16-1413 Improvement Revenue Bond Resolution-Transportation Improvement Revenue Note Series 2016CITY OF LONGWOOD, FLORIDA
IMPROVEMENT REVENUE BOND RESOLUTION
ADOPTED OCTOBER 3, 2016
TABLE OF CONTENTS
PAGE
ARTICLE I
GENERAL
SECTION 1.01. DEFINITIONS......................................................................................... 1
SECTION 1.02. AUTHORITY FOR RESOLUTION....................................................... 7
SECTION 1.03. RESOLUTION TO CONSTITUTE CONTRACT .................................. 7
SECTION1.04. FINDINGS............................................................................................... 7
SECTION 1.05. AUTHORIZATION OF SERIES 2016 PROJECTS ............................... 8
SECTION 1.06. DESIGNATION FOR BANK QUALIFICATION ................................. 9
ARTICLE II
AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF BONDS
SECTION 2.01. AUTHORIZATION AND DESCRIPTION OF THE BONDS; THE
SERIES2016 NOTE....................................................................... 10
SECTION 2.02. APPLICATION OF SERIES 2016 NOTE PROCEEDS ....................... 11
SECTION 2.03. EXECUTION OF BONDS.................................................................... 11
SECTION 2.04. BONDS MUTILATED, DESTROYED, STOLEN OR LOST ............. 12
SECTION 2.05. INTERCHANGEABILITY, NEGOTIABILITY AND TRANSFER... 12
SECTION 2.06. ADJUSTMENTS TO INTEREST RATE ............................................. 13
SECTION 2.07. FORM OF BONDS................................................................................ 14
ARTICLE III
REDEMPTION OF BONDS
SECTION 3.01. NOTICE OF REDEMPTION................................................................ 20
SECTION 3.02. REDEMPTION OF PORTIONS OF BONDS ...................................... 20
SECTION 3.03. PURCHASE OF BONDS BY ISSUER ................................................. 20
SECTION 3.04. PERMITTED AND REQUIRED REDEMPTIONS OF THE
SERIES2016 NOTE....................................................................... 20
ARTICLE IV
SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF
SECTION 4.01. BONDS NOT TO BE INDEBTEDNESS OF ISSUER ......................... 21
SECTION 4.02. SECURITY FOR THE BONDS............................................................ 21
SECTION 4.03. CONSTRUCTION FUND..................................................................... 21
SECTION 4.04. FUND AND ACCOUNTS.................................................................... 22
SECTION 4.05. FLOW OF FUNDS................................................................................ 22
SECTION 4.06. REBATE ACCOUNT............................................................................ 23
SECTION4.07. INVESTMENTS.................................................................................... 24
SECTION 4.08. SEPARATE ACCOUNTS..................................................................... 24
Resolution No. 16-1413
Page i
ARTICLE V
COVENANTS OF THE ISSUER
SECTION 5.01. BOOKS AND RECORDS..................................................................... 25
SECTION 5.02. ISSUANCE OF ADDITIONAL BONDS ............................................. 25
SECTION 5.03. ANNUAL AUDIT, BUDGET AND OTHER FINANCIAL
INFORMATION............................................................................. 26
SECTION 5.04. NO IMPAIRMENT................................................................................ 26
SECTION 5.05. FEDERAL INCOME TAX COVENANTS .......................................... 26
SECTION 5.06. ELIGIBILITY FOR RECEIPT AND USE OF PLEDGED
REVENUES..................................................................................... 27
SECTION 5.07. OTHER MONEYS................................................................................ 27
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT....................................................................... 28
SECTION6.02. REMEDIES............................................................................................ 28
SECTION 6.03. REMEDIES CUMULATIVE................................................................ 29
SECTION 6.04. WAIVER OF DEFAULT...................................................................... 29
ARTICLE VII
SUPPLEMENTAL RESOLUTIONS
SECTION 7.01. SUPPLEMENTAL RESOLUTIONS.................................................... 30
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. DEFEASANCE...................................................................................... 32
SECTION 8.02. SALE OF BONDS; SALE OF SERIES 2016 NOTE ............................ 33
SECTION 8.03. APPOINTMENT OF PAYING AGENT AND REGISTRAR .............. 33
SECTION 8.04. SEVERABILITY OF INVALID PROVISIONS ................................... 33
SECTION 8.05. REPEAL OF INCONSISTENT RESOLUTIONS ................................ 33
SECTION 8.06. WAIVER OF RIGHT TO TRIAL BY JURY; VENUE ........................ 33
SECTION 8.07. GENERAL AUTHORITY..................................................................... 34
SECTION 8.08. EFFECTIVE DATE............................................................................... 34
EXHIBIT A TERM SHEET FROM WHITNEY BANK d/b/a HANCOCK
BANK
Resolution No. 16-1413
Page ii
RESOLUTION NO. 16-1413
A RESOLUTION OF THE CITY COMMISSION OF
THE CITY OF LONGWOOD, FLORIDA, PROVIDING
DETAILS REQUIRED BY ORDINANCE NO. 16-2096
THAT AUTHORIZED THE FINANCING OF THE
SERIES 2016 PROJECTS DESCRIBED HEREIN;
AUTHORIZING THE ISSUANCE OF BONDS BY THE
CITY, INCLUDING A $5,900,000 CITY OF
LONGWOOD, FLORIDA TRANSPORTATION
IMPROVEMENT REVENUE NOTE, SERIES 2016, IN
ORDER TO FINANCE THE COST OF THE
ACQUISITION AND CONSTRUCTION OF VARIOUS
TRANSPORTATION AND ANCILLARY
IMPROVEMENTS WITHIN THE BOUNDARIES OF
THE CITY; PLEDGING THE MONEYS RECEIVED BY
THE CITY FROM (1) THE FIRST SIX CENTS OF THE
CITY'S RECEIPT OF LOCAL OPTION GAS TAX
IMPOSED PURSUANT TO SECTION 336.025(1),
FLORIDA STATUTES, AND (2) THE ONE -CENT
LOCAL GOVERNMENT INFRASTRUCTURE SALES
SURTAX IMPOSED PURSUANT TO SECTION
212.055(2), FLORIDA STATUTES, IN EACH CASE TO
SECURE PAYMENT OF THE PRINCIPAL OF AND
INTEREST ON BONDS, INCLUDING THE SERIES 2016
NOTE; PROVIDING FOR THE RIGHTS OF THE
HOLDERS OF BONDS, INCLUDING THE SERIES 2016
NOTE; AWARDING AND AUTHORIZING THE
NEGOTIATED SALE OF THE SERIES 2016 NOTE;
AND PROVIDING FOR AN EFFECTIVE DATE FOR
THIS RESOLUTION.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION
OF THE CITY OF LONGWOOD, FLORIDA, AS FOLLOWS:
ARTICLE I
GENERAL
SECTION 1.01. DEFINITIONS. When used in this Resolution, the
following terms shall have the following meanings, unless the context clearly otherwise
requires:
Resolution No. 16-1413
Page 1
"Act" shall mean Chapter 166, Florida Statutes, Section 212.055(2) Florida
Statutes, Section 336.025(1)(a), Florida Statutes, the City Charter, the Financing
Ordinance, and other applicable provisions of law.
"Act of Bankruptcy" shall mean (1) the Issuer shall be adjudicated as bankrupt
or become subject to an order for relief under federal bankruptcy law, (2) the Issuer shall
institute any proceedings seeking an order for relief under federal bankruptcy law or
seeking to be adjudicated as bankrupt or insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it or its debts
under any law relating to bankruptcy or insolvency, (3) there shall be appointed a
receiver, liquidator or similar official for the Issuer under any law relating to bankruptcy
or insolvency, or (4) without the application, approval or consent of the Issuer, a receiver,
trustee, examiner, liquidator or similar official shall be appointed for the Issuer, or a
proceeding described in (2) above shall be instituted against the Issuer, and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of thirty (30) consecutive days. The mere declaration of a state of
financial emergency under Section 218.503, Florida Statutes, shall not, in and of itself,
constitute an Act of Bankruptcy.
"Additional Bonds" means the obligations issued at any time under the
provisions of Section 5.02 hereof on parity with the Series 2016 Note.
"Annual Debt Service" shall mean, at any time, the aggregate amount in the then
current Fiscal Year of (1) interest required to be paid on the Outstanding Bonds during
such Fiscal Year, except to the extent that such interest is to be paid from deposits in the
Payment Account made from Bond proceeds, (2) principal of Outstanding Bonds
maturing in such Fiscal Year, and (3) any amortization installments designated with
respect to such Fiscal Year.
"Authorized Investments" shall mean any obligations as shall be permitted to be
legal investments of the Issuer by the laws of the State.
"Authorized Issuer Officer" shall mean the Mayor, or his or her designee, and
when used in reference to any act or document also means any other person authorized by
resolution of the Issuer to perform such act or sign such document.
"Bond" or "Bonds" shall mean the Series 2016 Note and any Additional Bonds
issued pursuant to the provisions hereof and authorized in accordance with the provisions
of the City Charter.
"Bondholder" or "Holder" or "holder" or any similar term, when used with
reference to a Bond or Bonds, shall mean any person who shall be the registered owner of
any Outstanding Bond or Bonds as provided in the registration books of the Issuer.
Resolution No. 16-1413
Page 2
"City Charter" shall mean the charter of the City, as the same may be amended
from time to time.
"City Commission" shall mean the City Commission of the Issuer.
"Bond Counsel" shall mean Nabors, Giblin & Nickerson, P.A., or any other
attorney at law or finn of attorneys, of nationally recognized standing in matters
pertaining to the federal tax exemption of interest on obligations issued by states and
political subdivisions, and duly admitted to practice law before the highest court of any
state of the United States of America.
"Business Day" shall mean any day other than (1) a Saturday or Sunday or a legal
holiday on which banking institutions in Florida are located are required or authorized by
law to remain closed, or (2) a day on which the New York Stock Exchange is closed.
"Clerk" shall mean the City Clerk of the Issuer, and such other person as may be
duly authorized to act on his or her behalf.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
regulations, procedures and rules thereunder in effect or proposed.
"Construction Fund" shall mean the City of Longwood, Florida Improvement
Revenue Bonds Construction Fund established pursuant to Section 4.03 hereof.
"Cost" or "Costs," as the same relates to a Project, to the extent permitted by the
Act, shall mean (1) the cost of physical construction, reconstruction or completion,
(2) the cost of acquisition or purchase, (3) the cost of all labor, materials, machinery and
equipment, (4) the cost of land and interests therein, property rights, easements and
franchises of any nature whatsoever, (5) the cost of any indemnity or surety bonds and
premiums for insurance during construction, (6) all interest due to be paid on the Bonds
and other obligations relating to a Project during the period of construction and for such
period of time subsequent to completion of acquisition and construction as the City
Commission deems appropriate, (7) engineering, financial, legal and other consultant fees
and expenses, (8) the cost of plans and specifications, construction plans, surveys and
estimates of costs, (9) costs and expenses of audits, (10) payments, when due (whether at
the maturity of principal or the due date of interest or upon redemption) on any interim or
temporary indebtedness incurred for any portion of such Project, (11) costs and expenses
related to the issuance of the Bonds or other indebtedness related to such Project, and
(12) any other costs and expenses properly attributable to acquisition or construction of
such Project, and such other expenses as may be necessary or incidental to the issuance of
the Bonds; and shall include reimbursement to the Issuer or any other Person, for any
moneys advanced for any costs incurred by the Issuer or such Person, in connection with
any such items of cost. Any Supplemental Resolution may provide for additional items
to be included in the aforesaid Costs.
