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R20-032 1 RESOLUTION NO. R20-032 2 3 A SERIES RESOLUTION PROVIDING FOR THE ISSUANCE OF THE 4 UP TO $43,000,000 CITY OF BOYNTON BEACH,FLORIDA TAXABLE 5 UTILITY SYSTEM REVENUE REFUNDING BOND, SERIES 2020A, 6 THE UP TO $11,000,000 CITY OF BOYNTON BEACH, FLORIDA 7 UTILITY SYSTEM REVENUE REFUNDING BOND, SERIES 2020B, 8 AND THE UP TO $43,000,000 CITY OF BOYNTON BEACH, FLORIDA 9 UTILITY SYSTEM REVENUE REFUNDING BOND, SERIES 2021A; 10 PROVIDING A METHOD FOR ESTABLISHING THE PRINCIPAL 11 AMOUNTS, INTEREST RATES, MATURITY DATES, PAYMENT 12 PROVISIONS AND OTHER DETAILS OF SAID BONDS; 13 AUTHORIZING THE SALE OF THE BONDS TO T.D. BANK, N.A.; 14 AUTHORIZING THE EXECUTION OF A BOND PURCHASE AND 15 EXCHANGE AGREEMENT; AUTHORIZING THE EXECUTION OF 16 AN ESCROW DEPOSIT AGREEMENT; PROVIDING FOR THE 17 APPLICATION OF THE PROCEEDS OF SAID BONDS AND CERTAIN 18 OTHER MONEYS; DESIGNATING THE BOND REGISTRAR FOR 19 SAID BONDS; CONTAINING CERTAIN AUTHORIZATIONS AND 20 OTHER PROVISIONS;AND PROVIDING AN EFFECTIVE DATE. 21 22 23 WHEREAS,pursuant to Resolution No. R 92-96 adopted by the City Commission(the 24 "City Commission") of the City of Boynton Beach, Florida (the "City") on June 16, 1992, as 25 amended (the "Bond Resolution") obligations of the City ("Bonds") may be issued and may be 26 secured by a lien upon and pledge of certain"Pledged Revenues" as defined in and to the extent 27 set forth in the Bond Resolution; and 28 29 WHEREAS, the City desires to authorize the issuance of a Bond, to be designated 30 "Taxable Utility System Revenue Refunding Bond, Series 2020A" (the "Series 2020A Bond"), 31 under the Bond Resolution to provide funds, together with available funds of the City, to 32 refinance the City's Utility System Revenue Bonds, Series 2012 maturing after November 1, 33 2021 (the "2012 Refunded Bonds")and to pay certain costs of issuing such Series 2020A Bond; 34 and 35 36 WHEREAS, the City desires to authorize the issuance of another Bond, to be 37 designated "Utility System Revenue Refunding Bond, Series 2020B" (the "Series 2020B 38 Bond"), under the Bond Resolution to provide funds,together with available funds of the City, 39 to refinance the City's Utility System Revenue Bond, Series 2018 (the "2018 Refunded Bond") 40 and to pay certain costs of issuing such Series 2020B Bond; and 41 42 WHEREAS, the City desires to authorize the issuance of another Bond, to be 43 designated "Utility System Revenue Refunding Bond, Series 2021A" (the "Series 2021A 44 Bond," and collectively with the Series 2020A Bond and the Series 2020B Bond, the 45 "2020/2021 Bonds"), which may be issued only in exchange for and in order to refinance and 46 replace the Series 2020A Bond; and 47 48 WHEREAS,the City Commission hereby determines that it is in the best interest of the 49 City that the establishment of the terms of the 2020/2021 Bonds,the establishment of the terms 50 of the sale by the City of the Series 2020A Bond and the Series 2020B Bond, and the 51 establishment of the terms upon which the exchange of the Series 2021A Bond for the Series 52 2020A Bond may occur,all take place through negotiation with T.D.Bank,N.A. (the "Lender"); 53 and 54 55 WHEREAS,it is necessary and desirable to specify a method for determining the dates, 56 the interest rates,maturity dates, payment and prepayment provisions and all other terms of the 57 2020/2021 Bonds; 58 59 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF 60 THE CITY OF BOYNTON BEACH, FLORIDA: 61 62 Section 1. Authority for this Resolution. This Resolution is adopted pursuant to the 63 provisions of the Charter of the City,the Constitution of the State of Florida, including,but not 64 limited to, Article VIII, Section 2 thereof, and other applicable provisions of law, including 65 Chapter 166, Florida Statutes and Chapter 159, Part I, Florida Statutes, and the Bond 66 Resolution. 67 68 Section 2. Definitions. Terms used herein in capitalized form and not otherwise defined 69 herein shall have the meanings ascribed thereto in the Bond Resolution. The following terms, 70 when used in this Resolution or in the Bond Resolution, as amended hereby, shall have the 71 following meanings: 72 73 "Authorized Representative" means the City Manager of the City,and in her absence or inability 74 to act, the Mayor or Vice-Mayor, and in the absence or inability to act of City Manager, the 75 Mayor and the Vice-Mayor, then any City Commissioner(the absence or inability to act of the 76 City Manager, Mayor or Vice-Mayor as to any particular action being conclusively established 77 by the taking of such action by the Mayor, Vice-Mayor or other City Commissioner). 78 79 "BPA" is defined in Section 6 hereof. 80 81 "Business Day" shall mean,with respect to any 2020/2021 Bond,any day other than a Saturday, 82 Sunday or other day on which the Payment Office of the Lender, as defined in the applicable 83 2020/2021 Bond, is lawfully and temporarily closed. 84 85 "Credit Event" means, as to a 2020/2021 Bond, the event described as such in Section 9(g) 86 hereof 87 88 "Escrow Agent" means The Bank of New York Mellon Trust Company,N.A. 89 90 "Escrow Deposit Agreement" means an agreement between the City and the Escrow Agent to 91 be entered into prior to or simultaneous with the issuance of the Series 2020A Bonds to provide 92 for the refunding and defeasance of the 2012 Refunded Bonds. 93 94 "Interest Payment Date" shall mean,May 1 and November 1 of each year,commencing(i)with 95 respect to the Series 2020A Bond and the Series 2020B Bond, on November 1, 2020 and (ii) 96 with respect to the Series 2021 A Bond, if issued, on the first May 1 or November 1 following 97 the date of issuance thereof. 98 2 S:\CA\RESO\Bonds\Supplemental Bond Reso(4).Docx 99 "Rating" means a long-term credit rating, assigned without regard to any liquidity or credit- 100 enhancement,to any Bonds by any Rating Agency. 101 102 "Rating Agency" means any of Fitch Ratings, and its successors, Moody's Investors Service, 103 Inc., and its successors, and S&P Global Ratings, a Standard& Poor's Financial Services LLC 104 business, and its successors. 105 106 Section 3.Authorization and Terms of Series 2020A Bond. 107 108 (a) The Series 2020A Bond is authorized to be issued pursuant to this Resolution and Section 109 210 of the Bond Resolution in the principal amount of not in excess of$43,000,000. The Series 110 2020A Bond is being issued for the principal purpose of providing funds to refinance the 2012 111 Refunded Bonds. Prior to or simultaneous with the issuance of the Series 2020A Bond the 112 conditions of Section 210 of the Bond Resolution shall be satisfied. 113 114 (b) The Series 2020A Bond shall be issued as a single fully registered Bond in the entire stated 115 principal amount thereof, shall be dated as of the date of its initial issuance, shall be issued in 116 the principal amount, shall bear interest at the rate of 2.56%per annum, computed on the basis 117 of a 360 day year consisting of twelve thirty-day months, subject to adjustment,payable on the 118 Interest Payment Dates, shall be payable in the manner, and shall have such required payments 119 and prepayment provisions, shall mature on November 1, 2034, all as set forth in a certificate 120 of the City (the "Certificate Establishing Series 2020A Bond Terms") signed on behalf of the 121 City by the Authorized Signatory prior to or simultaneous with the issuance of the Series 2020A 122 Bond: provided, that the City shall realize net present value debt service savings as a result of 123 the issuance of the Series 2020A Bond and the refinancing of the 2012 Refunded Bonds 124 (without regard to any adjustment to the interest rate borne by the Series 2020A Bond that is 125 contingent upon a future event) on an aggregate basis in an amount not less than $3,000,000, 126 calculated using the arbitrage yield (as if the 2020A Bond was a tax-exempt obligation) on the 127 Series 2020A Bond as the discount rate, and provided that a certificate of PFM Financial 128 Advisors LLC setting forth the net present value debt service savings calculations and 129 satisfaction of the foregoing condition shall be conclusive as to the satisfaction of the foregoing 130 conditions.The Authorized Signatory is authorized to determine the details of the Series 2020A 131 Bond within the parameters set forth above, and upon such determination to execute the 132 Certificate Establishing Series 2020A Bond Terms completed with the details of the Series 133 2020A Bond, thereby conclusively establishing such details. 