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HomeMy WebLinkAbout2004.10.14_OEDA Agenda8 PUBLIC NOTICE OF THE MEETING OF THE ' OWASSO ECONOMIC DEVELOPMENT AUTHORITY TYPE OF MEETING: DATE: TIME: PLACE: Regular October 14, 2004 10:00 a.m. Owasso City Hall Main Conference Room 111 North Main OEDA FILE Notice and agenda filed in the office of the City Clerk and posted on the City Hall bulletin board at 5:00 p.m. on Monday, October 11, 2004. Rickey AGENDA 1. Call to Order & Roll Call Mr. Yandell 2. Request Approval of Minutes of the September 9, 2004 Regular meeting. Mr. Yandell Attachment #2 ` 3. Request Approval of Claims. Mr. Yandell Attachment #3 4. Presentation of Financial Report. Ms. Bishop Director OEDA ,October 11, 2004 Page 2 of 3 5. Update from Economic Development Director. Mr. Hayes Attachment #5 6. Report from Community Development Director Mr. Wiles 7. Report from the Public Works Director Ms. Stagg 8. Report from OEDA Manager. Mr. Ray 9. Consideration and appropriate action relating to a request for Trustee approval of a Loan Agreement and Revenue Anticipation Note between the Owasso Economic Development Authority and the City of Owasso, and authorization of Resolution No. 2004 -01. Mr. Ray Attachment #9 10. Consideration and appropriate action relating to a request for Trustee approval of a Loan Agreement between the Owasso Economic Development Authority and Vanguard Car Rental, USA and authorization of Resolution 2004 -02. Mr. Ray Attachment #9 OEDA�, .October 11, 2004 Page 3 of 3 11. New Business. 12. Adjournment. r MEMORANDUM TO: THE HONORABLE CHAIR & TRUSTEES OWASSO ECONOMIC DEVELOPMENT AUTHORITY FROM: RICKEY HAYES, ECONOMIC DEVELOPMENT DIRECTOR SUBJECT: OEDA Claims for September 2004 DATE: 10/11/04 There were no claims for September 2004. MEMORANDUM TO: OWASSO ECONOMIC DEVELOPMENT AUTHORITY BOARD OF TRUSTEES FROM: RICKEY HAYES SUBJECT: ECONOMIC DEVELOPMENT DIRECTOR'S REPORT DATE: October 11, 2004 Progress continues on the commercial sites in the 96th Street retail corridor. The Smith Farms Marketplace development by Hunt Properties closes this week and construction is set to start on October 19th. Engineering is currently taking place on Garnett Road and 96th Street improvements to coincide with the opening of the Smith Farms center. City of Owasso staff are meeting with utility representatives and engineers on relocating utility lines in the area of 96th Street and Garnett. Several other properties along Garnett and 96th Street are being considered for commercial development also. I had the privilege of hosting a breakfast with about 150 realtors from Owasso and a few surrounding areas two weeks ago. The purpose of the meeting was to provide information about the City of Owasso's new marketing material and to discuss the new retail developments in and around the city. All the local real estate offices had representatives at the meeting. Both hospital groups continue discussions locally in regard to construction of a medical complex for the City of Owasso. The Bailey Medical Center group has a request for review of a site plan, as does the Owasso Medical Campus for the October Planning Commission. The Owasso Medical Campus (St. Johns Healthcare Systems) site plan is for a 110,000 sq. ft. facility on just over twelve acres of land just north of 96th Street on 129th East Avenue. The Bailey Medical Center site plan consists of a 75,141 sq. ft. medical facility and an 18,000 sq. ft. medical office building on 26 acres at Garnett Road and 106' St. North. As always, if I can serve you in any way, please call. Your input and direction are always important to the success of our efforts. MEMORANDUM TO: THE CHAIRMAN AND TRUSTEES OWASSO ECONOMIC DEVELOPMENT AUTHORITY FROM: RODNEY J RAY CITY MANAGER SUBJECT: REQUEST FOR APPROVAL OF DOCUMENTS RELATING TO ECONOMIC DEVELOPMENT LOAN TO VANGUARD CAR RENTAL USA DATE: October 12, 2004 BACKGROUND: For the past three months City and OEDA officials have worked to develop a plan that would allow Owasso an opportunity to forge a mutually beneficial partnership with Vanguard Car Rental USA and its principal owner, Mr. Bill Lobeck. The opportunity for such a partnership developed after an offer of relocation assistance to the company by the Tulsa Metropolitan Chamber of Commerce failed to be realized. You may recall that the Tulsa Chamber offered Vanguard a four million dollar interest free loan as an incentive for relocating their corporate offices to Tulsa. After the company decided to select Tulsa and after entering into leasing agreements the Chamber backed out of their offer leaving the company in a position of having to decide either to honor the leasing agreements and other monetary commitments relating to the move or "write -off' those expenses and relocate to another city. Fortunately for the Tulsa area the company determined to stay with the Tulsa decision and continue their move to the Cherokee Industrial Park where they will employ approximately 700 people. After Vanguard determined that the Chamber offer was not on the table a series of discussions were conducted between officials from Vanguard, the Tulsa Chamber and Owasso . The result of those discussions did not produce results, however additional discussions between Vanguard and Owasso did result in Owasso considering taking action to loan Vanguard a portion of the amount of the originally offered incentive. A joint meeting of the OEDA and Owasso City Council was conducted to discuss the issue, a joint committee was established and final recommendations were developed. After much discussion a consensus was reached that brings the issue to this point. That being the recommendation that the City of Owasso, for economic development purposes, provide relocation assistance to Vanguard Car Rental USA in the form of a no interest loan in the amount of $2,000,000. Relocation Loan Agreements for Vanguard Car Rental October 12, 2004 Page 2 of 3 THE CONCEPT: The concept that was developed as the most efficient and less costly method of accomplishing this loan was for the City to invest reserve funds in a "Revenue Anticipation Note" (RAN) that would be issued by the Owasso Economic Development Authority. The OEDA would then utilize the proceeds from the RAN to make a loan to Vanguard. Based on a review of all of the funding options available this concept offers the cleanest and lowest cost viable option. It does not impact the City's other debt or create problems when the City begins funding capital programs by issuing debt. THE PROCESS: Should the OEDA and the City Council desire to proceed with the proposed loan using the concept and parameters that has been developed by the staff and reviewed by the joint committee the process would be as follows: • OEDA consideration of a Resolution that authorizes a Revenue Anticipation Note to the City of Owasso. • OEDA consideration of a Resolution that authorizes the lending of the $2,000,000 to Vanguard. • City Council consideration of a Resolution authorizing the lending of the $2,000,000 to the OEDA and approving the Loan Agreement and Revenue Anticipation Note. • Closing on the loans. THE DOCUMENTS: The documentation necessary for the transaction as described is as follows: • City of Owasso Resolution No. 2004 -20 (Authorizing Resolution regarding OEDA loan) • Loan Agreement between the OEDA and the City of Owasso • Revenue Anticipation Note between the OEDA and the City of Owasso ($2,000,000) • OEDA Resolution No. 2004 -01 (Authorizing Resolution regarding the transaction with the City) • OEDA Resolution No. 2004 -02 (Authorizing Resolution for the Vanguard loan) • Loan Agreement between the OEDA and Vanguard • Promissory Note from Vanguard to the OEDA Relocation Loan Agreements for Vanguard Car Rental October 12, 2004 Page 3 of 3 THE SAFEGUARDS: If approved, the Loan Agreement requires that Vanguard, in providing security for the loan, pledge and assign the right to receive proceeds of the State of Oklahoma Quality Jobs payments for repayment over a period not to exceed five (5) years. Additionally, the document commits Vanguard to an equal, quarterly reduction of the principal in an amount required to accomplish the "pay -off' of the loan in five (5) years. The Loan Agreement requires the company to maintain a level of employment that at a minimum will insure adequate funds for the reduction of the principal from the Oklahoma Quality Jobs Act payments. The Loan Agreement also requires the company to guarantee the payment of the loan should the Quality Jobs payments not be sufficient to service the debt, and requires that should the company decide to relocate its corporate headquarters prior to the repayment of the loan, the note will become due immediately. THE METHOD OF REPAYMENT: The loan will be repaid by the payments directly paid over to the OEDA by the State of Oklahoma on behalf of the company under the Quality Jobs Act. To the extent such funds prove to be inadequate to repay the loan the remainder will come from the corporate revenues of Vanguard. RECOMMENDATION: Staff recommends the OEDA approve the transaction outlined above and authorize the appropriate officers to execute the necessary documentation. ATTACHMENTS: 1. Resolution No. 2004 -20 2. Loan Agreement between the OEDA and the City of Owasso 3. Revenue Anticipation Note between the OEDA and the City of Owasso 4. OEDA Resolution No. 2004 -01 5. OEDA Resolution No. 2004 -02 6. Loan Agreement between the OEDA and Vanguard CITY OF OWASSO, OKLAHOMA RESOLUTION NUMBER 2004 -20 