Resolution No. 16-1413
Page 3
"Debt Service Fund" shall mean the City of Longwood, Florida Improvement
Revenue Bonds Debt Service Fund established pursuant to Section 4.04 hereof.
"Default Rate" shall mean the lesser of 6% per annum or any statutory interest
rate limitation imposed by the State of Florida.
"Defeasance Obligations" shall mean (1) cash, or (2) direct, noncallable
obligations of the United States of America.
"Determination of Taxability" shall mean the circumstance of interest paid or
payable on the Bonds becoming includable for federal income tax purposes in the gross
income of the Bondholders due to any act or inaction of the Issuer, including, without
limitation, (1) the receipt by the Issuer or a Bondholder of an original or a copy of an
Internal Revenue Service Technical Advice Memorandum or Statutory Notice of
Deficiency which holds that any interest payable on its Bond is includable in the gross
income of such Bondholder; (2) the issuance of any public or private ruling of the
Internal Revenue Service that any interest payable on such Bond is includable in the
gross income of the Bondholder; or (3) receipt by the Issuer or a Bondholder of an
opinion of Bond Counsel that any interest on the Bond has become includable in the
gross income of the Bondholder for federal income tax purposes. For all purposes of this
definition, a Determination of Taxability will be deemed to occur on the date as of which
the interest on a Bond is deemed includable in the gross income of a Bondholder. A
Determination of Taxability shall not occur solely because such interest is taken into
account in determining adjusted current earnings for the purpose of the alternative
minimum income tax imposed on corporations or interest on the Bond is treated as an
indirect tax preference item under the Code.
"Event of Default" shall mean any Event of Default specified in Section 6.01 of
this Resolution.
"Financing Ordinance" shall mean Ordinance No. 16-2096 of the Issuer, enacted
October 3, 2016, as the same may be amended and supplemented.
"Financial Advisor" shall mean FirstSouthwest, a Division of Hilltop Securities,
and its successors.
"Fiscal Year" shall mean the period commencing on October 1 of each year and
continuing through the next succeeding September 30, or such other period as may be
prescribed by law.
"Gas Tax Interlocal Agreement" shall mean the Interlocal Agreement, with an
effective date of June 1, 2013, among Seminole County, Florida, the Issuer and other
municipalities located within Seminole County, Florida, and any supplement or
replacement of such interlocal agreement.
Resolution No. 16-1413
Page 4
"Gas Tax Revenues" shall mean the revenues derived by the Issuer from the first
six cents of the local option gas tax on motor fuel and special fuel authorized pursuant to
Section 336.025(1)(a), Florida Statutes, imposed pursuant to Seminole County Ordinance
No. 2013-13 enacted on March 26, 2013, and distributed pursuant to the Gas Tax
Interlocal Agreement.
"Initial Noteholder" shall mean Whitney Bank d/b/a Hancock Bank, or any
subsidiary or related entity of their parent company, and any assigns or successors
thereto.
"Interlocal Agreements" shall mean the Gas Tax Interlocal Agreement and the
Sales Tax Interlocal Agreement.
"Issuer" shall mean the City of Longwood, Florida, a municipal corporation
established by the State of Florida.
"Maximum Annual Debt Service" shall mean the largest aggregate amount of
the Annual Debt Service becoming due in any Fiscal Year in which Bonds are
Outstanding, excluding all Fiscal Years which shall have ended prior to the Fiscal Year in
which the Maximum Annual Debt Service shall at any time be computed.
"Mayor" shall mean the Mayor of the Issuer, who is a member of the City
Commission, and such other person as may be duly authorized to act on his or her behalf.
"Outstanding" when used with reference to the Bonds and as of any particular
date, shall describe all Bonds theretofore and thereupon being authenticated and delivered
except, (1) any Bond in lieu of which another Bond or Bonds have been issued under
agreement to replace the lost, stolen, mutilated or destroyed Bond under Section 2.04
hereof, (2) any Bond surrendered by the Holder thereof in exchange for another Bond or
Bonds under Section 2.05 hereof, (3) the Bonds deemed to have been paid pursuant to
Section 8.01 hereof, and (4) the Bonds canceled after purchase by the Issuer in the open
market or because of payment at or redemption prior to maturity.
"Paying Agent" shall mean any paying agent for Bonds appointed by or pursuant
to this Resolution and any other Person which may be substituted in its place pursuant to
this Resolution.
"Payment Account" shall mean the separate account in the Debt Service Fund
established pursuant to Section 4.04 hereof.
"Payment Date" shall mean the dates for payment of principal and/or interest on
the Bonds as provided in Section 2.01 hereof.
Resolution No. 16-1413
Page 5
"Person" shall mean an individual, a corporation, a partnership, an, association, a
joint stock company, a trust, any unincorporated organization or governmental entity.
"Pledged Revenues" shall mean (1) the Gas Tax Revenues, (2) the Sales Tax
Revenues, and (3) until applied in accordance with the provisions of this Resolution, all
moneys, including investments thereof, in the funds and accounts (other than the Rebate
Account) established hereunder.
"Project" shall mean the acquisition and construction of improvements as may be
authorized in accordance with the provisions of the City Charter and financed by Gas Tax
Revenues and Sales Tax Revenues pursuant to the Act and the Interlocal Agreements,
including the Series 2016 Projects.
"Rebate Account" shall mean the separate account of the Debt Service Fund
established pursuant to Section 4.04 hereof.
"Redemption Account" shall mean the separate account of the Debt Service
Fund established pursuant to Section 4.04 hereof.
"Redemption Price" shall mean, with respect to any Bond or portion thereof, the
principal amount or portion thereof, plus premiums if any, plus accrued interest through
the date of payment.
"Registrar" shall mean any registrar for the Bonds appointed by or pursuant to
this Resolution and its successors and assigns, and any other Person, which may at any
time be substituted in its place pursuant to this Resolution.
"Resolution" shall mean this Resolution, as the same may from time to time be
amended, modified or supplemented by Supplemental Resolution.
"Revenue Account" shall mean the separate account of the Debt Service Fund
established pursuant to Section 4.04 hereof.
"Sales Tax Interlocal Agreement" shall mean the Interlocal Agreement, with an
effective date of April 10, 2014, among Seminole County, Florida, the School Board of
Seminole County, Florida, the Issuer and other municipalities located within Seminole
County, Florida, and any supplement or replacement of such interlocal agreement.
"Sales Tax Revenues" shall mean the revenues derived by the Issuer from the
one -cent local government infrastructure sales surtax received by the City pursuant to
Section 212.055(2), Florida Statutes, imposed pursuant to Seminole County Ordinance
No. 2014-8 enacted on February 11, 2014, and distributed pursuant to the Sales Tax
Interlocal Agreement.
Resolution No. 16-1413
Page 6
"Series 2016 Note" shall mean the Issuer's Transportation Improvement Revenue
Note, Series 2016, issued pursuant to the Act and this Resolution.
"Series 2016 Projects" shall mean (1) the Church Avenue
resurfacing/reconstruction project, and (2) the Florida Central Commerce Parkway
project, all as more particularly described in the plans and specifications on file or to be
on file with the Issuer, as the same may be modified or amended from time to time.
"State" shall mean the State of Florida.
"Supplemental Resolution" shall mean any resolution of the Issuer amending or
supplementing this Resolution adopted and becoming effective in accordance with the
terms of Section 7.01 hereof.
The terms "herein," "hereunder," "hereby," "hereto," "hereof," and any similar
terms, shall refer to this Resolution; the term and "heretofore" shall mean before the date
of adoption of this Resolution; and the term "hereafter" shall mean after the date of
adoption of this Resolution.
Words importing the masculine gender include every other gender.
Words importing the singular number include the plural number, and vice versa.
SECTION 1.02. AUTHORITY FOR RESOLUTION. This Resolution is
adopted pursuant to the provisions of the Act.
SECTION 1.03. RESOLUTION TO CONSTITUTE CONTRACT. In
consideration of the purchase and acceptance of any or all of the Bonds by those who
shall hold the same from time to time, the provisions of this Resolution shall be a part of
the contract of the Issuer with the Holders of the Bonds, and shall be deemed to be and
shall constitute a contract between the Issuer and the Holders from time to time of the
Bonds. The pledge made in this Resolution and the provisions, covenants and
agreements herein set forth to be performed by or on behalf of the Issuer shall be for the
equal benefit, protection and security of the Holders of any and all of said Bonds. All of
the Bonds, regardless of the time or times of their issuance or maturity, shall be of equal
rank without preference, priority or distinction of any of the Bonds over any other thereof
except as expressly provided in or pursuant to this Resolution.
SECTION 1.04. FINDINGS. It is hereby ascertained, determined and
declared that:
(a) The Issuer has infrastructure needs and requirements in the form of
Projects, including but not limited to the Series 2016 Projects, which must be acquired
Resolution No. 16-1413
Page 7
and constructed in order to maintain and protect the health, safety and welfare of the
citizens of the Issuer.
(b) The Issuer issued a request for proposals dated August 1, 2016 to obtain the
most favorable interest rate and loan terms. The Issuer received the most favorable terms
and conditions (based on all the loan terms and conditions) from the Initial Noteholder
and the Financial Advisor recommended to the Issuer that they accept the proposal of the
Initial Noteholder to provide financing for the Series 2016 Projects, the terms and
conditions of which are set forth in a letter, dated August 18, 2016 attached hereto as
EXHIBIT A.
(c) The most efficient and fairest method of financing the acquisition and
construction of the Series 2016 Projects is by the issuance of Series 2016 Note secured by
the Pledged Revenues as provided herein.
(d) The Pledged Revenues are currently not pledged or encumbered in any
manner and the Issuer has no current plans to issue any Additional Bonds.
(e) The principal of, Redemption Price, if applicable, and interest on the Series
2016 Note shall be paid from the Pledged Revenues. The Issuer shall never be required
to use any ad valorem taxes for the payment of the Series 2016 Note. The Series 2016
Note shall not constitute a direct obligation of the Issuer or a pledge of its faith and credit,
nor shall the Bondholders have any lien or encumbrance on any property of the Issuer,
including the Series 2016 Projects, other than the Pledged Revenues.