134 135 Section 4.Authorization and Terms of Series 2020B Bond. 136 137 (a) The Series 2020B Bond is authorized to be issued pursuant to this Resolution and Section 138 210 of the Bond Resolution in the principal amount of not in excess of$11,000,000.The Series 139 2020B Bond is being issued for the principal purpose of providing funds to refinance the 2018 140 Refunded Bond. Prior to or simultaneous with the issuance of the Series 2020B Bond the 141 conditions of Section 210 of the Bond Resolution shall be satisfied. 142 143 (b)The Series 2020B Bond shall be issued as a single fully registered Bond in the entire stated 144 principal amount thereof, shall be dated as of the date of its initial issuance, shall be issued in 145 the principal amount, shall bear interest at the rate of 2.16%per annum, computed on the basis 146 of a 360 day year consisting of twelve thirty-day months, subject to adjustment,payable on the 147 Interest Payment Dates, shall be payable in the manner, shall have such required payments and 3 S:\CA\RESO\Bonds\Supplemental Bond Reso(4).Docx 148 prepayment provisions, shall mature on November 1,2034, all as set forth in a certificate of the 149 City (the "Certificate Establishing Series 2020B Bond Terms") signed on behalf of the City by 150 the Authorized Signatory prior to or simultaneous with the issuance of the Series 2020B Bond; 151 provided, that the City shall realize net present value debt service savings as a result of the 152 issuance of the Series 2020B Bond and the refinancing of the 2018 Refunded Bond (without 153 regard to any adjustment to the interest rate borne by the Series 2020B Bond that is contingent 154 upon a future event) on an aggregate basis in an amount not less than $1,000,000, calculated 155 using the arbitrage yield on the Series 2020B Bond as the discount rate, and provided that a 156 certificate of PFM Financial Advisors LLC setting forth the net present value debt service 157 savings calculations and satisfaction of the foregoing condition shall be conclusive as to the 158 satisfaction of the foregoing conditions. The Authorized Signatory is authorized to determine 159 the details of the Series 2020B Bond within the parameters set forth above, and upon such 160 determination to execute the Certificate Establishing Series 2020B Bond Terms completed with 161 the details of the Series 2020B Bond, thereby conclusively establishing such details. 162 163 Section 5.Authorization and Terms of Series 2021A Bond. 164 165 (a) The Series 2021A Bond is authorized to be issued pursuant to this Resolution and Section 166 210 of the Bond Resolution in the principal amount equal to the outstanding principal amount 167 of the Series 2020A Bond on the date of issuance of the Series 2021A Bond. The Series 2021A 168 Bond is authorized to be issued for the sole purpose of being exchanged for, and thereby 169 refinancing, the Series 2020A Bond. Prior to or simultaneous with the issuance of the Series 170 2021A Bond the conditions of Section 210 of the Bond Resolution shall be satisfied. 171 172 (b) If issued, the Series 2021A Bond shall be issued as a single fully registered Bond in the 173 entire stated principal amount thereof, shall be dated as of the date of its initial issuance, shall 174 bear interest at the rate of 2.09%per annum,computed on the basis of a 360 day year consisting 175 of twelve thirty-day months,subject to adjustment,payable on the Interest Payment Dates,shall 176 be payable in the manner, shall have such required payments and prepayment provisions and 177 shall mature on November 1, 2034, all as set forth in a certificate of the City (the "Certificate 178 Establishing Series 2021A Bond Terms") signed on behalf of the City by the Authorized 179 Signatory prior to or simultaneous with the issuance of the Series 2021A Bond.The Authorized 180 Signatory is authorized to determine the details of the Series 2021 A Bond within the parameters 181 set forth above, and upon such determination to execute the Certificate Establishing Series 182 2021 A Bond Terms completed with the details of the Series 2021 A Bond,thereby conclusively 183 establishing such details. 184 185 Section 6. Plan of Finance. 186 187 The City caused its registered independent municipal advisor,PFM Financial Advisors LLC,to 188 issue a request for proposals from interest financial institutions for the purchase of the 189 2020/2021 Bonds. The City hereby determines that the proposals submitted by the Lender 190 afford the best terms and are in the best interest of the City. The City has also determined that 191 due to the volatility of the market for debt instruments such as the 2020/2021 Bonds and the 192 complexity of the exchange feature of the Series 2020A and Series 2021A Bond, a negotiated 193 sale of the 2020/2021 Bonds is in the best interest of the City. 194 195 Upon establishment of the terms of the 2020/2021 Bonds as described herein, the Authorized 196 Signatory is authorized to award the sale of the Series 2020A Bond and the Series 2020B Bond 4 S:\CA\RESO\Bonds\Supplemental Bond Reso(4).Docx 197 to the Lender at a price equal to the principal amount thereof. The City authorizes the 198 Authorized Signatory to execute and deliver a Bond Purchase and Exchange Agreement 199 ("BPA") between the City and the Lender, which shall provide for the sale to and purchase by 200 the Lender of the Series 2020A Bond and the Series 2020B Bond,and for the possible exchange 201 of the Series 2021A Bond for the Series 2020A Bond, all on such dates and under such 202 conditions as described therein, in such form as shall be approved by the Authorized Signatory, 203 such execution to constitute conclusive evidence of such approval. Prior to execution of the 204 BPA, the Lender shall file with the City the disclosures required by Section 218.385, Florida 205 Statutes, and competitive bidding for the 2020/2021 Bonds is hereby waived pursuant to the 206 authority of Section 218.385, Florida Statutes. 207 208 Section 7. Provisions Generally Applicable to 2020/2021 Bonds. 209 210 (a) The Reserve Account Requirement for the 2020/2021 Bonds shall be zero and none of the 211 2020/2021 Bonds shall be secured by or entitled to payment from the Reserve Account. 212 213 (b)The City Clerk shall serve as Bond Registrar with respect to the 2020/2021 Bonds. 214 215 (c)The provisions of Article III of the Bond Resolution regarding "redemption" do not apply to 216 the 2020/2021 Bonds, and the 2020/2021 Bonds shall be subject to payment and prepayment 217 as provided therein. 218 219 (d) The 2020/2021 Bonds shall be in the form set forth in the Bond Resolution, with such 220 changes as may be deemed necessary or appropriate by the Authorized Signatory and in order 221 to conform to the provisions of this Resolution and the terms of the 2020/2021 Bonds as may 222 be approved by the Authorized Signatory executing the 2020/2021 Bonds, such execution to be 223 conclusive evidence of such approval. 