinion of bond counsel as to the validity and enforceability
of the obligations of the Issuer under the Bond Documents, priority of lien, and that interest
payable on the Bond is exempt from federal and State of Florida income taxation.
Financial Covenants: The Purchaser would require the following financial covenants, as further defined in the
Bond Documents:
Rate Maintenance Covenant;Net Revenues,System Development and Special Assessment
proceeds in each Fiscal year at least equal to 1.25x Annual Debt Service;and Net Revenues
in each Fiscal Year must also be sufficient to pay at least 100%of Annual Debt Service on
all Outstanding Bonds.
Rate Maintenance Covenant related to the District's subordinated SRF loans.
Additional Bonds Test of Net Revenues; Special Assessment Proceeds and System
Development Fees of at least 1.25x for parity obligations (MADS basis) and Net Revenues
equal to at least 1.00x(MADS basis)
Reporting Covenants: The Issuer would provide the following items in an electronic format acceptable to the
Purchaser: -
1. Receipt of CAFR within 210 days of the fiscal year end.
2. Additional information as reasonably requested by the Bank.
Tax Gross-Up: In the event that the Bond subsequently loses its tax exemption as a result of violations of the
tax covenants,the Purchaser would require an adjustment to the Interest Rates payable on the
Bond to account for such loss of tax exemption.
The Purchaser would not require any adjustment to the Interest Rate for (i) changes to the
regulatory environment or required regulatory capital,or(ii)changes due to a decline in the
Issuer's public bond rating. Any adjustment to the Interest Rate would solely be related to
the loss of tax exemption for violations of the tax covenants.
Change in Tax Rate: In the event of a change in the Corporate Tax Rate(as hereinafter defined)during any period
where interest is accruing on a tax-exempt basis causes a reduction in the tax equivalent yield
on the Bond, the interest payable on the Bond would be increased to compensate for such
change in the effective yield to a rate calculated by multiplying the bond interest rate by the
ratio equal to(1 minus A)divided by(1 minus B),where A equals the Corporate Tax Rate in
effect as of the date of the corporate tax rate adjustment as announced by the IRS and B
equals the Corporate Tax Rate in effect on the date of the original issuance of the Bond. The
5
Confidential
Corporate Tax Rate would mean the highest marginal statutory rate of federal income tax
imposed on corporations and applicable to the Bank(expressed as a decimal).
Should the Issuer request removal of the `Change in Tax Rate'provision referenced
above,then the Indicative Fixed Rate shall be multiplied by 1.23.
Sale/Assignment: The Issuer would agree that the Purchaser may without limitation(i)at any time sell,assign,
pledge or transfer all or a portion of the Bond, or one or more interests in all or any part of
the Purchaser's rights and obligations under the Facility to one or more assignees and/or
participants which may include affiliates of the Bank; and (ii) at the Purchaser's option,
disclose information and share fees with such assignees and/or participants.
Waiver of Jury Trial: The Issuer and the Purchaser would waive,to the fullest extent permitted by applicable law,
any right to have a jury participate in resolving any dispute in any way related to this Term
Sheet,any related documentation or the transactions contemplated hereby or thereby.
Governing Law: All aspects of the Facility being discussed including this Term Sheet and any Bond
Documents would be governed by the laws of the State of Florida.
SECTION IV OTHER BANK REQUIREMENTS
Municipal Advisor
Disclosure: The Issuer acknowledges and agrees that(i)the transaction contemplated herein is an arm's
length commercial transaction between the Issuer and the Bank and its affiliates, (ii) in
connection with such transaction, the Bank and its affiliates are acting solely as a principal
and not as an advisor including, without limitation, a "Municipal Advisor" as such term is
defined in Section 15B of the Securities and Exchange Act of 1934, as amended, and the
related final rules(the"Municipal Advisor Rules"),agent or a fiduciary of the Issuer,(iii)the
Bank and its affiliates are relying on the Bank exemption in the Municipal Advisor Rules,
(iv) the Bank and its affiliates have not provided any advice or assumed any advisory or
fiduciary responsibility in favor of the Issuer with respect to the transaction contemplated
hereby and the discussions, undertakings and procedures leading thereto(whether or not the
Bank, or any affiliate of the Bank, has provided other services or advised, or is currently
providing other services or advising the Issuer on other matters), (v) the Bank and its
affiliates have financial and other interests that differ from those of the Issuer, and (vi) the
Issuer has consulted with its own financial, legal, accounting, tax and other advisors, as
applicable,to the extent it deemed appropriate.
Expenses: The Issuer would pay or reimburse the Purchaser for all its out-of-pocket costs and expenses
and reasonable attorneys' fees where not prohibited by applicable law and incurred in
connection with (i) the development, preparation and execution of the Bond, and (ii) in
connection with the enforcement or preservation of any rights under any agreement, any
amendment,supplement,or modification thereto,and any other loan documents both before
and after judgment.