(f) Due to the present volatility of the market for tax-exempt obligations such
as the Series 2016 Note and the complexity of the transactions relating to such
indebtedness, it is in the best interest of the Issuer to sell the Series 2016 Note by a
negotiated sale to the Initial Noteholder, allowing the Issuer to enter the market at the
most advantageous time and conditions, thereby permitting the Issuer to obtain the best
possible price and interest rate for the Series 2016 Note. The Issuer acknowledges
receipt of the information required by Section 218.385, Florida Statutes, from the Initial
Noteholder in connection with the negotiated sale of the Series 2016 Note. A copy of the
disclosure statement provided by the Initial Noteholder containing the aforementioned
information has been provided under separate cover to the Issuer.
(g) The enactment of the Financing Ordinance constituted the City
Commission's approval of the issuance of the Series 2016 Note and the borrowing of
money in accordance with Sections 3.10 and 6.10(b) of the City Charter. As required by
the City Charter, the Financing Ordinance was enacted by a vote in favor of by at least
four out of five of the members of the City Commission.
SECTION 1.05. AUTHORIZATION OF SERIES 2016 PROJECTS. The
Issuer hereby authorizes the acquisition and construction of the Series 2016 Projects.
Resolution No. 16-1413
Page 8
SECTION 1.06. DESIGNATION FOR BANK QUALIFICATION. The
Issuer hereby designates the Series 2016 Note as a "qualified tax-exempt bond," within
the meaning of Section 265(b)(3) of the Code, and hereby certifies that the Issuer does
not reasonably expect to issue more than $10,000,000 in tax-exempt indebtedness,
including the Series 2016 Note, in calendar year 2016. The Issuer hereby covenants and
agrees not to take any action or to fail to take any action if such action or failure would
cause the Series 2016 Note to no longer be a "qualified tax-exempt obligation."
Resolution No. 16-1413
Page 9
ARTICLE II
AUTHORIZATION, TERMS, EXECUTION AND
REGISTRATION OF BONDS
SECTION 2.01. AUTHORIZATION AND DESCRIPTION OF THE
BONDS; THE SERIES 2016 NOTE. In accordance with the authorization provided in
the Financing Ordinance, this Resolution creates an issue of Bonds of the Issuer to be
designated as its "City of Longwood, Florida, Transportation Improvement Revenue
Note, Series 2016," issued in the aggregate principal amount of $5,900,000. The Series
2016 Note is issued for the principal purposes of financing the Series 2016 Projects and
paying certain costs of issuance incurred with respect to the Series 2016 Note. The Series
2016 Note shall constitute a 'Bond" for purposes of this Resolution. Additional Bonds, if
authorized in accordance with the provisions of the City Charter, shall have such terms as
set forth herein and as established by Supplemental Resolution.
The Series 2016 Note shall be in the form of one registered Series 2016 Note in
the principal amount of 5,900,000, which shall be dated October 5, 2016 and mature on
September 1, 2024, shall be issued in fully registered form and shall bear interest from
October 5, 2016. The Series 2016 Note shall be issued initially in the denomination of
5,900,000.
The Series 2016 Note shall be payable as to interest and principal by check or
draft of the Paying Agent, mailed to the owner of record thereof, or by bank wire or
transfer as such owner may specify in writing to the Issuer or otherwise as such owner
and the Issuer shall agree, as such owner shall appear on the registration books of the
Issuer on the 15th day of the month prior to such Payment Date. Principal of and interest
on the Series 2016 Note shall be payable in any coin or currency of the United States of
America which, on the date of payment, are legal tender for the payment of public and
private debts.
Interest on the Series 2016 Note shall accrue until payment in full of the Series
2016 Note at the rate of 1.450% per annum, computed based on a 30 over 360 day basis,
subject to adjustment from time to time as set forth in this paragraph and in Section 2.06
hereof, and shall be payable semi-annually on each March 1 and September 1,
commencing on March 1, 2017 (accruing (a) from and including each March 1st through
and including the following August 31 st, and (b) from and including each September 1 st
through and including the following February 28th, or 29th as applicable, each an
"Accrual Period"). Upon and during the continuance of an Event of Default the Series
2016 Note shall bear interest at the Default Rate. Principal on the Series 2016 Note shall
be payable annually on September 1, commencing September 1, 2017, in the amounts set
forth below, with the final such payment due September 1, 2024.
Resolution No. 16-1413
Page 10
Dates
September 1, 2017
September 1, 2018
September 1, 2019
September 1, 2020
September 1, 2021
September 1, 2022
September 1, 2023
September 1, 2024*
*Final Maturity
Principal Payments
$688,000
713,000
723,000
734,000
744,000
755,000
766,000
777,000
All payments of principal and interest shall be made on the first Business Day
immediately following an Accrual Period.
SECTION 2.02. APPLICATION OF SERIES 2016 NOTE PROCEEDS.
The proceeds derived from the sale of the Series 2016 Note, including accrued interest
and premium, if any, shall, simultaneously with the delivery of the Series 2016 Note to
the purchaser thereof, be applied by the Issuer as follows:
(a) An amount of the Series 2016 Note proceeds shall be applied to the
payment of costs and expenses relating to the issuance of the Series 2016 Note.
(b) The remaining amount of the Series 2016 Note proceeds shall be
deposited in the Construction Fund and used to finance the Cost of the Series 2016
Proj ects.
SECTION 2.03. EXECUTION OF BONDS. Bonds shall be executed in the
name of the Issuer with the manual or facsimile signature of the Mayor and the official
seal of the Issuer shall be imprinted thereon, attested and countersigned with the manual
or facsimile signature of the Clerk. In case any one or more of the officers who shall
have signed or sealed Bonds or whose facsimile signature shall appear thereon shall cease
to be such officer of the Issuer before the Bonds so signed and sealed have been actually
sold and delivered, such Bonds may nevertheless be sold and delivered as herein
provided and may be issued as if the person who signed or sealed such Bond had not
ceased to hold such office. Any Bond may be signed and sealed on behalf of the Issuer
by such person who at the actual time of the execution of such Bond shall hold the proper
office of the Issuer, although at the date of such Bond such person may not have held
such office or may not have been so authorized. The Issuer may adopt and use for such
purposes the facsimile signatures of any such persons who shall have held such offices at
any time after the date of the adoption of this Resolution, notwithstanding that either or
Resolution No. 16-1413
Page 11
both shall have ceased to hold such office at the time the Bonds shall be actually sold and
delivered.
SECTION 2.04. BONDS MUTILATED, DESTROYED, STOLEN OR
LOST. In case any Bond shall become mutilated, or be destroyed, stolen or lost, the
Issuer may, at its discretion, issue and deliver a new Bond of like tenor as the Bond so
mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond
upon surrender and cancellation of such mutilated Bond or in lieu of and substitution for
the Bond destroyed, stolen or lost, and upon the Holder furnishing the Issuer proof of its
ownership thereof and indemnity satisfactory to the Issuer, and complying with such
other reasonable regulations and conditions as the Issuer may prescribe and paying such
expenses as the Issuer may incur. All Bonds so surrendered or otherwise substituted shall
be canceled by the Clerk. If any Bonds shall have matured or been called for redemption
or be about to mature or be called for redemption, instead of issuing a substitute Bond,
the Issuer may pay the same or cause the Bond to be paid, upon being indemnified as
aforesaid, and if such Bonds be lost, stolen or destroyed, without surrender thereof.
Any such duplicate Bonds issued pursuant to this Section 2.04 shall constitute
original, additional contractual obligations on the part of the Issuer whether or not the
lost, stolen or destroyed Bond be at any time found by anyone, and such duplicate Bonds
shall be entitled to equal and proportionate benefits and rights as to lien on the Pledged
Revenues to the same extent as all other Bonds issued hereunder.
SECTION 2.05. INTERCHANGEABILITY, NEGOTIABILITY AND
TRANSFER. The Bonds, upon surrender thereof at the office of the Registrar with a
written instrument of transfer satisfactory to the Registrar, duly executed by the Holder
thereof or its attorney duly authorized in writing, may, at the option of the Holder thereof,
be exchanged for an equal aggregate principal amount of registered Bonds of the same
maturity of any other authorized denominations.
The Bonds issued under this Resolution shall be and have all the qualities and
incidents of negotiable instruments under the law merchant and the Uniform Commercial
Code of the State of Florida, subject to the provisions for registration of transfer
contained in this Resolution and in the Bonds. So long as any of the Bonds shall remain
Outstanding, the Issuer shall maintain and keep, at the office of the Registrar, books for
the registration of transfer of the Bonds.
The transfer of any Bond shall be registered only upon the books of the Issuer, at
the office of the Registrar, under such reasonable regulations as the Issuer may prescribe,
by the Holder thereof in person or by its attorney duly authorized in writing upon
surrender thereof together with a written instrument of transfer satisfactory to the
Registrar duly executed by the Holder or its duly authorized attorney with signature
guaranteed. Upon the registration of transfer of any such Bond, the Issuer shall issue, and
Resolution No. 16-1413
Page 12
cause to be authenticated, in the name of the transferee a new Bond or Bonds of the same
aggregate principal amount and maturity as the surrendered Bond or Bonds.
Notwithstanding the foregoing, the Series 2016 Note may not be transferred
except in whole. Further, the transfer of the Series 2016 Note shall be restricted to
Permitted Lenders. A "Permitted Lender" shall mean any bank, trust company, savings
institution, finance or leasing company, "qualified institutional buyer" (within the
meaning of Securities and Exchange Commission Rule 144A), insurance company or
subsidiary or affiliate of the Holder of the Series 2016 Note that is engaged as a regular
part of its business in making loans and is authorized to do business in the State.
In all cases in which Bonds shall be exchanged or the transfer of the Bonds shall
be registered, the Issuer shall execute and authenticate and deliver such Bonds in
accordance with the provisions of this Resolution. For every such exchange or
registration of transfer, the Issuer may make a charge sufficient to reimburse it for any
tax, fee or other governmental charge imposed by an entity other than the Issuer with
respect to such exchange or registration of transfer. The Issuer shall not be obligated to
make any such exchange or registration of transfer of Bonds during the fifteen (15) days
next preceding a Payment Date on the Bonds, or, in the case of any proposed redemption
of Bonds, then, during the fifteen (15) days next preceding the date of the first mailing of
notice of such redemption and, in the case of the Bonds called for redemption, continuing
until such redemption date.
SECTION 2.06. ADJUSTMENTS TO INTEREST RATE. (a) The interest
rate on the Series 2016 Note shall be subject to adjustment as described in Section 2.01
and this Section 2.06. The Holder of the Series 2016 Note or its assigns shall provide the
Issuer written notice of such adjustments.