224 225 (e) The Authorized Representative is authorized and directed on behalf of the City to execute 226 the 2020/2021 Bonds. It is not necessary for the seal of the City to be impressed on the 227 2020/2021 Bonds or for the City Clerk to execute the 2020/2021 Bonds. 228 229 (f) Proceeds from the sale of the 2020/2021 Bonds shall be applied for the purposes authorized 230 herein as described in the BPA and/or as authorized and directed by the Authorized 231 Representative at or prior to the issuance of the respective series of 2020/2021 Bonds. 232 233 (g)In any case where the scheduled date for payment of principal of,prepayment fee, if any,or 234 interest on any 2020/2021 Bond is not a Business Day, then such payment of principal, 235 prepayment fee, if any, or interest need not be made on such date but may be made on the next 236 succeeding Business Day, provided,however,that interest shall continue to accrue to and shall 237 be payable on such succeeding Business Day. 238 239 Section 8. Compliance with Tax Requirements. The City agrees to comply with the 240 requirements applicable to it contained in Section 103 and Part IV of Subchapter B of Chapter 241 1 of the Internal Revenue Code of 1986, as amended (the "Code") to the extent necessary to 242 preserve the exclusion of interest on the Series 2020B Bond and the Series 2021A Bond (if 243 issued) (jointly, the "Tax-Exempt Bonds") from gross income for federal income tax purposes. 244 Specifically, without intending to limit in any way the generality of the foregoing, the City 245 covenants and agrees: 5 S:\CA\RESO\Bonds\Supplemental Bond Reso(4).Docx 246 247 (1) to make payments to the United States of America from, to the extent legally available, 248 the funds and sources of revenues pledged to the payment of the Tax-Exempt Bonds, and from 249 any other legally available funds, at the times and in the amounts required pursuant to Section 250 148(f) of the Code; 251 252 (2) to refrain from using proceeds of the Tax-Exempt Bonds in a manner that would cause 253 any of the Tax-Exempt Bonds to be classified as a private activity bond under Section 141(a) 254 of the Code; and 255 256 (3) to refrain from taking any action that would cause any of the Tax-Exempt Bonds to be 257 classified as an arbitrage bond under Section 103(b) and Section 148 of the Code. 258 259 The City understands that the foregoing covenants impose continuing obligations on the City 260 to comply with the requirements of Section 103 and Part IV of Subchapter B of Chapter 1 of 261 the Code so long as such requirements are applicable. 262 263 Section 9. Provisions Required by the Lender. The following provisions shall apply for 264 so long as, and only for so long as, any 2020/2021 Bond is Outstanding: 265 266 (a) The City shall within 210 days after the end of each of its Fiscal Years furnish to the 267 Bondholder(s)of the 2020/2021 Bonds the financial statements of the City for such Fiscal Year, 268 together with an audit report of an independent certified public accountant to the effect that 269 such audit has been conducted in accordance with generally accepted auditing standards and 270 stating whether such financial statements present fairly in all material respects the financial 271 position of the City and the results of its operations and cash flows for the periods covered by 272 the audit report, all in conformity with generally accepted accounting principles applied on a 273 consistent basis. 274 275 (b) The City shall also furnish to the Bondholder(s) of the 2020/2021 Bonds, within sixty days 276 after the adoption thereof,the annual budget of the City,and,promptly but not more than fifteen 277 days after written request therefor, such other information, other than any information required 278 or permitted by law to be confidential, respecting the affairs, condition and/or operations, 279 financial or otherwise,of the City,as the Bondholder may reasonably request, including but not 280 limited to a certification as to the absence of any Event of Default and compliance by the City 281 with the covenant of Section 502 of the Bond Resolution. 282 283 (c) The City shall within five Business Days after it acquires knowledge thereof, notify the 284 Bondholder(s) of the 2020/2021 Bonds in writing at the applicable Payment Office of the 285 Lender of the happening, occurrence, or existence of any Event of Default and any event or 286 condition which with the passage of time or giving of notice,or both,would constitute an Event 287 of Default, and shall provide such Bondholder(s), with such written notice, a detailed statement 288 by a responsible officer of the City of all relevant facts and the action being taken or proposed 289 to be taken by the City with respect thereto. Regardless of the date of receipt of such notice by 290 the Bondholder, such date shall not in any way modify the date of occurrence of the actual 291 Event of Default. 292 293 (d)It shall be an Event of Default if(A)the City shall fail to observe and perform any covenant, 294 condition or agreement on its part to be observed or performed under this Resolution for a 6 S:\CA\RESO\Bonds\Supplemental Bond Reso(4).Docx 295 period of thirty days after the earlier of(i) the date written notice specifying such failure and 296 requesting that it be remedied, is given to the City by one or more Bondholder(s) of the 297 2020/2021 Bonds or(ii)the date the City was required to give notice of the event or condition 298 to the Bondholders of the 2020/2021 Bonds pursuant to this Resolution, unless the 299 Bondholder(s) of the 2020/2021 Bonds shall agree in writing to an extension of such time prior 300 to its expiration or(B)any representation or warranty made in writing by the City in or pursuant 301 to this Resolution or the Agreement or its execution, delivery or performance shall prove to 302 have been false, incorrect, misleading or breached in any material respect on the date when 303 made. 304 305 (e) Notwithstanding anything to the contrary in Section 801(i) of the Bond Resolution, the 306 failure to cure an Event of Default under Section 801(i) of the Bond Resolution within sixty 307 days of the occurrence thereof shall be an Event of Default. 308 309 (f)No modification or amendment of this Resolution or of any resolution amendatory hereof or 310 supplemental hereto may be made except with the written consent of the Bondholder. No 311 modification or amendment to Article V, Sections 701 and 706, Article VIII, Article X and 312 Article XI of the Bond Resolution(or the definitions referenced therein) may be made without 313 the written consent of the Bondholder(s) of all of the Outstanding 2020/2021 Bonds. 314 315 (g) If any Rating is withdrawn or suspended for credit-related reasons, or if during any time as 316 there is a Rating the highest Rating is not at least BBB+Baal (or the equivalent), then at the 317 option of the Bondholder of a 2020/2021 Bond,the same shall constitute a "Credit Event" as to 318 such 2020/2021 Bond, in which event the interest rate borne by such 2020/2021 Bond shall 319 increase to the Default Rate (as defined in such 2020/2021 Bond) so long as such condition 320 persists. and it shall be deemed to be and it shall be deemed to be a breach of the covenants 321 hereunder and an event of default hereunder. 322 323 (h) The failure of the City to have a Rating is not in and of itself a Credit Event so long as the 324 withdrawal or suspension of the last applicable Rating was not initiated by the Rating Agency 325 for credit-related matters, provided, that in the event the City has no Rating, and for so long as 326 such condition persists, Sections 209 and 502 of the Bond Resolution (Additional Bonds and 327 Rate Covenant) shall be applied as if each reference therein to "one hundred ten per centum" 328 and "110%" is instead "one hundred twenty per centum" and "120%." 