Amended Agenda Item 6A 8-11-14 AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
CITY OF ATLANTIC BEACH
CITY COMMISSION MEETING
STAFF REPORT
AGENDA ITEM : RESOLUTION NO . 14-07
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
ATLANTIC BEACH, FLORIDA; SUPPLEMENTING ORDINANCE
NO . 15 - 14- 14; AUTHORIZING THE ISSUANCE OF A
$ 13 ,960 ,000 UTILITIES SYSTEM REVENUE REFUNDING
BOND, SERIES 2014; AUTHORIZING AWARD OF THE BONDS
TO TD BANK, N.A. FOLLOWING SOLICITATION OF
COMPETITIVE PROPOSALS ; AUTHORIZING THE EXECUTION
AND DELIVERY OF THE BOND , THE LOAN AGREEMENT AND
THE ESCROW DEPOSIT AGREEMENT; AUTHORIZING
CERTAIN CITY OFFICIALS TO TAKE ALL NECESSARY ACTION
IN CONNECTION WITH THE ISSUANCE OF THE BOND AND
THE EXECUTION AND DELIVERY OF THE LOAN AGREEMENT
AND THE ESCROW DEPOSIT AGREEMENT AND PROVIDING
AN EFFECTIVE DATE.
SUBMITTED BY: Nelson Van Liere, City Manager
DATE : August 8, 2014
BACKGROUND : The City ' s Financial Advisor, Dunlap and Associates, has recommended
that it is an advantageous time to refund all of the City' s outstanding debt, other than the two
State Revolving Fund (SRF) loans . The City will achieve debt service savings of $ 1 ,618 ,745
through refunding the current debt and obtaining new debt at an interest rate of 2 . 33 % . This is a
9 . 5% savings to the City and lowers our debt service by about $ 145 ,000 per year through
10/01 /2025 . The final interest rate was set on August 7, 2014, three (3 ) business days prior to
the closing date of August 12, 2014 .
The refunded debt will be legally defeased upon the issuance of the new indebtedness . An
escrow account will be created with Wells Fargo, acting as the City ' s Escrow Agent, to hold the
proceeds of the new indebtedness. The proceeds wiL be invested until the date the refunded
bonds are redeemed.
The City may only incur debt by ordinance per the City' s Charter. Subject and pursuant to the
provisions of the supplementing Ordinance No . 15 - 14- 14 and this resolution, the City is
authorized to incur a Loan and to issue the Bond in evidence thereof, according to the terms of
the Loan Agreement attached hereto as Exhibit B . All of the terms and covenants contained in
the Loan Agreement are incorporated herein by reference. The Bond Ordinance and the Loan
Agreement, upon the funding of the Loan and the issuance of the Bond, shall constitute a
contract between the City and the Lender.
RECOMMENDATION : Approve Resolution No . 14-07 and authorize the Mayor
and City Manager to sign all related documents where
appropriate for each to sign.
ATTACHMENTS : Resolution No . 14-07 and Exhibits
REVIEWED BY CITY MANAGER: Van. Act,c
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
RESOLUTION NO. 14-07
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
ATLANTIC BEACH, FLORIDA; SUPPLEMENTING ORDINANCE
NO. 15- 14-14 ; AUTHORIZING THE ISSUANCE OF A $ 13,960,000
UTILITIES SYSTEM REVENUE REFUNDING BOND, SERIES
2014 ; AUTHORIZING AWARD OF THE BONDS TO TD BANK,
N.A. FOLLOWING SOLICITATION OF COMPETITIVE
PROPOSALS ; AUTHORIZING THE EXECUTION AND
DELIVERY OF THE BOND, THE LOAN AGREEMENT AND THE
ESCROW DEPOSIT AGREEMENT; AUTHORIZING CERTAIN
CITY OFFICIALS TO TAKE ALL NECESSARY ACTION IN
CONNECTION WITH THE ISSUANCE OF THE BOND AND THE
EXECUTION AND DELIVERY OF THE LOAN AGREEMENT
AND THE ESCROW DEPOSIT AGREEMENT AND PROVIDING
AN EFFECTIVE DATE.