(b) Subject to the provisions of Section 2.06(a) above, the interest rate on the
Series 2016 Note shall be adjusted (retroactively, if necessary) to provide the Holder of
the Series 2016 Note with the same after-tax yield on the Series 2016 Note if (i) a
Determination of Taxability shall occur, or (ii) the Series 2016 Note shall be determined
not to be a "qualified tax-exempt bond" within the meaning of Section 265(b)(3) of the
Code. In the case of either (i) or (ii) above, the Issuer shall also pay to the Holder of the
Series 2016 Note an amount equal to any interest, penalties or overdue interest and
additions to tax (as referred to in Subchapter A of Chapter 68 of the Code) owed by the
Holder of the Series 2016 Note as a result of the occurrence of a Determination of
Taxability or the Series 2016 Note no longer being a "qualified tax-exempt bond."
(c) The above adjustments shall be cumulative, but in no event shall the
interest rate on the Series 2016 Note exceed the maximum rate permitted by law. The
above adjustments to the interest rate on the Series 2016 Note shall be effective on (i) the
earlier of the date of the Determination of Taxability or the date on which the interest on
Resolution No. 16-1413
Page 13
the Series 2016 Note became taxable by virtue of the Determination of Taxability, or (ii)
the date the Series 2016 Note is no longer deemed to be a "qualified tax-exempt bond"
within the meaning of Section 265(b)(3) of the Code; provided such adjustment shall not
become payable until after notice has been given pursuant to Section 2.06(a) hereof.
Interest on the Series 2016 Note and all other tax rates and interest rates are expressed as
annual rates. However, proper partial adjustment shall be made if the tax law change is
effective after the first day of the Bondholder's tax year or if interest on the Series 2016
Note does not accrue for the entire tax year of the Bondholder.
(d) If any adjustments made to the interest rate on the Series 2016 Note
pursuant to the terms of this Section shall cause such interest rate to be in violation of the
maximum interest rate provisions of Section 215.84, Florida Statutes, the Series 2016
Note shall be subject to mandatory redemption, upon 30 days' notice from the
Bondholder or its assigns to redeem the Series 2016 Note.
SECTION 2.07. FORM OF BONDS. The text of the Bonds shall be in
substantially the following form of the Series 2016 Note with such omissions, insertions
and variations, as may be necessary and/or desirable and approved by the Mayor prior to
the issuance thereof (which necessity and/or desirability and approval shall be presumed
by such officer's execution of the Bonds and the Issuer's delivery of the Bonds to the
purchaser or purchasers thereof):
* * * * * BEGIN FORM OF SERIES 2016 NOTE * * * * *
Resolution No. 16-1413
Page 14
No. RA-1
UNITED STATES OF AMERICA
STATE OF FLORIDA
CITY OF LONGWOOD, FLORIDA
TRANSPORTATION IMPROVEMENT REVENUE NOTE,
SERIES 2016
5,900,000
KNOW ALL MEN BY THESE PRESENTS that the City of Longwood, Florida
(the "Issuer"), for value received, hereby promises to pay, in the manner provided herein,
to WHITNEY BANK DB/A HANCOCK BANK, as registered owner, or registered
assigns (the "Holder"), the principal sum of
5,900,000.00
solely from the Pledged Revenues (hereinafter defined) and to pay interest on the unpaid
balance thereof from the date hereof. Interest shall be payable in arrears on the dates set
forth below, at an annual rate equal to 1.450% per annum, computed based on a 30 over
360 day basis, subject to adjustment as described herein. The principal of this Series
2016 Note shall be payable on September 1, 2017 and annually thereafter in the amounts
set forth below on September 1 of each year, through and including September 1, 2024,
on which date all unpaid principal and interest due shall be due and payable in full:
Year (September 1)
2017
2018
2019
2020
2021
2022
2023
2024*
*Final Maturity
Amount
$688,000
713,000
723,000
734,000
744,000
755,000
766,000
777,000
Interest shall be payable on each March 1 and September 1, commencing March 1,
2017 (accruing (a) from and including each March 1st through and including the
following August 31st, and (b) from and including each September 1st through and
including the following February 28th, or 29th as applicable, each an "Accrual Period").
All payments of principal and interest shall be made on the first Business Day
Resolution No. 16-1413
Page 15
immediately following an Accrual Period. The interest rate on this Series 2016 Note is
subject to adjustment as provided for in the Resolution defined below.
Both principal of and interest on this Series 2016 Note are payable in lawful
money of the United States of America by check or draft of the Paying Agent (as defined
in the Resolution) appointed by the Issuer to the owner of record hereof, or by bank wire
or transfer as such owner may specify in writing to the Issuer or otherwise as such owner
and the Issuer shall agree, as such owner shall appear in the registration books of the
Issuer on the 15th day of the month prior to such payment date. If a payment date for this
Series 2016 Note is not a Business Day, such payment date shall be the next succeeding
Business Day, with interest accruing at the interest rate then due hereon until payment is
made. Upon payment in full of this Series 2016 Note, the Holder hereof agrees to return
the same to the Issuer.
This Series 2016 Note is issued for the principal purpose of providing moneys to
finance or refinance the cost of certain transportation -related capital improvements as
specified and defined in the Resolution, under the authority of and in full compliance
with the Constitution and laws of the State of Florida, particularly Chapter 166, Florida
Statutes, Section 212.055(2), Florida Statutes, Section 336.025, Florida Statutes, the
Issuer's Charter, the Issuer's Ordinance No. 16-2096, duly enacted by the City
Commission on October 3, 2016 (the "Financing Ordinance"), the Issuer's Resolution No.
16-1413, duly adopted by the City Commission on October 3, 2016 (the "Resolution"),
and other applicable provisions of law (the "Act") and is subject to all the terms and
conditions of the Resolution.
This Series 2016 Note and the interest hereon are payable from and secured by an
irrevocable lien upon and pledge of (1) revenues derived by the Issuer from the first six
cents of the local option gas tax on motor fuel and special fuel authorized pursuant to
Section 336.025(1)(a), Florida Statutes, as more particularly described in the Resolution,
(2) revenues derived by the Issuer from the one -cent local government infrastructure sales
surtax received by the City pursuant to Section 212.055(2), Florida Statutes, as more
particularly described in the Resolution, and (3) until applied in accordance with the
provisions of the Resolution, all moneys, including investments thereof, in the funds and
accounts established under the Resolution (other than the Rebate Account), all in the
manner and to the extent described in the Resolution (collectively, the "Pledged
Revenues").
IT IS EXPRESSLY AGREED BY THE HOLDER OF THIS SERIES 2016 NOTE
THAT THE FULL FAITH AND CREDIT OF THE ISSUER, THE STATE OF
FLORIDA, OR ANY POLITICAL SUBDIVISION THEREOF, ARE NOT PLEDGED
TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST
ON THIS SERIES 2016 NOTE AND THAT SUCH HOLDER SHALL NEVER HAVE
THE RIGHT TO REQUIRE OR COMPEL THE EXERCISE OF ANY AD VALOREM
Resolution No. 16-1413
Page 16
TAXING POWER OF THE ISSUER, THE STATE OF FLORIDA, OR ANY
POLITICAL SUBDIVISION THEREOF, TO THE PAYMENT OF SUCH PRINCIPAL,
PREMIUM, IF ANY, AND INTEREST. THIS SERIES 2016 NOTE AND THE
OBLIGATION EVIDENCED HEREBY SHALL NOT CONSTITUTE A LIEN UPON
ANY PROPERTY OF THE ISSUER OR THE SERIES 2016 PROJECTS (AS
DESCRIBED IN THE RESOLUTION), BUT SHALL CONSTITUTE A LIEN ONLY
ON, AND SHALL BE PAYABLE FROM, THE PLEDGED REVENUES TO THE
EXTENT DESCRIBED IN THE RESOLUTION.
Neither the Mayor or any other members of the City Commission of the Issuer,
any person executing this Series 2016 Note, nor any other officer or employee of the
Issuer, shall be liable personally hereon or be subject to any personal liability or
accountability by reason of the issuance hereof.
The transfer of this Series 2016 Note is registrable in accordance with the terms of
the Resolution only upon the books of the Issuer kept for that purpose at the principal
office of the Registrar (as defined in the Resolution) by the Holder hereof in person or by
its attorney duly authorized in writing, upon the surrender of this Series 2016 Note
together with a written instrument of transfer satisfactory to the Registrar duly executed
by the Holder or its attorney duly authorized in writing, and thereupon a new Note in the
same aggregate principal amount shall be issued to the transferee in exchange therefor,
and upon the payment of the charges, if any, permitted by the Resolution, subject to the
restrictions set forth in the Resolution. This Series 2016 Note is issuable in fully
registered form initially in the denomination of 5,900,000. The Issuer and any Paying
Agent may treat the registered Holder of this Series 2016 Note as the absolute owner
hereof for all purposes, whether or not this Series 2016 Note shall be overdue, and shall
not be affected by any notice to the contrary.
This Series 2016 Note is subject to optional redemption prior to its stated date of
maturity, in whole but not in part, on any date, at a price of 100% of the principal amount
thereof, plus accrued interest to the redemption date, with 10 days advance written notice
to the Holder hereof. This Note is subject to optional redemption prior to its stated date
of maturity in part on any principal payment date (September 1) at a price of 100% of the
principal amount thereof, plus accrued interest to the redemption date, with 10 days
advance written notice to the Holder hereof, provided that (i) any such partial principal
redemptions shall be in multiples of $1,000, and (ii) partial redemptions shall be applied
to scheduled principal payments in inverse order. This Series 2016 Note is also subject to
mandatory redemption under certain circumstances, as described in the Resolution.
Reference to the Resolution and any and all resolutions supplemental thereto and
modifications and amendments thereof, to the Financing Ordinance and any and all
ordinances supplemental thereto and modifications and amendments thereof, and to the
Act is made for a description of the pledge and covenants securing this Series 2016 Note,
Resolution No. 16-1413
Page 17
the nature, manner and extent of enforcement of such pledge and covenants and the
rights, duties, immunities and obligations of the Issuer.
It is hereby certified and recited that all acts, conditions and things required to
exist, to happen and to be performed precedent to and in connection with the issuance of
this Series 2016 Note, exist, have happened and have been performed, in regular and due
form and time as required by the laws and Constitution of the State of Florida applicable
thereto, and that the issuance of this Series 2016 Note does not violate any constitutional
or statutory limitations or provisions.
IN WITNESS WHEREOF, the City Commission of the City of Longwood,
Florida has issued this Series 2016 Note and has caused the same to be executed by the
manual or facsimile signature of its Mayor, its official seal or a facsimile thereof to be
affixed or reproduced hereon, and countersigned and attested to by the manual or
facsimile signature of its Clerk, all as of the 5th day of October, 2016.
(SEAL)
ATTEST:
Michelle Longo, City Clerk
CITY OF LONGWOOD, FLORIDA
Joseph Durso, Mayor
Resolution No. 16-1413
Page 18
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
Insert Social Security or Other Identifying Number of Assignee
(Name and Address of Assignee)
the within Series 2016 Note and does hereby irrevocably constitute and appoint
as attorneys to register the transfer of
the said Series 2016 Note on the books kept for registration thereof with full power of
substitution in the premises.