329 330 Section 10. Refunded Bonds. The refinancing of the 2012 Refunded Bonds and 2018 331 Refunded Bond is hereby authorized and the Authorized Signatory is authorized and directed 332 to take such action as shall be required to accomplish the same. 333 334 The Authorized Signatory is authorized to select and engage an independent certified public 335 accountant to verify the calculations of the sufficiency of amounts to be deposited pursuant to 336 the Escrow Deposit Agreement to pay the principal of and interest on the 2012 Refunded Bonds. 337 338 The Authorized Signatory is authorized to execute the Escrow Deposit Agreement in such form 339 as shall be approved by the Authorized Signatory, such execution to constitute conclusive 340 evidence of such appros al. 341 342 The Authorized Signatory,the Escrow Agent and PFM Asset Management LLC,or any of them, 343 are hereby authorized to subscribe for the purchase of any United State Treasury Obligations - 7 S:\CA\RESO\Bonds\Supplemental Bond Reso(4).Docx 344 - State and Local Government Series("SLGS")to be purchased pursuant to the Escrow Deposit 345 Agreement. The Authorized Signatory is also authorized to determine to proceed with a 346 solicitation for the purchase of investments on the open market in order to fund the Escrow 347 Deposit Agreement.The Authorized Signatory is authorized to engage PFM Asset Management 348 LLC to assist with any SLGS subscription or to act as bidding agent of the City in connection 349 with such open market solicitation. 350 351 Section 11. Authorizations. The Authorized Representative, the City Clerk and the 352 Director of Financial Services are hereby jointly and severally authorized to do all acts and 353 things required of them by this Resolution or the Bond Resolution, or desirable or consistent 354 with the requirements hereof or thereof,and for the full,punctual and complete performance of 355 all terms, covenants and agreements contained in the 2020/2021 Bonds, the Escrow Deposit 356 Agreement, the BPA, the Bond Resolution and this Resolution, and to make any elections 357 necessary or desirable in connection with the arbitrage provisions of Section 148 of the Code. 358 359 Section 12. Resolution to Constitute a Contract. In consideration of the purchase and 360 acceptance of the 2020/2021 Bonds by those who shall be the holders thereof from time to time, 361 this Resolution shall constitute a contract between the City and such holders, and all covenants 362 and agreements herein and in the Bond Resolution set forth to be performed by the City shall 363 be for the equal benefit and security of all of the holders. 364 365 Section 13. No Implied Beneficiary. With the exception of any rights herein expressly 366 conferred, nothing expressed or mentioned in or to be implied from this Resolution or the 367 2020/2021 Bonds is intended or shall be construed to give any person other than the City, the 368 Lender and the Bondholder(s) of the 2020/2021 Bonds, any legal or equitable right, remedy or 369 claim under or with respect to this Resolution or the Bond Resolution or any covenants, 370 conditions,and provisions herein contained;this Resolution and the Bond Resolution and all of 371 the covenants, conditions and provisions hereof and thereof being intended to be and being for 372 the sole and exclusive benefit of the City, the Lender and such Bondholder(s). 373 374 Section 14. Jury Trial; Venue. The City waives any right to trial by jury of any issue 375 between or among the City, the Lender and the Bondholder(s) of the 2020/2021 Bonds arising 376 out of this Resolution, the Bond Resolution, the BPA or the 2020/2021 Bonds, and it is a 377 condition to the issuance of the 2020/2021 Bonds that the Bondholder(s) of the 2020/2021 378 Bonds, by accepting the ownership thereof, shall also waive any right to trial by jury of any 379 issue between or among the City, the Lender and the Bondholder(s) of the 2020/2021 Bonds 380 arising out of this Resolution, the Bond Resolution, the BPA or the 2020/2021 Bonds. 381 Furthermore, the City, and the Bondholder(s) of the 2020/2021 Bonds, by accepting the 382 ownership thereof, waive any objection to venue of any judicial proceeding arising out of this 383 Resolution,the Bond Resolution,the BPA or the 2020/2021 Bonds lying in any State of Florida 384 or United States federal court seated in Palm Beach County, Florida or having jurisdiction over 385 the geographic area in which the City is located. 386 387 Section 15. Compliance With Open Meetings Law. It is found and determined that all 388 formal actions of the City Commission concerning and relating to the adoption of this 389 Resolution were taken in an open meeting of the City Commission,and that all deliberations of 390 the City Commission that resulted in the formal actions were in meetings that were open to the 391 public in compliance with all legal requirements, including Section 286.011, Florida Statutes. 392 8 S:\CA\RESO\Bonds\Supplemental Bond Reso(4).Docx 393 Section 16. Severability. If any provision of this Resolution shall be held or deemed to 394 be or shall, in fact, be illegal, inoperative or unenforceable in any context, the same shall not 395 affect any other provision herein or render any other provision (or such provision in any other 396 context) invalid, inoperative or unenforceable to any extent whatsoever. 397 398 Section 17. Repealer. All Resolutions or parts thereof of the City in conflict with the 399 provisions herein contained or, to the extent of any such conflict, hereby superseded and 400 repealed. 401 402 Section 18: This Resolution shall take effect immediately upon its passage. 403 404 PASSED AND ADOPTED this 21st day of April, 2020. 405 CITY OF BOYNTON BEACH, FLORIDA 406 407 YES NO 408 409 Mayor—Steven B. Grant 410 411 Commissioner—Justin Katz 412 413 Commissioner—Woodrow L. Hay ✓ 414 415 Commissioner—Christina L. Romelus (/ 416 417 Commissioner—Ty Penserga 418 419 420 VOTE 421 ATTEST: 422 423 -14ha'4%-‘ 424 C tal Gibson, MMC 425 City Clerk 426 427 428 (Corporate Seal) I VOY44T , r 0.4 V .. 1920 ln 0 R I i 9 S:\CA\RESO\Bonds\Supplemental Bond Reso(4).Docx TD Bank, N.A. 301 East Pine Street,Suite 1000 Orlando,FL 32801 ID Bank Tel: 407-622-3563 Fax:407-423-0070 America's Most Convenient Bank• Sterling.Harrell@td.com April 3, 2020 Ms. Mara Frederiksen Mr. Jay Glover Director of Finance Managing Director City of Boynton Beach PFM Financial Advisors LLC 3301 Quantum Blvd, Suite 101 300 S. Orange Avenue, Suite 1170 Boynton Beach, FL 33426 Orlando, FL 32801 Mr. Michael Dennis Analyst PFM Financial Advisors LLC 300 S. Orange Avenue, Suite 1170 Orlando, FL 32801 RE: Request for Proposal for Cinderella Bank Loan Dear Ms. Frederiksen and Messrs. Glover and Dennis, In response to the Request for Proposal for the City of Boynton Beach, TD Bank, N.A. (the "Bank") is pleased to submit the following proposal to the City of Boynton Beach, Florida (the "City"). The structure of the proposed Credit Accommodation is outlined in the attached term sheet which provides a statement of suggested terms, but under no circumstance shall such statement be construed as a complete summarization of terms necessary for consummation of the proposed Credit Accommodation. PLEASE NOTE THIS PROPOSAL IS SUBJECT TO FORMAL CREDIT REVIEW AND UNDERWRITING IN ACCORDANCE WITH THE BANK'S INTERNAL POLICY AND NOTHING HEREIN SHALL CONSTITUTE A BINDING COMMITMENT TO LEND. Further, we expressly advise you that TD Bank, N.A. has not approved the Credit Accommodation. The Bank shall not be liable to the Borrower or any other person for any losses, damages or consequential damages which may result from the Borrower's reliance upon this proposal letter, the proposed Credit Accommodation, the proposed term sheet or any transaction contemplated hereby. The Bank's Loan Proposal is subject to receipt by the City prior to 5:00 pm eastern standard time on April 3, 2020 and is contingent upon a Loan Closing with mutually acceptable documents between the City and Bank on or before April 30, 2020, unless otherwise negotiated between the Parties. This letter, including the terms contained within the proposed Credit Accommodation, is delivered to you on the condition that its existence and its contents will not be disclosed without our prior written approval, except (i) as may be required to be disclosed in any legal proceeding or as may otherwise be required by law and on a confidential and "need to know" basis, to your directors, officers, employees, advisors and agents. 