20-1527 Capital Improvement Revenue NoteCITY OF LONGWOOD, FLORIDA
CAPITAL IMPROVEMENT REVENUE NOTE RESOLUTION
ADOPTED APRIL 6, 2020
TABLE OF CONTENTS
PAGE
ARTICLE I
GENERAL
SECTION 1.01. DEFINITIONS......................................................................................... I
SECTION 1.02. AUTHORITY FOR RESOLUTION........................................................ 7
SECTION 1.03. RESOLUTION TO CONSTITUTE CONTRACT .................................. 7
SECTION 1.04. FINDINGS............................................................................................... 7
SECTION 1.05. AUTHORIZATION OF THE SERIES 2020 PROJECT ......................... 8
SECTION 1.06. DESIGNATION FOR BANK QUALIFICATION ................................. 8
ARTICLE II
AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF THE
SERIES 2020 NOTE
SECTION 2.01. AUTHORIZATION AND DESCRIPTION OF THE SERIES 2020
NOTE................................................................................................. 9
SECTION 2.02. APPLICATION OF SERIES 2020 NOTE PROCEEDS .......................10
SECTION 2.03. EXECUTION OF SERIES 2020 NOTE................................................10
SECTION 2.04. SERIES 2020 NOTE MUTILATED, DESTROYED, STOLEN OR
LOST................................................................................................10
SECTION 2.05. INTERCHANGEABILITY, NEGOTIABILITY AND TRANSFER ... I I
SECTION 2.06. ADJUSTMENTS TO INTEREST RATE..............................................12
SECTION 2.07. FORM OF SERIES 2020 NOTE...........................................................13
ARTICLE III
REDEMPTION OF SERIES 2020 NOTE
SECTION 3.01. NOTICE OF REDEMPTION................................................................19
SECTION 3.02. REDEMPTION OF PORTIONS OF SERIES 2020 NOTE ..................19
SECTION 3.03. PURCHASE OF SERIES 2020 NOTE BY ISSUER ............................19
SECTION 3.04. PERMITTED AND REQUIRED REDEMPTIONS OF THE
SERIES 2020 NOTE........................................................................19
ARTICLE IV
SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF
SECTION 4.01. SERIES 2020 NOTE NOT TO BE INDEBTEDNESS OF ISSUER .... 20
SECTION 4.02. COVENANT TO BUDGET AND APPROPRIATE ............................. 20
SECTION 4.03. PROJECT FUND................................................................................... 21
SECTION 4.04. FUNDS AND ACCOUNTS................................................................... 21
SECTION 4.05. REBATE ACCOUNT............................................................................ 22
SECTION 4.06. INVESTMENTS.................................................................................... 23
SECTION 4.07. SEPARATE ACCOUNTS..................................................................... 23
Resolution No. 20-1527
Page i
ARTICLE V
COVENANTS OF THE ISSUER
SECTION 5.01. PAYMENT OF THE SERIES 2020 NOTE ........................................... 24
SECTION 5.02. BOOKS AND RECORDS.....................................................................24
SECTION 5.03. ANNUAL AUDIT, BUDGET AND OTHER FINANCIAL
INFORMATION.............................................................................. 24
SECTION 5.04. FEDERAL INCOME TAX COVENANTS...........................................24
SECTION 5.05. ANTI-DILUTION..................................................................................25
SECTION 5.06. BANKING RELATIONSHIP................................................................25
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT....................................................................... 26
SECTION 6.02. REMEDIES............................................................................................ 26
SECTION 6.03. REMEDIES CUMULATIVE................................................................ 27
SECTION 6.04. WAIVER OF DEFAULT....................................................................... 27
ARTICLE VII
SUPPLEMENTAL RESOLUTIONS
SECTION 7.01. SUPPLEMENTAL RESOLUTION WITH NOTEHOLDER'S
CONSENT....................................................................................... 28
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. SALE OF SERIES 2020 NOTE.............................................................29
SECTION 8.02. APPOINTMENT OF PAYING AGENT AND REGISTRAR .............. 29
SECTION 8.03. SEVERABILITY OF INVALID PROVISIONS...................................29
SECTION 8.04. REPEAL OF INCONSISTENT RESOLUTIONS ................................. 29
SECTION 8.05. WAIVER OF RIGHT TO TRIAL BY JURY; VENUE ........................ 29
SECTION 8.06. GENERAL AUTHORITY..................................................................... 29
SECTION 8.07. NO PERSONAL LIABILITY................................................................ 30
SECTION 8.08. EFFECTIVE DATE............................................................................... 30
Resolution No. 20-1527
Page ii
RESOLUTION NO.20-1527
A RESOLUTION OF THE CITY COMMISSION OF
THE CITY OF LONGWOOD, FLORIDA, PROVIDING
DETAILS REQUIRED BY ORDINANCE NO. 20-2174
THAT AUTHORIZED THE FINANCING OF THE
SERIES 2020 PROJECT DESCRIBED HEREIN;
AUTHORIZING THE ISSUANCE OF THE $1,400,000
CITY OF LONGWOOD, FLORIDA CAPITAL
IMPROVEMENT REVENUE NOTE, SERIES 2020, IN
ORDER TO FINANCE THE COSTS OF THE
ACQUISITION AND INSTALLATION OF EQUIPMENT
TO BE LOCATED WITHIN THE CITY;
AUTHORIZING THE REPAYMENT OF SUCH NOTE
FROM A COVENANT TO BUDGET AND
APPROPRIATE LEGALLY AVAILABLE NON -AD
VALOREM REVENUES; PROVIDING FOR THE
RIGHTS OF THE HOLDER OF THE SERIES 2020
NOTE; AWARDING AND AUTHORIZING THE
NEGOTIATED SALE OF THE SERIES 2020 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:
"Act" shall mean Chapter 166, Florida Statutes, the City Charter, the Financing
Ordinance, and other applicable provisions of law.