Dated:
Signature guaranteed:
NOTICE: Signature(s) must be
guaranteed by an institution which is a
participant in the Securities Transfer
Agent Medallion Program (STAMP) or
similar program.
NOTICE: The signature to this assignment
must correspond with the name of the
registered Holder as it appears upon the
face of the within Series 2016 Note in
every particular, without alteration or
enlargement or any change whatever and
the Social Security or other identifying
number of such assignee must be supplied.
* * * * * END FORM OF SERIES 2016 NOTE
Resolution No. 16-1413
Page 19
ARTICLE III
REDEMPTION OF BONDS
SECTION 3.01. NOTICE OF REDEMPTION. Except as otherwise
provided herein or by Supplemental Resolution, notice of any redemption, which shall
specify the Bond or Bonds (or portions thereof) to be redeemed, the Redemption Price
thereof and the date and place for redemption, shall be mailed first class, postage prepaid,
at least ten (10) days prior to the redemption date to all Holders of Bonds to be redeemed
at their addresses as they appear on the registration books kept by the Registrar.
SECTION 3.02. REDEMPTION OF PORTIONS OF BONDS. Notice of
redemption having been given substantially as aforesaid, the Bonds or portions of Bonds
so to be redeemed shall, on the redemption date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the Issuer shall
default in the payment of the Redemption Price) such Bonds or portions of Bonds shall
cease to bear interest.
SECTION 3.03. PURCHASE OF BONDS BY ISSUER. Any Bonds
purchased by the Issuer shall be canceled.
SECTION 3.04. PERMITTED AND REQUIRED REDEMPTIONS OF
THE SERIES 2016 NOTE. (a) The Series 2016 Note is subject to optional redemption
prior to its stated date of maturity, in whole but not in part, on any date at a price of 100%
of the principal amount thereof, plus accrued interest to the redemption date, with 10 days
advance written notice to the Holder thereof. The Series 2016 Note is subject to optional
redemption prior to its stated date of maturity in part on any principal payment date
(September 1) at a price of 100% of the principal amount thereof, plus accrued interest to
the redemption date, with 10 days advance written notice to the Holder thereof, provided
that (i) any such partial principal redemptions shall be in multiples of $1,000, and (ii)
partial redemptions shall be applied to scheduled principal payments in inverse order.
(b) The Series 2016 Note shall be subject to mandatory redemption in whole, at
a price equal to the Redemption Price, upon the occurrence of the circumstances
described in Section 2.06(d) hereof.
Resolution No. 16-1413
Page 20
ARTICLE IV
SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF
SECTION 4.01. BONDS NOT TO BE INDEBTEDNESS OF ISSUER. The
Bonds shall not be or constitute a general obligation or indebtedness of the Issuer as
"bonds" within the meaning of any constitutional or statutory provision, but shall be
special obligations of the Issuer, payable from and secured by a lien upon and pledge of
the Pledged Revenues in accordance with the terms of this Resolution. No Holder of any
Bond shall ever have the right to compel the exercise of any ad valorem taxing power to
pay such Bond, or be entitled to payment of such Bond from any moneys of the Issuer,
except from the Pledged Revenues, in the manner provided herein. The Bonds and the
obligation evidenced hereby shall not constitute a lien upon any property of the Issuer or
the Series 2016 Projects but shall constitute a lien only on, and shall be payable from, the
Pledged Revenues to the extent described in this Resolution.
SECTION 4.02. SECURITY FOR THE BONDS. The payment of the
principal of or Redemption Price, if applicable, and interest on the Bonds shall be secured
forthwith equally and ratably by a pledge of and lien upon the Pledged Revenues. The
Issuer does hereby irrevocably pledge the Pledged Revenues to the payment of the
principal of or Redemption Price, if applicable, and interest on the Bonds in accordance
with the provisions hereof. The pledge of the Pledged Revenues shall be cumulative until
payment in full of the Bonds. The Pledged Revenues shall immediately be subject to the
lien of this pledge without any physical delivery thereof or further act, and the lien of this
pledge shall be valid and binding as against all parties having claims of any kind in tort,
contract or otherwise against the Issuer.
SECTION 4.03. CONSTRUCTION FUND. The Issuer covenants and agrees
to establish a special fund to be known as the "City of Longwood, Florida Improvement
Revenue Bonds, Construction Fund," which shall be used only for payment of the Cost of
the Projects. Moneys in the Construction Fund, until applied in payment of any item of
the Cost of a Project in the manner hereinafter provided, shall be held in trust by the
Issuer, and shall be subject to a lien and charge in favor of the Holders of the Bonds and
for the further security of such Holders.
The proceeds of insurance maintained against physical loss of or damage to any
Project, or the contractors' performance bonds with respect thereto pertaining to the
period of construction thereof, shall be deposited into the Construction Fund.
The Issuer covenants that the acquisition, construction and installation of each
Project will be completed without delay and in accordance with sound engineering
practices. The Issuer shall make disbursements or payments from the Construction Fund
to pay the Cost of a Project. The Issuer shall keep records of such disbursements and
payments and shall retain all such records for six (6) years from the dates of such records.
Resolution No. 16-1413
Page 21
Notwithstanding any of the other provisions of this Section 4.03, to the extent that
other moneys are not available therefor, amounts in the Construction Fund shall be
applied to the payment of principal and interest on Bonds, when due.
The date of completion of acquisition and construction of each Project shall be
determined by an Authorized Issuer Officer who shall certify such fact in writing to the
City Commission. Promptly after the date of the completion of each Project, and after
paying or making provisions for the payment of all unpaid items of the Cost of the
Project, the Issuer shall deposit any balance of moneys remaining in the Construction
Fund to the Redemption Account.
SECTION 4.04. FUND AND ACCOUNTS. The Issuer covenants and agrees
to establish a special fund to be known as the "City of Longwood, Florida Improvement
Revenue Bonds Debt Service Fund." The Issuer shall maintain in the Debt Service Fund
four accounts: the "Revenue Account," the "Payment Account," the "Redemption
Account" and the "Rebate Account." Moneys in the aforementioned fund and accounts
(other than moneys on deposit in the Rebate Account), until applied in accordance with
the provisions hereof, shall be held in trust for and be subject to a lien and charge in favor
of the Holders of the Bonds and for the further security of such Holders.
SECTION 4.05. FLOW OF FUNDS.
(a) All Gas Tax Revenues and Sales Tax Revenues shall be deposited, as
received, into the Revenue Account of the Debt Service Fund. Not later than the last day
of each month, the Issuer shall apply such moneys in the following manner and in the
following order of priority:
(1) Payment Account. The Issuer shall deposit or credit to the Payment
Account of the Debt Service Fund, from the Revenue Account, the sum which,
together with the balance in said Account, shall equal (i) the interest on all
Outstanding Bonds accrued and unpaid and to accrue to the end of the current
calendar month, and (ii) the principal next due which would have accrued on said
Bonds during the then current calendar month if such principal amounts were
deemed to accrue daily (assuming that a year consists of twelve (12) calendar
months of thirty (30) days each) in equal amounts from the next preceding
principal payment due date, or if there is no such preceding principal payment due
date, from a date twelve months preceding the due date of such principal amount.
Moneys in the Payment Account shall be used for payment of principal of and
interest on the Bonds when the same become due and payable. In the event the
Issuer shall determine that any moneys in the Payment Account shall not be
required to pay the principal or interest of Bonds coming due on the otherwise
corresponding Payment Date because such Bonds have been called or redeemed or
Resolution No. 16-1413
Page 22
due to an excess of funds in such account, the Issuer shall transfer such moneys to
the Redemption Account.
(2) Rebate Account. The Issuer shall next deposit into the Rebate
Account, from the Revenue Account, all amounts required to be deposited therein
in order to make timely rebate payments to the United States government pursuant
to Section 4.06 hereof.
(3) Redemption Account. The Issuer shall next deposit into the
Redemption Account any amount to be applied to the redemption of Bonds
pursuant to Article III hereof. Excess moneys on deposit in the Construction Fund
shall be deposited to the Redemption Account in accordance with the provisions of
Section 4.03 hereof.
(4) Remaining Amount. The balance of any moneys remaining in the
Revenue Account after payment of amounts required by Section 4.05(a)(1)
through 4.05(a)(3) hereof may be used for any lawful purpose.
(b) On or before the date established for payment of any principal of or
Redemption Price, if applicable, or interest on the Bonds, the Issuer shall withdraw from
the appropriate account of the Debt Service Fund sufficient moneys to pay such principal
or Redemption Price, if applicable, and interest.
SECTION 4.06. REBATE ACCOUNT. Amounts on deposit in the Rebate
Account shall be held in trust by the Issuer and used solely to make required rebates to
the United States (except to the extent the same may be transferred to the Revenue
Account) and the Bondholders shall have no right to have the same applied for debt
service on the Bonds. The Issuer agrees to undertake all actions required of it in its
Certificate as to Arbitrage and Certain Other Tax Matters, dated the date of issuance of
the Bonds, relating to such Bond, as well as any successor Certificate thereto, including,
but not limited to:
(a) snaking a determination in accordance with the Code of the amount
required to be deposited in the Rebate Account;
(b) depositing the amount determined in clause (a) above in the Rebate
Account;
(c) paying on the dates and in the manner required by the Code to the United
States Treasury from the Rebate Account and any other legally available moneys of the
Issuer such amounts as shall be required by the Code to be rebated to the United States
Treasury; and
Resolution No. 16-1413
Page 23
(d) keeping such records of the determinations made pursuant to this Section
4.06 as shall be required by the Code, as well as evidence of the fair market value of any
investments purchased with "gross proceeds" of the Bonds (as defined in the Code).
The provisions of the above -described Certificate as to Arbitrage and Certain
Other Tax Matters may be amended from time to time as shall be necessary, in the
opinion of Bond Counsel, to comply with the provisions of the Code.
SECTION 4.07. INVESTMENTS. The Construction Fund and the Debt
Service Fund shall be continuously secured in the manner by which the deposit of public
funds are authorized to be secured by the laws of the State. Moneys on deposit in the
Construction Fund and the Debt Service Fund may be invested and reinvested in
Authorized Investments maturing not later than the date on which the moneys therein will
be needed. Any and all income received by the Issuer from the investment of moneys in
the Construction Fund, the Revenue Account, the Payment Account and the Rebate
Account shall be retained in such respective Fund or Account. Any and all income
received by the Issuer from the investment of moneys in the Redemption Account shall
be transferred to the Revenue Account. All investments shall be valued at amortized
cost.
Nothing contained in this Resolution shall prevent any Authorized Investments
acquired as investments of or security for funds held under this Resolution from being
issued or held in book -entry form on the books of the Department of the Treasury of the
United States.
SECTION 4.08. SEPARATE ACCOUNTS. The moneys required to be
accounted for in each of the foregoing funds and accounts established herein may be
deposited in a single bank account, and funds allocated to the various funds and accounts
established herein may be invested in a common investment pool, provided that adequate
accounting records are maintained to reflect and control the restricted allocation of the
moneys on deposit therein and such investments for the various purposes of such funds
and accounts as herein provided.