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF OWASSO, OKLAHOMA, AUTHORIZING THE CITY TREASURER OF THE CITY OF OWASSO, OKLAHOMA, TO INVEST CERTAIN UNAPPROPRIATED AND UNENCUMBERED MONIES OF THE CITY OF OWASSO, OKLAHOMA, SURPLUS TO THE PRESENT NEEDS OF SAID CITY, IN A REVENUE ANTICIPATION NOTE OF THE OWASSO ECONOMIC DEVELOPMENT AUTHORITY, AN OKLHOMA PUBLIC TRUST, HAVING THE CITY OF OWASSO, OKLAHOMA, AS ITS BENEFICIARY, IN AN AMOUNT NOT TO EXCEED TWO MILLION DOLLARS (2,000,000.00), APPROVING THE PROPOSED AGREEMENT AND REVENUE ANTICIPATION NOTE, AUTHORIZING THE MAYOR, OR VICE -MAYOR AS THE CASE MAY BE, CITY CLERK OR DEPUTY CITY CLERK, AS THE CASE MAY BE AND THE CITY TREASURER OR DEPUTY CITY TREASURER, AS THE CASE MAY BE, TO EXECUTE, DELIVER AND RECEIVE ANY AND ALL DOCUMENTATION, OR AMENDMENTS THERETO, BEING LAWFULLY NECESSARY TO ACCOMPLISH THE INVESTMENT PURPOSES SET FORTH HEREINAFTER WHEREAS, the City Council of the City of Owasso, Oklahoma, finds that the City presently maintains funds that have reserves which have reached a level that would allow for investments of a significant nature and for long term investments that might produce a higher yield; WHEREAS, the City Council of the City of Owasso, Oklahoma, finds that investment opportunities are problematical due to low level of interest rates presently existing in the market as well as legal restrictions placed upon the placement of public funds in the market; WHEREAS, the City Council of the City of Owasso, Oklahoma, finds that after exploration of several investment opportunities and the discovery that the return on investments of a traditional nature would not be significant, alternatives to traditional investments that would produce a higher yield in an otherwise depressed investment climate have been ascertained; WHEREAS, the City Council of the City of Owasso, Oklahoma, has determined that the Owasso Economic Development Authority, an Oklahoma Public Trust, having the City of Owasso, Oklahoma, as its beneficiary, has a present need to raise additional funds for the Vanguard Project; WHEREAS, the City Council of the City of Owasso, Oklahoma, finds that a present need in the amount not to exceed Two Million Dollars ($2,000,000) exists on the part of the Owasso Economic Development Authority, and that the Owasso Economic Development Authority, is desirous of obtaining such funding from the City of Owasso, Oklahoma in a manner that would produce for the City higher yield on its investments while at the same time assisting the Owasso Economic Development Authority in completing the Vanguard Project, an economic development project; and, WHEREAS, under the public finance provisions of the statutes of the State of Oklahoma, relating to municipal investment of funds, 68 O.S. Section 348.1 /Authorized Investments/Disposition of Income, the City Treasurer of the City, when authorized by the City Council by written investment policy, ordinance or resolution, is authorized to invest monies in the custody of the City Treasurer in Revenue Anticipation Notes issued by a public trust for which such City is a beneficiary thereof; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OWASSO, OKLAHOMA, THAT TO -WIT: SECTION ONE. The City Treasurer of the City of Owasso, Oklahoma, is hereby authorized to invest certain unappropriated and unencumbered monies of the City of Owasso, Oklahoma, surplus to the present needs of said City, in the custody of the City Treasurer of the City of Owasso, Oklahoma, in a Revenue Anticipation note to be issued by the Owasso Economic Development Authority, an Oklahoma Public Trust having the City of Owasso, Oklahoma as its beneficiary, in an amount not to exceed Two Million Dollars ($2,000,000.00). The City Council of the City of Owasso, Oklahoma, hereby approves the proposed Agreement and Revenue Anticipation Note to be issued by the Owasso Economic Development Authority, a copy thereof being attached hereto, made a part hereof and marked as Exhibit "A ". SECTION TWO. The Mayor, or Vice -Mayor as the case may be, the City Clerk or the Deputy City Clerk as the case may be, and the City Treasurer or Deputy Treasurer as the case may be, of the City of Owasso, be and they hereby are, authorized and empowered for and on behalf of the City of Owasso, Oklahoma, to execute, deliver and receive the Agreement and Revenue Anticipation Note of the Owasso Economic Development Authority exhibited hereto and such further agreements and documents and to take such actions as such officer or officers may deem necessary or desirable in order to carry out and perform the investment and to effect the purposes thereof and to consummate the transaction contemplated thereby. SECTION THREE. That in accordance with public finance provisions of the Statutes of the State of Oklahoma relating to municipal investment of funds, 68 O.S. Section 348.1(5), the income received by the City of Owasso from the investment herein contemplated shall be placed, on a pro rata basis as hereinafter set forth, in the Contributing Funds within the City of Owasso, Oklahoma Consolidated Cash Account. Such pro rata distribution of income shall be made on the percentage basis that the Contributing Fund within the Consolidated Cash Amount of the City of Owasso, Oklahoma, bears to the Contributing Funds within the Consolidated Cash Account of the City of Owasso, Oklahoma, on an average monthly basis, as determined semi- annually, on July 1, and January 1, for distribution of the income earned in the preceding six (6) month period. Any Contributing Fund within the Consolidated Cash Account of the City of Owasso, Oklahoma, subsequently closed by the City Council of the City of Owasso, Oklahoma, shall receive no further pro rata distributions of income. PASSED AND APPROVED this _ day of October 2004. CITY OF OWASSO, OKLAHOMA L-I'm ATTEST: Sherry Bishop, City Clerk APPROVED AS TO FORM: Ronald D. Cates, City Attorney Susan Kimball, Mayor LOAN AGREEMENT THIS LOAN AGREEMENT (the "Agreement ") made and entered into as of the I" day of November, 2004, is by and between the Owasso Economic Development Authority, an Oklahoma public trust, (the "Authority "), and the City of Owasso, Oklahoma, an Oklahoma Municipal Corporation (the "City "). WITNES SETH: WHEREAS, the City has determined to make a loan to the Authority, aggregating $2,000,000.00 to be evidenced by the Authority's Revenue Anticipation Note payable to the order of the City in the original principal amount not to exceed $2,000,000.00, (the "Note ") to enable the Authority, pursuant to certain of its approvals, to finance the costs of a Capital Venture/Economic Development Project consisting of provision of funds for the Authority's corporate relocation assistance lending to Vanguard Car Rental, USA (the "Project "). WHEREAS, pursuant to the terms and conditions hereinafter set forth, the City is willing to make such loan to be evidenced by the Note; and WHEREAS, the payment of the Note is to be made from the notes receivable from Vanguard Car Rental, USA, as well as any realized security therefor and the general revenues of the Authority, receipts and receivables, under the conditions as set forth hereinafter. NOW, THEREFORE, in consideration of the mutual agreements herein made and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: ARTICLE I THE AUTHORITY NOTES 1.1 The City's Commitment. The City agrees, subject to the terms and conditions of this Agreement, to make the loan to the Authority in the amount not to exceed $2,000,000.00. 1.2 Issuance of the Authority Note. Subject to the terms and conditions hereof and in reliance on the representations and covenants made herein, the Authority agrees to issue the Note to the City. The loan shall be repaid with interest in accordance with the terms of the Note. The Note shall be delivered to the City at a closing (the "Closing ") which will occur at such time and place as may be agreed on by the Authority and the City. Upon the issuance and delivery of the Note, and the satisfaction of all the conditions precedent of this Agreement, the City shall, upon receipt and approval of requisitions therefor, advance the proceeds of the loan to the Authority to pay the costs of the Project. 1.3 Loan Advances. The loan advances on the Note shall be made pursuant to a Loan Schedule to be executed after final approval of the construction contracts for the Project. Each request for an advance shall be accompanied by a certificate signed by the project manager, describing the invoices for which the loan advances are sought, certifying that the work, labor or materials for which the loan advance is sought have been performed according to the plans and specifications or as approved by the City, and certifying that sufficient funds are available under the Note to complete the construction of the Project in accordance with the plans and specifications. Lien wavers from all contractors and subcontractors shall be provided by the Authority with each loan advance. 1.4 Terms of the Note. The Note shall be in substantially the form set forth in Exhibit A attached hereto. Interest shall accrue, be payable and subject to adjustment, as provided for in the Note on the outstanding and unpaid principal balance thereon from the date of first advance thereon until payment in full thereof as set forth and provided therein. 