1 We appreciate this opportunity and are delighted to provide this Proposal. We look forward to working with you to successfully complete this transaction. My contact information is noted above. Very truly yours, TD BANK, N.A. By:C: t521LliZ- Sterling Harrell Director 2 TD Bank, N.A. TERMS AND CONDITIONS OF CREDIT ACCOMMODATION DATED April 3, 2020 ("Loan") THIS IS A STATEMENT OF TERMS AND CONDITIONS AND NOT A COMMITMENT TO LEND. ALL CREDIT ACCOMMODATIONS ARE SUBJECT TO FORMAL CREDIT UNDERWRITING AND APPROVAL. 1. Loan a) Borrower: City of Boynton Beach, FL (the "Borrower") b) Facility: Series 2020A: Bank Loan (the "2020A Note") issued as a "Cinderella" Bond," as described herein. c) Purpose: The 2020A Note will be issued to refund the City's outstanding Utility System Revenue Bonds, Series 2012 maturing on and after November 1, 2022 and pay costs of issuing the 2020A Note. d) Amount: Not to exceed $43,000,000.00 USD e) Security: The principal and interest on the 2020A Note will be payable solely from and secured by a pledge of the Pledged Revenues, which include (i) Net Revenues of the System, (ii) certain Impact Fees, and (iii) subject to application thereof as provided in the Resolution, amounts in certain funds and accounts established under the Resolution. No Debt Service Reserve Fund will be funded for the 2020A Note. The lien of the 2020A Note on the Pledged Revenues will be on parity with the 2002 Bonds, 2012 Bonds not refunded by the 2020A Note, 2016 Bond, 2018 Bond and any Additional Bonds issued under the Resolution. f) Settlement Date: Estimated April 27, 2020 g) Maturity: November 1, 2034 h) Repayment Interest on the 2020A Note will be paid semi-annually (May 1 and Terms: November 1), commencing on November 1, 2020, based upon a 30/360- day basis. Principal on the 2020A Note will be paid annually (November 1), commencing on November 1, 2020, with final maturity of November 1, 2036 in accordance with the Amortization Schedule attached in Appendix A. i) Interest Rate: Taxable Fixed Rate: 2.56% until satisfaction of conditions to convert to tax-exempt rate as described below. 3 This rate will be held until a settlement date no later than April 30, 2020 so long as the Bank receives notification that it will be recommended Lender on or before 5:00PM EST on April 3, 2020. In the event the selection or closing goes beyond the dates noted above, the fixed interest rate will be determined by mutual agreement between the parties. The initial taxable rate may be converted to a tax-exempt rate of 2.09%, which based on current tax law we understand can be within 90 days prior to the 2012 Bond first optional redemption date, provided that there shall be no default or event of default and there shall be delivered to the Bank an opinion of bond counsel that the interest on the 2020A Note is excludable from gross income of the owners thereof for Federal income tax purposes. Until the conditions precedent for the conversion to the tax- exempt rate shall be satisfied, the 2020A Note shall continue to bear interest at the taxable rate. j) Prepayment Provision: Option A: At the time of any full or partial prepayment, (i) A "Yield Maintenance Fee" in an amount computed as follows shall apply: This Note may be prepaid on any Business Day in whole or in part upon thirty (30) days prior written notice to the Bank. In the event of any prepayment of the 2020A Note, whether by voluntary prepayment, acceleration or otherwise, the Borrower shall, at the option of the Bank, pay a "fixed rate prepayment charge" equal to the greater of (i) 1.00% of the principal balance being prepaid multiplied by the "Remaining Term," as hereinafter defined, in years or (ii) a "Yield Maintenance Fee" in an amount computed as follows: The current cost of funds, specifically the bond equivalent yield for United States Treasury securities (bills on a discounted basis shall be converted to a bond equivalent yield) with a maturity date closest to the "Remaining Term", shall be subtracted from the "Stated Interest Rate"in effect at the time of prepayment. If the result is zero or a negative number, there shall be no Yield Maintenance Fee due and payable. If the result is a positive number, then the resulting percentage shall be multiplied by the amount being prepaid times the number of days in the "Remaining Term" and divided by 360. The resulting amount is the "fixed prepayment charge" due to the Bank upon prepayment of the principal of this Loan plus any accrued interest due as of the prepayment date and is expressed in the following calculation: Yield Maintenance Fee = [Amount Being Prepaid x (Stated Interest Rate - Current Cost of Funds) x Days in the Remaining Term/360 days] + any accrued interest due "Remaining Term." "Remaining Term" as used herein shall mean the remaining term of the 2020A Note. Option B: Borrower can elect to have a "No Prepayment" penalty associated with 2020A Note by adding a premium of 14 basis points to the quoted proposed Loan Rates. Partial prepayments shall be applied in inverse order of maturity, treating scheduled amortization installments as maturities. 4 k) Default Rate of Interest: The "default rate of interest" shall be six (6) percentage points in excess of the Prime Rate as quoted in the Wall Street Journal. Events of Default: Will include, but not be limited to: (1) Breach of representation or warranties. (2)Violation of covenants. (3) Bankruptcy or insolvency. (5) Payment default. I) Late Charges: If any payment due the Bank is more than fifteen (15) days overdue, a late charge of six percent (6%) of the overdue payment shall be assessed. 2. Fees and Expenses: The Borrower shall pay to the Bank on demand any and all costs and expenses (including, without limitation, reasonable attorneys' fees and disbursements, court costs, litigation and other expenses) incurred or paid by the Bank in connection with the loan. The City's bond counsel will provide documentation associated with this transaction. Documentation will be subject to the review and approval of the Bank and the Bank's counsel. The City agrees to pay all legal fees and expenses of the Bank associated with the review and closing of this transaction, which costs may be paid with proceeds of the Loan with a maximum time basis not to exceed $17,500.00 upon initial issuance and $5,000 upon conversion of taxable loan to tax- exempt loan. Bank's counsel shall be the following: Michael Wiener Holland & Knight LLP 2115 Harden Blvd. Lakeland, FL 33803 (863) 499-5362 3. Financial Reporting: a) Borrower(s)shall furnish the following financial reports: Type of Report(s) Frequency Due Date Audited Financial Statements Annually Within 210 days after the end of the fiscal year Annual Budget Annually Within 60 days after its adoption The Bank reserves the right to request reasonable additional financial information to supplement or verify certain financial assumptions or verify the creditworthiness of the Borrower. 