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Resolution 522-1998 INDUSTRIAL DEVELOPMENT AUTHORITY RESOLUTION 522-1998 AN INDUCEMENT RESOLUTION OF THE MONROE COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY REGARDING THE OFFICIAL ACTION OF THE AUTHORITY WITH RESPECT TO THE PROPOSED ISSUANCE BY THE AUTHORITY OF TAX-EXEMPT PRIVATE ACTIVITY REVENUE BONDS IN AN ~ INITIAL AGGREGATE PRINCIPAL AMOUNT NOT TO ~ ~ EXCEED $8,000,000 FOR THE PRINCIPAL PURPOSE OF ,&p5f FINANCING CERTAIN CAPITAL IMPROVEMENT COSTS ::;?';:: INCURRED OR TO BE INCURRED BY KEY WEST BREWERY, g~~:;r;; INC. IN CONNECTION WITH THE ACQUISITION,~~F? CONSTRUCTION AND EQUIPPING OF A BREWERY-~:-i?; F ACll..ITY AS DESCRIBED HEREIN~ AUTHORIZING T~ ~ EXECUTION AND DELIVERY OF A MEMORANDUM OF AGREEMENT BY AND BETWEEN THE AUTHORITY AND THE CORPORATION~ AND PROVIDING FOR RELATED MATTERS. \0 .." \0 - k r- ,." :e 0 f\) ." 0 ~ ;0 ;0 f\) ,." C"') .. <::) en ::0 - 0 WHEREAS, Key West Brewery, Inc., a Florida corporation (the "Corporation"), has applied to the Monroe County Industrial Development Authority (the "Authority"), to issue its private activity industrial development revenue bonds in the initial aggregate principal amount of not to exceed $8,000,000 (the "Bonds") for the principal purpose of (1) financing certain costs of acquisition, construction and equipping of a brewery facility (the "Project"), as more particularly described herein, (2) funding a debt service reserve fund, ifrequired, and (3) paying a portion of costs associated with the issuance of the Bonds. The Project is to be owned and operated by the Corporation; and WHEREAS, the Corporation has requested that the Authority loan the proceeds of the Bonds to said Corporation pursuant to Chapter 159, Parts II and III, Florida Statutes or such other provision or provisions of Florida law as the Authority may determine advisable (the "Act") in order to accomplish the foregoing~ and WHEREAS, the bond resolution granting the final authority for the issuance of the Bonds has not yet been adopted by the Authority; and WHEREAS, the issuance of the Bonds under the Act in one or more issues or series in such amounts of tax-exempt bonds and/or taxable bonds not exceeding an aggregate principal amount of $8,000,000 and the loaning of the proceeds thereof to the Corporation to finance a portion of the costs of the Project under a loan agreement or other financing agreement, and pursuant to the terms thereof which will provide that payments thereunder be at least sufficient to pay the principal of and interest and redemption premium, if any, on such Bonds and such other costs in connection therewith as may be incurred by the Authority, will assist the Corporation and promote the public purposes provided in the Act~ and WHEREAS, the Corporation has submitted the Memorandum of Agreement (the "Memorandum of Agreement") relating to the issuance of the Bonds, attached hereto as Exhibit A; and WHEREAS, in order to satisfy certain of the requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), it was necessary for the Authority to hold a public hearing on the proposed issuance of the Bonds for the purposes herein stated, which hearing was held on the date hereof, which date is more than 14 days following the first publication of notice of such public hearing in a newspaper of general circulation in Monroe County, Florida (a true and accurate copy of the proof of publication of such notice is attached hereto as Exhibit B), which public hearing was conducted in a manner that provided a reasonable opportunity for persons with differing views to be heard, both orally and in writing, on the issuance of such Bonds and the location and nature of the Project~ and WHEREAS, it is intended that this Resolution shall constitute official action toward the issuance of the Bonds within the meaning of the applicable United States Treasury Regulations in addition to any other action that may have heretofore been taken by the Corporation; NOW, THEREFORE, DETERMINED AND RESOLVED BY THE MONROE COUNTY INDUSTRIAL DEVELOPMENT AUTHORITI', THAT: SECTION 1. AUTHORITI' FOR THIS RESOLUTION. This resolution, hereinafter called "Resolution" is adopted pursuant to the provisions of the Act and other applicable provisions oflaw. SECTION 2. PRELIMINARY STATEMENT. This Resolution is entered into to permit the Corporation to proceed with the financing of all or a portion of the costs of the Project and to provide an expression of intention by the Authority, prior to the issuance of the Bonds, to issue and sell the Bonds and make the proceeds thereof available to finance all or a portion of the costs of the Project, to the extent of such proceeds, all in accordance with and subject to the provisions of the Act, the Constitution and other laws of the State of Florida, including the Code and this Resolution, but subject in all respects to the terms of the Memorandum of Agreement hereinafter referred to. SECTION 3. APPROVAL OF THE FINANCING. The financing of a portion of the costs of the Project by the Authority through the issuance of the Bonds, pursuant to the Act, will promote the economic development, prosperity, health and welfare of the citizens of Monroe County, will promote the general economic structure of Monroe County, and will thereby serve the public purposes of the Act and is hereby preliminarily approved, subject, however, in all respects to the Corporation meeting the conditions set forth in the Memorandum of Agreement to the sole satisfaction of the Authority, 2 SECTION 4. EXECUTION AND DELIVERY OF MEMORANDUM OF AGREEMENT. The Chainnan or the Vice-Chainnan are hereby authorized and directed to execute, for and on behalf of the Authority, the Memorandum of Agreement attached hereto as Exhibit "A" between the Authority and the Corporation, which Memorandum of Agreement provides understandings relative to the proposed issuance of the Bonds by the Authority to finance all or a portion of the costs of the Project, fund a debt service reserve fund, if required, and pay a portion of the costs of issuance of the Bonds in an aggregate principal amount not to exceed the lesser of (a) $8,000,000, or (b) the amount determined by the Authority and the Corporation to be necessary to accomplish the foregoing. SECTION 5. AUTHORIZATION OF THE BONDS. There is hereby authorized to be issued and the Authority hereby grants its preliminary approval for the issuance of the Bonds, if so requested by the Corporation, and subject in all respects to the conditions set forth in the Memorandum of Agreement attached hereto, in one or more issues or series of such tax-exempt and/or taxable revenue bonds in an aggregate principal amount not to exceed $8,000,000 for the principal purpose of financing all or a portion of the costs of the Project as described in the Memorandum of Agreement. The rate of interest payable on the Bonds shall not