Legal Counsel: The Bank would engage Locke Lord LLP as the Purchaser's legal counsel. Mark-David
Adams would be acting in the capacity of attorney representing the Purchaser.Legal fees to
be paid by the Issuer are estimated at $7,500 based on the scope of the financing as
presented.
Mark-David Adams
Locke Lord LLP
525 Okeechobee Boulevard,Suite 1600
West Palm Beach,FL 33401
Tel:(561)820-0281
Fax:(561)655-8719
6
Confidential
Email:mark.adams@lockelord.com
Information Sharing: The Issuer would agree that the Purchaser may provide any information or knowledge the
Purchaser may have about the Issuer or about any matter relating to the Facility described in
this Term Sheet to JPMorgan Chase & Co., or any of its subsidiaries or affiliates or their
successors, or to any one or more purchasers or potential purchasers of the Bond, or
participants or assignees of the Bond or the Facility described in this letter.
Website Disclosure: As a best practice to maintain transparency,final bond documentation may be posted by the
Issuer on a national public bond market repository provided that certain information be
redacted by the Issuer as directed by the Bank. Items that should be redacted include pricing,
financial ratio covenants, signatures/names, account numbers, wire transfer and payment
instructions and any other data that could be construed as sensitive information,
Confidentiality: This Term Sheet is for the Issuer's confidential review and may not be disclosed by it to any
other person other than its employees, attorneys, board members and financial advisors (but
not other commercial lenders), and then only in connection with the transactions being
discussed and on a confidential basis, except where disclosure is required by law, or where
the Purchaser consents to the proposed disclosure.
7
SUST CONFIDENTIAL NON-BINDING PROPOSAL LETTER
December 6,2017
Collier County, Florida
Public Utilities Department
Attn:Joseph Bellone, Director
3339 Tamiami Trail East, Suite 301
Naples, FL 34112
Re: One or more loans or facilities described on Annex 1"Loan" to Collier County Water-Sewer District (whether one or
more collectively"Borrower").
Dear Mr. Bellone:
STI Institutional & Government, Inc. ("Lender") is pleased to consider making the Loan to Borrower based substantially on
the proposed summary of terms and conditions [set forth on Annex I attached hereto and incorporated herein by this
reference (Annex I, together with this letter and any other supplemental annexes attached hereto and incorporated herein by
this reference,this"Letter").
This Letter is provided for discussion purposes as an expression of interest by Lender in the proposed financing, does not
contain all required terms and conditions and should not be construed to be a commitment, offer, or agreement by Lender to
issue a commitment or provide the proposed financing and, as such, Borrower shall be deemed to place no reliance on this
Letter. The proposed financing is subject to standard credit underwriting and approval by Lender, which may not be
forthcoming. This Letter is not assignable, not intended to benefit any third party, subject to such other terms and conditions
as Lender may require, confidential, and not an offer or recommendation to enter into any "swap" transaction per Section
1 a(47)of the Commodity Exchange Act.
Evaluation of the proposed financing would require and remain conditioned on, inter alia, Lender's receipt of all
documentation and information Lender may require. Pursuant to the requirements of the Patriot Act, Lender and its affiliates
are required to obtain, verify and record information that identifies Loan obligors, which information includes the name,
address, tax identification number and other information regarding obligors that will allow Lender to identify obligors in
accordance with the Patriot Act, and Lender is hereby so authorized. This notice is given in accordance with the
requirements of the Patriot Act and is effective for SunTrust and its affiliates.
All costs incurred by Lender in connection with the proposed financing, including but not limited to, Lender's legal fees and
expenses, appraisals, searches, reports and other third party costs (collectively"Costs"), shall be paid and/or reimbursed by
Borrower,whether or not the proposed financing is approved or closes, and your acknowledgement below authorizes Lender
to proceed with same at your expense and in reliance on this understanding. Borrower shall be responsible for all fees and
expenses including, without limitation, legal fees and expenses, incurred by Lender in enforcing its rights under this Letter.
Borrower's obligation in respect of the costs and expenses referenced in this paragraph is in consideration, inter alia, for
Lender's undertaking to underwrite the proposed financing and incur such Costs and shall survive the cancellation or
termination of this Letter. If there are multiple parties comprising "Borrower", the defined terms shall refer to all such parties
collectively, but each such party shall be jointly and severally liable under the Loan.
This Letter constitutes the entire understanding between Lender and Borrower in connection with the proposed Loan as of
the date hereof, supersedes any prior written or oral communications or understandings, and may be amended only by a
writing signed by Lender. This Letter is unconditionally cancellable by Lender at any time, neither party shall have an
express or implied duty to negotiate and either party may terminate negotiations at any time in their sole discretion, and
partial performance or efforts to carry out other acts in contemplation of consummating the proposed Loan shall not, in
isolation or in aggregate, be deemed evidence of intent by either party to be bound by the terms of this.Letter. Neither
Lender nor Borrower shall be deemed to have entered into, signed or executed binding documents evidencing the Loan by
virtue of this or any other communication at any time prior to Lender's express acceptance of Loan documents prepared by
Lender or its counsel. If Lender and Borrower enter into the proposed Loan, this Letter shall not survive any closing of the
1
proposed Loan, and if there is a conflict between the terms of this Letter and any documents evidencing the Loan, the terms
of the documents evidencing the Loan shall be controlling.