"Adjusted Ad Valorem Tax Revenues" shall mean all ad valorem tax revenues
of the Issuer after deducting therefrom the required debt service payments on any limited
or unlimited general obligation debt of the Issuer.
"Adjusted Non -Ad Valorem Revenues" shall mean all Non -Ad Valorem
Revenues (except revenues of any enterprise fund of the Issuer, unless and until such
revenues are transferred from such enterprise fund to the Issuer's general fund) less that
Resolution No. 20-1527
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portion, if any, of the Adjusted Costs of Essential Services which exceeds Adjusted Ad
Valorem Tax Revenues.
"Adjusted Costs of Essential Services" shall mean that portion of the Costs of
Essential Services which are identified as "general government" or "public safety" in the
Issuer's annual audited financial statements.
"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.
"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 Representative" shall mean the Mayor, Deputy Mayor, City
Manager, Director of Financial Services, or any designee of such persons, 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.
"Balloon Indebtedness" means any indebtedness, 25% or more of the original
principal of which matures during any one Fiscal Year.
"Business Day" shall mean any day other than (1) a Saturday or Sunday or a legal
holiday on which banking institutions in the State are required or authorized by law to
remain closed, or (2) a day on which the New York Stock Exchange is closed.
"City Charter" shall mean the charter of the Issuer, as the same may be amended
from time to time.
"City Commission" shall mean the City Commission of the Issuer.
"City Manager" shall mean the City Manager of the Issuer.
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"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.
"Cost" or "Costs," as the same relates to the Series 2020 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 within the legal boundaries of the Issuer, (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 Series 2020 Note and other obligations
relating to the Series 2020 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 the Series 2020 Proj ect, (11) costs
and expenses related to the issuance of the Series 2020 Note or other indebtedness related
to the Series 2020 Project, and (12) any other costs and expenses properly attributable to
acquisition or construction of the Series 2020 Project, and such other expenses as may be
necessary or incidental to the issuance of the Series 2020 Note; 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 or costs. Any
Supplemental Resolution may provide for additional items to be included in the aforesaid
Costs.
"Costs of Essential Services" shall mean the cost of services and programs which
are for essential public purposes affecting the health, welfare and safety of the inhabitants
of the Issuer or which are legally mandated by applicable law.
"Debt Service Fund" shall mean the City of Longwood, Florida Capital
Improvement Revenue Note Series 2020 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.
"Determination of Taxability" shall mean the circumstance of interest paid or
payable on the Series 2020 Note becoming includable for federal income tax purposes in
the gross income of the Noteholder due to any act or inaction of the Issuer, including,
without limitation, (1) the receipt by the Issuer or Noteholder of an original or a copy of
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an Internal Revenue Service Technical Advice Memorandum or Statutory Notice of
Deficiency which holds that any interest payable on the Series 2020 Note is includable in
the gross income of the Noteholder, (2) the issuance of any public or private ruling of the
Internal Revenue Service that any interest payable on the Series 2020 Note is includable
in the gross income of the Noteholder, or (3) receipt by the Issuer or Noteholder of an
opinion of Note Counsel that any interest on the Series 2020 Note has become includable
in the gross income of the Noteholder 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 the Series 2020 Note is deemed includable in the gross income of
the Noteholder. 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
Series 2020 Note is treated as an indirect tax preference item under the Code.
"Director of Financial Services" shall mean the Director of Financial Services of
the Issuer.
"Event of Default" shall mean any Event of Default specified in Section 6.01 of
this Resolution.
"Financing Ordinance" shall mean Ordinance No. 20-2174 of the Issuer, enacted
April 6, 2020, as the same may be amended and supplemented.
"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.
"Issuer" shall mean the City of Longwood, Florida, a municipal corporation
established by the State.
"Maximum Annual Debt Service" shall mean with respect to indebtedness that
bears interest at a fixed interest rate, the largest aggregate amount of annual debt service
coming due in any Fiscal Year in which such indebtedness is scheduled to be
outstanding, and, with respect to indebtedness which bears interest at a variable interest
rate, Maximum Annual Debt Service shall be determined assuming that interest accrues
on such indebtedness at the current 'Bond Buyer Revenue Bond Index" as published in
The Bond Buyer no more than three business days prior to any such calculation; provided,
however, if any indebtedness, whether bearing interest at a fixed or variable interest rate,
constitutes Balloon Indebtedness, Maximum Annual Debt Service on such indebtedness
shall be determined assuming such indebtedness is amortized over 20 years (from the
date of issuance of such indebtedness) on an approximately level annual debt service
basis.
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"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.
"Non -Ad Valorem Revenues" shall mean all legally available revenues of the
Issuer derived from any source whatsoever other than special assessments and ad -
valorem taxation on real and personal property, which are legally available to make the
payments required herein, but only after provision has been made by the Issuer for the
payment of services and programs which are for essential public purposes affecting the
health, welfare and safety of the inhabitants of the Issuer or which are legally mandated
by applicable law.
"Note Counsel" shall mean Nabors, Giblin & Nickerson, P.A., or any other
attorney at law or firm 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.
"Noteholder" shall mean, initially, One Florida Bank, as the holder of the
Series 2020 Note, and any subsequent holder of the Series 2020 Note as provided in the
registration books of the Issuer.