exceed the maximum rate permitted by law, SECTION 6. GENERAL AUTHORIZATION. The Chairman and the Vice-Chairman are hereby further authorized to proceed, upon execution of the Memorandum of Agreement, with the undertakings provided for therein on the part of the Authority and are further authorized to take such steps and actions as may be required or necessary in order to cause the Authority to issue the Bonds subject in all respects to the terms and conditions set forth in the Memorandum of Agreement authorized hereby. SECTION 7. AFFIRMATIVE ACTION. This resolution is an affirmative action of the Authority toward the issuance of the Bonds, as contemplated in the Memorandum of Agreement, in accordance with the purposes of the laws of the state of Florida and the applicable United States Treasury Regulations. SECTION 8. LIMITED OBLIGATIONS. The Bonds and the interest thereon shall not constitute an indebtedness or pledge of the general credit or taxing power of Monroe County, the state of Florida or any political subdivision or agency thereof but shall be payable solely from the revenues pledged therefor pursuant to a loan agreement or other financing agreement entered into by and between the Authority and the Corporation prior to or contemporaneously with the issuance of the Bonds. The Authority has no taxing power. SECTION 9. LIMITED APPROVAL. The approval given herein shall not be construed as (i) an endorsement of the creditworthiness of the Corporation or the financial viability of the Project, (ii) a recommendation to any prospective purchaser of the Bonds, (iii) an evaluation of the likelihood of the repayment of the debt service on the Bonds, or (iv) an approval of any necessary rezoning applications nor for any other regulatory permits relating to the Project and the 3 Authority shall not be construed by reason of its adoption of this resolution to have made any such endorsement, finding or recommendation or to have waived any of the County's or Authority's rights or estopping the County or the Authority from asserting any rights or responsibilities it may have in that regard. SECTION 10. EFFECTIVE DATE. This Resolution shall take effect immediately. ADOPTED this 9th day of December, 1998. MONROE COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY, MONROE COUNTY, FLORIDA (SEAL) MA)L~I~I~RMAN '" ATTEST: (SEAl) \ . ATTE" :CANt:./ L KOLHAGE ClG,K \.. R \ . . l1J;><J~ C::.'UTY elL ,:< - Clerk 4 EXHIBIT A TO RESOLUTION MEMORANDUM OF AGREEMENT FOR ISSUANCE OF PRIVATE ACTIVITY REVENUE BONDS This Agreement between the Monroe County Industrial Development Authority, a public body corporate and politic (the "Authority") and Key West Brewery, Inc, (the "Corporation"), a Florida corporation. WIT N E SSE T H: 1. Preliminary Statement. Among the matters of mutual understanding and inducement which have resulted in the execution of this Agreement are the following: (a) Whereas Chapter 159, Parts II and ill, Florida Statutes, (the "Act") provides that the Authority may issue tax-exempt revenue bonds and loan the proceeds thereof to one or more persons, finns or private corporations, or use such proceeds, to defray the cost of acquiring, by purchase or construction or renovation, certain qualifying manufacturing, warehousing or distribution facilities. (b) The Corporation is considering financing all or a portion of the costs of acquisition, construction and equipping of a brewery facility, which facility is more fully described in Exhibit A attached hereto (the "Project"). (c) The Authority intends this Agreement to constitute its preliminary approval, subject in all respects to the terms hereof, to issue its bonds (the "Bonds") in one or more series or issues, tax-exempt and/or taxable, pursuant to the Act in an amount to be agreed upon by the Authority and the Corporation and to loan the proceeds thereof to the Corporation, or to use such proceeds, to finance a portion of the costs of the Project, including all costs incurred in connection with the issuance of the Bonds by the Authority and the Corporation, up to an amount not to exceed $8,000,000. (d) The Authority considers the issuance and sale of the Bonds, for the purposes hereinabove set forth, consistent with the objectives of the Act. This Agreement constitutes the official preliminary action of the Authority toward the issuance of the Bonds as herein contemplated in accordance with the purposes of both the Act and the applicable United States Treasury Regulations, A-I 2. Undertakinis on the Part of the Authority. Subject to the terms hereof, the Authority agrees as follows: (a) Subject to the Corporation providing the Authority with sufficient evidence to enable the Authority to make the findings set forth in Section 159.29 of the Act, the Authority will, subject to Section 4(g) hereof, authorize the issuance of the Bonds, in one or more Series or issues, tax- exempt and/or taxable, in the aggregate principal amount necessary and sufficient to finance all or a portion of the cost of acquiring, constructing and equipping the Project as the Authority and the Corporation shall agree in writing (including costs of issuance of such Bonds and a debt service reserve fund), but in all events, the principal amount of such Bonds shall not exceed the lesser of (i) the amount determined by the Authority and the Corporation necessary to accomplish the foregoing, or (ii) $8,000,000. (b) The Authority will cooperate with the Corporation and with the underwriters, placement agents or purchasers of the Bonds and the bond counsel of the Authority with respect to the issuance and sale of the Bonds and will take such further action and authorize the execution of such documents as shall be mutually satisfactory to the Authority and the Corporation for the authorization, issuance and sale of such Bonds and the use of the proceeds thereof to finance a portion of the cost of constructing, acquiring and equipping the Project. (c) Such actions and documents may permit the issuance from time to time in the future of additional bonds on terms which shall be set forth therein, whether pari passu with other series of bonds or otherwise, for the purpose of defraying the cost of completion, enlargements, improvements and expansions of the Project, or any segment thereof, or refunding of the Bonds. (d) The loan agreement, trust indenture, mortgage and other financing documents (collectively, the "Financing Agreements") between the Authority and the Corporation shall, under terms agreed upon by the parties, provide for payments to be made by the Corporation in such sums as shall be necessary to pay the amounts required under the Act, including the principal of and interest and redemption premium, if any, on the Bonds, as and when the same shall become due and payable. (e) In authorizing any issuance of the Bonds pursuant to this Agreement, the Authority will make no warranty, either