This Letter is governed by the laws of the State of FL. To the extent permitted by applicable law, Borrower and Lender waive
trial by jury in connection with any action arising under or related to this Letter and submit to exclusive jurisdiction in the
foregoing state of governing law.
Except as expressly set forth herein with regard to confidentiality, choice of law,waiver of jury trial and Borrower's obligation
to pay Costs, this Letter is not intended to, and shall not,create a legally binding obligation on the part of Lender or Borrower,
and your signature below confirms your understanding of this. Subject to the foregoing sentence, if you would like Lender
to begin its underwriting and review process and to seek the appropriate credit approvals (which may not be
forthcoming), please so advise by executing and returning a copy of this Letter to the address below(delivery of this Letter by
the parties via electronic transmission shall be permissible). This Letter may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which, taken together, shall constitute one and the same
instrument. A signed counterpart of this Letter transmitted via facsimile, pdf or some other electronic means shall be as fully
enforceable as the counterpart containing the original signature(s). If you have any questions in connection with this Letter,
please contact me.
Yours sincerely,
Joshua A. McCoy
SVP&Market President
Institutional&Government Relationship Manager
Lender's address:
1777 Main Street
Mail Code: FL-Sarasota-3061
Sarasota, FL 34236
The terms and conditions of this Letter are hereby acknowledged and agreed to this day of ,20 .1
BORROWER:
By:
Print Name:
Print Title:
1
Note:Execution of this Letter will signify Borrower's request for credit. If Lender does not timely receive the information or documentation outlined herein or
subsequently requested by Lender, Borrower's request for credit will be deemed withdrawn by Borrower.1 You should inquire about the status of Borrower's
request for credit at Lender's address listed above. If the requested financing is denied,you have the right to request a written explanation by writing to Lender
at the above address within 60 days of Lender's notice of denial. The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit
applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided that the applicant has the capacity to enter into a binding
contract),because all or part of the applicant's income derives from any public assistance program,or because the applicant has in good faith exercised any right
under the Consumer Credit Protection Act.The federal agency that administers compliance with this law concerning this creditor is the Federal Reserve Bank of
Atlanta.Any questions concerning this creditor should be directed to the Federal Reserve Consumer Help Center,P.O.Box 1200,Minneapolis,MN 55480,toll-free
number:(888)851-1920,fax number:(877)888-2520,TTY number:(877)766-8533.
2
ANNEX 1
SUMMARY OF TERMS AND CONDITIONS
Municipal Advisor
Rule Disclosure: STI Institutional & Government; Inc. (Lender) is an institutional buyer and makes direct
purchase loans to Municipal Entities and Obligated Persons as defined under the Municipal
Advisor Regulation, and in this term sheet is providing information regarding the terms under
which it would make such a purchase for its own account.
(a) Lender is not recommending an action to Borrower or the issuer of the debt;
(b) Lender is not acting as an advisor to Borrower or the issuer of the debt and does not owe
a fiduciary duty pursuant to Section 15B of the Exchange Act to Borrower or the issuer of
the debt with respect to the information and material contained in this communication;
(c) Lender is acting for its own interests; and
(d) Borrower and the issuer of the debt should discuss any information and material contained
in this communication with any and all internal or external advisors and experts that the
municipal entity or obligated person deems appropriate before acting on this information or
material.
Borrower: Collier County Water-Sewer District("Borrower").
Lender: STI Institutional&Government, Inc. ("Lender").
Facility: Non-Bank Qualified Loan in the form of a tax-exempt note ("Loan"). The Loan will be funded
in a single drawdown on the closing date.
Loan Amount: Not to exceed amount of$43,000,000.
Purpose: To: (1) refund all or a portion of the outstanding public debt of the Golden Gate Utility System
(the "System") in order to provide for the District's acquisition of the System, (2) cash-fund a
debt service reserve account, and (3)to pay the cost of issuance.
Maturity Date: July 1, 2029.
Interest Rate: A fixed rate equal to 2.35% p. a. (calculated on the basis of a 30 day month and 360 day
year). This rate may be locked for 90 days at a rate increase of 6 basis points.
Repayments: Interest shall be payable semi-annually (calculated on the basis of a 30 day month and 360
day year) due January 1 and July 1 beginning July 1, 2018. Principal shall be payable annually
on July 1 beginning July 1, 2018, based on the principal schedule in the RFP.