1.5 Patents, etc. Payment of principal and interest on the Note and other charges under this Agreement to be made to the City shall be made in lawful money of the United States of America, and shall be made at City's principal office in Owasso, Oklahoma, not later than 11:00 o'clock a.m. on the date due. If any such payment falls on a Saturday, Sunday or public holiday at the place of payment thereof, then such due date shall be extended on the next succeeding full business day at such place and interest shall be payable in respect of such extension. ARTICLE II CONDITIONS PRECEDENT 2.1 Conditions. The obligations of the City to make the loan pursuant to this Agreement are subject to there being no Event of Default hereunder or an event which with notice or lapse of time would become an Event of Default hereunder and the City having received in form and substance satisfactory to it: (a) A duly certified copy of the minutes of the Authority authorizing execution and delivery of this Agreement, and related instruments, and the issuance, execution and delivery of the Note; (b) Original duly executed counterparts of this Agreement, (c) Such certificates, documents and certificates respecting the Authority, as City counsel shall reasonably require; (d) Such opinions of counsel for the Authority, as City counsel shall reasonably require; (e) A detailed description and cost breakdown analysis of the Project (the "Breakdown ") and all amendments thereto, all for approval by City; and 2 (f) Such other and further materials and /or information as the City may reasonably request. ARTICLE III SPECIAL OBLIGATION; PLEDGE; SATISFACTION 3.1 Special Obligation. The Note shall constitute a limited and special obligation of the Authority. The principal of and interest on the Note shall be payable by the Authority solely from, and shall be enforceable only out of the revenues of the Authority being hereby pledged by the Authority to such payment. The Note and all other obligations of the Authority hereunder shall not be construed or considered to be an indebtedness of the City of Owasso, Oklahoma, or any municipality, county or political subdivision of the State of Oklahoma within the meaning of any constitutional or statutory provision of the State of Oklahoma, under any circumstances. 3.2 Satisfaction of Debt. Notwithstanding anything to the contrary contained herein or in the Note, or in any instrument or document executed by or on behalf of the Authority in connection herewith, no stipulation, covenant, agreement or obligation contained herein or therein shall be deemed or construed to be a stipulation, covenant, agreement or obligation of any present or future member, trustee, officer, employee or agent or any successor to the Authority, in any such person's individual capacity, and no such person, in his individual capacity, shall be liable personally for any breach or non- observance of or for any failure to perform, fulfill or comply with any such stipulations, covenants, agreements, or interest on the Note or for any claim based thereon or on any such stipulation, covenant, agreement or obligation, against such person, in his individual capacity, either directly or through the Authority or any successor to the Authority, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such person, in his individual capacity is hereby expressly waived and released. The Authority and the City expressly recognize and agree that this Agreement, the Note and any documentation issued, executed and delivered therewith, are subordinate and junior to all Revenue Bond obligations or Promissory Notes of the Authority currently outstanding or to be issued in the future. ARTICLE IV COVENANTS OF THE AUTHORITY The Authority hereby agrees with the City that, so long as the Note remains outstanding: 4.1 Performance of Agreements. The Authority shall take all action and do all things which it is authorized by law to take and do in order to perform and observe all covenants and agreements on its part to be performed and observed under this Agreement and the Note and in order to provide for and to assure payment of the principal of the Note and interest thereon when due. 4.2 Creation of Charges on Revenues. Left blank intentionally. 3 4.3 Amendment. The Authority shall not alter, amend or repeal the resolutions described in Section 2.1(a) hereof, or, without the prior written consent of the City, agree to any alteration or amendment of any of the instruments described in Sections 2.1(b) and 2.1(c) hereof; or take any action impairing any authority, right or benefit given or conferred by such resolution or instruments. 4.4 Payment. The Authority shall pay or cause to be paid the principal of and the interest on the Note as the same becomes due, whether by acceleration or otherwise, but solely from the sources referred to in Article III hereof. 4.5 Representations and Warranties of Authority. The Authority represents and warrants to the City as follows: (a) The Authority is an Oklahoma public trust duly organized, validly existing and in good standing under the laws of the State of Oklahoma and all other states in which it is necessary that the Authority be qualified to do business. (b) The Authority and the Owasso City Council have taken all necessary actions to authorize entering into this Agreement and to authorize the execution and delivery of the Note, and the other documents contemplated hereby. (c) The execution and delivery of this Agreement and, the Note, will not cause, constitute or result in a breach of any agreement, contract or other undertaking to which the Authority is a party. (d) The Authority shall deliver to the City copies, certified by the Authority's Secretary, of all resolutions and actions undertaken by the Authority or the Owasso City Council to authorize this transaction. (e) The Authority shall maintain its existence in Oklahoma. (f) The Authority shall deliver to the City, within one week after they are prepared, copies of the Authority's quarterly financial statements. ARTICLE V DEFAULT AND REMEDIES 5.1 Events of Default. Any one or more of the following shall constitute and "Event of Default" hereunder; (a) Nonpayment when due of interest and principal in accordance with the terms of the Note; or 4 (b) The attachment of any involuntary lien in the sum of $25,000 or more, of any kind or character, upon the Revenues, or any portion thereof, except for taxes due but not in default and liens being contested in such a manner as to prevent execution on the Property; or (c) The entry against the Authority of any judgment in an amount of $25,000 or more on a claim not covered by insurance which is not discharged within thirty (30) days of such judgment becoming a final judgment; or (d) If the Authority shall apply for or consent to the appointment of a receiver, a trustee or liquidator of themselves or itself, or of all or a substantial part of its assets, or (ii) file a petition or answer seeking reorganization or admit (by answer, default or otherwise) the material allegations of a petition filed against them in any reorganization proceeding; or (e) If the Authority shall (i) become insolvent, generally fail to pay, or admit in writing its inability to pay its respective debts as they fall due, (ii) make a general assignment for the benefit of its creditors, (iii) be adjudicated as bankrupt or insolvent, or (iv) file a voluntary petition in bankruptcy or file a petition or answer seeking an arrangement with creditors or to take advantage of any insolvency laws or admit (by answer, default or otherwise) the material allegations of a petition filed against it in any bankruptcy, arrangement or insolvency proceeding, or take or omit to take any action for the purpose or with the result of effecting any of the foregoing; or (f) If the petition in bankruptcy is filed against the Authority and is not dismissed within thirty (30) days, or if an order, judgment or decree by any court of competent jurisdiction shall be entered, adjudicating the Authority to be bankrupt or insolvent, without the application, approval or consent of the Authority or if the Authority shall seek or consent to or fail to timely contest of any order, judgment or decree appointing a custodian of all or a substantial part of its assets, or if the Authority shall seek or consent to, or fail to timely contest any order, judgment or decree approving a petition seeking reorganization or appointing a receiver, trustee or other custodian or liquidator of all or a substantial part of its assets; or (g) Left blank intentionally; or (h) The breach of, or default under, any covenant, agreement, term, condition, provision, representation or warranty contained in this Agreement, the Note, not specifically referred to in this Section, if such breach or default is not cured within thirty (30) days of the occurrence thereof, or (i) In any event of default shall occur and shall continue for more than the period of grace, if any, provided with respect thereto, under this Agreement; or 0) The Project cannot be completed in accordance with the plans and specifications approved by the City with the funds remaining to be advanced on the Note. 5.2 Remedies of Default. Whenever any Event of Default referred to in Section 5.1 hereof shall have occurred, the City may take any one or more of the following remedial steps: (a) Declare all amounts payable hereunder and pursuant to the Note or any renewal thereof, to be immediately due and payable without notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor, or other notices or demands of any kind whatsoever, whereupon the same, together with the accrued interest thereon, shall become immediately due and payable; or (b) Left blank intentionally; or (c) Take whatever action at law or in equity may appear necessary or desirable to collect the amount then due and thereafter to become due, or to enforce performance or observance of any obligations, agreements, covenants of the Authority under the Note, this Agreement, or otherwise. ARTICLE VI MISCELLANEOUS 6.1 Defeasance. If the Authority shall pay or cause to be paid or otherwise provide for, or there shall otherwise be paid or provided for, the principal and the interest on the Note and all other amounts payable by the Authority at the times and in the manner stipulated in this Agreement or the Note, then all covenants, agreements and other obligations of the Authority hereunder shall thereupon terminate and be discharged and satisfied. 