expressed or implied, that the proceeds of the Bonds will be sufficient to pay all costs of acquiring, constructing, installing and developing the Project or that those facilities encompassed by the Project will be suitable for the Corporation's purposes or needs. (f) The Bonds shall specifically provide that they are payable solely from the revenues derived from the Financing Agreements or other agreements approved by the Authority, except to the extent payable out of amounts attributable to Bond proceeds. The Bonds and the interest thereon shall not constitute an indebtedness or pledge of the general credit of Monroe County, the state of Florida or any political subdivision or agency thereof, and such fact shall be plainly stated on the face of the Bonds. (g) Issuance of the Bonds by the Authority shall be contingent upon satisfaction of (i) all of the provisions hereof and (ii) all applicable provisions of the Internal Revenue Code of 1986, as A-2 amended (the "Code"), and the regulations promulgated thereunder, including the ability of and desirability by the Authority to issue obligations to finance all or a portion of the costs of the Project and the approval thereof by the Authority and the Board of County Commissioners of Monroe County in accordance with the provisions of Section 147(f) of the Code, 3. Undertakinis on the Part of the COI:poration. Subject to the terms hereof, the Corporation agrees as follows: (a) The Corporation will use reasonable efforts to insure that the Bonds in the aggregate principal amount as stated above are sold; provided, however, that the terms of such Bonds and of the sale and delivery thereof shall be mutually satisfactory to the Authority and the Corporation. (b) Prior to the issuance of the Bonds in the principal amount stated above in one or more Series or issues from time to time as the Authority and the Corporation shall agree in writing, the Corporation will enter into the Financing Agreements with the Authority, the terms of which shall be mutually agreeable to the Authority and Corporation, providing for the loan or use of the proceeds of the Bonds to finance a portion of the costs of the Project. Such Financing Agreements will provide that the Corporation will be obligated to pay the Authority (or the trustee for holders of the Bonds on behalf of the Authority, as the case may be) sums sufficient in the aggregate to enable the Authority to pay the principal of and interest and redemption premium, if any, on the Bonds, as and when the same shall become due and payable, and all other expenses related to the issuance and delivery of the Bonds. (c) The Corporation shall, in addition to paying the amounts set forth in the Financing Agreements, pay all costs of operation, maintenance, taxes, governmental and other charges which may be assessed or levied against or with respect to the Project. (d) To the extent not otherwise paid from Bond proceeds as part of the costs of the Project, the Corporation hereby agrees to pay all of the reasonable out-of-pocket expenses of officials and representatives of the Authority incurred in connection with the issuance of the Bonds and will pay all reasonable fees and expenses of the Authority in accordance with its guidelines, of the Authority's Financial Advisor, Public Financial Management, Inc., of the Authority's Counsel and of Nabors, Giblin & Nickerson, P.A., Bond Counsel to the Authority. (e) The Corporation will hold the Authority and Monroe County free and harmless from any loss or damage and from any taxes or other charges levied or assessed by reason of any mortgaging or other disposition of the Project except those arising from the Authority's or Monroe County's gross negligence or willful misconduct. (f) The Corporation agrees to indemnity and defend the Authority and Monroe County and hold the Authority and Monroe County harmless against any and all claims, losses, liabilities or damages to property or any injury or death of any person or persons occurring in connection with the Project or the issuance of the Bonds and the Corporation's undertaking thereof, or in any way growing out of or resulting from this Agreement except those arising from the Authority's or Monroe County's gross negligence or willful misconduct including, without limitation, all reasonable costs and A-3 expenses of the Authority and reasonable attorneys' fees incurred in the enforcement of any agreement of the Corporation contained herein, In the event that the Bonds are not issued and delivered, this indemnity shall survive the termination of this Agreement. (g) The Corporation will take such further action as may be required to implement its aforesaid undertakings and as it may deem appropriate in pursuance thereof 4. General Provisions. All commitments of the Authority under Section 2 hereof and of the Corporation under Section 3 hereof are subject to the conditions that all of the following events shall have occurred not later than December 31, 1999, or such other date as shall be mutually satisfactory to the Authority and Corporation, (a) The Authority shall be lawfully entitled to issue the Bonds as herein contemplated. (b) The Authority and Corporation shall have agreed on mutually acceptable terms for the Bonds and the sale and delivery thereof and mutually acceptable terms and conditions of any trust instrument or instruments in respect thereto and any Financing Agreements or other agreements incidental to the financing or referred to in Sections 2 and 3 hereof (c) Rulings satisfactory to the Corporation and to the Authority as to such matters with respect to the Bonds, the Project, the Financing Agreements and any other trust instrument or instruments, if specified by the Authority and Corporation, shall have been obtained from the Internal Revenue Service and/or the United States Treasury Department and shall be in full force and effect at the time of issuance of the Bonds. (d) Such other rulings, approvals, consents, certificates of compliance, opinions of counsel and other instruments and proceedings reasonably satisfactory to the Corporation and to the Authority as to such matters with respect to the Bonds, the Project, the Financing Agreements and any other trust instrument or instruments, as shall be specified by the Corporation or the Authority, shall have been obtained from such governmental, as well as non-governmental, agencies and entities as may have or assert competent jurisdiction over or interest in matters pertinent thereto and shall be in full force and effect at the time of issuance of the Bonds. (e) Compliance with all applicable provisions of Chapters 159, 189,215 and 218, Florida Statutes, and the Authority's guidelines and procedures relating to the issuance of the Bonds, the interest rate thereon, the type of purchasers of the Bonds and the terms on which the Bonds may otherwise be issued. (f) Evidence