"Other Debt" shall mean all of the following to the extent that they are secured
by or payable in whole or in part from any Non -Ad Valorem Revenues: (i) all obligations
of the Issuer for borrowed money evidenced by bonds, debentures, notes or other similar
instruments or otherwise documented by a written agreement or instrument; (ii) all
obligations of the Issuer to pay the deferred purchase price of property or services, except
trade accounts payable under normal trade terms and which arise in the ordinary course
of business; and (iii) all obligations of the Issuer as lessee under capitalized leases.
"Paying Agent" shall mean any paying agent for the Series 2020 Note 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 Series 2020 Note as provided in Section 2.01 hereof.
"Person" shall mean an individual, a corporation, a partnership, an association, a
joint stock company, a trust, any unincorporated organization or governmental entity.
"Pledged Funds" shall mean (1) the Non -Ad Valorem Revenues which have
been budgeted and appropriated by the Issuer in its annual budget for payment of the
Series 2020 Note and deposited to the Payment Account as described herein, and (2) until
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applied in accordance with the provisions of this Resolution, all moneys, including
investments thereof, in the funds and accounts established hereunder for the benefit of the
Series 2020 Note except for any rebate account or fund.
"Project Fund" shall mean the City of Longwood, Florida Capital Improvement
Revenue Note Series 2020 Project Fund established pursuant to Section 4.03 hereof.
"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 the Series 2020 Note 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 Series 2020 Note 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.
"Series 2020 Note" shall mean the Issuer's Capital Improvement Revenue Note,
Series 2020, issued pursuant to the Act and this Resolution.
"Series 2020 Project" shall mean, collectively, the acquisition and installation of
equipment within the Issuer's municipal area including, but not limited to, fencing,
information technology hardware and software, patrol vehicles, patrol motorcycles,
police equipment and weapons, vehicle and personnel camera systems, utility vehicles,
lawn maintenance equipment, fire protection vehicles and equipment, medical equipment
for first responders and other related equipment needs for the Issuer, 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 "heretofore" shall mean before the date of
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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 the Series 2020 Note by the Noteholder,
the provisions of this Resolution shall be a part of the contract of the Issuer with the
Noteholder, and shall be deemed to be and shall constitute a contract between the Issuer
and the Noteholder. 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 Noteholder.
SECTION 1.04. FINDINGS. It is hereby ascertained, determined and
declared that:
(a) The Issuer has various capital needs and requirements in the form of the
Series 2020 Project which must be acquired, constructed, equipped and installed in order
to provide for the general governmental purposes of the Issuer including, but not limited
to, the recreation, health, safety and welfare of the citizens of the Issuer.
(b) The most efficient and fairest method of financing the acquisition,
construction, equipping and installation of the Series 2020 Project is by the issuance of
the Series 2020 Note secured by the Pledged Funds as provided herein.
(c) The principal of, Redemption Price, if applicable, and interest on the
Series 2020 Note shall be paid solely from the Pledged Funds. The Issuer shall never be
required to use any ad valorem taxes for the payment of the Series 2020 Note. The
Series 2020 Note shall not constitute a direct obligation of the Issuer or a pledge of its
faith and credit, nor shall the Noteholder have any lien or encumbrance on any property
of the Issuer, including the Series 2020 Project.
(d) Due to the present volatility of the market for tax-exempt obligations such
as the Series 2020 Note and the complexity of the transactions relating to such
indebtedness, it is in the best interest of the Issuer to sell the Series 2020 Note by a
negotiated sale to the 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 2020 Note. The Issuer acknowledges
receipt of the information required by Section 218.385, Florida Statutes, from the
Noteholder in connection with the negotiated sale of the Series 2020 Note. A copy of the
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disclosure statement provided by the Noteholder containing the aforementioned
information has been provided under separate cover to the Issuer.
(e) The enactment of the Financing Ordinance constituted the City
Commission's approval of the issuance of the Series 2020 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
three out of five of the members of the City Commission.
SECTION 1.05. AUTHORIZATION OF THE SERIES 2020 PROJECT.
The Issuer hereby authorizes the acquisition, construction, equipping and installation of
the Series 2020 Project.
SECTION 1.06. DESIGNATION FOR BANK QUALIFICATION. The
Issuer hereby designates the Series 2020 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 2020 Note, in calendar year 2020. 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 2020 Note to no longer be a "qualified tax-exempt obligation."
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ARTICLE H
AUTHORIZATION, TERMS, EXECUTION AND
REGISTRATION OF THE SERIES 2020 NOTE
SECTION 2.01. AUTHORIZATION AND DESCRIPTION OF THE
SERIES 2020 NOTE. In accordance with the authorization provided in the Financing
Ordinance, this Resolution creates the "City of Longwood, Florida, Capital Improvement
Revenue Note, Series 2020," issued in the aggregate principal amount of $1,400,000.
The Series 2020 Note is issued for the principal purposes of fmancing the Series 2020
Project and paying certain costs of issuance incurred with respect to the Series 2020
Note.
The Series 2020 Note shall be in the form of one registered Series 2020 Note in
the principal amount of $1,400,000, which shall be dated April 8, 2020, and mature on
December 1, 2024, shall be issued in fully registered form and shall bear interest from
April 8, 2020. The Series 2020 Note shall be issued initially in the denomination of
$1,400,000.