6.2 Waivers, etc. No failure on the part of the City to exercise and no delay in exercising, and no course of dealing with respect to, any right under this Agreement, or any other agreement or instrument referred to in this Agreement, shall operate as a waiver thereof, nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein and therein provided are cumulative and not exclusive of any remedies provided by law. 6.3 Successors; etc. This Agreement shall be binding upon and inure to the benefit of the parties hereto and any subsequent holder of the Note and its successors and assigns. 6.4 Governing Law. This Agreement shall be construed in accordance with, and governed by the laws of the State of Oklahoma. 6.5 Amendments. This Agreement may not be amended, modified, or waived except with the written consent of the parties hereto. 6.6 Notices. All requests and notices under the Agreement shall be hand delivered or sent by United States Mail, postage prepaid, addressed as follows, except that either party may be written notice change of address, its counsel or its counsel's address for subsequent notices to be given hereunder: RI Authority Owasso Economic Development Authority 111 N. Main Owasso, Oklahoma 74055 Attention: Scott Yandell, Chairman With a copy to: Ronald D. Cates Authority Attorney 111 N. Main Owasso, Oklahoma 74055 City City of Owasso 111 N. Main Owasso, Oklahoma 74055 Attn: Susan Kimball, Mayor With a copy to: Ronald D. Cates City Attorney 111 N. Main Owasso, Oklahoma 74055 Notice given hereunder shall be deemed given upon receipt by the principal addressee. 6.8 Severability. If any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 6.9 Execution in Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute one and the same instrument. 7 ATTEST: Sherry Bishop, Secretary (SEAL) ATTEST: By: Sherry Bishop, City Clerk Owasso Economic Development Authority By: Scott Yandell, Chairman City of Owasso, Oklahoma By: 8 Susan Kimball, Mayor REVENUE ANTICIPATION NOTE OF THE OWASSO ECONOMIC DEVELOPMENT AUTHORITY Dated as of the I" day of November, 2004 Owasso, Tulsa County, Oklahoma $2,000,000.00 FOR VALUE RECEIVED, the undersigned, Owasso Economic Development Authority, an Oklahoma Public Trust, having the City of Owasso, as its beneficiary, its successors and assigns (collectively, the "Borrower "), promises to pay to the order of the City of Owasso, Oklahoma, an Oklahoma Municipal Corporation, its successors and assigns (collectively, the "City ") at its principal office at 1 I I N. Main, Owasso, Tulsa County, Oklahoma 74055, or at such other place as may be designated in writing by the City, the principal sum of TWO MILLION AND NO /100 DOLLARS ($2,000,000.00) or so much thereof as shall have been advanced hereon shall be due and payable on or before the I'` day of November, 2005. Interest on the unpaid portion of the principal balance computed from the date of each advance, until principal is paid in full, at the rate of one -half of one percent (0.05 %) per annum thereupon shall be due and payable on the I'` day of March, 2005 and on the 1't day of November, 2005. The Borrower may prepay this Note, in whole or in part, at any time prior to the due date hereof, without penalty. If any payment shall be due on a Saturday or Sunday or upon any banking holiday of the holder hereof, such payment shall be due and payable on the next succeeding banking day and interest shall accrue to such day. This Revenue Anticipation Note is the Revenue Anticipation Note referred to in that certain Loan dated as of the I" day of November, 2004, by and between the Borrower and the City (the "City ") given and entered into to secure this note, the proceeds of which the City is loaning to the Borrower to provide financing of a Capital Venture/Economic Development Project in close proximity to the City of Owasso, Tulsa County, Oklahoma, consisting of lending for corporate headquarter relocation assistance to Vanguard Car Rental, USA. Except as may be herein otherwise specifically provided, the rights and obligations of the Borrower and the City arising by virtue of this Revenue Anticipation Note as well as the Agreement above referred to, shall be governed by the Agreement as if same were specifically incorporated herein, such Agreement surviving the issuance, execution and delivery of this Revenue Anticipation Note. The City may, at any time prior to the due date of payment of this Revenue Anticipation Note call for an early pre - payment in whole, or in part, if it is determined by the City, in its sole discretion, that the funds heretofore advanced pursuant to this Revenue Anticipation Note are needed by the City for its operations, governmental or proprietary, and the Borrower is afforded a reasonable opportunity to obtain reasonably satisfactory refinancing hereof. All parties (makers, sureties, guarantors and all others now or hereafter liable for payment of all or any portion of the indebtedness evidenced by this Revenue Anticipation Note) severally waive demand, presentment, notice of dishonor, protest, notice of protest, and diligence in collecting this Revenue Anticipation Note and diligence in bringing and prosecuting suit against any party bound hereby, and agree that no extension, renewal or partial payment, or release or substitution of collateral before or after maturity, with or without notice, shall release or discharge the obligation of any party. Upon the failure to pay when due the principal and or interest, the holder hereof shall be entitled, at its option, to extend the term or declare the unpaid principal balance of this Revenue Anticipation Note to be immediately due and payable. A failure by such holder to exercise such option will not constitute a waiver of the right to exercise the same in the event of any subsequent default. After maturity (whether by extension, acceleration or otherwise), interest shall accrue hereon at a rate of interest of ten percent (10 1/6) per annum. If this Revenue Anticipation Note is placed with an attorney for collection upon any default, or to defend or enforce any rights of the holder(s) hereunder or any instrument securing payment of this Revenue Anticipation Note, or if this Revenue Anticipation Note is collected through bankruptcy or other judicial proceeding, the Borrower agrees to pay the reasonable attorney fees of the holder(s) of this Revenue Anticipation Note and all reasonable costs and expenses incurred in connection therewith. OWASSO ECONOMIC DEVELOPMENT AUTHORITY, an Oklahoma Public Trust LIM ATTEST: Sherry Bishop, Secretary Scott Yandell Chairman Delivery receipted this day of 12004. ATTEST: Sherry Bishop, City Clerk 3 CITY OF OWASSO, OKLAHOMA LM Susan Kimball, Mayor OWASSO ECONOMIC DEVELOMENT AUTHORITY RESOLUTION NUMBER 2004 -01 A RESOLUTION OF THE OWASSO ECONOMIC DEVELOPMENT AUTHORITY AUTHORIZING THE ISSUANCE, EXECUTION AND DELIVERY OF THE OWASSO ECONOMIC DEVELOPMENT AUTHORITY REVENUE ANTICIPATION NOTE IN AN AMOUNT NOT TO EXCEED TWO MILLION AND N01100 DOLLARS ($2,000,000.00), TO THE CITY OF OWASSO, OKLAHOMA, APPROVING THE LOAN AGREEMENT, FORM REVENUE ANTICIPATION NOTE AND OTHER DOCUMENTS AND AGREEMENTS AS MAY BE NECESSARY OR REQUIRED; AND CONTAINING OTHER PROVISIONS RELATING THERETO WHEREAS, the Owasso Economic Development Authority was created by a Declaration of Trust, dated as of October 26, 1987, (collectively the "Trust Indenture ") for the use and benefit of the City of Owasso, Oklahoma (the "City ") under authority of and pursuant to the provisions of Title 60 0. S. 1981, Section 176 to 180.3 inclusive as amended and supplemented and other applicable statutes of the State of Oklahoma; and, WHEREAS, the Authority has determined that it would be most advantageous at this time for the Authority to provide funds for assistance in the relocation of Vanguard Car Rental U.S.A. to areas in proximity to the City; and WHEREAS, there has been presented to this meeting a form of Loan Agreement and Revenue Anticipation Note by and between the Authority and the City of Owasso, Oklahoma (the "Note "). NOW, THEREFORE, BE IT RESOLVED BY THE TRUSTEES OF THE OWASSO ECONOMIC DEVELOPMENT AUTHORITY THAT, TO -WIT: SECTION ONE. The Loan Agreement and form of the Note presented to this meeting be, and hereby is, approved, and the Chairman or Vice - Chairman of the Trustees and the Secretary or any Assistant Secretary of Trustees of the Authority be, and hereby are, authorized, directed, and empowered to execute and deliver in the name of the Authority, the Agreement and the Note in said form and containing the terms and provisions contained in said Note, the execution thereof by such officers being conclusive evidence of such approval, and to execute and deliver in the name of and on