that the Bonds have been privately placed with or otherwise sold to accredited investors in accordance with Section 189.4085, Florida Statutes, and applicable federal securities laws. (g) Notwithstanding any other terms hereof, nothing contained herein shall be construed to create a binding commitment by the Authority to issue the Bonds until such time, if ever, as the Authority shall grant its final approval for the issuance of the Bonds and the final terms and provisions A-4 of the financing, By its execution hereof, the Corporation agrees that the Authority may withhold its flnal approval of the issuance of the Bonds in its sole discretion and shall not incur any liability whatsoever as a result of it not granting any such approval notwithstanding any other provision hereof (h) Receipt by the Corporation of all licenses and necessary approvals from applicable governmental agencies and entities. If the events set forth in this Section 4 do not take place within the time set forth or any extension thereof, the Corporation agrees that it will reimburse the Authority for all the reasonable and necessary direct or indirect expenses which the Authority may incur at the Corporation's request arising from the execution of this Agreement and the performance by the Authority of its obligations hereunder, including legal fees for counsel to the Authority and the expenses of bond counsel. 5. Bindini Effect. All covenants and agreements herein contained by or on behalf of the Authority and the Corporation shall bind and inure to the benefit of the respective successors and assigns of the Authority and the Corporation whether so expressed or not. IN WITNESS WHEREOF, the parties hereto have entered into this Agreement by their officers thereunder duly authorized as of the 9th day of December, 1998. (SEAL) MONROE COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY, MONROE COUNTY, FLORIDA MA~~H~~ ATTEST: ~c. ~~ " Clerk KEY WEST BREWERY, INC. (SEAL) ..~ f5. President ATTEST: Secretary APPROVE AN 0 AS TO FOR LE AL SUFF/CIENCMy B . ROBERT N. W E DATE -.!' Z... '2 < - 2.8 A-5 EXHIBIT A TO RESOLUTION MEMORANDUM OF AGREEMENT FOR ISSUANCE OF PRIVATE ACTIVITY REVENUE BONDS This Agreement between the Monroe County Industrial Development Authority, a public body corporate and politic (the "Authority") and Key West Brewery, Inc, (the "Corporation"), a Florida corporation, WITNESSETH: 1. Preliminary Statement. Among the matters of mutual understanding and inducement which have resulted in the execution of this Agreement are the following: (a) Whereas Chapter 159, Parts IT and ill, Florida Statutes, (the "Act") provides that the Authority may issue tax-exempt revenue bonds and loan the proceeds thereof to one or more persons, firms or private corporations, or use such proceeds, to defray the cost of acquiring, by purchase or construction or renovation, certain qualifying manufacturing, warehousing or distribution facilities. (b) The Corporation is considering financing all or a portion of the costs of acquisition, construction and equipping of a brewery facility, which facility is more fully described in Exhibit A attached hereto (the "Project"). (c) The Authority intends this Agreement to constitute its preliminary approval, subject in all respects to the terms hereof, to issue its bonds (the "Bonds") in one or more series or issues, tax-exempt and/or taxable, pursuant to the Act in an amount to be agreed upon by the Authority and the Corporation and to loan the proceeds thereof to the Corporation, or to use such proceeds, to finance a portion of the costs of the Project, including all costs incurred in connection with the issuance of the Bonds by the Authority and the Corporation, up to an amount not to exceed $8,000,000. (d) The Authority considers the issuance and sale of the Bonds, for the purposes hereinabove set forth, consistent with the objectives of the Act. This Agreement constitutes the official preliminary action of the Authority toward the issuance of the Bonds as herein contemplated in accordance with the purposes of both the Act and the applicable United States Treasury Regulations. A-I 2. Undertakin~s on the Part of the Authority. Subject to the terms hereof, the Authority agrees as follows: (a) Subject to the Corporation providing the Authority with sufficient evidence to enable the Authority to make the findings set forth in Section 159.29 of the Act, the Authority will, subject to Section 4(g) hereof, authorize the issuance of the Bonds, in one or more Series or issues, tax- exempt and/or taxable, in the aggregate principal amount necessary and sufficient to finance all or a portion of the cost of acquiring, constructing and equipping the Project as the Authority and the Corporation shall agree in writing (including costs of issuance of such Bonds and a debt service reserve fund), but in all events, the principal amount of such Bonds shall not exceed the lesser of (i) the amount determined by the Authority and the Corporation necessary to accomplish the foregoing, or (ii) $8,000,000, (b) The Authority will cooperate with the Corporation and with the underwriters, placement agents or purchasers of the Bonds and the bond counsel of the Authority with respect to the issuance and sale of the Bonds and will take such further action and authorize the execution of such documents as shall be mutually satisfactory to the Authority and the Corporation for the authorization, issuance and sale of such Bonds and the use of the proceeds thereof to finance a portion of the cost of constructing, acquiring and equipping the Project. (c) Such actions and documents may permit the issuance from time to time in the future of additional bonds on terms which shall be set forth therein, whether pari passu with other series of bonds or otherwise, for the purpose of defraying the cost of completion, enlargements, improvements and expansions of the Project, or any segment thereof, or refunding of the Bonds. (d) The loan agreement, trust indenture, mortgage and other financing documents (collectively, the "Financing Agreements") between the Authority and the Corporation shall, under tenns agreed upon by the parties, provide for payments to be made by the Corporation in such sums as shall be necessary to pay the amounts required under the Act, including the principal of and interest and redemption premium, if any, on the Bonds, as and when the same shall become due and payable. (e) In authorizing any issuance of the Bonds pursuant to this Agreement, the Authority will make no warranty, either expressed or implied, that the proceeds of the Bonds will be sufficient to pay all costs of acquiring, constructing, installing and developing the Project or that those facilities encompassed by the Project will be suitable for the Corporation's purposes or needs. (f) The Bonds shall specifically provide that they are payable solely from