5 4. Legal Opinion: Prior to closing, there shall be delivered to the Bank: (A) an opinion of Bond Counsel acceptable to the Bank covering matters customary for a transaction of this type and nature and which shall, without limitation, opine that: (1) the Borrower is duly formed; (2) all loan documents have been validly authorized and executed by and on behalf of the Borrower, if any; (3) all loan documents are valid, binding, enforceable in accordance with their terms and do not violate any legal requirements, including without limitation, organizational documents, laws and material agreements; (4) the loan and loan documents are exempt from registration and qualification under the Securities Act of 1933 and Trust Indenture Act of 1939, and (5) the interest on the 2020A Note is not excludable from the gross income of the Bank. (B) An opinion of counsel to the Borrower in form and substance satisfactory to the Bank. 5. Financial Covenants: All standard covenants and provisions shall be applicable to the Loans, including but not limited to: Rate Covenant: The Issuer will fix, establish revise from time to time whenever necessary, maintain and collect always such fees, rates, rentals and other charges for the use of the products, services and facilities of the System which will always provide Net Revenues in each year sufficient to pay one hundred and ten percent (110%) of the Principal and Interest requirements for such Fiscal Year on account of the bonds then outstanding. Additional Bonds Test: The City may issue Additional Bonds under and secured by the Resolution, on a parity as to the pledge of the Pledged Revenues with any other Bonds then Outstanding, provided that there shall be filed with the City a written statement or report, with respect to such Additional Bonds being issued to provide funds to pay the Cost of a Project, described in either (i) or (ii) below, with respect to Additional Bonds, issued to pay debt service on Utility Debt, described in (ii) below: (i) prepared by the Consulting Engineers and demonstrating that the percentage derived by dividing the Net Revenues projected for the System, based upon assumptions approved in writing by each issuer of a Credit Facility after an opportunity to review and comment on such statement or report, for the Fiscal Year following the Fiscal Year in which the Completion Date of the Improvements to be financed by the Additional Bonds then to be delivered is expected to occur, as such Completion Date is established by the Consulting Engineers, adjusted as provided below, by the Maximum Principal and Interest Requirements, including the Principal and Interest Requirements with respect to the Additional Bonds then to be delivered, for any future Fiscal Year is not less than one hundred and ten per centum (110%) or (ii) prepared by the Consulting Engineers, the Finance Director, the Accountant or the Rate Consultant and demonstrating the percentage derived by dividing the Net Revenues for any period of twelve consecutive months selected by the City out of the twenty four month preceding the delivery of such written statement or report, by the Maximum Principal and Interest Requirements, including the Principal and Interest Requirements with respect to the Additional Bonds then to be delivered, for any future Fiscal Year is not less than one hundred and ten per centum (110%), provided, that for purposes of this clause (ii), Net Revenues consisting of Impact Fees and amounts transferred from the Rate Stabilization Account shall not account for more than 10% of the total Net Revenues. The period during which Net Revenues are determined is referred to as the "Measurement Period". 6. Other Conditions: a. To the extent that any other bondholder has acceleration rights or exercises acceleration as a remedy, Bank shall have the same rights and remedies. b. The Borrower shall within five (5) days after it acquires knowledge thereof, notify the Bank in writing upon the happening, occurrence, or existence of any Event of Default, any event or condition which with the passage of time or giving of notice, or both, would constitute an Event of Default, and shall provide the Owner, with such written notice, a detailed statement by a responsible officer of the Issuer of all relevant facts and the action being taken or proposed to be taken by the Issuer with respect thereto. c. No Material Adverse Change to the Borrower. 6 d. The Borrower shall maintain a Public Debt Rating ("PDR") with at least one of the three major rating agencies throughout the life of the loan with a minimum rating of BBB+/Baa1. Bank will allow for PDR to be dropped if not due to downgrade, suspension or other adverse event in exchange for the Rate Covenant and Additional Bonds Test moving from 1.10X to 1.20X concurrent with withdrawal of Bond Rating. e. Bank to charge $5,000 commitment fee on the Facility. f. The implementation of certain terms, conditions, covenants or other non-material changes to the proposed Credit Accommodation required as part of the Bank's formal credit approval shall be deemed an approval in substantially the form outlined in this proposed Credit Accommodation. g. All standard representations, warranties, rights and remedies in the event of default that are acceptable to the Bank. h. Documents for the 2020A Note will, effective upon a conversion to the tax-exempt interest rate, include determination of taxability language (including retroactive interest, penalties and other fees and costs associated therewith) allowing for a higher taxable loan rate should the IRS deem the Loan to be a taxable facility due to events associated with action or inaction of Borrower. i. All legal matters and documentation to be executed in connection with the contemplated proposed Credit Accommodation shall be satisfactory in form and substance to the Bank and counsel to the Bank. j. The Bank shall not be required to enter into the proposed Credit Accommodation until the completion of all due diligence inquiries, receipt of approvals from all requisite parties and the execution and receipt of all necessary documentation reasonably acceptable to the Bank and its counsel. Furthermore, certain assumptions are made for this proposal which, if altered, could affect the overall credit approval and or terms of the proposed Credit Accommodation. Patriot Act Notice. Lender is subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107- 56) (signed into law October 26, 2001)) (the "Act") and hereby notifies the Borrower and Guarantor that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Borrower and Guarantor, which information includes the name and address of the Borrower and Guarantor and other information that will allow Lender to identify the Borrower and Guarantor in accordance with the Act. 7 THIS PROPOSAL IS NOT AND SHOULD NOT BE CONSTRUED AS A COMMITMENT BY THE BANK OR ANY AFFILIATE TO ENTER INTO ANY CREDIT ACCOMMODATION. Appendix A: Amortization Schedule 11/1/2020 $330,000 11/1/2021 $735,000 11/1/2022 $3,595,000 11/1/2023 $3,690,000 11/1/2024 $3,775,000 11/1/2025 $3,860,000 11/1/2026 $3,955,000 11/1/2027 $4,050,000 11/1/2028 $4,145,000 11/1/2029 $2,260,000 11/1/2030 $2,310,000 11/1/2031 $2,360,000 11/1/2032 $2,405,000 11/1/2033 $2,455,000 11/1/2034 $2,505,000 8 ap -�3a TD Bank, N.A. 301 East Pine Street,Suite 1000 Orlando,FL 32801 Bank Tel: 407-622-3563 ;: Fax:407-423-0070 America's Most Convenient Sank• Sterling.Harrell@td.com April 3, 2020 Ms. Mara Frederiksen Mr. Jay Glover Director of Finance Managing Director City of