Prepayment: Alternative #1 Make Whole Provision: Borrower may prepay the Loan in whole or in part on
any business day upon two Business Days' prior written notice to Lender. Such prepayment
notice shall specify the amount of the prepayment which is to be made. In the event of a
prepayment of the Loan, Borrower may be required to pay Lender an additional fee (a
prepayment charge or premium) determined by Lender's make whole compensation provision
in the loan documents, to compensate Lender for all losses, costs and expenses incurred in
connection with such prepayment. Any partial prepayment shall be applied as determined by
Lender in its sole discretion.
Alternative #2 No Prepayment Penalty: The Lender will allow prepayment in whole or in part
on any Business Day after 2 years without any penalty for the above mentioned interest rate
described above using the following schedule: Add an additional 14 basis points to the interest
3
rate. Any partial prepayment shall be applied as determined by Lender in its sole discretion.
Accounts and
Payments by
Auto Debit: Borrower agrees to execute an agreement authorizing Lender to debit a deposit account
maintained by Borrower with SunTrust Bank or bank of its choice approved by Lender for all
amounts due under the Loan.
Security: The Note will be secured solely by a senior, parity pledge of (1) the Net Revenues of the
District's county-wide Water and Sewer System (the"District System") and (2) certain charges
imposed by the District on customers of the District System.
Reserve Account: There shall be on deposit in the Reserve Account, an amount sufficient to cause the amount
on deposit in the Reserve Account to equal a sum equal to the lesser of (1) the Maximum
Annual Debt Service on all Outstanding Bonds, or (2) 125% of the average annual debt
service for all Outstanding Bonds(the"Reserve Account Requirement").
Representations
and Warranties: Usual and customary for Lender in transactions of this type.
Affirmative
Covenants: In addition to the covenants expressly set forth herein, other affirmative covenants usual and
customary for Lender in transactions of this type, including without limitation: Borrower shall
submit to the Lender annual audited financial statements within 270 days of fiscal year end
and an annual budget within 30 days of adoption, together with any other information the
Lender may reasonably request, in form satisfactory to Lender, and other additional
information, reports or schedules(financial or otherwise), all as Lender may request.
Negative
Covenants: Usual and customary of Lender in transactions of this type.
Events of
Default: Usual and customary for transactions of this type (with customary notice and cure periods),
and usual and customary remedies. The default rate shall be equal to the lesser of Prime+8%
or the maximum allowed rate by law and the documents shall contain a clause assuring
Lender that if other bondholders have acceleration rights Lender will have the same
acceleration rights.
Rate Covenant: The District is required to charge such rates, fees and other charges that will maintain Net
Revenues equal to at least 1.00 times Maximum Annual Debt Service and Pledged Revenues
(includes Special Assessment Proceeds and System Development Fee) equal to at least 1.25
times Maximum Annual Debt Service. In addition, the District shall satisfy the coverage
requirements of all subordinate debt obligations.
Parity Debt: This debt will be on parity with all other senior debt secured by the pledged revenues of
Borrower.
Additional Debt: In order to issue additional indebtedness on parity with the Series 2018 Bond and other
outstanding senior lien debt, Net Revenues must equal at least 1.00 times Maximum Annual
Debt Service of the outstanding bonds and the proposed additional bonds, and Pledged
Revenues (includes Special Assessment Proceeds and System Development Fee) must equal
at least 1.25 times Maximum Annual Debt Service of the outstanding bonds and the proposed
additional bonds.
Yield Maintenance: Upon the occurrence of a Taxable Event the Interest Rate on the Bond shall be adjusted to
assure maintenance of the yield. "Taxable Event" means the occurrence after the date
hereof of a final decree or judgment of any Federal court or a final action of the Internal
4
Revenue Service determining that interest paid or payable on all or a portion of any Bond is or
was includable in the gross income of a Lender for Federal income tax purposes; provided,
that no such decree, judgment, or action will be considered final for this purpose, however,
unless the Borrower has been given written notice and, if it is so desired and is legally allowed,
has been afforded the opportunity to contest the same, either directly or in the name of any
Lender , and until the conclusion of any appellate review, if sought. A Taxable Event does not
include and is not triggered by a change in law by Congress that causes the interest to be
includable under Lender's gross income.
Opinion of Counsel: (a) Borrower shall be required to deliver a written opinion from Borrower's Counsel, in form
and substance acceptable to the Lender and Lender's Counsel.
(b) Receipt of opinion from Bond Counsel in form and substance satisfactory to the Lender,
which shall include, without limitation, an opinion that the interest on the Bond is
excludable from gross income of the owners thereof for Federal income tax purposes.
Legal Fee Quote: Our proposed Lender's counsel is Michael Wiener at Holland & Knight in Lakeland, FL. Fees
for Lender's counsel will be:
(a) $7,500.00 if our counsel closes the transaction and reviews documentation prepared by
the note counsel or counsel to the Borrower;
(b) Borrower agrees to pay the agreed fees for Lender's counsel and all other reasonable
fees, charges, expenses and costs in connection with the transaction.