the revenues derived from the Financing Agreements or other agreements approved by the Authority, except to the extent payable out of amounts attributable to Bond proceeds. The Bonds and the interest thereon shall not constitute an indebtedness or pledge of the general credit of Monroe County~ the state of Florida or any political subdivision or agency thereof, and such fact shall be plainly stated on the face of the Bonds. (g) Issuance of the Bonds by the Authority shall be contingent upon satisfaction of (i) all of the provisions hereof and (ii) all applicable provisions of the Internal Revenue Code of 1986, as A-2 amended (the "Code"), and the regulations promulgated thereunder, including the ability of and desirability by the Authority to issue obligations to finance all or a portion of the costs of the Project and the approval thereof by the Authority and the Board of County Commissioners of Monroe County in accordance with the provisions of Section 147(f) of the Code, 3, Undertakinis on the Part of the Cor:poration. Subject to the terms hereof, the Corporation agrees as follows: (a) The Corporation will use reasonable efforts to insure that the Bonds in the aggregate principal amount as stated above are sold; provided, however, that the terms of such Bonds and of the sale and delivery thereof shall be mutually satisfactory to the Authority and the Corporation. (b) Prior to the issuance of the Bonds in the principal amount stated above in one or more Series or issues from time to time as the Authority and the Corporation shall agree in writing, the Corporation will enter into the Financing Agreements with the Authority, the terms of which shall be mutually agreeable to the Authority and Corporation, providing for the loan or use of the proceeds of the Bonds to finance a portion of the costs of the Project. Such Financing Agreements will provide that the Corporation will be obligated to pay the Authority (or the trustee for holders of the Bonds on behalf of the Authority, as the case may be) sums sufficient in the aggregate to enable the Authority to pay the principal of and interest and redemption premium, if any, on the Bonds, as and when the same shall become due and payable, and all other expenses related to the issuance and delivery of the Bonds. (c) The Corporation shall, in addition to paying the amounts set forth in the Financing Agreements, pay all costs of operation, maintenance, taxes, governmental and other charges which may be assessed or levied against or with respect to the Project. (d) To the extent not otherwise paid from Bond proceeds as part of the costs of the Project, the Corporation hereby agrees to pay all of the reasonable out-of-pocket expenses of officials and representatives of the Authority incurred in connection with the issuance of the Bonds and will pay all reasonable fees and expenses of the Authority in accordance with its guidelines, of the Authority's Financial Advisor, Public Financial Management, Inc., of the Authority's Counsel and of Nabors, Giblin & Nickerson, P.A., Bond Counsel to the Authority. (e) The Corporation will hold the Authority and Monroe County free and harmless from any loss or damage and from any taxes or other charges levied or assessed by reason of any mortgaging or other disposition of the Project except those arising from the Authority's or Monroe County's gross negligence or willful misconduct. (f) The Corporation agrees to indemnify and defend the Authority and Monroe County and hold the Authority and Monroe County harmless against any and all claims, losses, liabilities or damages to property or any injury or death of any person or persons occurring in connection with the Project or the issuance of the Bonds and the Corporation's undertaking thereof, or in any way growing out of or resulting from this Agreement except those arising from the Authority's or Monroe County's gross negligence or willful misconduct including, without limitation, all reasonable costs and A-3 expenses of the Authority and reasonable attorneys' fees incurred in the enforcement of any agreement of the Corporation contained herein. In the event that the Bonds are not issued and delivered, this indemnity shall survive the termination of this Agreement. (g) The Corporation will take such further action as may be required to implement its aforesaid undertakings and as it may deem appropriate in pursuance thereof 4, General Provisions. All commitments of the Authority under Section 2 hereof and of the Corporation under Section 3 hereof are subject to the conditions that all of the following events shall have occurred not later than December 31, 1999, or such other date as shall be mutually satisfactory to the Authority and Corporation. (a) The Authority shall be lawfully entitled to issue the Bonds as herein contemplated. (b) The Authority and Corporation shall have agreed on mutually acceptable terms for the Bonds and the sale and delivery thereof and mutually acceptable terms and conditions of any trust instrument or instruments in respect thereto and any Financing Agreements or other agreements incidental to the financing or referred to in Sections 2 and 3 hereof. (c) Rulings satisfactory to the Corporation and to the Authority as to such matters with respect to the Bonds, the Project, the Financing Agreements and any other trust instrument or instruments, if specified by the Authority and Corporation, shall have been obtained from the Internal Revenue Service and/or the United States Treasury Department and shall be in full force and effect at the time of issuance of the Bonds. (d) Such other rulings, approvals, consents, certificates of compliance, opinions of counsel and other instruments and proceedings reasonably satisfactory to the Corporation and to the Authority as to such matters with respect to the Bonds, the Project, the Financing Agreements and any other trust instrument or instruments, as shall be specified by the Corporation or the Authority, shall have been obtained from such governmental, as well as non-governmental, agencies and entities as may have or assert competent jurisdiction over or interest in matters pertinent thereto and shall be in full force and effect at the time of issuance of the Bonds. (e) Compliance with all applicable provisions of Chapters 159, 189,215 and 218, Florida Statutes, and the Authority's guidelines and procedures relating to the issuance of the Bonds, the interest rate thereon, the type of purchasers of the Bonds and the terms on which the Bonds may otherwise be issued. (f) Evidence that the Bonds have been privately placed with or otherwise sold to accredited investors in accordance with Section 189.4085, Florida Statutes, and applicable federal securities laws. (g) Notwithstanding any other terms hereof, nothing contained herein shall be construed to create a binding commitment by the Authority to issue the Bonds