behalf of the Authority all documents, closing papers, certificates and such other documents as are necessary to accomplish the issuance of the Revenue Anticipation Note. SECTION TWO. The signatures of the officers of the Authority appearing on the Loan Agreement and the Note and other documents and agreements, closing papers and certificates executed and delivered pursuant to this resolution shall be conclusive evidence of their approval thereof and of their authority to execute and deliver such agreements and documents on behalf of the Authority. SECTION THREE. The Chairman or Vice - Chairman of the Trustees and the Secretary or any Assistant Secretary of the Trustees of the Authority be, and they hereby are, authorized and empowered for and on behalf of the Authority to execute and deliver such further agreements and documents and to take such action as such officer or officers may deem necessary or desirable in order to carry out and perform the Note and any contracts, documents, or instruments executed and delivered in connection with the issuance of the Note, and to effect the purposes thereof and to consummate the transactions contemplated thereby. PASSED AND APPROVED this day of October 2004. ATTEST: Sherry Bishop, Secretary APPROVED AS TO FORM: Ronald D. Cates, Authority Attorney OWASSO ECONOMIC DEVELOPMENT AUTHORITY LE 2 Scott Yandell, Chairman OWASSO ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NUMBER 2004 -02 A RESOLUTION OF THE OWASSO ECONOMIC DEVELOPMENT AUTHORITY AUTHORIZING THE LOAN OF AN AMOUNT NOT TO EXCEED TWO MILLION AND NO /100 DOLLARS TO VANGUARD CAR RENTAL U.S.A., AUTHORIZING EXECUTION AND DELIVERY OF THE OWASSO ECONOMIC DEVELOPMENT AUTHORITY LOAN AGREEMENT, AND OTHER DOCUMENTS AND AGREEMENTS AS MAY BE NECESSARY OR REQUIRED; AND CONTAINING OTHER PROVISIONS RELATING THERETO WHEREAS, the Owasso Economic Development Authority was created by a Declaration of Trust, dated as of October 26, 1987, (collectively the "Trust Indenture ") for the use and benefit of the City of Owasso, Oklahoma (the "City ") under authority of and pursuant to the provisions of Title 60 O.S. 1981, Section 176 to 180.3 inclusive as amended and supplemented and other applicable statutes of the State of Oklahoma; and, WHEREAS, the Authority has determined that it would be most advantageous at this time for the Authority to provide funds for assistance in the relocation of Vanguard Car Rental U.S.A. to areas in proximity to the City; and WHEREAS, there has been presented to this meeting a form of Loan Agreement between the Authority and Vanguard Car Rental U.S.A. NOW, THEREFORE, BE IT RESOLVED BY THE TRUSTEES OF THE OWASSO ECONOMIC DEVELOPMENT AUTHORITY THAT, TO -WIT: SECTION ONE. The Loan Agreement presented to this meeting be, and hereby is, approved, and the Chairman or Vice- Chairman of the Trustees and the Secretary or any Assistant Secretary of Trustees of the Authority be, and hereby are, authorized, directed, and empowered to execute and deliver in the name of the Authority the Loan Agreement in said form and containing the terms and provisions, the execution thereof by such officers being conclusive evidence of such approval, and to execute and deliver in the name of and on behalf of the Authority all documents, closing papers, certificates and such other documents as are necessary to accomplish the loan of Authority funds to Vanguard Car Rental U.S.A.. SECTION TWO. The signatures of the officers of the Authority appearing on the Loan Agreement and other documents and agreements, closing papers and certificates executed and delivered pursuant to this resolution shall be conclusive evidence of their approval thereof and of their authority to execute and deliver such agreements and documents on behalf of the Authority. SECTION THREE. The Chairman or Vice - Chairman of the Trustees and the Secretary or any Assistant Secretary of the Trustees of the Authority be, and they hereby are, authorized and empowered for and on behalf of the Authority to execute and deliver such further agreements and documents and to take such action as such officer or officers may deem necessary or desirable in order to carry out the loan transaction with Vanguard Car Rental U.S.A. and to effect the purposes thereof as well as to consummate the transactions contemplated thereby. PASSED AND APPROVED this day of October 2004. OWASSO ECONOMIC DEVELOPMENT AUTHORITY �: ATTEST: Sherry Bishop, Secretary APPROVED AS TO FORM: Ronald D. Cates, Authority Attorney F) Scott Yandell, Chairman LOAN AGREEMENT THIS LOAN AGREEMENT is made and entered into as of the day of November, 2004, by and between VANGUARD CAR RENTAL U.S.A., a corporation ( "Borrower "'), and the OWASSO ECONOMIC DEVELOPMENT AUTHORITY, an Oklahoma Public Trust having the City of Owasso, Oklahoma as its beneficiary ( "OEDA "). THE LOAN. 1.1 Limits on Loan. Subject to the terms and conditions of this Agreement, OEDA agrees to loan Borrower Two Million and No /100 Dollars ($2,000,000.00) ( "Loan"). 1.2 Note. Borrower shall execute and deliver to OEDA its promissory note evidencing the Loan and payable to the order of OEDA in the principal amount of Two Million and No /100 Dollars ($2,000,000.00) in substantially the form of Schedule "12" hereto (the "Note "). 1.3 Application of Proceeds. Borrower shall apply the funds received from OEDA under the Loan for the purpose of, among other OEDA approved uses, financing relocation of its corporate offices from Ft. Lauderdale, Florida to the Cherokee Industrial Park an industrial park located in near proximity to the City of Owasso, Oklahoma in Tulsa County, State of Oklahoma. 2. SECURITY. As security for any indebtedness, obligations or liabilities of every kind and description of the Borrower to OEDA, including without limitation all advances and loans evidenced by the Note and any other advances and loans pursuant to this Agreement or any other agreement, including extensions, renewals or changes in form of any note or other evidence of indebtedness, and including indebtedness, obligations or liabilities now existing or hereafter created, direct or indirect, absolute or contingent, joint and several or joint or several, due or to become due, howsoever created, evidenced or arising and howsoever acquired by OEDA (all hereinafter referred to as "Obligations "), Borrower, by these presents, assigns Borrower's right to receive from the Department of Commerce of the State of Oklahoma payments pursuant to the Oklahoma Quality Jobs Act. In conjunction herewith, the Borrower agrees to maintain a level of employment which at a minimum will insure adequate funds from the Department of Commerce of the State of Oklahoma for the reduction of the principal within five (5) years. 2.1 Additional. Borrower also agrees to execute and deliver all other instruments, agreements or documents required by the OEDA to perfect its security interests and liens in all applicable jurisdictions. All of the foregoing security specified in this Section is hereinafter referred to as "Collateral." 3. CONDITIONS PRECEDENT. The making of the loan provided for herein shall be conditioned upon the following: 3.1 Loan Documents. All Loan Documents shall be executed and/or delivered to OEDA, including without limitation the Note. 3.2 Guaranties. At closing, Borrower shall deliver executed original guaranty agreements to OEDA and a corporate guaranty resolution in form and content as set forth on Schedule "3.3(a )-2" hereto and a Certificate of Good Standing from its state of incorporation. 3.3 Commitment Letter. Reference is made to the August 24, 2004 , commitment letter ( "Commitment Letter ") from OEDA to Borrower, a copy of which is attached hereto as Schedule "33", which includes conditions precedent and subsequent to closing. The terms thereof are hereby incorporated by reference in full. This Agreement and the Commitment Letter are intended to supplement each other. To the extent a conflict exists, as determined by OEDA, the provision(s) most favorable to OEDA shall control. At closing, all requirements constituting conditions precedent in the Commitment Letter must be satisfied or waived by OEDA in writing. 3.4 Legal Opinion. At closing, Borrower shall deliver to OEDA a legal opinion including the opinions set forth on Schedule "14" hereto, including only such assumptions and restrictions which are acceptable to OEDA. 3.5 Financial Condition. No material adverse change, in the opinion of the OEDA, shall have occurred in Borrower's or Guarantors' financial condition, since the date of the latest financial information provided to OEDA. 3.6 No Default. No Event of Default or any event which might mature into an Event of Default hall have occurred. 3.7 Representations and Warranties. The representations, warranties and covenants set forth in this Agreement shall be true and correct as of the date hereof. 3.8 General. OEDA shall have received in substance and form satisfactory to OEDA all other certificates, affidavits, schedules, security agreements, legal opinions and other documents which are provided for hereunder, or which OEDA may reasonably request. 4. REPRESENTATIONS AND WARRANTIES. To induce the OEDA to make the loan, Borrower represents and warrants to OEDA that: 9. 