(c) Payment by borrower of expenses described herein shall not be contingent upon closing
and legal fees on account of borrower after documentation has started are payable
regardless of whether the transaction closes.
(d) If the loan has extraordinary negotiations, unexpected issues arise or the loan does not
close before the closing date set in the commitment the legal fee will be increased to
reflect any extra work performed and Borrower agrees to pay such fee.
Closing Conditions: The closing of the Loan shall be conditioned upon satisfaction (or valid waiver)of
conditions precedent usual and customary for transactions of this type, including, without
limitation, the following conditions (all of the items to be delivered in form and substance
satisfactory to Lender): (1) receipt and review of (a) all financial, formation and other
information required by Lender on Borrower) and their constituent entities and other entities
specified by Lender, including all due diligence materials to verify authority, identity and
background information for regulatory purposes under applicable "know your customer" and
anti-money laundering laws, as deemed necessary by Lender in its sole and absolute
discretion and (b) such other information and due diligence deliveries as are requested by and
acceptable to Lender, including, but not limited to, legal documentation and attorney opinion
letters; (2) authorization, execution and delivery of such documentation as, is standard and
customary for this type of transaction or otherwise deemed necessary or appropriate by
Lender; and (3) there shall not have occurred, in the opinion of Lender, any materia l adverse
change in the business or financial condition of Borrower or in any other state of facts submitted
to Lender in connection with the Loan, from that which existed at the time Lender initially
considered the proposed Loan.
The funding of the Loan shall be subject to accuracy of representations and warranties as of
the date of such Loan and no event of default or incipient default under the Loan shall have
occurred and be continuing as of the date of such Loan or would result from making the Loan.
Expenses and
Indemnification: Borrower will pay all costs and expenses of Lender in connection with the administration and
enforcement of all documentation executed in connection with the Loan including, without
limitation, the fees, charges and disbursements of Lender's counsel (including in-house
counsel)subject to the limitations above regarding the loan closing counsel fees.
5
Governing Law and
Jurisdiction: State of FL.
This Summary of Terms and Conditions-is intended as an outline of certain material terms and conditions
applicable to the Loan and does not purport to describe all of the terms and conditions, representations and
warranties, covenants and other provisions that could be contained in the definitive loan and collateral
documentation relating to the Loan.
6
Independent Registered Municipal Advisor Certificate
To: the below named client
Cc:the below named independent registered municipal advisor("IRMA")
Each of SunTrust Bank, STI Institutional & Government, Inc., SunTrust Equipment Finance & Leasing Corp. and
SunTrust Robinson Humphrey, Inc. (collectively, "SunTrust")2 hereby discloses to the undersigned that, by obtaining
the below representation from you, none of the SunTrust entities is a municipal advisor and none of the SunTrust
entities is subject to the fiduciary duty established in Section 15B(c) (1) of the Securities Exchange Act of 1934, as
amended. In the context of a potential transaction between a SunTrust entity and you, and/or a potential engagement
between a SunTrust entity and you, in any discussions, communications, conferences, negotiations and undertakings,
(a) each SunTrust entity will act as a principal and not in a fiduciary capacity; (b) no SunTrust entity has assumed an
advisory or fiduciary responsibility in favor of you; and (c) no SunTrust entity is acting as your financial advisor. The
SunTrust entities have financial and other interests that may differ from yours. Further, each SunTrust entity advises
you to consult your own legal, financial and other advisors to the extent you deem appropriate.
IRMA Certification:
The undersigned state or local government or obligated person has retained an independent registered municipal
advisor ("IRMA"). The undersigned is represented by and will rely on the below listed IRMA to provide advice on
proposals from any SunTrust entity concerning the making of loans or the purchase of municipal securities for its own
account, and/or proposals concerning municipal financial products. The personnel of the IRMA who will advise the
undersigned on such matters have represented to the undersigned that they have not been associated with SunTrust
within the two years prior to the date of this certificate.
This certificate may be relied upon until it is withdrawn.
CLIENT LEGAL NAME
By:
Name: Date:
Title:
Name of IRMA:
IRMA Email Address:
2 The SunTrust Bank Tax Exempt Loan Program and other direct purchase municipal financings are offered by
SunTrust Bank or its subsidiary, ST Institutional &Government, Inc. Risk management and derivative products are
offered by SunTrust Bank. SunTrust Robinson Humphrey is the trade name for the corporate and investment banking
services of SunTrust Banks, Inc. and its subsidiaries, including SunTrust Robinson Humphrey, Inc., member, FINRA
and SIPC. Debt and equity underwriting, trading, research and sales, loan syndications, municipal securities trading
and sales, and mergers and acquisitions advisory services are offered by SunTrust Robinson Humphrey, Inc.