Boynton Beach PFM Financial Advisors LLC 3301 Quantum Blvd, Suite 101 300 S. Orange Avenue, Suite 1170 Boynton Beach, FL 33426 Orlando, FL 32801 Mr. Michael Dennis Analyst PFM Financial Advisors LLC 300 S. Orange Avenue, Suite 1170 Orlando, FL 32801 RE: Request for Proposal for Tax-Exempt Bank Loan Dear Ms. Frederiksen and Messrs. Glover and Dennis, In response to the Request for Proposal for the City of Boynton Beach, TD Bank, N.A. (the "Bank") is pleased to submit the following proposal to the City of Boynton Beach, Florida (the "City"). The structure of the proposed Credit Accommodation is outlined in the attached term sheet which provides a statement of suggested terms, but under no circumstance shall such statement be construed as a complete summarization of terms necessary for consummation of the proposed Credit Accommodation. PLEASE NOTE THIS PROPOSAL IS SUBJECT TO FORMAL CREDIT REVIEW AND UNDERWRITING IN ACCORDANCE WITH THE BANK'S INTERNAL POLICY AND NOTHING HEREIN SHALL CONSTITUTE A BINDING COMMITMENT TO LEND. Further, we expressly advise you that TD Bank, N.A. has not approved the Credit Accommodation. The Bank shall not be liable to the Borrower or any other person for any losses, damages or consequential damages which may result from the Borrower's reliance upon this proposal letter, the proposed Credit Accommodation, the proposed term sheet or any transaction contemplated hereby. The Bank's Loan Proposal is subject to receipt by the City prior to 5:00 pm eastern standard time on April 3, 2020 and is contingent upon a Loan Closing with mutually acceptable documents between the City and Bank on or before April 30, 2020, unless otherwise negotiated between the Parties. This letter, including the terms contained within the proposed Credit Accommodation, is delivered to you on the condition that its existence and its contents will not be disclosed without our prior written approval, except (i) as may be required to be disclosed in any legal proceeding or as may otherwise be required by law and on a confidential and "need to know" basis, to your directors, officers, employees, advisors and agents. I 1 We appreciate this opportunity and are delighted to provide this Proposal. We look forward to working with you to successfully complete this transaction. My contact information is noted above. Very truly yours, TD BANK, N.A. By: % Sterling Harrell Director 2 TD Bank, N.A. TERMS AND CONDITIONS OF CREDIT ACCOMMODATION DATED April 3, 2020 ("Loan") THIS IS A STATEMENT OF TERMS AND CONDITIONS AND NOT A COMMITMENT TO LEND. ALL CREDIT ACCOMMODATIONS ARE SUBJECT TO FORMAL CREDIT UNDERWRITING AND APPROVAL. 1. Loan a) Borrower: City of Boynton Beach, FL (the "Borrower") b) Facility: Series 2020B: Bank Loan (the "2020B Note") issued as a tax-exempt Bond, as described herein. c) Purpose: The 2020B Note will be issued to refund all of the City's outstanding Utility System Revenue Bond, Series 2018 and pay costs of issuing the 2020B Note. d) Amount: Not to exceed $11,000,000.00 USD e) Security: The principal and interest on the 2020B Note will be payable solely from and secured by a pledge of the Pledged Revenues, which include (i) Net Revenues of the System, (ii) certain Impact Fees, and (iii) subject to application thereof as provided in the Resolution, amounts in certain funds and accounts established under the Resolution. No Debt Service Reserve Fund will be funded for the 2020B Note. The lien of the 2020B Note on the Pledged Revenues will be on parity with the 2002 Bonds, 2012 Bonds not refunded by the 2020B Note, 2016 Bond, 2018 Bond not refunded by the 2020B Note and any Additional Bonds issued under the Resolution. f) Settlement Date: Estimated April 27, 2020 g) Maturity: November 1, 2034 h) Repayment Terms: Interest on the 2020B Note will be paid semi-annually (May 1 and November 1), commencing on November 1, 2020, based upon a 30/360- day basis. Principal on the 2020B Note will be paid annually (November 1), commencing on November 1, 2020, with final maturity of November 1, 2034 in accordance with the Amortization Schedule attached in Appendix A. i) Interest Rate: Tax-Exempt Fixed Rate: 2.16%. This rate will be held until a settlement date no later than April 30, 2020 so long as the Bank receives notification that it will be recommended Lender 3 on or before 5:00PM EST on April 3, 2020. In the event the selection or closing goes beyond the dates noted above, the fixed interest rate will be determined by mutual agreement between the parties. j) Prepayment Provision: Option A: At the time of any full or partial prepayment, (i) A "Yield Maintenance Fee" in an amount computed as follows shall apply: This Note may be prepaid on any Business Day in whole or in part upon thirty (30) days prior written notice to the Bank. In the event of any prepayment of the 2020B Note, whether by voluntary prepayment, acceleration or otherwise, the Borrower shall, at the option of the Bank, pay a "fixed rate prepayment charge" equal to the greater of (i) 1.00% of the principal balance being prepaid multiplied by the "Remaining Term," as hereinafter defined, in years or (ii) a "Yield Maintenance Fee" in an amount computed as follows: The current cost of funds, specifically the bond equivalent yield for United States Treasury securities (bills on a discounted basis shall be converted to a bond equivalent yield) with a maturity date closest to the "Remaining Term", shall be subtracted from the "Stated Interest Rate" in effect at the time of prepayment. If the result is zero or a negative number, there shall be no Yield Maintenance Fee due and payable. If the result is a positive number, then the resulting percentage shall be multiplied by the amount being prepaid times the number of days in the "Remaining Term" and divided by 360. The resulting amount is the "fixed prepayment charge" due to the Bank upon prepayment of the principal of this Loan plus any accrued interest due as of the prepayment date and is expressed in the following calculation: Yield Maintenance Fee = [Amount Being Prepaid x (Stated Interest Rate - Current Cost of Funds) x Days in the Remaining Term/360 days] + any accrued interest due "Remaining Term." "Remaining Term" as used herein shall mean the remaining term of the 2020B Note. Option B: Borrower can elect to have a "No Prepayment" penalty associated with 2020B Note by adding a premium of 11 basis points to the quoted proposed Loan Rates. Partial prepayments shall be applied in inverse order of maturity, treating scheduled amortization installments as maturities. k) Default Rate of Interest: The"default rate of interest" shall be six (6) percentage points in excess of the Prime Rate as quoted in the Wall Street Journal. Events of Default: Will include, but not be limited to: (1) Breach of representation or warranties. (2)Violation of covenants. (3) Bankruptcy or insolvency. (5) Payment default. I 4 I) Late Charges: If any payment due the Bank is more than fifteen (15) days overdue, a late charge of six percent (6%) of the overdue payment shall be assessed. 2. Fees and Expenses: The Borrower shall pay to the Bank on demand any and all costs and expenses (including, without limitation, reasonable attorneys' fees and disbursements, court costs, litigation and other expenses) incurred or paid by the Bank in connection with the loan. The City's bond counsel will provide documentation associated with this transaction. Documentation will be subject to the review and approval of the Bank and the Bank's counsel. The City agrees to pay all legal fees and expenses of the Bank associated with the review and closing of this transaction, which costs may be paid with proceeds of the Loan with a maximum time basis not to exceed $12,000.00. Bank's counsel shall be the following: Michael Wiener Holland & Knight LLP 2115 Harden Blvd. Lakeland, FL 33803 (863) 499-5362 3. Financial Reporting: a) Borrower(s) shall furnish the following financial reports: Type of Report(s) Frequency Due Date Audited Financial Statements Annually Within 210 days after the end of the fiscal year Annual Budget Annually Within 60 days after its adoption The Bank reserves the right to request reasonable additional financial information to supplement or verify certain financial assumptions or verify the creditworthiness of the Borrower. 