The Series 2020 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 2020 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 2020 Note shall accrue until payment in full of the
Series 2020 Note at the rate of 1.8% per annum, computed based on a 30/360-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 June 1 and December 1, commencing
on December 1, 2020, (accruing from and including each December 1 st, through and
including the following May 31 st and accruing from and including each June 1 st, through
and including the following November 30th, each an "Accrual Period"). Upon and
during the continuance of an Event of Default the Series 2020 Note shall bear interest at
the Default Rate. Principal on the Series 2020 Note shall be payable annually on
December 1, commencing December 1, 2020, in the amounts set forth below, with the
final such payment due December 1, 2024.
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Dates
Principal Payments
12/ 1 /2020
$189,000
12/ 1 /2021
295,000
12/ 1 /2022
300,000
12/1/2023
305,000
12/ 1 /2024*
311,000
*Final Maturity
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 2020 NOTE PROCEEDS.
The proceeds derived from the sale of the Series 2020 Note, including accrued interest
and premium, if any, shall, simultaneously with the delivery of the Series 2020 Note to
the purchaser thereof, be applied by the Issuer as follows:
(a) An amount of the Series 2020 Note proceeds shall be applied to the
payment of costs and expenses relating to the issuance of the Series 2020 Note.
(b) The remaining amount of the Series 2020 Note proceeds shall be
deposited in the Project Fund and used to finance the Costs of the Series 2020
Project.
SECTION 2.03. EXECUTION OF SERIES 2020 NOTE. The Series 2020
Note shall be executed in the name of the Issuer with the manual or facsimile signature of
the Authorized Issuer Representative 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 the Series 2020
Note or whose facsimile signature shall appear thereon shall cease to be such officer of
the Issuer before the Series 2020 Note so signed and sealed has been actually sold and
delivered, the Series 2020 Note may nevertheless be sold and delivered as herein
provided and may be issued as if the person who signed or sealed the Series 2020 Note
had not ceased to hold such office. The Series 2020 Note may be signed and sealed on
behalf of the Issuer by such person who at the actual time of the execution of the
Series 2020 Note shall hold the proper office of the Issuer, although at the date of the
Series 2020 Note 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 both shall have ceased to hold
such office at the time the Series 2020 Note shall be actually sold and delivered.
SECTION 2.04. SERIES 2020 NOTE MUTILATED, DESTROYED,
STOLEN OR LOST. In case the Series 2020 Note shall become mutilated, or be
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destroyed, stolen or lost, the Issuer may, at its discretion, issue and deliver a new
Series 2020 Note of like tenor as the Series 2020 Note so mutilated, destroyed, stolen or
lost, in exchange and substitution for such mutilated Series 2020 Note upon surrender and
cancellation of such mutilated Series 2020 Note or in lieu of and substitution for the
Series 2020 Note destroyed, stolen or lost, and upon the Noteholder 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. Such Series 2020 Note so surrendered or
otherwise substituted shall be canceled by the Clerk. If the Series 2020 Note shall have
matured or been called for redemption or be about to mature or be called for redemption,
instead of issuing a substitute Series 2020 Note, the Issuer may pay the same or cause the
Series 2020 Note to be paid, upon being indemnified as aforesaid, and if such Series 2020
Note be lost, stolen or destroyed, without surrender thereof.
Any such duplicate Series 2020 Note 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 Series 2020 Note be at any time found by anyone, and
such duplicate Series 2020 Note shall be entitled to equal and proportionate benefits and
rights as to lien on the Pledged Funds to the same extent as all other Series 2020 Notes
issued hereunder.
SECTION 2.05. INTERCHANGEABILITY, NEGOTIABILITY AND
TRANSFER. The Series 2020 Note, upon surrender thereof at the office of the Registrar
with a written instrument of transfer satisfactory to the Registrar, duly executed by the
Noteholder thereof or its attorney duly authorized in writing, may, at the option of the
Noteholder thereof, be exchanged for an equal aggregate principal amount of registered
Series 2020 Notes of the same maturity of any other authorized denominations.
The Series 2020 Note 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, subject to the provisions for registration of transfer
contained in this Resolution and in the Series 2020 Note. So long as the Series 2020
Note shall remain outstanding, the Issuer shall maintain and keep, at the office of the
Registrar, books for the registration of transfer of the Series 2020 Note.
The transfer of the Series 2020 Note 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 Noteholder 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 Noteholder or its duly authorized attorney with
signature guaranteed. Upon the registration of transfer of the Series 2020 Note, the Issuer
shall issue, and cause to be authenticated, in the name of the transferee a new Series 2020
Note of the same aggregate principal amount and maturity as the surrendered Series 2020
Note.
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Notwithstanding the foregoing, the Series 2020 Note may not be transferred
except in whole. Further, the transfer of the Series 2020 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 Noteholder 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 the Series 2020 Note shall be exchanged or the transfer of the
Series 2020 Note shall be registered, the Issuer shall execute and authenticate and deliver
the Series 2020 Note 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 the Series 2020
Note during the fifteen (15) days next preceding a Payment Date on the Series 2020 Note,
or, in the case of any proposed redemption of the Series 2020 Note, 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 Series 2020 Note called for redemption, continuing until such
redemption date.
SECTION 2.06. ADJUSTMENTS TO INTEREST RATE. (a) The interest
rate on the Series 2020 Note shall be subject to adjustment as described in Section 2.01
and this Section 2.06. The Noteholder 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 2020 Note shall be adjusted (retroactively, if necessary) to provide the Noteholder
with the same after-tax yield on the Series 2020 Note if (i) a Determination of Taxability
shall occur, or (ii) the Series 2020 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 Noteholder 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 Noteholder as a result of the occurrence of a
Determination of Taxability or the Series 2020 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 2020 Note exceed the maximum rate permitted by law. The
above adjustments to the interest rate on the Series 2020 Note shall be effective on (i) the
earlier of the date of the Determination of Taxability or the date on which the interest on
the Series 2020 Note became taxable by virtue of the Determination of Taxability, or (ii)
the date the Series 2020 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
Resolution No. 20-1527
Page 12
become payable until after notice has been given pursuant to Section 2.06(a) hereof.