7
0, Bank
America's Most Convenient Banks
TD BANK,NA
375 SmAVE S
NAPLES,FL 34102
December 6,2017
Collier County Water-Sewer District
4420 Mercantile Avenue
Naples,Florida 34104
ATTN:Mr.Joseph Bellone
josephbellonena.collieroov.net
cc:
masvidals anpfm.com
varonap a.pfm.com
Dear Collier County Water-Sewer District,
The Collier County Water-Sewer District via a Request of Qualifications(RFQ)has provided us with certain information regarding
the need for the District to identify an institution that can provide a Bank Loan/Non-Bank Qualified Tax-Exempt Facility at the lowest overall
borrowing cost, pursuant to certain conditions as determined by the District, in an amount not to exceed $43,000,000. In connection
therewith,we are pleased to submit our proposal to provide the credit accommodations(the"Credit Accommodations")described on the
attached term sheet(s)for your consideration.
The structure of the proposed Credit Accommodation(s) is outlined in the attached Term Sheet which provides a statement of
suggested terms, but under no circumstance shall such statement be construed as a complete summarization of terms necessary for
consummation of the proposed Credit Accommodation. PLEASE NOTE, ALTHOUGH THE TERM SHEET HAS BEEN APPROVED BY
THE APPROPRIATE CREDIT AUTHORITIES AT THE BANK, THIS PROPOSAL IS SUBJECT TO FORMAL CREDIT REVIEW AND
UNDERWRITING IN ACCORDANCE WITH THE BANK'S INTERNAL POLICY AND NOTHING HEREIN SHALL CONSTITUTE A
BINDING COMMITMENT TO LEND. The Bank shall not be liable to the District or any other person for any losses, damages or
consequential damages which may result from the City's reliance upon this proposal letter or the proposed Credit Accommodations, the
proposed term sheet(s)or any transaction contemplated hereby.
This letter,along with the proposed terms and conditions, are delivered to the District for its confidential use and evaluation,and
shall not be disclosed by the District except(i)as may be required to be disclosed in any legal proceeding or as may otherwise be required
by law and(ii)on a confidential and"need to know"basis,to your directors,officers,employees,advisors and agents.
We appreciate the opportunity to provide this proposal to the District and look forward to working with you, and the District's
Team on successfully completing this transaction.
VERY TRULY YOURS,
TD BANK, N.A.
By:
Delle Joseph, CPA,Vice President
Florida Middle Market-Municipal Lending
1
TERMS AND CONDITIONS OF TERMS SHEET SATISFACTORY TO AND ACCEPTED BY:
NAME:
TITLE:
2
FOR:
COLLIER COUNTY WATER&SEWER DISTRICT—BANK LOAN
UP TO$43,000,000
NON-BANK QUALIFIED TAX-EXEMPT FACILITY, SERIES 2018
The attached Proposal is crafted to provide the District with the lowest cost of funds and maximum
flexibility on this financing request by having a fixed rate in place until expected closing date of
2/28/2018.
We are looking forward to continue being a value-added partner to the District in every way possible
and would like very much to provide the District with the requested financing. We are currently a
Financing Provider for Collier County CRA and have enjoyed our working relationship with the County.
TD Bank, N.A. is one of the 10 largest banks in the U.S. with deep roots in the communities we serve
dating back more than 150 years. Following are the current credit rating for TB Bank, NA as it is
important that the District partners with a strong financial institution for its banking needs.
Moody's S&P Fitch
The Toronto- Aal AA- AA-
Dominion Bank
TD Bank, N.A. Aa2 AA- AA-
The project team for this transaction has over couple decades of experience providing Tax Exempt
Bank Loan financing to municipalities in Collier County and the State of Florida. Should you have any
questions regarding the terms and options proposed under the attached proposal or wish to further
negotiate additional terms, please contact Delle Joseph, TD Bank Senior Loan Officer at:
Delle Joseph, CPA
Senior Relationship Manager
Florida Middle Market- Municipal Lending
TD Bank, America's Most Convenient Bank
375 5th Ave S
Naples, FL 34102
305-441-5692 (Office)
305-332-1855 (Cell)
E-mail: Delle.joseph(a�td.com
3
TERM SHEET
TERMS AND CONDITIONS OF CREDIT ACCOMMODATION DATED
12/04/17 ("DIRECT PURCHASE LOAN")
THIS IS A STATEMENT OF TERMS AND CONDITIONS AND NOT A COMMITMENT TO LEND. ALL CREDIT
ACCOMMODATIONS ARE SUBJECT TO FORMAL CREDIT UNDERWRITING AND APPROVAL.
1. Loan.
(a) Borrower(s): Collier County Water-Sewer District, Florida (the "District")
(b) Guarantor: N/A
(c) Facility: Non-Bank Qualified Tax Exempt Term Loan.
(d) Purpose: The proposed Series 2018 Note will be used to: (1) refund all or a
portion of the outstanding public debt of the Golden Gate Utility System
(the "System") in order to provide for the District's acquisition of the
System, (2) cash-fund a debt service reserve account, and (3) to pay
the cost of issuance.
(e) Amount: Principal Amount not to exceed $43,000,000.