until such time, if ever, as the Authority shall grant its final approval for the issuance of the Bonds and the final terms and provisions A-4 of the financing, By its execution hereof, the Corporation agrees that the Authority may withhold its final approval of the issuance of the Bonds in its sole discretion and shall not incur any liability whatsoever as a result of it not granting any such approval notwithstanding any other provision hereof (h) Receipt by the Corporation of all licenses and necessary approvals from applicable governmental agencies and entities. If the events set forth in this Section 4 do not take place within the time set forth or any extension thereof, the Corporation agrees that it will reimburse the Authority for all the reasonable and necessary direct or indirect expenses which the Authority may incur at the Corporation's request arising from the execution of this Agreement and the performance by the Authority of its obligations hereunder, including legal fees for counsel to the Authority and the expenses of bond counsel. 5. B indini Effect. All covenants and agreements herein contained by or on behalf of the Authority and the Corporation shall bind and inure to the benefit of the respective successors and assigns of the Authority and the Corporation whether so expressed or not. IN WITNESS WHEREOF, the parties hereto have entered into this Agreement by their officers thereunder duly authorized as of the 9th day of December, 1998. (SEAL) MONROE COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY, MONROE COUNTY, FLORIDA m 4/~. MARY ~ICH, VICE CHAIRMAN ATTEST: -90-1-Jl, c. ~A ~ Clerk (SEAL) ~ ATTEST: A-5 Secretary EXHmIT A TO MEMORANDUM OF AGREEMENT DESCRIPTION OF PROJECT The Project will generally consist of the acquisition, construction, renovation and equipping of a brewery facility, including, but not limited to the acquisition of an existing building and the renovation and refurbishment thereof, the acquisition of brewery equipment and machinery thereof, the acquisition of general equipment and the financing of certain related working capital. A-6 EXHIBIT B TO RESOLUTION PROOF OF PUBLICATION t> Notice OF PUBUe.HEARING t.tJO~RQE;<-COUNTY INDUS- ; T'RIAl;~.~xe:Lp.~~ENT AU- THORrtV,.',,;c ,t". ",r'.. .. .Th8-MOnroeCountYlnijustrlaJ De- velopmentAathori (the "Author- tty-). will.tioId .,~: . .Ic:~ng on Wedn..aaYi mbtt"o9. ,.. at '0:00' .,rr,,:.or.:l~ thereaf- ter as, . . '1.\~t1heMar.- thon ,~v.mm . 'Center, 2788 ~ :",g~y,,'MII. Marker ~7 ,S ',~h6rir\fI~ to oOn- aidel':.dOptioo '01'. .;t;t'iQMion au. th~oq thO ~.~" not ex. ceedlng $8_000lQ.P.Pt~IJl' .ggre- .G.t..prIncJPa1~.. 'ur,t of Indus- !,ialD~miitIt;~$o'ld', Series .988 (1(->, Weat"Ir...-v. Inc, f'tOj~~ir.l~or ;Tj"'....rl.. (the "Bonds ), ~ M1he Bonds . will tie"'~ ~ ., -. ~~ncIpal pur. poses of (1) ~~c.iJ1~ ~naln ..C:OSU qf .~_~U~Qnicon.vuc- lion. reno~on anct'~Uipping of . 'a breW)l'fg.cIIIty~ 'nQluding. but , not Jlmlt.cl'tO th..:acqullltlOn of an exl$~o.s _tl~ilding and the renova- tion ,and . refurbiat r "I\t thereof, the acquisition of' bnnv.ry equip- ment .,a macl'llnery th.reof, ttle acquisitionaf gen.....l equipment &n.d,lbe 1ifl8ncing of certain re- lated wortclng capital to all be 10. cated at t9 Calle Uno Rockland Key. Monroe County Florida (COl- lectively. the "Prolect"). (II) fund- ing ad'l3t. ,~ce re$8rve fund if required. :.T\d~(III) paying certain costs assoc:Iat. with 'the issuance ~ the Bonds. The project shall be owned and operated by Key West Brewery; Inc. (the "Company.) whose mailing address is 1 107 Key PloIza-'229. Key West, Fl. 3304.0, The..Bonds Shall be paid fOt solely' from th. revenue de. rived by.... authority from a loan -na I8CUrity agrnment and other fir:t..I',lC,i~,g~Qqy.m mtmiii - ';~'.IjN.t"~ bMwnn ~.~Mcf..~ Company, SUcb:JlO"d.ilnd imer- est tlereon ahaIl not cOnstitute an Indebtedn8$$, o~. pledge. of the general credit oi'tbingpower of Itte Authority. Mor\roe Counry. .the State ofFIDri~, or 8r'Jy, political aubdlvla10n or'~ *,*8Ot. Is- auanoe of the bond. lha1l-be lilt). .~ 1O:~r,I. C~~itl~.. Ing Mtrlfactory ~ ~Bnfjltlon'; . the approv~ by' bond oOunlel 'as to 'the tax..xempt aWUs.01 the inter- est on all' a portiqn. of'" Bonds and receipt 01 nec~ ~prov- ,als.fOrtl:le fl~.ancl~g:'~:'''Ore- 'Mentioned hearing shall be . pUb- lic h.arit)g an,d 'all ~r-sWho may.~ I~terutad wll! ~ given an opportunity to be Mard c;onoern- in; .~ '..me; Wmt.n~rnent& may also be aubm!tted p.nOflo the tlearingatthe.Offi~ ,of. .the County' Attomey,'.500 .~ltahead Street, KeyWest.FL~~Attn:. Rob Wolfe. A$SiJtant' ~nty At. tomey. .... .:. ALL PE~.SC)N$ "FOR OR AGAINST SAID APPeOVAL CAN BE HEARD AT SAID TIME AND PLACE. IF A PERSON DECIDES TO APPEAL ANV' DECISION MADE BY THE COUNTY OR THE AUTHORITY WITH RESPECT TO SUCH HEARING OR'MEET- ING. (S)HEWlLl NEEO TO EN. . 'SURE THAT A VERBATlMREC- OAO OF SUCH HEARING. OR MEETING IS 'MApe,':"W'HICH AECORD INCLUOES THE TES- TIMONY ANO EVIOENCE UPON WHICH THE APPEAL IS BASED, In accordance with the American with Disabilities Act penons n.eding a special accommoda- tion to participate in this proceed- ing Should COl'!tact the individual or ag.nCy' publishing ,t~ls' ~otice no later than IeVeri'd.VS prior to the proceeding at the. address given in thiS notiCe. Telephone 3051282-444 1, '. .' " By order of It\e ~rOi. County In- dustrial Development.~. by Wdhetmina H~. Ctljairman. Dated thIs 1eth avotNoYember. 1198. . . , . . l\l_mtwtr2Oth.l998. STATE OF FLORIDA COUNTY OF MONROE Before the undersigned authority personally appeared Randy G, Erickson, who on oath says that he is director of the Advertising Department of the Key West Citizen. a daily newspaper published at Key West. in Monroe County Florida; that the attached copy of advertisement. being a legal ~~the~er~~ /J f1 ~ ;". _" __~'~i~fJA<.J~. _ ~~I- il the iiO Q f .- ~u,. 7 was published in said newspaper in the issues of ~. ( l't Affiant timber says that The Key West Citizen is a newspaper published in Key West, in said Monroe County. Florida, and that the said newspaper has heretofore been continuously published in said Monroe County. Florida each day (except Saturdays) and has been entered as second-class ~l matter at the post office in Key West, in said Monroe County, Florida, for a period of I year next: preceding tbe first publication of the attached copy ofadvenisement; and affiant further says that he has neither paid nor promised any person, finn or corporation any discount, rebate, conunission or refund for the purpose of securing this advcnisem for publication in the said newspaper, Signature of Affiant Sworn and subscribed before IlIe Ibis -t t;.j- .'f . 1998. Expires Personally Known.)o Produced Identification Type of Identification Produced MEMORANDUM OF AGREEMENT FOR ISSUANCE OF PRIVATE ACTIVITY REVENUE BONDS This Agreement between the Monroe County Industrial Development Authority, a public bod~ corporate ~nd politic (the IIAuthorityll) and Key West Brewery, Inc. (the IICqJ>or~iot$ a ~ Flonda corporation, ~C")~ .." f:;; Or- "..'