Interest on the Series 2020 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 Noteholder's tax year or if interest on the Series 2020
Note does not accrue for the entire tax year of the Noteholder.
(d) If any adjustments made to the interest rate on the Series 2020 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 2020
Note shall be subject to mandatory redemption, upon thirty (30) days' notice from the
Noteholder or its assigns to redeem the Series 2020 Note.
SECTION 2.07. FORM OF SERIES 2020 NOTE. The text of the
Series 2020 Note shall be in substantially the following form with such omissions,
insertions and variations, as may be necessary and/or desirable and approved by the
Authorized Issuer Representative prior to the issuance thereof (which necessity and/or
desirability and approval shall be presumed by such officer's execution of the Series 2020
Note and the Issuer's delivery of the Series 2020 Note to the purchaser or purchasers
thereof):
* * * * * BEGIN FORM OF SERIES 2020 NOTE * * * * *
Resolution No. 20-1527
Page 13
No. RA-1
UNITED STATES OF AMERICA
STATE OF FLORIDA
CITY OF LONGWOOD, FLORIDA
CAPITAL IMPROVEMENT REVENUE NOTE,
SERIES 2020
$1,400,000.00
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 One Florida Bank, as registered owner, or registered assigns (the "Holder"), the
principal sum of
$1,400,000.00
solely from the Pledged Funds (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 1.8% per annum, computed based on a 30/360 day
basis, subject to adjustment as described herein. The principal of this Series 2020 Note
shall be payable on December 1, 2020 and annually thereafter in the amounts set forth
below on December 1 of each year, through and including December 1, 2024, on which
date all unpaid principal and interest due shall be due and payable in full:
Dates
Principal Payments
12/1 /2020
$189,000
12/ 1 /2021
295,000
12/ 1 /2022
300,000
12/1/2023
305,000
12/l/2024*
311,000
*Final Maturity
Interest shall be payable semi-annually on each June 1 and December 1,
commencing December 1, 2020 (accruing from and including each December 1st,
through and including the following May 31 st and accruing from and including each June
1 st, through and including the following November 30th, each an "Accrual Period"). All
payments of principal and interest shall be made on the first Business Day immediately
following an Accrual Period (each, a "Payment Date"). The interest rate on this
Series 2020 Note is subject to adjustment as provided for in the Resolution defined
below.
Both principal of and interest on this Series 2020 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
Resolution No. 20-1527
Page 14
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 2020 Note is not a Business Day, such payment may be made on the next
succeeding Business Day with the same force and effect as if paid on the Payment Date,
and no interest on any principal amount shall accrue for the period after such Payment
Date. Upon payment in full of this Series 2020 Note, the Holder hereof agrees to return
the same to the Issuer.
This Series 2020 Note is issued for the principal purpose of providing moneys to
finance the cost of certain capital improvements and the acquisition of certain equipment
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, the Issuer's Charter, the Issuer's Ordinance No. 20-2174, duly enacted by the
City Commission on April 6, 2020 (the "Financing Ordinance"), the Issuer's Resolution
No. 20-1527, duly adopted by the City Commission on April 6, 2020 (the "Resolution"),
and other applicable provisions of law (the "Act") and is subject to all the terms and
conditions of the Resolution.
This Series 2020 Note and the interest hereon are payable from (1) the Non -Ad
Valorem Revenues which have been budgeted and appropriated by the Issuer in its
annual budget for payment of the Series 2020 Note and deposited to the Payment
Account as described in the Resolution, and (2) 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 Funds").
IT IS EXPRESSLY AGREED BY THE HOLDER OF THIS SERIES 2020 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 2020 NOTE AND THAT SUCH HOLDER SHALL NEVER HAVE
THE RIGHT TO REQUIRE OR COMPEL THE EXERCISE OF ANY AD VALOREM
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 2020 NOTE AND THE
OBLIGATION EVIDENCED HEREBY SHALL NOT CONSTITUTE A LIEN UPON
ANY PROPERTY OF THE ISSUER OR THE SERIES 2020 PROJECT (AS
DESCRIBED IN THE RESOLUTION), BUT SHALL BE PAYABLE SOLELY FROM
THE PLEDGED FUNDS TO THE EXTENT DESCRIBED IN THE RESOLUTION.
Neither the Authorized Issuer Representative or any other members of the City
Commission of the Issuer, any person executing this Series 2020 Note, nor any other
Resolution No. 20-1527
Page 15
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 2020 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 2020 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 clew Series 2020
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 2020 Note is issuable in
fully registered form initially in the denomination of $1,400,000. The Issuer and any
Paying Agent may treat the registered Holder of this Series 2020 Note as the absolute
owner hereof for all purposes, whether or not this Series 2020 Note shall be overdue, and
shall not be affected by any notice to the contrary.
This Series 2020 Note is subject to optional redemption prior to its stated date of
maturity, in whole or in part, on any date, at a price of 100% of the principal amount to
be redeemed, plus accrued interest to the redemption date, with two (2) Business Days
advance written notice to the Holder hereof. This Series 2020 Note is also subject to
mandatory redemption under certain circumstances, as described in the Resolution.
The Issuer has designated this Series 2020 Note as a "qualified tax-exempt
obligation" pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986, as
amended.