(f) Collateral: The principal of and interest on the Series 2018 Bond will be secured by
a senior, parity pledge of (1) the Net Revenues of the District's county-
wide Water and Sewer System (the "District System") and (2) certain
charges imposed by the District on customers of the District System.
(g) Maturi : July 1, 2029.
(h) Repayment Terms: Interest payments on the outstanding principal balance of the Term
Loan will be calculated on a 30/360-day basis and will be paid
semiannually on January 1 and July 1, of each year, beginning July 1,
2018.
The principal amount of the Term Loan will be payable annually on July
1 of each year beginning July 1, 2018, through the final maturity of the
Series 2018 Bond.
(i) Interest Rate: NON-BANK QUALIFIED INDICATIVE FIXED RATE
Indicative Fixed Rate for the Loan Term duration is 2.28% as of
12/04/17.
The final loan rate to be set prior to closing, upon Borrower's request,
shall be based upon the following same formula that was used to
calculate the quoted indicative fixed rate: (69.25% of the prevailing ten
(10)year USD 1100 ICE Swap Rate) plus 62 basis points, as publicized
by the Intercontinental Exchange (ICE):
https://www.theice.com/i ba/historical-data
4
RATE HOLD: Bank will re-calculate and hold the loan rate of interest
until closing date, for up to Ninety(90)days from the date that
Borrower formally requests Bank to hold and lock in the Loan Rate.
(i) Prepayment Premium: The Loan will be subject to the Bank's standard prepayment penalty
language which reads as follows:
At the time of any full or partial prepayment, a fee equal to the greater
of (i) 1.00% of the principal balance being prepaid multiplied by the
"Remaining Term," as hereinafter defined, in years or (ii) a "Yield
Maintenance Fee"in an amount computed as follows:
The current cost of funds, specifically the bond equivalent yield for
United States Treasury securities (bills on a discounted basis shall be
converted to a bond equivalent yield) with a maturity date closest to the
"Remaining Term", shall be subtracted from the Note rate, or default
rate if applicable. If the result is zero or a negative number, there shall
be no Yield Maintenance Fee due and payable. If the result is a positive
number, then the resulting percentage shall be multiplied by the amount
being prepaid times the number of days in the "Remaining Term" and
divided by 360. The resulting amount is the "fixed prepayment charge"
due to the Bank plus any accrued interest due as of the prepayment
date and is expressed in the following calculation:
Yield Maintenance Fee = [Amount Being Prepaid x (Stated Interest Rate
— Current Cost of Funds) x Days in Remaining Term / 360] + Accrued
Interest Due.
"Remaining Term" as used herein shall mean the shorter of (i) the
remaining term of the Loan, or (ii) the remaining term of the then
current fixed interest rate period.
No Prepayment Penalty Option: Borrower can elect to have the Loan
Facility not be subject to the prepayment penalty provision
abovementioned by adding 1.9 basis points to the quoted Loan Rate.
(k) Late Charge: If any payment due the Bank is more than fifteen (15)days overdue,
a late charge of six percent(6%)of the overdue payment shall be
assessed.
(I) Events of Default: Will include but not be limited to:
(1) Breach of representation or warranties.
(2) Violation of covenants.
(3) Bankruptcy or insolvency.
(4) Final, non-appealable judgments against the District in excess of
$10,000,000
(5) Payment default.
5
(m) Default Rate of Thedefault rate of interest" shall be eight g ht (8) percentage points in
Interest: excess of the Bank's Prime Rate of interest charged at the time of the
event of default or the maximum loan rate allowed under the Law.
2. Fees and Expenses:
The Borrower shall pay to the Bank on demand any and all costs and expenses (including, without limitation,
reasonable-attorneys' fees and disbursements, court costs, litigation and other expenses) incurred or paid by
the Bank in connection with the loan. The Borrower's bond counsel will provide documentation associated
with this transaction. Documentation will be subject to the review and approval of the Lender and the
Lender's counsel. The Borrower agrees to pay all legal fees and expenses of the lender associated with the
review and closing of this transaction, which costs may be paid with proceeds of the Loan: Legal costs shall
be capped at no more than $10,000.
3. Legal Opinions.
Prior to closing, there shall be delivered to the Bank an opinion of Bond Counsel and /or District Counsel
acceptable to the Bank covering matters customary for a transaction of this type and nature and which shall,
without limitation, opine that: (1) the Borrower is duly formed; (2) all loan documents have been validly
authorized and executed by and on behalf of the Borrower, if any; (3) all loan documents are valid, binding,
enforceable in accordance with their terms and do not violate any legal requirements, including without
limitation, organizational documents, laws and material agreements; (4) Facility is Tax Exempt Non-Bank
Qualified.
4. Financial Reporting:
a) Borrower(s) shall furnish the following financial reports:
Type of Report(s) Frequency Due Date
Audited Financial Statement Annually Within 210 days of fiscal year
end
Operating Budget Annually Within 30 days of approval or
acceptance by Borrower's
Board
b) The Bank reserves the right to request additional financial information to supplement or verify certain
financial assumptions or verify the creditworthiness of the Borrower and if applicable.