. r::z """::J; -< ...... 0 (") 'r- , .." 0("'). \0 0 WIT N E SSE T H: ~?'J G ." ::0 ~ C"') r- :x ;:0 - :-f :r.: ,." '"r1 '):;> .t:- C") r- c> .. 1. Preliminary Statement. Among the matters of mutual understanding ~d lmiu<j!tera5 which have resulted in the execution of this Agreement are the following: 0 (a) Whereas Chapter 159, Parts II and ill, Florida Statutes, (the II Act II) provides that the Authority may issue tax-exempt revenue bonds and loan the proceeds thereof to one or more persons, firms or private corporations, or use such proceeds, to defray the cost of acquiring, by purchase or construction or renovation, certain qualifYing manufacturing, warehousing or distribution facilities. (b) The Corporation is considering financing all or a portion of the costs of acquisition, construction and equipping of a brewery facility, which facility is more fully described in Exhibit A attached hereto (the IIProjectll). (c) The Authority intends this Agreement to constitute its preliminary approval, subject in all respects to the terms hereof, to issue its bonds (the IIBondsll) in one or more series or issues, tax-exempt and/or taxable, pursuant to the Act in an amount to be agreed upon by the Authority and the Corporation and to loan the proceeds thereof to the Corporation, or to use such proceeds, to finance a portion of the costs of the Project, including all costs incurred in connection with the issuance of the Bonds by the Authority and the Corporation, up to an amount not to exceed $8,000,000, (d) The Authority considers the issuance and sale of the Bonds, for the purposes hereinabove set forth, consistent with the objectives of the Act. This Agreement constitutes the official preliminary action of the Authority toward the issuance of the Bonds as herein contemplated in accordance with the purposes of both the Act and the applicable United States Treasury Regulations. 2, Undertakinis on the Part of the Authority. Subject to the terms hereof, the Authority agrees as follows: (a) Subject to the Corporation providing the Authority with sufficient evidence to enable the Authority to make the findings set forth in Section 159,29 of the Act, the Authority will, subject to Section 4(g) hereof, authorize the issuance of the Bonds, in one or more Series or issues, tax- exempt and/or taxable, in the aggregate principal amount necessary and sufficient to finance all or a portion of the cost of acquiring, constructing and equipping the Project as the Authority and the Corporation shall agree in writing (including costs of issuance of such Bonds and a debt service reserve fund), but in all events, the principal amount of such Bonds shall not exceed the lesser of (i) the amount determined by the Authority and the Corporation necessary to accomplish the foregoing, or (ii) $8,000,000. (b) The Authority will cooperate with the Corporation and with the underwriters, placement agents or purchasers of the Bonds and the bond counsel of the Authority with respect to the issuance and sale of the Bonds and will take such further action and authorize the execution of such documents as shall be mutually satisfactory to the Authority and the Corporation for the authorization, issuance and sale of such Bonds and the use of the proceeds thereof to finance a portion of the cost of constructing, acquiring and equipping the Project. ( c) Such actions and documents may permit the issuance from time to time in the future of additional bonds on terms which shall be set forth therein, whether pari passu with other series of bonds or otherwise, for the purpose of defraying the cost of completion, enlargements, improvements and expansions of the Project, or any segment thereof, or refunding of the Bonds. (d) The loan agreement, trust indenture, mortgage and other financing documents (collectively, the "Financing Agreements") between the Authority and the Corporation shall, under terms agreed upon by the parties, provide for payments to be made by the Corporation in such sums as shall be necessary to pay the amounts required under the Act, including the principal of and interest and redemption premium, if any, on the Bonds, as and when the same shall become due and payable. (e) In authorizing any issuance of the Bonds pursuant to this Agreement, the Authority will make no warranty, either expressed or implied, that the proceeds of the Bonds will be sufficient to pay all costs of acquiring, constructing, installing and developing the Project or that those facilities encompassed by the Project will be suitable for the Corporation's purposes or needs. (f) The Bonds shall specifically provide that they are payable solely from the revenues derived from the Financing Agreements or other agreements approved by the Authority, except to the extent payable out of amounts attributable to Bond proceeds. The Bonds and the interest thereon shall not constitute an indebtedness or pledge of the general credit of Monroe County, the state of Florida or any political subdivision or agency thereof, and such fact shall be plainly stated on the face of the Bonds. (g) Issuance of the Bonds by the Authority shall be contingent upon satisfaction of (i) all of the provisions hereof and (ii) all applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations promulgated thereunder, including the ability of and desirability by the Authority to issue obligations to finance all or a portion of the costs of the Project and the approval thereof by the Authority and the Board of County Commissioners of Monroe County in accordance with the provisions of Section 147(f) of the Code. 2 3. Undertakings on the Part of the Corporation, Subject to the terms hereof, the Corporation agrees as follows: (a) The Corporation will use reasonable efforts to insure that the Bonds in the aggregate principal amount as stated above are sold; provided, however, that the terms of such Bonds and of the sale and delivery thereof shall be mutually satisfactory to the Authority and the Corporation. (b) Prior to the issuance of the Bonds in the principal amount stated above in one or more Series or issues from time to time as the Authority and the Corporation shall agree in writing, the Corporation will enter into the Financing Agreements with the Authority, the terms of which shall be mutually agreeable to the Authority and Corporation, providing for the loan or use of the proceeds of the Bonds to finance a portion of the costs of the Project. Such Financing Agreements will provide that the Corporation will be obligated to pay the Authority (or the trustee for holders of the Bonds on behalf of the Authority, as the case may be) sums sufficient in the aggregate to enable the Authority to pay the principal of and interest and redemption premium, if any, on the Bonds, as