In the event that principal or interest remains unpaid ten (10) days after the due
date, a late fee equal to the lesser of $100 or five percent (5%) of the unpaid amount shall
be due to the Holder.
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 2020 Note,
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 2020 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 2020 Note does not violate any constitutional
or statutory limitations or provisions.
Resolution No. 20-1527
Page 16
IN WITNESS WHEREOF, the City Commission of the City of Longwood,
Florida has issued this Series 2020 Note and has caused the same to be executed by the
manual or facsimile signature of its Authorized Issuer Representative, 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 8th day of April, 2020.
(SEAL)
ATTEST:
FPO
CITY OF LONGWOOD, FLORIDA
Matt Morgan, A
Representative
Resolution No. 20-1527
Page 17
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 2020 Note and does hereby irrevocably constitute and appoint
as attorneys to register the transfer of
the said Series 2020 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 2020 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 2020 NOTE
Resolution No. 20-1527
Page 18
ARTICLE III
REDEMPTION OF SERIES 2020 NOTE
SECTION 3.01. NOTICE OF REDEMPTION. Except as otherwise
provided herein, notice of any redemption, which shall specify the Series 2020 Note (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 two (2) Business Days
prior to the redemption date to the Noteholder at its address as it appears on the
registration books kept by the Registrar.
SECTION 3.02. REDEMPTION OF PORTIONS OF SERIES 2020
NOTE. Notice of redemption having been given substantially as aforesaid, the
Series 2020 or portions of the Series 2020 Note 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 Series 2020 Note or portions of the Series 2020 Note shall cease to bear
interest.
SECTION 3.03. PURCHASE OF SERIES 2020 NOTE BY ISSUER. The
Series 2020 Note purchased by the Issuer shall be canceled.
SECTION 3.04. PERMITTED AND REQUIRED REDEMPTIONS OF
THE SERIES 2020 NOTE. (a) The Series 2020 Note is subject to optional redemption
prior to its stated date of maturity, in whole or in part, on any date, at a price of 100% of
the principal amount to be redeemed, plus accrued interest to the redemption date, with
two (2) Business Days advance written notice to the Noteholder hereof.
(b) The Series 2020 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. 20-1527
Page 19
ARTICLE IV
SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF
SECTION 4.01. SERIES 2020 NOTE NOT TO BE INDEBTEDNESS OF
ISSUER. The Series 2020 Note 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 a special obligation of the Issuer, payable solely from the
Pledged Funds in accordance with the terms of this Resolution. No Noteholder shall ever
have the right to compel the exercise of any ad valorem taxing power to pay the
Series 2020 Note, or be entitled to payment of the Series 2020 Note from any moneys of
the Issuer, except from the Pledged Funds, in the manner provided herein. The
Series 2020 Note and the obligation evidenced hereby shall not constitute a lien upon any
property of the Issuer or the Series 2020 Project but shall be payable solely from the
Pledged Funds to the extent described in this Resolution.
SECTION 4.02. COVENANT TO BUDGET AND APPROPRIATE.
Subject to the next paragraph below, the Issuer covenants and agrees to appropriate in its
annual budget, by amendment, if necessary, from Non -Ad Valorem Revenues legally
available in each Fiscal Year, amounts sufficient to pay the principal of, redemption
premium, if any, and interest on the Series 2020 Note when due each Fiscal Year. Such
covenant and agreement on the part of the Issuer to budget and appropriate such amounts
of Non -Ad Valorem Revenues, if any, shall be cumulative to the extent not paid, and
shall continue until such Non -Ad Valorem Revenues or other legally available funds in
amounts sufficient to make all such required payments shall have been budgeted,
appropriated and actually paid. Notwithstanding the foregoing, the Issuer shall not
covenant to maintain any services or programs, now provided or maintained by the
Issuer, which generate Non -Ad Valorem Revenues.
Such covenant to budget and appropriate shall not create any lien upon or pledge
of such Non -Ad Valorem Revenues, nor shall it preclude the Issuer from pledging in the
future its Non -Ad Valorem Revenues, nor shall it require the Issuer to levy and collect
any particular Non -Ad Valorem Revenues, nor shall it give the Noteholder a prior claim
on the Non -Ad Valorem Revenues as opposed to claims of general creditors of the Issuer.
Such covenant to appropriate Non -Ad Valorem Revenues shall be subject in all respects
to the payment of obligations secured by a pledge of such Non -Ad Valorem Revenues
heretofore or hereafter entered into (including the payment of debt service on bonds and
other debt instruments). However, the covenant to budget and appropriate in its general
annual budget for the purposes and in the manner stated herein shall have the effect of
making available for the payment of the Series 2020 Note, in the manner described
herein, Non -Ad Valorem Revenues and placing on the Issuer a positive duty to
appropriate and budget, by amendment, if necessary amounts sufficient to meet its
obligations hereunder; subject, however, in all respects to the restrictions of
Resolution No. 20-1527
Page 20
Section 166.241, Florida Statutes, which provides, in part, that the governing body of
each municipality make appropriations for each Fiscal Year which, in any one year, shall
not exceed the amount to be received from taxation or other revenue sources; and subject,
further, to the payment of services and programs which are for essential public purposes
affecting the health, safety and welfare of the inhabitants of the Issuer or which are
legally mandated by applicable law.
SECTION 4.03. PROJECT FUND. The Issuer covenants and agrees to
establish a special fund to be known as the "City of Longwood, Florida Capital
Improvement Revenue Note Series 2020 Project Fund," which shall be used only for
payment of the Cost of the Series 2020 Project. Moneys in the Project Fund, until
applied in payment of any item of the Cost of the Series 2020 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 Noteholder and for the further security of such Noteholder.