5. Financial Covenant/Additional Bond Test:
Coverage Requirements:i
The District is required to charge such rates, fees and other charges that will maintain Net Revenues equal to at
least 1.00 times Maximum Annual Debt Service and Pledged Revenues(includes Special Assessment Proceeds
and System Development Fee)equal to at least 1.25 times Maximum Annual Debt Service. In addition, the
District shall satisfy the coverage requirements of all subordinate debt obligations.
6
The loan agreements of the District authorizing the District's subordinated SRF loans contain separate rate
covenants to help ensure the availability of revenues for the payment of such obligations. The District shall
impose rates for the services of the District which will produce revenues pledged in an amount not less than
115% of debt service on all bonded indebtedness of the District, and not less than 125%.
ii. Additional Debt Requirements:
In order to issue additional indebtedness on parity with the Series 2018 Bond and other outstanding senior lien
debt, Net Revenues must equal at least 1.00 times Maximum Annual Debt Service of the outstanding bonds and
the proposed additional bonds, and Pledged Revenues(includes Special Assessment Proceeds and System
Development Fee) must equal at least 1.25 times Maximum Annual Debt Service of the outstanding bonds and
the additional bonds.
6. Other Conditions:
a. No Material Adverse Change to the Borrower prior to closing.
b. Loan debt service payments shall be settled via auto debit.
c. The Facility shall be cross defaulted with all other existing Borrower debt secured by same revenue as
this Facility.
d. Borrower shall maintain, during the life of the Loan, a minimum Public Debt Rating (PDR) of BBB-or
equivalent on debt issued by the District which carries a PDR.
e. Facility shall carry a debt service reserve, as per the master resolution, in an amount equal to the lesser
of the Maximum Annual Debt Service(MADS) or 125% of average annual debt service.
f. Borrower covenants and agrees that documents will include language stipulating that the Loan Facility
and all existing and future debt secured by the Water and Sewer Net System Revenues of the District will
be subject to no preference given at any time to any particular issuance, including acceleration rights.
g. Borrower shall comply with all laws applicable to its operations.
h. Borrower shall comply with its Master Bond Resolution and/or Ordinance (wherever applicable).
i. Documents shall include taxability language allowing for a higher taxable loan rate should the IRS, or a
court of competent jurisdiction, deem the Loan to be a taxable facility.
j. Bank reserves the right, at the time such an event shall occur, to charge Borrower a premium of up to 23
basis points(if Corporate Tax Rate = 25%) or up to 37 basis points(if Corporate Tax Rate = 20%) shall
the corporate tax rate in the United States decrease to either 25%or 20% in the future; and results in an
adverse yield impact on existing privately placed tax exempt facilities.
k. All standard rights and remedies.
I. The implementation of certain terms, conditions, covenants or other non-material changes to the
proposed Credit Accommodation required as part of the Bank's formal credit approval shall be deemed an
approval in substantially the form outlined in this proposed Credit Accommodation.
m. All legal matters and documentation to be executed in connection with the contemplated proposed Credit
Accommodation shall be satisfactory in form and substance to the Bank and counsel to the Bank.
n. The Bank shall not be required to enter into the proposed Credit Accommodation until the completion of
all due diligence inquiries, receipt of approvals from all requisite parties and the execution and receipt of
all necessary documentation reasonably acceptable to the Bank and its counsel. Furthermore, certain
assumptions are made for this proposal which, if altered, could affect the overall credit approval and or
terms of the proposed Credit Accommodation.
o. Patriot Act Notice: Patriot Act Notice. Lender is subject to the requirements of USA Patriot Act(Title III
of Pub. L. 107-56) (signed into law October 26, 2001)) (the"Act"), and hereby notifies the Borrower and
Guarantor(if any)that pursuant to the requirements of the Act, it is required to obtain,verify and record
information that identifies the Borrower and Guarantor, which information includes the names and
address of the Borrower and Guarantor and other information that will allow Lender to identify the
Borrower and Guarantor in accordance with the Act.
THIS PROPOSAL IS NOT AND SHOULD NOT BE CONSTRUED AS A COMMITMENT.BY THE BANK OR ANY
AFFILIATE TO ENTER INTO ANY CREDIT ACCOMMODATION.
7
Preliminary Amortization Schedule (Subject to change)
Maturity Amortization
Date Schedule
7/1/2018 2,355,000
7/1/2019 2,485,000
711/2020 2,545,000
7/1/2021 2,605,000
7/1/2022 2,685,000
711/2023 3,940,000
711/2024 4,045,000
7/1/2025 4,145,000
7/1/2026 4,250,000
7/1/2027 4,365,000
7/1/2028 4,475,000
7/1/2029 3,195,000
Total: 41,090,000
Average Life: 6.7 Years
8