The designation and establishment of the various funds and accounts in and by this
Resolution shall not be construed to require the establishment of any completely
independent, self -balancing funds as such term is commonly defined and used in
governmental accounting, but rather is intended solely to constitute an earmarking of
certain revenues for certain purposes and to establish certain priorities for application of
such revenues as herein provided.
Resolution No. 16-1413
Page 24
ARTICLE V
COVENANTS OF THE ISSUER
SECTION 5.01. BOOKS AND RECORDS. The Issuer will keep books and
records of the receipt of the Gas Tax Revenues and Sales Tax Revenues and the funds
and accounts established hereunder in accordance with generally accepted accounting
principles, and the Holder or Holders of the Bonds shall have the right at all reasonable
times to inspect the records, accounts and data of the Issuer relating thereto.
SECTION 5.02. ISSUANCE OF ADDITIONAL BONDS. No Additional
Bonds, payable on a parity with the Bonds then Outstanding pursuant to this Resolution,
shall be issued except upon the conditions and in the manner herein provided. The Issuer
may issue one or more series of Additional Bonds for any one or more of the following
purposes: (1) financing the Cost of a Project, or the completion thereof; or (2) refunding
any or all Outstanding Bonds or any subordinated indebtedness of the Issuer.
No such Additional Bonds shall be issued unless the following conditions are
complied with:
(a) There shall have been obtained and filed with the Issuer and the
Holder of the Series 2016 Note a statement of the Clerk: (1) stating that the books
and records of the Issuer relating to the Gas Tax Revenues and the Sales Tax
Revenues have been examined; (2) setting forth the amount of the Gas Tax
Revenues and the Sales Tax Revenues which has been received by the Issuer
during any twelve (12) consecutive months designated by the Issuer within the
eighteen (18) months immediately preceding the date of delivery of such
Additional Bonds with respect to which such statement is made; and (3) stating
that the amount of the Gas Tax Revenues and the Sales Tax Revenues received
during the aforementioned 12-month period equals at least 1.25 times the
Maximum Annual Debt Service of all Bonds then Outstanding and such
Additional Bonds with respect to which such statement is made.
(b) For the purpose of determining the Maximum Annual Debt Service
under Section 5.02(A) hereof, the interest rate on additional parity variable rate
Bonds then proposed to be issued and on Outstanding variable rate Bonds shall be
deemed to be the maximum interest rate applicable thereto.
(c) Additional Bonds shall be deemed to have been issued pursuant to
this Resolution the same as the Outstanding Bonds, and all of the other covenants
and other provisions of this Resolution (except as to details of such Additional
Bonds inconsistent therewith) shall be for the equal benefit, protection and
security of the Holders of all Bonds issued pursuant to the Resolution. All Bonds,
regardless of the time or times of their issuance, shall rank equally with respect to
Resolution No. 16-1413
Page 25
their lien on the Pledged Revenues and their sources and security for payment
therefrom without preference of any Bonds over any other.
(d) No Additional Bonds shall be issued hereunder if any Event of
Default shall have occurred and be continuing hereunder.
SECTION 5.03. ANNUAL AUDIT, BUDGET AND OTHER FINANCIAL
INFORMATION. (a) The Issuer shall, immediately after the close of each Fiscal Year,
cause the financial statements of the Issuer to be properly audited by a recognized
independent certified public accountant or recognized independent firm of certified
public accountants, and shall require such accountants to complete their report on the
annual financial statements in accordance with applicable law. The annual financial
statements shall be prepared in conformity with generally accepted accounting principles.
A copy of the Issuer's Comprehensive Annual Financial Report, which contains the
audited financial statements for each Fiscal Year, shall be furnished to the Bondholder, at
no cost, as soon as it becomes available but not later than 210 days after each Fiscal Year
end.
(b) Upon written request, the Issuer shall provide the Bondholder, at no cost,
with a copy of the annual budget for the next Fiscal Year and any other financial
information the Bondholder may reasonably request.
SECTION 5.04. NO IMPAIRMENT. The pledging of the Pledged Revenues
in the manner provided herein shall not be subject to repeal, modification or impairment
by any subsequent ordinance, resolution or other proceedings of the City Commission
without the prior written consent of the Holders of all Outstanding Bonds.
SECTION 5.05. FEDERAL INCOME TAX COVENANTS. The Issuer
covenants with the Holders of the Bonds that it shall not use the proceeds of the Bonds in
any manner which would cause the interest on such Bonds to be included in gross income
for purposes of federal income taxation (to the extent not otherwise included therein on
the date of issuance of the Bonds).
The Issuer covenants with the Holders of the Bonds that neither the Issuer nor any
Person under its control or direction will make any use of the proceeds of such Bonds (or
amounts deemed to be proceeds under the Code) in any manner which would cause such
Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code and neither
the Issuer nor any other Person shall do any act or fail to do any act which would cause
the interest on such Bonds to be included in gross income for purposes of federal income
taxation (to the extent not otherwise included therein on the date of issuance of the
Bonds).
The Issuer hereby covenants with the Holders of the Bonds that it will comply
with all provisions of the Code necessary to maintain the exclusion of interest on the
Resolution No. 16-1413
Page 26
Bonds from gross income for purposes of federal income taxation (to the extent not
otherwise included therein on the date of issuance of the Bonds), including, in particular,
the payment of any amount required to be rebated to the United States Treasury pursuant
to the Code.
SECTION 5.06. ELIGIBILITY FOR RECEIPT AND USE OF PLEDGED
REVENUES. The Issuer covenants to do all things necessary on its part to maintain, and
take no action that would impair, its receipt of the Gas Tax Revenues and the Sales Tax
Revenues, or its eligibility to participate in the distribution of the Gas Tax Revenues and
Sales Tax Revenues required, under State law and the Interlocal Agreements, and to use
the proceeds of Bonds issued pursuant to this Resolution only for those Projects which
may be eligible for funding from Pledged Revenues under State law and in accordance
with the Interlocal Agreements.
SECTION 5.07. OTHER MONEYS. The Issuer may, in its sole discretion,
utilize other legally available moneys, in addition to the Pledged Revenues, to pay the
principal of and interest on the Bonds.
Resolution No. 16-1413
Page 27
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. The following events shall each
constitute an 'Event of Default":
(a) Default shall be made in the payment of the principal of, redemption
premium, if any, or interest on any Bond, when due.
(b) The Issuer shall default in the due and punctual performance of any other of
the covenants, conditions, agreements and provisions contained in the Bonds or in this
Resolution (other than defaults referenced in Section 6.01(a) and Section 6.01(c) hereof)
on the part of the Issuer to be performed, and such default shall continue for a period of
thirty (30) days after written notice of such default shall have been received from the
Holders of not less than ten percent (10%) of the aggregate principal amount of the
Outstanding Bonds. Notwithstanding the foregoing, and provided that no such grace
period shall exceed sixty (60) days, the Issuer shall not be deemed in default hereunder if
such default can be cured within a reasonable period of time and if the Issuer in good
faith institutes curative action and diligently pursues such action until the default has
been corrected.
(c) An Act of Bankruptcy shall have occurred with respect to the Issuer.
Notice of any default by the Issuer hereunder shall be given immediately to the
Bondholders.
SECTION 6.02. REMEDIES. Whenever any Event of Default referred to in
Section 6.01 hereof shall have happened and be continuing, the Bondholders or their
assigns, may take one or any combination of the following remedial steps:
(a) Have reasonable access to and inspect, examine and make copies of the
books and records and any and all accounts and data of the Issuer during regular business
hours; or
(b) Take whatever action at law or in equity may appear necessary or desirable
to collect the amounts then due and thereafter to become due, or to enforce performance
and observance of any obligation, agreement or covenant of the Issuer under this
Resolution or to enforce the lien granted hereunder on the Pledged Revenues.
Notwithstanding the foregoing, no Bondholder shall have the right to declare the
unpaid principal amount of any Bond immediately due and payable. In the event the
Issuer subsequently amends the Resolution to permit a Bondholder to declare the unpaid
principal amount of any Bond immediately due and payable, the Issuer hereby agrees that
Resolution No. 16-1413
Page 28
the Holder of the Series 2016 Note shall also have that right. In addition, the Issuer will
reimburse the Holder of the Series 2016 Note and its agents for all reasonable legal and
collection costs incurred in the exercise of its remedies or to collect its payments in the
case of an Event of Default, and such Holder's remedies can be exercised independently
of all other Bondholders, and no other Bondholder or creditor approvals will be required
prior to the execution of such remedies.
SECTION 6.03. REMEDIES CUMULATIVE. No remedy herein conferred
upon or reserved to the Bondholders is intended to be exclusive of any other remedy or
remedies, and each and every such remedy shall be cumulative, and shall be in addition
to every other remedy given hereunder or now or hereafter existing at law or in equity or
by statute. If any remedial action is discontinued or abandoned, the Bondholders shall be
restored to their former position.
SECTION 6.04. WAIVER OF DEFAULT. No delay or omission of any
Bondholder to exercise any right or power accruing upon any default shall impair any
such right or power or shall be construed to be a waiver of any such default, or an
acquiescence therein; and every power and remedy given by this Article VI to the
Bondholders may be exercised from time to time, and as often as may be deemed
expedient.
Resolution No. 16-1413
Page 29
ARTICLE VII
SUPPLEMENTAL RESOLUTIONS
SECTION 7.01. SUPPLEMENTAL RESOLUTIONS. The Holder or
Holders of not less than a majority in aggregate principal amount of the Bonds then
Outstanding shall have the right, from time to time, anything contained in this Resolution
other than in this Section 7.01 to the contrary notwithstanding, to consent to and approve
the adoption of such Supplemental Resolution or Resolutions hereto as shall be deemed
necessary or desirable by the Issuer for the purpose of supplementing, modifying,
altering, amending, adding to or rescinding, in any particular, any of the terms or
provisions contained in this Resolution; provided, however, that (i) if such modification
or amendment will, by its terms, not take effect so long as any Bonds of any series
remain Outstanding, the consent of the Holders of such Bonds shall not be required and
such Bonds shall not be deemed to be Outstanding for the purpose of any calculation of
Outstanding Bonds under this Section 7.01, and (ii) no consent shall be required for
Supplemental Resolutions adopted solely for the purposes of issuing Additional Bonds
pursuant to Section 5.02 hereof. No Supplemental Resolution may be approved or
adopted without approval of the owners of 100% in aggregate principal amount of Bonds
then Outstanding which shall permit or require (a) an extension of the maturity of the
principal of or the payment of the interest on any Bond issued hereunder, (b) reduction in
the principal amount of any Bond or the Redemption Price or the rate of interest thereon,
(c) the creation of a lien upon or a pledge of the Pledged Revenues other than the lien and
pledge created by this Resolution or any other lien or pledge permitted by the terms of
this Resolution which materially adversely affects any Bondholders, (d) a preference or
priority of any Bond or Bonds over any other Bond or Bonds, or (e) a reduction in the
aggregate principal amount of the Bonds required for consent to such Supplemental
Resolution.