The proceeds of insurance maintained against physical loss of or damage to the
Series 2020 Project, or the contractors' performance bonds with respect thereto pertaining
to the period of construction thereof, if any, shall be deposited into the Project Fund.
The Issuer covenants that the acquisition, construction and installation of the
Series 2020 Project will be completed without delay and in accordance with sound
engineering practices. The Issuer shall make disbursements or payments from the Project
Fund to pay the Cost of the Series 2020 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.
The date of completion of acquisition, construction and installation of the
Series 2020 Project shall be determined by an Authorized Issuer Representative who shall
certify such fact in writing to the City Commission. Promptly after the date of the
completion of the Series 2020 Project, and after paying or making provisions for the
payment of all unpaid items of the Cost of the Series 2020 Project, the Issuer shall
deposit any balance of moneys remaining in the Project Fund to the Redemption
Account.
SECTION 4.04. FUNDS AND ACCOUNTS.
(a) Establishment of Funds and Accounts. The Issuer covenants and agrees to
establish a special fund to be known as the "City of Longwood, Florida Capital
Improvement Revenue Note Series 2020 Debt Service Fund." The Issuer shall maintain
in the Debt Service Fund three accounts: the "Payment Account," the "Redemption
Account" and the "Rebate Account." Moneys in the Payment Account and the
Redemption Account shall be held in trust for and be subject to a lien and charge in favor
of the Noteholder and for the further security of such Noteholder.
Resolution No. 20-1527
Page 21
(b) Payment Account. On or before the Business Day prior to each date fixed
for the payment of principal or interest on the Series 2020 Note, the Issuer shall deposit
from Non -Ad Valorem Revenues budgeted and appropriated pursuant to the covenant
contained herein to the Payment Account the amounts sufficient to pay the interest and
principal becoming due on the Series 2020 Note on the next Payment Date therefor. 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 the Series 2020 Note coming due on the
otherwise corresponding Payment Date because the Series 2020 Note has been called or
redeemed or due to an excess of funds in such account, the Issuer shall transfer such
moneys to the Redemption Account. In no event shall any moneys remain on deposit in
the Payment Account for a period greater than 13 months.
(c) Redemption Account. The Issuer shall deposit into the Redemption
Account any amount to be applied to the redemption of the Series 2020 Note pursuant to
Article III hereof. Excess moneys on deposit in the Project Fund shall be deposited to the
Redemption Account in accordance with the provisions of Section 4.03 hereof.
SECTION 4.05. 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 and the Noteholder shall have no right to have the same applied for debt
service on the Series 2020 Note. 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 Series 2020 Note, as well as any successor Certificate thereto, including, but not
limited to:
(a) making a determination in accordance with the Code of the amount
required to be deposited in the Rebate Account;
(b) depositing the amount required to make timely rebate payments to the
United States government;
(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
(d) keeping such records of the determinations made pursuant to this
Section 4.05 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 Series 2020 Note (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 Note Counsel, to comply with the provisions of the Code.
Resolution No. 20-1527
Page 22
SECTION 4.06. INVESTMENTS. The Project 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 Project
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 Project
Fund, the Redemption Account, the Payment Account and the Rebate Account shall be
retained in such respective fund or 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 4.07. 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. 20-1527
Page 23
ARTICLE V
COVENANTS OF THE ISSUER
SECTION 5.01. PAYMENT OF THE SERIES 2020 NOTE. The Issuer
covenants that it will promptly pay the principal of and interest on the Series 2020 Note
from the Non -Ad Valorem Revenues at the place, on the dates and in the manner
provided herein and in the Series 2020 Note, in accordance with the terms thereof.
SECTION 5.02. BOOKS AND RECORDS. The Issuer will keep books and
records of the receipt of the Non -Ad Valorem Revenues and the funds and accounts
established hereunder in accordance with generally accepted accounting principles, and
the Noteholder shall have the right at all reasonable times to inspect the records, accounts
and data of the Issuer relating thereto.
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 Noteholder, at
no cost, as soon as it becomes available but not later than 270 days after each Fiscal Year
end.
(b) The Issuer shall provide the Noteholder, at no cost, with a copy of the
annual budget for the next Fiscal Year as soon as available and in any event no later than
thirty (30) days after adoption of the same and any other financial information the
Noteholder may reasonably request.
SECTION 5.04. FEDERAL INCOME TAX COVENANTS. The Issuer
covenants with the Noteholder that it shall not use the proceeds of the Series 2020 Note
in any manner which would cause the interest on the Series 2020 Note 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 Series 2020 Note).
The Issuer covenants with the Noteholder that neither the Issuer nor any Person
under its control or direction will make any use of the proceeds of the Series 2020 Note
(or amounts deemed to be proceeds under the Code) in any manner which would cause
the Series 2020 Note 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 the Series 2020 Note to be included in gross income
Resolution No. 20-1527
Page 24
for purposes of federal income taxation (to the extent not otherwise included therein on
the date of issuance of the Series 2020 Note).
The Issuer hereby covenants with the Noteholder that it will comply with all
provisions of the Code necessary to maintain the exclusion of interest on the Series 2020
Note from gross income for purposes of federal income taxation (to the extent not
otherwise included therein on the date of issuance of the Series 2020 Note), including, in
particular, the payment of any amount required to be rebated to the United States
Treasury pursuant to the Code.