4.1 Authority. The execution and delivery by Borrower of this Agreement and the performance by it of its Obligations hereunder and under the instruments and other documents required hereby: (a) are and will be within its powers; (b) are not and will not be in contravention of the Articles of Incorporation or Bylaws of the corporation, any law or any indenture, agreement or undertaking to which it or any of its property is bound; (d) do not require any consent or approval (including governmental) which has not been given; (e) do not contravene any statute, rule or regulation or any contractual or governmental restriction binding upon it; and (f) will not result in the imposition of liens, charges or encumbrances on any of the properties or assets of Borrower except as may be required pursuant to this Agreement. 4.2 Binding Effect. This Agreement and all Loan Documents are legal, valid and binding obligations, enforceable in accordance with their terms. 4.3 Financial Data. Any balance sheets, earnings statements and other financial data which have been or shall hereafter be furnished to OEDA to induce it to make the Loan do, or, as to subsequent financial statements will, fairly represent the financial condition of the Borrower as of the date for which the same are furnished; have been prepared in accordance with generally accepted accounting principles consistently applied; no material adverse change has since occurred in the condition, financial or otherwise, of Borrower; reports and other papers and data furnished to OEDA are or will be, at the time the same are so famished, accurate and correct in all material respects and complete insofar as completeness may be necessary to give the OEDA a true and accurate knowledge of the subject matter. Borrower has not incurred any material liabilities or made any material investments or guarantees, direct or contingent, either in any case or in the aggregate, since the last statements provided to OEDA. 4.4 Liti ag tion. There is not now pending against the-Borrower nor, to the knowledge of the Borrower, is there threatened any litigation, legal or administrative proceedings, investigation or any other action of any nature against it or affecting it. 4.5 Collateral. All of the Collateral granted to the OEDA hereunder is, and will be, owned by the Borrower free and clear of all liens, claims or encumbrances whatsoever, except for the rights herein granted to the OEDA and the exceptions permitted under the Mortgage ( "Permitted Exceptions "), and Borrower has good right to cause such Collateral to be hypothecated to the OEDA as security for Borrower's obligations. 4.6 Taxes. Borrower has filed all tax returns required to be filed and paid all taxes shown thereon to be due, including interest and penalties, if any, or provided adequate reserves for the payment thereof. 4.7 Titles. Borrower has good title to its properties and assets, free and clear of all mortgages, liens and encumbrances, except for those referred to in the financial statements famished to the OEDA in writing, the Permitted Exceptions and covenants, restrictions, rights, easements, liens, encumbrances and minor irregularities in title which do not materially interfere with the occupation, use and enjoyment by Borrower of such properties and assets in the normal course of business as presently conducted or materially impair the value thereof for such business. z 4.8 Regulation UU. Borrower is not engaged principally, or as one of its important activities, in the business of extending in credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System). 5. AFFIRMATIVE COVENANTS. Borrower covenants and agrees that, until the full and final payment of all the obligations, it will, unless the OEDA waives compliance in writing: 5.1 Financial Statements. Deliver to OEDA in form and detail satisfactory to OEDA, and in such numbers of copies as OEDA may request: (a) Quarterl . As soon as available and in any event within thirty (30) days after the end of each fiscal quarter end, commencing with the quarter ending December 31, 2004, its balance sheet and income statement as of the close of such quarter, and for that portion of the fiscal year ending with such quarter. (b) Annual. As soon as available and in any event within sixty (60) days after the close of each fiscal year of Borrower, commencing with the year ending December 31, 2004, its balance sheet and income statement as of the close of such year. (c) Annual Audit. As soon as available and in any event within ninety (90) days after the end of each fiscal year of, commencing with the year ending December 31, 2004, its audited balance sheet and income statement as of the close of such year. Additionally OEDA may request in writing operating statements on other owned by Borrower, which shall be furnished within ten (10) days of receipt of request. (d) Annual Financial Statements. As soon as available and in any event by April 15 of each year for commencing April 15, 2004, financial statements in form and content reasonably acceptable to OEDA. (e) Such other statement or statements, lists of property and accounts, budgets, forecasts or reports as to Borrower as OEDA may request from time to time. 5.2 Inspection. Permit any authorized representative of OEDA to visit and inspect any of the properties of the Borrower, including any books and records (and to make extracts therefrom), and to discuss its affairs and finances, and as often as OEDA may reasonably request. 5.3 Conduct of Business. Maintain its corporate existence and use its best efforts to maintain in full force and effect all licenses, leases, contracts and other rights necessary or desirable to the profitable conduct of its business. 5.4 Maintenance of Properties. Maintain, preserve and keep its properties and every part thereof in good repair, working order and condition and make all needful and proper repairs, 4 renewals, replacements and additions and improvements thereto so that the efficiency thereof shall be fully preserved and maintained. 5.5 Payment of Taxes and Assessments. Duly pay and discharge, or cause to be paid and discharged, all taxes, assessments and other governmental charges imposed upon it and its properties or any part thereof, or upon the income or profits therefrom, as well as all claims for labor, materials or supplies which if unpaid might by law become a lien or charge upon any property of Borrower, except for such items as are being in good faith appropriately contested by Borrower and with respect to which adequate reserves, satisfactory to the OEDA, are set aside and maintained on the books of the Borrower. 5.6 Notices. Promptly give written notice to OEDA of any of the following facts coming to the attention of the Borrower, of (a) Litigation affecting Borrower or any Guarantor where the amount in any case or in the aggregate is Ten Thousand Dollars ($ 10,000. 00) or more, and is not covered by insurance; (b) Any substantial dispute which may exist between Borrower and any governmental regulatory body or law enforcement authority; (c) Any labor controversy resulting in or threatening to result in a strike; and (d) Any Event of Default under the terms of this Agreement or of any instruments provided for herein. 5.7 Insurance. Maintain insurance with a responsible and reputable insurer in such amounts and covering such risks as is usually carried by companies engaged in similar businesses at similar locations with loss payable clauses to OEDA. 5.8 Further Assurances. Borrower will promptly cure any defects in the issuance of the Note and the execution of this Agreement and any other instrument or documents referred to or mentioned herein. Borrower will immediately execute and deliver to the OEDA upon request all such other and further instruments as may be required or desired by the OEDA from time to time in compliance with or in accomplishment of the covenants and agreements of Borrower made in this Agreement and other such instruments and documents referred to or mentioned herein, or to further evidence and more fully describe the properties intended as security for the Note; also, to correct any omission in any exhibits or to perfect any security interests or liens, to make- any recordings, to file any notices or to obtain any consents, all as may be necessary or appropriate in connection therewith. 5.9 Reimbursement of Expenses. Borrower will pay all reasonable legal fees and other fees, charges or expenses incurred by the OEDA in connection with the preparation of this Agreement, and all other agreements and instruments contemplated hereby, the closing of the transaction contemplated hereby and any other matter arising out of or in connection herewith. 6. NEGATIVE COVENANTS. Borrower covenants and agrees that, until the full and final payment of all Obligations, it will not, unless OEDA consents in writing: 6.1 Indebtedness. Except as in this Agreement provided, create or incur any indebtedness of borrowed money or become liable as surety, guarantor, accommodation endorser or otherwise, for or upon the obligation of any Person or entity, provided, however, that this paragraph shall not be deemed to prohibit (a) the execution of bonds, undertakings or contracts in the usual course of Borrower's business which are not for the purpose of obtaining borrowed money; (b) the endorsement by Borrower of negotiable instruments received in the usual course of its business. 