4. Legal Opinion: Prior to closing, there shall be delivered to the Bank: (A) an opinion of Bond Counsel acceptable to the Bank covering matters customary for a transaction of this type and nature and which shall, without limitation, opine that: (1) the Borrower is duly formed; (2) all loan documents have been validly authorized and executed by and on behalf of the Borrower, if any; (3) all loan documents are valid, binding, enforceable in accordance with their terms and do not violate any legal requirements, including without limitation, organizational documents, laws and material agreements; (4) the loan and loan documents are exempt from registration and qualification under the Securities Act of 1933 and Trust Indenture Act of 1939, and (5) the interest on the 2020B Note is excludable from the gross income of the Bank. (B) An opinion of counsel to the Borrower in form and substance satisfactory to the Bank. 5. Financial Covenants: All standard covenants and provisions shall be applicable to the Loans, including but not limited to: Rate Covenant: The Issuer will fix, establish revise from time to time whenever necessary, maintain and collect always such fees, rates, rentals and other charges for the use of the products, services and facilities of the 5 System which will always provide Net Revenues in each year sufficient to pay one hundred and ten percent (110%) of the Principal and Interest requirements for such Fiscal Year on account of the bonds then outstanding. Additional Bonds Test: The City may issue Additional Bonds under and secured by the Resolution, on a parity as to the pledge of the Pledged Revenues with any other Bonds then Outstanding, provided that there shall be filed with the City a written statement or report, with respect to such Additional Bonds being issued to provide funds to pay the Cost of a Project, described in either (i) or (ii) below, with respect to Additional Bonds, issued to pay debt service on Utility Debt, described in (ii) below: (i) prepared by the Consulting Engineers and demonstrating that the percentage derived by dividing the Net Revenues projected for the System, based upon assumptions approved in writing by each issuer of a Credit Facility after an opportunity to review and comment on such statement or report, for the Fiscal Year following the Fiscal Year in which the Completion Date of the Improvements to be financed by the Additional Bonds then to be delivered is expected to occur, as such Completion Date is established by the Consulting Engineers, adjusted as provided below, by the Maximum Principal and Interest Requirements, including the Principal and Interest Requirements with respect to the Additional Bonds then to be delivered, for any future Fiscal Year is not less than one hundred and ten per centum (110%) or (ii) prepared by the Consulting Engineers, the Finance Director, the Accountant or the Rate Consultant and demonstrating the percentage derived by dividing the Net Revenues for any period of twelve consecutive months selected by the City out of the twenty four month preceding the delivery of such written statement or report, by the Maximum Principal and Interest Requirements, including the Principal and Interest Requirements with respect to the Additional Bonds then to be delivered, for any future Fiscal Year is not less than one hundred and ten per centum (110%), provided, that for purposes of this clause (ii), Net Revenues consisting of Impact Fees and amounts transferred from the Rate Stabilization Account shall not account for more than 10% of the total Net Revenues. The period during which Net Revenues are determined is referred to as the "Measurement Period". 6. Other Conditions: a. To the extent that any other bondholder has acceleration rights or exercises acceleration as a remedy, Bank shall have the same rights and remedies. b. The Borrower shall within five (5) days after it acquires knowledge thereof, notify the Bank in writing upon the happening, occurrence, or existence of any Event of Default, any event or condition which with the passage of time or giving of notice, or both, would constitute an Event of Default, and shall provide the Owner, with such written notice, a detailed statement by a responsible officer of the Issuer of all relevant facts and the action being taken or proposed to be taken by the Issuer with respect thereto. c. No Material Adverse Change to the Borrower. d. The Borrower shall maintain a Public Debt Rating ("PDR") with at least one of the three major rating agencies throughout the life of the loan with a minimum rating of BBB+/Baa1. Bank will allow for PDR to be dropped if not due to downgrade, suspension or other adverse event in exchange for the Rate Covenant and Additional Bonds Test moving from 1.10X to 1.20X concurrent with withdrawal of Bond Rating. e. Bank to charge $5,000 commitment fee on the Facility. f. The implementation of certain terms, conditions, covenants or other non-material changes to the proposed Credit Accommodation required as part of the Bank's formal credit approval shall be deemed an approval in substantially the form outlined in this proposed Credit Accommodation. g. All standard representations, warranties, rights and remedies in the event of default that are acceptable to the Bank. h. Documents for the 2020B Note will include determination of taxability language (including retroactive interest, penalties and other fees and costs associated therewith) allowing for a higher taxable loan rate should the IRS deem the Loan to be a taxable facility due to events associated with action or inaction of Borrower. i. All legal matters and documentation to be executed in connection with the contemplated proposed Credit Accommodation shall be satisfactory in form and substance to the Bank and counsel to the Bank. j. The Bank shall not be required to enter into the proposed Credit Accommodation until the completion of all due diligence inquiries, receipt of approvals from all requisite parties and the execution and receipt of 6 all necessary documentation reasonably acceptable to the Bank and its counsel. Furthermore, certain assumptions are made for this proposal which, if altered, could affect the overall credit approval and or terms of the proposed Credit Accommodation. Patriot Act Notice. Lender is subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107- 56) (signed into law October 26, 2001)) (the "Act") and hereby notifies the Borrower and Guarantor that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Borrower and Guarantor, which information includes the name and address of the Borrower and Guarantor and other information that will allow Lender to identify the Borrower and Guarantor in accordance with the Act. I ii THIS PROPOSAL IS NOT AND SHOULD NOT BE CONSTRUED AS A COMMITMENT BY THE BANK OR ANY AFFILIATE TO ENTER INTO ANY CREDIT ACCOMMODATION. 7 Appendix A: Amortization Schedule 11/1/2020 $310,000 11/1/2021 $630,000 11/1/2022 $650,000 11/1/2023 $660,000 11/1/2024 $670,000 11/1/2025 $690,000 11/1/2026 $705,000 11/1/2027 $715,000 11/1/2028 $730,000 11/1/2029 $750,000 11/1/2030 $765,000 11/1/2031 $780,000 11/1/2032 $800,000 11/1/2033 $815,000 11/1/2034 $830,000 8