SECTION 5.05. ANTI -DILUTION. During each Fiscal Year that the Series
2020 Note is outstanding hereunder, prior to the incurrence of any additional Other Debt,
the Issuer agrees and covenants with the Noteholder that Adjusted Non -Ad Valorem
Revenues shall be no less than the aggregate Maximum Annual Debt Service on the
Series 2020 Note and Other Debt, including the proposed Other Debt. Such calculation
shall be determined using the average of actual Adjusted Non -Ad Valorem Revenues for
the prior two Fiscal Years based on the Issuer's annual audited financial statements. The
Issuer agrees to provide the Noteholder with a certification that such test has been
satisfied and accompanying calculation prior to the incurrence of such additional Other
Debt.
SECTION 5.06. BANKING RELATIONSHIP. So long as the Series 2020
Note is outstanding, the Issuer shall maintain a deposit account relationship with One
Florida Bank, in an amount and upon such terms that are mutually agreed upon by One
Florida Bank and the Issuer.
Resolution No. 20-1527
Page 25
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. The following events shall each
constitute an 'Event of Default":
(a) Payment of the principal of, redemption premium, if any, or interest on the
Series 2020 Note is not made within thirty (30) days of when the same becomes due and
payable.
(b) The Issuer shall default in the due and punctual performance of any other of
the covenants, conditions, agreements and provisions contained in the Series 2020 Note
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 Noteholder. 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
Noteholder.
SECTION 6.02. REMEDIES. Whenever any Event of Default referred to in
Section 6.01 hereof shall have happened and be continuing, the Noteholder or its 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.
Notwithstanding the foregoing, no Noteholder shall have the right to declare the
unpaid principal amount of the Series 2020 Note immediately due and payable. The
Issuer will reimburse the Noteholder 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
Resolution No. 20-1527
Page 26
Event of Default, and no other creditor approvals will be required prior to the execution
of such remedies.
In the event that principal or interest remains unpaid ten (10) days after the due
date, a late fee equal to the lesser of $100 or five percent (5%) of the unpaid amount shall
be due to the Noteholder.
SECTION 6.03. REMEDIES CUMULATIVE. No remedy herein conferred
upon or reserved to the Noteholder 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 Noteholder shall be
restored to its former position.
SECTION 6.04. WAIVER OF DEFAULT. No delay or omission of the
Noteholder 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
Noteholder may be exercised from time to time, and as often as may be deemed
expedient.
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ARTICLE VII
SUPPLEMENTAL RESOLUTIONS
SECTION 7.01. SUPPLEMENTAL RESOLUTION WITH
NOTEHOLDER'S CONSENT. The Issuer may not amend or supplement this
Resolution except with the prior written consent of the Noteholder.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. SALE OF SERIES 2020 NOTE. The negotiated sale of the
Series 2020 Note to the Noteholder is hereby authorized at a price equal to 100% of the
principal amount of the Series 2020 Note. In addition, the Issuer will pay the costs of the
Noteholder's counsel in connection with the closing of the Series 2020 Note, in the
amount of $2,500.00.
SECTION 8.02. APPOINTMENT OF PAYING AGENT AND
REGISTRAR. The Issuer hereby appoints the Clerk as Registrar and Paying Agent with
respect to the Series 2020 Note.
SECTION 8.03. 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 Series 2020 Note issued hereunder.
SECTION 8.04. REPEAL OF INCONSISTENT RESOLUTIONS. All
resolutions or parts thereof in conflict herewith are hereby superseded and repealed to the
extent of such conflict.
SECTION 8.05. WAIVER OF RIGHT TO TRIAL BY JURY; VENUE.
The Issuer and, by its purchase of the Series 2020 Note, the Noteholder hereby
irrevocably and voluntarily waives any right it 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 Series 2020 Note or any document related
hereto or thereto, and agree that exclusive venue for such suit or action shall be Seminole
County, Florida.
SECTION 8.06. GENERAL AUTHORITY. The Authorized Issuer
Representative, 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 the Series 2020 Note, documents, agreements and instruments) required
of them by this Resolution, the issuance of the Series 2020 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 2020 Note and in the financing documents. If the Mayor is unavailable or unable
Resolution No. 20-1527
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at any time to perform any duties or functions hereunder, then any other duly authorized
member of the City Commission is hereby authorized to act on his behalf.
SECTION 8.07. NO PERSONAL LIABILITY. No recourse under or upon
any obligation, covenant or agreement of this Resolution, or the Series 2020 Note or for
any claim based thereon or otherwise in respect thereof, shall be had against any Issuer
official, officer or employee or any member of the City Commission, as such, of the
Issuer, past, present or future, either directly or through the Issuer it being expressly
understood (a) that no personal liability whatsoever shall attach to, or is or shall be
incurred by, any Issuer official, officer or employee or members of the City Commission,
as such, under or by reason of the obligations, covenants or agreements contained in this
Resolution, or the Series 2020 Note or implied therefrom, and (b) that any and all such
personal liability, either at common law or in equity or by constitution or statute, of, and
any and all such rights and claims against, any Issuer official, officer or employee or
member of the City Commission, as such, are waived and released as a condition of, and
as a consideration for, the execution of this Resolution and the and the issuance of the
Series 2020 Note, on the part of the Issuer.
SECTION 8.08. EFFECTIVE DATE. This Resolution shall take effect
immediately upon its adoption.
low.
DULY ADOPTED thisAM day of April, 2020.
CITY OF LONGWOOD FLORIDA
Matt Morgan, Mayor
APPROVED AS TO FORM AND LEGALITY
FOR THE USE AND RELIANCE OF THE
CITY OE�WOOD, FLORIDA ONLY:
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