If at any time the Issuer shall determine that it is necessary or desirable to adopt
any Supplemental Resolution pursuant to this Section 7.01, the Clerk shall give notice of
the proposed adoption of such Supplemental Resolution and the form of consent to such
adoption to be mailed, first class mail, postage prepaid, to all Bondholders at their
addresses as they appear on the registration books. Such notice shall briefly set forth the
nature of the proposed Supplemental Resolution and shall state that copies thereof are on
file at the offices of the Clerk for inspection by all Bondholders. The Issuer shall not,
however, be subject to any liability to any Bondholder by reason of its failure to cause the
notice required by this Section 7.01 to be mailed and any such failure shall not affect the
validity of such Supplemental Resolution when consented to and approved as provided in
this Section 7.01.
Whenever the Issuer shall deliver to the Clerk an instrument or instruments in
writing purporting to be executed by the Holders of not less than a majority in aggregate
Resolution No. 16-1413
Page 30
principal amount of the Bonds then Outstanding, which instrument or instruments shall
refer to the proposed Supplemental Resolution described in such notice and shall
specifically consent to and approve the adoption thereof in substantially the form of the
copy thereof referred to in such notice, thereupon, but not otherwise, the Issuer may
adopt such Supplemental Resolution in substantially such form, without liability or
responsibility to any Holder of any Bond, whether or not such Holder shall have
consented thereto.
If the Holders of not less than a majority in aggregate principal amount of the
Bonds Outstanding at the time of the adoption of such Supplemental Resolution shall
have consented to and approved the adoption thereof as herein provided, no Holder of
any Bond shall have any right to object to the adoption of such Supplemental Resolution,
or to object to any of the terms and provisions contained therein or the operation thereof,
or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain
the Issuer from adopting the same or from taking any action pursuant to the provisions
thereof.
Upon the adoption of any Supplemental Resolution pursuant to the provisions of
this Section 7.01, this Resolution shall be deemed to be modified and amended in
accordance therewith, and the respective rights, duties and obligations under this
Resolution of the Issuer and all Holders of Bonds then Outstanding shall thereafter be
determined, exercised and enforced in all respects under the provisions of this Resolution
as so modified and amended.
Resolution No. 16-1413
Page 31
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. DEFEASANCE. If the Issuer shall pay or cause to be paid
or there shall otherwise be paid to the Holders of all Bonds the principal or Redemption
Price, if applicable, and interest due or to become due thereon, at the times and in the
manner stipulated therein and in this Resolution, then the pledge of the Pledged
Revenues, and all covenants, agreements and other obligations of the Issuer to the
Bondholders, shall thereupon cease, terminate and become void and be discharged and
satisfied.
Any Bonds or interest installments appertaining thereto, whether at or prior to the
maturity or redemption date of such Bonds, shall be deemed to have been paid within the
meaning of this Section 8.01 if (a) in case any such Bonds are to be redeemed prior to the
maturity thereof, there shall have been taken all action necessary to call such Bonds for
redemption and notice of such redemption shall have been duly given or provision shall
have been made for the giving of such notice, (b) there shall have been deposited in
irrevocable trust with a banking institution or trust company by or on behalf of the Issuer
either moneys in an amount which shall be sufficient, or Defeasance Obligations, which
in either case shall be verified by an independent certified public accountant to be in such
amount that the principal of and the interest on which when due will provide moneys
which, together with the moneys, if any, deposited with such banking institution or trust
company at the same time shall be sufficient, to pay the principal of or Redemption Price,
if applicable, and interest due and to become due on said Bonds on and prior to the
redemption date or maturity date thereof, as the case may be, and (c) the Issuer shall
receive an opinion of Bond Counsel to the effect that refunded Bonds are defeased in
accordance with this Section 8.01 and, therefore, are no longer Outstanding under this
Resolution. Except as hereafter provided, neither the Defeasance Obligations nor any
moneys so deposited with such banking institution or trust company nor any moneys
received by such banking institution or trust company on account of principal of or
Redemption Price, if applicable, or interest on said Defeasance Obligations shall be
withdrawn or used for any purpose other than, and all such moneys shall be held in trust
for and be applied to, the payment, when due, of the principal of or Redemption Price, if
applicable, of the Bonds for the payment or redemption of which they were deposited and
the interest accruing thereon to the date of maturity or redemption; provided, however,
the Issuer may substitute new Defeasance Obligations and moneys for the deposited
Defeasance Obligations and moneys if the new Defeasance Obligations and moneys are
verified by an independent certified public accountant as being sufficient to pay the
principal of or Redemption Price, if applicable, and interest on the refunded Bonds.
In the event the Bonds for which moneys are to be deposited for the payment
thereof in accordance with this Section 8.01 are not by their terms subject to redemption
Resolution No. 16-1413
Page 32
within the next succeeding sixty (60) days, the Issuer shall mail a notice to the Holders of
such Bonds that the deposit required by this Section 8.01 of moneys or Defeasance
Obligations has been made and said Bonds are deemed to be paid in accordance with the
provisions of this Section 8.01 and stating such maturity or redemption date upon which
moneys are to be available for the payment of the principal of or Redemption Price, if
applicable, and interest on said Bonds.
Nothing herein shall be deemed to require the Issuer to call any of the Outstanding
Bonds for redemption prior to maturity pursuant to any applicable optional redemption
provisions, or to impair the discretion of the Issuer in determining whether to exercise
any such option for early redemption.
SECTION 8.02. SALE OF BONDS; SALE OF SERIES 2016 NOTE. The
Bonds shall be issued and sold at public or private sale at one time or in installments from
time to time and at such price or prices as shall be consistent with the provisions of the
Act, the requirements of this Resolution and other applicable provisions of law. The
negotiated sale of the Series 2016 Note to the Initial Noteholder is hereby authorized at a
price equal to 100% of the principal amount of the Series 2016 Note. In addition, the
Issuer will pay the costs of the Initial Noteholder's counsel in connection with the closing
of the Series 2016 Note, in the amount of $4,000.00.
SECTION 8.03. APPOINTMENT OF PAYING AGENT AND
REGISTRAR. The Issuer hereby appoints the Clerk as Registrar and Paying Agent with
respect to the Series 2016 Note.
SECTION 8.04. SEVERABILITY OF INVALID PROVISIONS. If any
one or more of the covenants, agreements or provisions of this Resolution shall be held
contrary to any express provision of law or contrary to the policy of express law, though
not expressly prohibited, or against public policy, or shall for any reason whatsoever be
held invalid, then such covenants, agreements or provisions shall be null and void and
shall be deemed separable from the remaining covenants, agreements and provisions of
this Resolution and shall in no way affect the validity of any of the other covenants,
agreements or provisions hereof or of the Bonds issued hereunder.
SECTION 8.05. REPEAL OF INCONSISTENT RESOLUTIONS. All
resolutions or parts thereof in conflict herewith are hereby superseded and repealed to the
extent of such conflict.
SECTION 8.06. WAIVER OF RIGHT TO TRIAL BY JURY; VENUE.
The Issuer and, by their purchase of the Bonds, the Bondholders hereby irrevocably and
voluntarily waive any right they may have to a trial by jury in respect of any controversy
or claims between themselves, whether in contract, by tort or law, that arise out of or
relate to this Resolution or the Bonds or any document related hereto or thereto, and
agree that exclusive venue for such suit or action shall be Seminole County, Florida.
Resolution No. 16-1413
Page 33
SECTION 8.07. GENERAL AUTHORITY. The Mayor, Clerk, officers,
attorneys, or other agents or employees of the Issuer are hereby authorized to do all acts
and things (including without limitation, the execution and delivery of Bonds, documents,
agreements and instruments) required of them by this Resolution, the issuance of the
Series 2016 Note and the related financing documents, and to do all acts and things which
are desirable and consistent with the requirements hereof or of the financing documents,
for the full, punctual and complete performance of all the terms, covenants and
agreements contained herein, in the Series 2016 Note and in the financing documents. If
the Mayor is unavailable or unable at any time to perform any duties or functions
hereunder, then the Deputy Mayor or other duly authorized member of the City
Commission is hereby authorized to act on his behalf.
SECTION 8.08. EFFECTIVE DATE. This Resolution shall take effect
immediately upon its adoption.
DULY ADOPTED this 3rd day of October, 2016.
CITY OF LONGWOOD, FLORIDA
Ash urso, Mayor
ATTEST:
ichell&Loyjo; � Jerk
APPROVED AS TO FORM AND LEGALITY
FOR THE USE AND RELIANCE OF THE
CITY OF LONGWOOD, FLORIDA ONLY:
Resolution No. 16-1413
Page 34
EXHIBIT A
TERM SHEET FROM
WHITNEY BANK d/b/a HANCOCK BANK
Hancock Bank
PUBLIC FINANCE DEPARTMENT
Via Federal Express
August 18, 2016
Honorable Mayor and City Commission
City of Longwood, Florida
C/o Mr. Greg Kirby
Purchasing Manager
City of Longwood
155 W. Warren Avenue
Longwood, Florida 32750
C/o Mr. Mark P. Galvin
Director
FirstSouthwest, a Division
of Hilltop Securities
450 S. Orange Ave., Suite 460.
Orlando, Florida 32801
ORIGINAL
Re: City of Longwood RFP #08012016-2 dated August 1,, 2016 as amended (the `RFP")
$5,900,000 maximum Transportation Improvement Revenue Note, Series 2016
Please accept this letter as .a commitment of Hancock Bank (Whitney Bank doing business as
Hancock Bank) or the "Bank" to purchase the above captioned Note upon the terms and conditions
outlined below:
Issuer: City of Longwood, Florida.
Amount $5,900,000 maximum aggregate principal bank loan in , the form of a Transportation
Improvement Revenue Note, Series 2016 (the "Note" or "Series 2016 Note") of the Issuer.
Purpose of Issue: the Series 2016 Note proceeds will be used to finance various transportation
improvement projects as outlined in the City's RFP and to pay the cost of issuance related to the
financing (collectively the "Project").
113 Designer Cir6le / othan, AL 36303
334-792-8422 / Fax 334-792-8 4 / Toll Free (888) 516-7373
City of Longwood — $5,900,000 Transportation Improvement Revenue Note
Page 2
Authority for Issue: Provisions of the Florida Constitution, Chapter 166, Florida Statutes, and other
valid constitutional and statutory authority.
Dated Date of Note - Date of Delivery
Form of Certificates: The Note will be issued as a single typewritten or printed certificate, in fully
registered form.