6.2 Mortgages, Pledges and Liens. Create, incur or suffer to exist, any pledge, mortgage, security interest, assignment or other encumbrance or lien of or upon any of its properties or assets now or hereafter owned, or upon the income or profits thereof, or acquire or agree to acquire any property or assets under conditional sale or other title retention agreements, except: (a) Liens in favor of OEDA pursuant to this Agreement; (b) Deposits or pledges in connection with or to secure payment of workmen's compensation, unemployment insurance, old age pensions or other social security payments or in connection with the good faith contest of any tax lien if adequate reserves satisfactory to the OEDA are set aside and maintained with respect thereto; (c) Current taxes not delinquent or being contested in good faith in such manner as not to make the property forfeitable; mechanics' liens or landlords' liens for sums not due and owing or contested in good faith in such manner as not to make the property subject to such liens forfeitable; and liens or Judgments or awards pending appeal; if, as to all preceding matters referred to in this paragraph, adequate reserves satisfactory to the OEDA are set aside and maintained with respect thereto; or easements, rights of way, encumbrances or title defects and the like which do not materially interfere with the business operations of Borrower. 6.3 Sales. Sell or assign, or discount with or without recourse, any accounts receivable, notes receivable or contract rights, or sell, lease or otherwise dispose of any of its assets except in the ordinary course of business. 6.4 Advances. Make or permit to exist any loans or, except in the ordinary course of business, make advances or extend credit to any Person or entity. 6 6.5 Changes in Business. Engage in any business activity substantially different from or unrelated to present business activities and operations. 6.6 Guaranties, Loans or Advances. Become or be a guarantor or surety of, or otherwise become or be responsible in any manner with respect to, any undertaking of any other Person or entity, or make or permit to exist any loans or advances to any other Person or entity, except for the endorsement, in the ordinary course of collection, of instruments payable to it or to its order. 6.7 Use of Proceeds. Use or permit any proceeds of the Loan to be used, either directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of "purchasing or carrying any margin stock" within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, as amended from time to time. 6.8 Other Agreements. Enter into any agreement containing any provision which would be violated or breached by the performance of its obligations hereunder or under any instrument or document delivered or to be delivered by it hereunder or in connection herewith. 7. EVENTS OF DEFAULT. The occurrences of any of the following events shall constitute an Event of Default hereunder: 7.1 Nonpayment. Nonpayment when due of any installment of interest or -principal in accordance with the terms of any promissory note or other instrument evidencing Borrower's indebtedness to OEDA or nonpayment when due of any other sums payable by Borrower to OEDA. 7.2 Representations and Warranties. Any representation or warranty made to OEDA by the Borrower or by the Guarantor in the Guaranty or which is contained in any certificate, document, opinion, or financial or other statement furnished at any time under or in connection with any Loan Documents shall prove to have been incorrect, incomplete, or misleading in any material respect on or as of the date made or deemed made. 7.3 Covenants. The Borrower or the Guarantor shall fall to perform or observe any term, covenant, or agreement contained herein or in any other Loan Documents. 7.4 Involuntary Lien. The attachment of any involuntary lien in the sum of Fifty Thousand Dollars ($50,000) or more, of any kind or character, upon the assets or property of the Borrower, except for taxes due but not in default. 7.5 Judgment. The entry against Borrower of any judgment in the amount of Fifty Thousand Dollars ($50,000) or more on a claim not covered by insurance which has not been dismissed within ten (10) days from judgment, or the entry against Borrower of judgments totaling in excess of Fifty Thousand Dollars ($50,000) in any three (3) months' period. 7.6 Act of Insolvencv. If Borrower or any Guarantor shall (i) apply for or consent to the appointment of a receiver, trustee or liquidator of itself, or of all or a substantial part of its assets; (ii) admit in writing its inability to pay its debts as they fall due; (iii) make a general assignment for the benefit of its creditors; (iv) be adjudicated a Bankrupt or insolvent; or (v) file a voluntary petition in Bankruptcy or file a petition or answer seeking reorganization or an arrangement with creditors or seeking to take advantage of any insolvency law or admit (by answer, default or otherwise) the material allegations of a petition filed against it in any Bankruptcy, reorganization, arrangement or insolvency proceeding, or take or omit to take any action for the purpose or with the result of effecting any of the foregoing. 7.7 Involuntary Bankruptcy. An order, judgment or decree by any court of competent jurisdiction shall be entered, adjudicating the Borrower or any Guarantor to be Bankrupt or insolvent; without the application, approval or consent of the Borrower or any Guarantor, approving a petition seeking reorganization of the Borrower or any Guarantor or appointing a receiver, trustee or liquidator of the Borrower or any Guarantor or all or a substantial part of any of its or their assets. 7.8 Condemnation. The condemnation, seizure or appropriation of all, or such as in the opinion of OEDA constitutes substantially all, of the property of Borrower. 7.9 Suspension of Business. The voluntary or involuntary suspension of business by Borrower for a period deemed by OEDA to substantially adversely affect Borrower's ability to repay the obligations. 7.10 Default of Other Obligations. Any event of default as defined in any loan or similar agreement to which the Borrower is now or hereafter a party, or any other event pursuant to which any holder or holders of indebtedness of Borrower may declare the same due and 0 payable, or the failure to pay any such indebtedness when due, shall occur and shall continue for more than the period of grace, if any, provided with respect thereto. -7- 7.11 General Default. The breach of, or default under, any covenant, agreement, term, condition, provision, representation or warranty contained in this Agreement or in any agreement or instrument executed in connection herewith or as security for any of the Obligations, by Borrower not specifically referred to in this Section. 8. REMEDIES. If any one or more Events of Default shall occur and be continuing, OEDA may without notice, presentment or demand, proceed to protect and enforce all or any of the rights with respect thereto contained in this Agreement or any other Loan Documents, or may proceed to enforce payment of all indebtedness due hereunder or enforce any other legal or equitable rights or exercise any other legal or equitable remedies, or cure or remedy any default by Borrower for the purpose of preserving the Property. All rights, remedies or powers conferred upon OEDA shall be cumulative and not exclusive of any other rights, remedies or powers available: No delay or omission to exercise any right, remedy or power, shall impair any such right, remedy or power, or shall be construed to be a waiver of any Event of Default or an acquiescence therein. Any such right, remedy or power may be exercised from time to time, independently or concurrently, and as often as shall be deemed expedient. No waiver of any Event of Default shall extend to any subsequent Event of Default. No single or partial exercise of any right, remedy or power shall preclude other or further exercise thereof. Borrower covenants that if an Event of Default shall happen and be continuing it will pay costs of court and other out - of- pocket expenses paid or incurred by OEDA in collecting the amounts due pursuant to this Agreement, the Note, the Mortgage or any other Loan Documents, including attorneys fees, together with interest on amounts so expended from the respective dates of each expenditure at an annual rate equal to the rate accruing under the Note. 9. GENERAL. 9.1 Definitions. As used herein: (a) "Person" shall mean any individual, corporation, limited liability company, partnership, trust or unincorporated organization, or a government or any agency or political subdivision thereof. (b) "this Agreement" shall include all amendments, modifications and supplements and shall refer to this Agreement as the same may be in effect at the time such reference becomes operative. (c) "Loan Documents" shall mean this Agreement, the Note, the Mortgage and the other instruments, documents and agreements executed and/or presented to OEDA as required under this Agreement. 0 9.2 Notices. All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given when (a) delivered by hand with written confirmation of receipt), (b) sent by telecopier (with written confirmation of receipt), provided that a copy is mailed by registered mail, return receipt requested, or (c) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and telecopier numbers set forth below (or to such other addresses and telecopier numbers as a party may designate by notice to the other parties): The Borrower: Vanguard Car Rental, U.S.A. 200 South Andrews Ave. Ft. Lauderdale, Fl 33301 Attn: Howard Swartz, General Counsel Facsimile No.: The OEDA: Owasso Economic Development Authority 111 North Main St. Owasso, OK 74055 Attn: Rickey Hayes, Economic Development Director Facsimile No.: (918) 376 -1599 or at such other address as any party shall designate for itself in-writing to the other parties. Any notice hereunder shall be deemed effective when actually received or when placed in the United States malls, postage prepaid, certified mail, return receipt requested. 