and when the same shall become due and payable, and all other expenses related to the issuance and delivery of the Bonds. ( c) The Corporation shall, in addition to paying the amounts set forth in the Financing Agreements, pay all costs of operation, maintenance, taxes, governmental and other charges which may be assessed or levied against or with respect to the Project. (d) To the extent not otherwise paid from Bond proceeds as part of the costs of the Project, the Corporation hereby agrees to pay all of the reasonable out-of-pocket expenses of officials and representatives of the Authority incurred in connection with the issuance of the Bonds and will pay all reasonable fees and expenses of the Authority in accordance with its guidelines, of the Authority's Financial Advisor, Public Financial Management, Inc., of the Authority's Counsel and of Nabors, Giblin & Nickerson, P.A., Bond Counsel to the Authority. ( e) The Corporation will hold the Authority and Monroe County free and harmless from any loss or damage and from any taxes or other charges levied or assessed by reason of any mortgaging or other disposition of the Project except those arising from the Authority's or Monroe County's gross negligence or willful misconduct. (f) The Corporation agrees to indemnify and defend the Authority and Monroe County and hold the Authority and Monroe County harmless against any and all claims, losses, liabilities or damages to property or any injury or death of any person or persons occurring in connection with the Project or the issuance of the Bonds and the Corporation's undertaking thereof, or in any way growing out of or resulting from this Agreement except those arising from the Authority's or Monroe County's gross negligence or willful misconduct including, without limitation, all reasonable costs and expenses of the Authority and reasonable attorneys' fees incurred in the enforcement of any agreement of the Corporation contained herein. In the event that the Bonds are not issued and delivered, this indemnity shall survive the termination of this Agreement. 3 (g) The Corporation will take such further action as may be required to implement its aforesaid undertakings and as it may deem appropriate in pursuance thereof 4. General Provisions. All commitments of the Authority under Section 2 hereof and of the Corporation under Section 3 hereof are subject to the conditions that all of the following events shall have occurred not later than December 31, 1999, or such other date as shall be mutually satisfactory to the Authority and Corporation. (a) The Authority shall be lawfully entitled to issue the Bonds as herein contemplated. (b) The Authority and Corporation shall have agreed on mutually acceptable terms for the Bonds and the sale and delivery thereof and mutually acceptable terms and conditions of any trust instrument or instruments in respect thereto and any Financing Agreements or other agreements incidental to the financing or referred to in Sections 2 and 3 hereof ( c) Rulings satisfactory to the Corporation and to the Authority as to such matters with respect to the Bonds, the Project, the Financing Agreements and any other trust instrument or instruments, if specified by the Authority and Corporation, shall have been obtained from the Internal Revenue Service and/or the United States Treasury Department and shall be in full force and effect at the time of issuance of the Bonds. (d) Such other rulings, approvals, consents, certificates of compliance, opinions of counsel and other instruments and proceedings reasonably satisfactory to the Corporation and to the Authority as to such matters with respect to the Bonds, the Project, the Financing Agreements and any other trust instrument or instruments, as shall be specified by the Corporation or the Authority, shall have been obtained from such governmental, as well as non-governmental, agencies and entities as may have or assert competent jurisdiction over or interest in matters pertinent thereto and shall be in full force and effect at the time of issuance of the Bonds. (e) Compliance with all applicable provisions of Chapters 159, 189,215 and 218, Florida Statutes, and the Authority's guidelines and procedures relating to the issuance of the Bonds, the interest rate thereon, the type of purchasers of the Bonds and the terms on which the Bonds may otherwise be issued. (f) Evidence that the Bonds have been privately placed with or otherwise sold to accredited investors in accordance with Section 189.4085, Florida Statutes, and applicable federal securities laws, (g) Notwithstanding any other terms hereof, nothing contained herein shall be construed to create a binding commitment by the Authority to issue the Bonds until such time, if ever, as the Authority shall grant its final approval for the issuance of the Bonds and the final terms and provisions of the financing. By its execution hereof, the Corporation agrees that the Authority may withhold its final approval of the issuance of the Bonds in its sole discretion and shall not incur any liability 4 whatsoever as a result of it not granting any such approval notwithstanding any other provision hereof (h) Receipt by the Corporation of all licenses and necessary approvals from applicable governmental agencies and entities. If the events set forth in this Section 4 do not take place within the time set forth or any extension thereof, the Corporation agrees that it will reimburse the Authority for all the reasonable and necessary direct or indirect expenses which the Authority may incur at the Corporation's request arising from the execution of this Agreement and the performance by the Authority of its obligations hereunder, including legal fees for counsel to the Authority and the expenses of bond counsel. 5. B indin" Effect. All covenants and agreements herein contained by or on behalf of the Authority and the Corporation shall bind and inure to the benefit of the respective successors and assigns of the Authority and the Corporation whether so expressed or not. IN WITNESS WHEREOF, the parties hereto have entered into this Agreement by their officers thereunder duly authorized as of the 9th day of December, 1998. (SEAL) MONROE COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY, MONROE COUNTY, FLORIDA Y;;, /I ~. MARY ~REICH, ICE CHAIRMAN ATTEST: ..Iko.kJ.. a. LQ.,,)&~Q) Clerk liI- 9- 'II (SEAL) KEY WEST BREWERY, INC. ~~~~ President ' ATTEST: Secretary 5 EXHIBIT A TO MEMORANDUM OF AGREEMENT DESCRIPTION OF PROJECT The Project will generally consist of the acquisition, construction, renovation and equipping of a brewery facility, including, but not limited to the acquisition of an existing building and the renovation and refurbishment thereof, the acquisition of brewery equipment and machinery thereof, the acquisition of general equipment and the financing of certain related working capital. A-I