Interest Rate & Tenn: Pursuant to the City's Request for Proposal (RFP) we are offering the
following interest rate and term:
Fixed Rate Option (Bank Qualified):
Fixed Rate option — fully funded ** on the day we close the loan as outlined below:
Annual
Term ## Interest Rate #
8 year term approximately
— fully amortized 1.45% (Bank Qualified tax exempt)
** The Issuer would fully fund the loan on the day we close the loan.
# The quoted fixed Interest rate is contingent upon the City accepting our proposal by no later than 20 days
from the date of this letter. If the City accepts our proposal by the stipulated time, we will hold the above
referenced fixed interest rate firm, provided that the Note is closed (fully funded) no later than 45 days from
the date of this proposal. Based on your-RFP (estimated closing date of September 22, 2016), the 45 day
time frame should provide more than adequate time to "lock -in" the interest rate. Should the Note not be
funded within the 45 day time frame a different rate would apply, which would be based upon market
conditions at the time the loan Is actually closed.
## Our pricing is based on the estimated amortization of principal that the City presented in its RFP. We
realize that the final amortization schedule could change slightly in order to better meet the Citys needs
and therefore we are open to some changes in this proposed amortization structure; however our pricing
is based on the final amortization of principal not having an average life that exceeds 4.65 years. Should
the final amortization have an average life that exceeds 4.65 years, our rate would be higher than that
offered above.
2-
City of Longwood — $5,900,000 Transportation Improvement Revenue Note
Page 3
interest and Principal Payments: iriterestwould be,calculated on a 30 over 360 day basis. Interest
would be payable semi-annually on March 1 and September 1 of each year, commencing March 1,
2017. Principal would be payable annually on September - 1 of each year commencing on
September 1, 2017. The last principal payment would be due on September 1, 2024 as shown on
the City's RFP.
The loan would be structured such that minimum principal denominational units are in units of one -
thousand ($1,000.00) or multiples thereof.
Prepayment Provisions: The principal maybe prepaid in whole on any date with 10 days advance
written notice to the Bank without prepayment penally. Principal maybe prepaid in Part on any
principal payment date (each September 1") with 10 days advance written notice to the Bank
without prepayment penalty, provided that the City pays all accrued interest which shall have
accrued to the date of prepayment and provided further that any principal prepayments shall be in
multiples of one -thousands ($1,000.00). Prepayments shall be deemed to -apply to those principal
installments with the latest maturities of the Note in inverse order.
Credit Approval: Already approved.
Security: The Series 2016 Note would be issued pursuant to a Debt Ordinance and Authorizing
Resolution (the Note Resolution) and would be secured by an irrevocable first lien pledge of the
City's (1)1 % Local Government Infrastructure Sales Surtax Revenue (the "Sales Tax') and (2)
1 through 6 cents local option fuel tax (LOFT), together the "Pledged Revenues". The Note would
be further secured by all moneys, including investments thereof, until spent in accordance with the
Note Resolution, in funds and accounts that will be established pursuant to the Note Resolution.
Regarding the Sales Tax, we understand that the Sales Tax was approved by the voters of
Seminole County (the "County") on May 20, 2014 for a period of 10 years commencing January 1,
2015 and extended through December 31, 2024. The Sales Tax is and will continue to be
distributed to the City through an Interlocal Agreement dated March 27, 2014 between the City and
the County. The term of the Interlocal Agreement runs concurrently with the term -of the Sales Tax
levy. We further understand that currently no other debt or obligations are secured by the Sales
Tax
Regarding the LOFT, we understand thatthis tax is levied pursuantto Seminole County's Ordinance
No. 2013-13 enacted on March 26, 2013 which extends the LOFT levy through August 31, 2043.
Furthermore, the County is obligated to share the LOFT revenues with certain municipalities
(including the City) pursuant to the above referenced Ordinance and an interlocal Agreement dated
March 26, 2013. We further understand that currently no other debt obligations are secured by the
LOFT.
We further understand that at this time the County has no plans to issue additional debt secured by
either the Sales Tax or the LOFT. Our offer is subject to the understandings cited above as indeed
being factual.
3
City of Longwood — $5,900,000 Transportation Improvement Revenue Note
Page 4
Additional Debt: The City could issue future first lien (parity) debt secured by the Pledged Revenues
provided that it meets an "additional bonds tests" (ABT) equal to 125% of the maximum annual debt
service on the proposed debt and all outstanding parity debt, as further outlined in the City's RFP.
Required Accounts and Flow of Funds: We would not require a debt service reserve fund.
However, the City would be required to establish certain funds and accounts in the Note Resolution
i.e., Construction Fund, Revenue Fund, and Debt Service Payment (sinking) Fund. The City would
transfer, on a monthly basis, from the Revenue Fund to the Sinking Fund proportional amounts of
money (1/6 and 1112) 16 order to meet its next immediately upcoming Note interest and principal
payments.
Documentation: All documentation would need to be acceptable to the Bank and "Bank Counsel".
The Bank and Bank Counsel -would need to review and approve all documentation priorto adoption
and/or acceptance by the issuer's Board. The loan documentation would include standard terms,
conditions, and covenants which are customary for this type of financing. We understand that Bond
Counsel will be Nabors, Gib/in and Nickerson, P.A.. Bond Counsel would draft the loan documents
and issue the customary legal and tax opinions. The City's Local Counsel would also issue an
opinion letter as to the due authorization and validity of the authorizing documents and the Note.
Based on this, the role of "Bank Counsel" would be -that of a "review function" only. We have
outlined the cost of Bank Counsel in the paragraph captioned "Closing costs, fees and expenses"
presented below.
Additional Terms and Conditions:
* All legal and tax opinions would be addressed to the Bank and be in a form and substance
acceptable to the Bank. The City's legal counsel would opine as to the authority, legality, validity and
enforceability of the Ordinances, Inter -Local Agreements, the Authorizing Note Resolution, the Note,
and such other proceedings of the City Commission as Bank Counsel may deem necessary.
* The City would covenant to use the proceeds of the Series 2016 Note only for those projects which
are approved by the. County. and. as are eligible to receive the. Sales Tax revenue. distributions.
pursuant to the Sales Tax Interlocal Agreement dated March 24, 2014 between the City and the
County.
* No Impairment: the pledge of the Pledged Revenues as provided for by the Inter -Local
Agreements (both Sales Tax and LOFT) will not be subject to repeal, modification or impairment by
any subsequent ordinance, resolution or other proceedings of the City, including, without limitation,
any modifications, amendments or supplements to the Inter -Local Agreement.
* The City would covenant in its loan agreement with the Bank to meet its obligations under the
Inter -Local Agreements (Sales Tax & LOFT) with the County, and to take all lawful action necessary
or required to continue to entitle the City to receive such Pledged Revenues from the County and will
take no action which would impair or adversely affect its receipt of said Pledged Revenues.
4
City of Longwood — $5,900,000 Transportation Improvement Revenue Note
Page 5
* The City would be required to do all things necessary (including taking legal action should it be
necessary) to enforce its contracts with the County in order to insure that the Pledged Revenues are
forthcoming from the County to pay the City's Note.
* The City would warrant in the loan documents that the Pledged Revenues are not currently
pledged to any other obligations or debts.
* Prior to funding the Series 2016 Note the Cl y's Financial Advisor would furnish to us a final
"Sources and Uses" of funds statement, based on the final numbers.
* Prior to closing the Note the City would provide to the Bank a certificate to the effect that i) the
financial statements were prepared in accordance with GAAP and fairly present the financial
condition of the City as of their date and ii) since the date of the information presented in the 2015
audit (latest audit available at this time) there has been no material adverse change in the financial
condition of the City or the pledged sources of repayment
* We would require that the interest rate on the loan be "grossed up" and applied retroactivelyto the
date of any event of taxability should it be determined by the Internal Revenue Service that the tax
status of the Note has changed due to the actions or inaction of the Issuer. Such "gross up" would
not exceed any statutory limit imposed by the State of Florida and would be equal to the tax
equivalent yield as originally contemplated by the Bank.
* Provision would be made for a "default interest rate" equal to.6% or any statutory interest rate
limitation imposed by the State of Florida, whichever is less.
* The loan documentation would define standard events of default as are customary for this type of
transaction and would provide reasonable remedies to the Bank in the event of default under the
loan documents.
* The City, immediately upon receiving knowledge of an event of default, would provide written
notice to the Bank in the event of default.
* In addition, the City, would. reimburse the Bank. (or. its agent e.g., receiver., trustee, .etc.) for all
reasonable legal and collection costs to exercise Its remedies or collect its payments for the loan in
the event of default.
* The Note would not be subject to acceleration. However, the City would covenant that no debt
payable from or secured by the Pledged Revenue would be subject to acceleration, whether at the
option of the Holder or upon an event of default or otherwise. In the event any debt payable from or
secured by the Pledged Revenues is accelerated, the Bank shall have the right, upon the
occurrence of an event of default, to accelerate the principal and interest of the Series 2016 Note
and upon exercise of such right the principal and interest of the Series 2016 Note shall become
immediately due and payable.
* Hancock Bank's remedies could be exercised independently of all otherseries of debt obligations
of the City and would require no other bondholders', or creditors' approvals to exercise such
remedies in the event of default
City of Longwood — $5,900,000 Transportation Improvement Revenue Note
Page 6
* The City would provide to the Bank at no cost) the following information: a copy of its audited
financial statement annually (automatically within 210 days after fiscal year end or whenever it
becomes available, whichever occurs first), annual operating budgets (if requested by the Bank),
and such other financial information as the Bank may reasonably request.
Closing costs, fees and expenses: The bank would charge no fees and assess no closing costs
for its own benefit. However, we would require the City to reimburse the Bank for "Bank Counsel"
expense. Bank Counsel's fee will not exceed $4,000 if its role is limited to a "review' function only.
All other legal expense i.e., Bond Counsel, the City's Local Counsel, and the City's Financial Advisor
would be paid directly by the City — see the "Documentation" paragraph above for more detail.
Tax Status of the Note: The quoted interest rate is predicated upon the Note being designated as a
bank qualified tax exempt obligation pursuant to Section 265(b)(3) of the Internal Revenue Service
Code of 1986, as amended.
Del_ iveD As soon as possible after all approvals, but in any event the loan would be closed no later
than 45 days from the date of this proposal in order for us to hold firm the quoted fixed rate of
interest.
This proposal shall remain valid for a period of 45 days provided the City accepts this proposal
within 20 days from the date of this letter.
Yours very truly,
HANCOCK BANK **
By: G�
Steven E. Cole
Senior Vice President
Public Finance Department
** "Hancock Bank" is a trade name used by Whitney Bank, a Mississippi chartered banking corporation, in providing
products and services through its locations in Florida, Alabama and Mississippi. Any obligations incurred with regard to
this proposal would be payable to Whitney Bank.
0
City of Longwood — $5,900,000 Transportation Improvement Revenue Note
Page 7
Accepted and Approved:
The City of Longwood has accepted this Financing Proposal from Hancock Bank and herebyselects
Hancock Bank to finance the above referenced Project.
Approved and accepted: As of this the 6 fh day of i b'> '2016.
Attest:
7