9.3 OEDA Making Required Payments. In the event the Borrower shall fall to maintain insurance, or to pay taxes, assessments, costs or expenses which the Borrower is required to pay, under any of the terms hereof or of any instrument or agreement securing any of the Obligations or executed in connection herewith or therewith including, without limitation, costs and expenses incurred as provided for in this paragraph, or fall to keep the Collateral free from other security interests, liens or encumbrances, except as permitted herein, OEDA may at its election make expenditures for any or all such purposes and the amount so expended, together with interest thereon at the rate accruing under the Note, shall become immediately due and payable by Borrower to OEDA; but OEDA shall be under no duty or obligation whatever with respect to any of the foregoing expenditures. All costs and reasonable attorney's fees and legal expenses shall likewise constitute additional indebtedness of Borrower which Borrower promises to pay on demand and which shall be entitled to the benefits of and be secured by the Collateral. 9.4 UCC Rights. When any indebtedness or liability of the Borrower hereunder is due and payable and is unpaid in whole or in part, OEDA shall have, in addition to all other rights and remedies, the rights and remedies of a secured party under the Oklahoma Uniform in Commercial Code ( "Code "), regardless of whether the Code is the law of the jurisdiction where the rights or remedies are asserted, including the right to take possession of the Collateral and, for that purpose, OEDA may, so far as Borrower can give authority therefore, enter upon any premises where the Collateral may be located and remove the same therefrom. OEDA may require Borrower to assemble the Collateral and make it. available to OEDA at a place designated by OEDA. Unless the Collateral is perishable or threatens to decline speedily in value, or is of a type customarily sold on a recognized market, OEDA shall give Borrower at least ten (10) days' prior written notice before the time after which any public or private sale or other intended disposition is to be made, and any such notice shall be deemed commercially reasonable. 9.5 Setoff, Etc. Upon the occurrence of an Event of Default, any indebtedness owing from OEDA to Borrower including, without limitation, any general or special deposit account, may be set off or otherwise applied by OEDA under a general lien covering such indebtedness on any indebtedness or liability of the Borrower under the Note or this Agreement to OEDA at any time and from time to time, either before or after maturity, and without demand or notice to anyone. It is understood that the OEDA may sell participation in loans made hereunder, and Borrower agrees that any such participant shall have the same right of setoff or other application under the general lien as herein granted to OEDA. -9- 9.6 Borrower's Waiver of Sale Rights. Borrower, so far as permitted by law, agrees to waive and does hereby irrevocably waive the benefit of any valuation, stay, appraisement, extension or redemption law now or hereafter existing applicable to any sale made under judgment, order or decree based on this Agreement. 9.7 Nonwaiver of Rights. No delay or omission to exercise any right, power or remedy accruing to OEDA upon any agreement or instrument executed pursuant hereto or in connection herewith shall impair any such right, power or remedy of OEDA nor shall it be construed to be a waiver of any such breach or default, or any acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore occurring. Any waiver, permit, consent or approval of any kind or character on the part of OEDA of any breach or default or condition to the making of any loans under this Agreement, or any waiver on the part of OEDA of any provision or condition of this Agreement or any agreement or instrument executed pursuant hereto or in connection herewith, must be in writing signed by OEDA and shall be effective only to the extent such writing specifically sets forth. All remedies, either under this Agreement or by law or otherwise, afforded to OEDA shall be cumulative and not alternative. 9.8 Applicable Law. This Agreement has been delivered and accepted in, and shall be a contract made under and shall be entered into and governed by the laws of the State of Oklahoma. The Note shall be deemed to be an obligation made under and shall be construed in accordance with and governed by the laws of the State of Oklahoma. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid II under the applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 9.9 Binding Effect. This Agreement shall be binding upon the Borrower and the OEDA and their respective successors and assigns, and shall inure to the benefit of the OEDA and the successors and assigns of the OEDA. 9.10 Headings. The Section and paragraph headings of this Agreement are for convenience and shall not affect, limit or expand any term or provision hereof. 9.11 Severabilitv. If any part of this Agreement and Loan documents is held invalid or illegal, the remainder of this Agreement shall not be affected thereby. "Borrower" Vanguard Car Rental U.S.A. By _ Name Title 1.OEDA' Owasso Economic Development Authority By Name: Scott Yandell Title: Chairman Schedule "1.2" PROMISSORY NOTE FOR VALUE RECEIVED, the undersigned, Vanguard Car Rental U.S.A., its successors and assigns (collectively, the "Borrower "), promises to pay to the order of the Owasso Economic Development Authority of Owasso, Oklahoma, its successors and assigns (collectively, the "Authority") at its principal office at 111 N. Main, Owasso, Tulsa County, Oklahoma 74055, or at such other place as may be designated in writing by the Authority, the principal sum of TWO MILLION AND NO /100 DOLLARS ($2,000,000.00) or so much thereof as shall have been advanced hereon shall be due and payable on or before the 1St day of November, 2009. The Borrower shall repay the principal by making quarterly installment payments to the Authority in an amount not less than One Hundred Thousand and No /100 Dollars ($100,000.00) per quarter for a period of five (5) years or otherwise the principal shall have been paid, whichever the sooner.. The initial installment shall be paid on or before the 1St day of January, 2005. No Interest on the unpaid portion of the principal balance computed from the date of each advance shall be due; however, if and in the event the Borrower shall default in making any payments as called for hereunder or otherwise failing to perform covenants herein contained or as set forth in that certain Loan Agreement between the Borrower and the Authority then, from such date of default or nonperformance until principal is paid in full, interest shall be calculated at the rate of ten percent (10 %) per annum thereupon shall be due and payable on or before the 1St day of November, 2005 and the 1St day of November of each successive year thereafter until paid in full. The Borrower may prepay this Note, in whole or in part, at any time prior to the due date hereof, without penalty. If any payment shall be due on a Saturday or Sunday or upon any banking holiday of the holder hereof, such payment shall be due and payable on the next succeeding banking day and interest shall accrue to such day. All parties (makers, sureties, guarantors and all others now or hereafter liable for payment of all or any portion of the indebtedness evidenced by this Revenue Anticipation Note) severally waive demand, presentment, notice of dishonor, protest, notice of protest, and diligence in collecting this Revenue Anticipation Note and diligence in bringing and prosecuting suit against any party bound hereby, and agree that no extension, renewal or partial payment, or release or substitution of collateral before or after maturity, with or without notice, shall release or discharge the obligation of any party. Upon the failure to pay when due the principal and or interest, the holder hereof shall be entitled, at its option, to extend the term or declare the unpaid principal balance of this Note to be immediately due and payable. A failure by such holder to exercise such option will not constitute a waiver of the right to exercise the same in the event of any subsequent default. After maturity (whether by extension, acceleration or otherwise), interest shall accrue hereon at a rate of interest of ten percent (10 1/6) per annum. If this Revenue Anticipation Note is placed with an attorney for collection upon any default, or to defend or enforce any rights of the holder(s) hereunder or any instrument securing payment of this Note, or if this Note is collected through bankruptcy or other judicial proceeding, the Borrower agrees to pay the reasonable attorney fees of the holder(s) of this Note and all reasonable costs and expenses incurred in connection therewith. Vanguard Car Rental U.S.A. Im 1 n Not Applicable Schedule "2(a)- I " (Legal Description) 1G Schedule "2(a)-2" ASSIGNMENT OF PROCEEDS OKLAHOMA QUALITY JOBS INITIATIVE Schedule "2(a) --3" (UCC -1 Financing Statement) Schedule "33(a)-l" (Guaranty Agreement) Schedule "3.3(a) -2" (Corporate Guaranty Resolution) Schedule "3.3(b)" (Guaranty Agreement) Schedule "3.4" (Commitment Letter) Schedule "3.5" (Legal Opinion)