WHEREAS , the City Commission of the City of Atlantic Beach, Florida (the "City") has
determined to refinance certain Refunded Bonds of the City and has enacted Ordinance No . 15 -
14- 14 (the "Ordinance") for such purpose; and;
WHEREAS, the City has received competitive proposals from area financial institutions
and has received a recommendation of its financial advisor to accept the proposal of TD Bank,
N.A. (the "Bank") as in the best interest of the City;
NOW THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF ATLANTIC BEACH, FLORIDA:
Section 1 . AUTHORITY FOR THIS RESOLUTION. This resolution is adopted
pursuant to the provisions of the Act, as defined in the Loan Agreement, and is supplemental to
the Ordinance.
Section 2. DEFINITIONS. All terms in this resolution shall have the meanings as
defined in the Loan Agreement.
Section 3. AWARD OF BOND ; LOAN AGREEMENT AND ESCROW DEPOSIT
AGREEMENT.
(A) Findings . The City reaffirms its prior findings that in accordance with the
provisions of Part III, Chapter 218 , Florida Statutes, a negotiated sale of the Bond is in the best
interest of the City because of the flexibility available in structuring the Bond and its terms .
(B) Award of Bond and Loan Agreement. The City has solicited proposals for
purchase of the Bond from area commercial banks and has determined that the proposal of the
Bank, set forth by letter dated June 9, 2014 and attached hereto as Exhibit A, is the best proposal.
Following evaluation of the responses received and negotiation with the offeror of the proposal
most advantageous to the City, the City hereby authorizes and awards the sale of the Bond to the
Bank, upon the terms set forth in the Bond, including but not limited to interest rate, interest
payment dates, maturity dates and amounts, and terms of prepayment, as set forth in the revised
form of Loan Agreement attached hereto as Exhibit B, with such modifications to the terms of
the Loan Agreement as are set forth therein. The revised form of Loan Agreement, attached
00362197-4
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
hereto as Exhibit B, is hereby approved and the appropriate officials of the City are hereby
authorized to execute and deliver the Loan Agreement to the Bank. The Bond shall be issued in
substantially the form set forth in Exhibit A to the Loan Agreement and the appropriate officials
of the City are hereby authorized and directed to execute and deliver the Bond to the Bank.
(c) Escrow Deposit Agreement. The form of the Escrow Deposit Agreement attached
hereto as Exhibit C is hereby approved and the appropriate officials of the City are hereby
authorized to execute and deliver the Escrow Deposit Agreement to the escrow holder, Wells
Fargo Bank, N.A.
Section 4. NECESSARY ACTION. The Mayor, City Manager, City Clerk, City
Attorney and Bond Counsel are designated as the agents of the City in connection with the
issuance and delivery of the Bond, the Loan Agreement and the Escrow Deposit Agreement and
are authorized and empowered to take all actions and steps to execute and deliver any and all
instruments, documents or contracts on behalf of the City which are necessary or desirable in
connection with the execution and delivery of the Bond, the Loan Agreement, and the Escrow
Deposit Agreement which are not inconsistent with the terms and provisions of the Ordinance
and this Resolution.
Section 5. EFFECTIVE DATE. This resolution shall take effect immediately upon
its adoption.
PASSED AND ADOPTED by the City Commission of the City of Atlantic Beach,
Florida at a regular meeting duly called and held this 11th day of August, 2014 .
CITY OF ATLANTIC BEACH, FLORIDA
By:
Carolyn Woods
Mayor
Approved as to form, sufficiency
and correctness :
By:
Richard C . Komando, Esq.
Kopelousos, Bradley & Garrison
1279 Kingsley Avenue, Suite 118
Orange Park, FL 32073 -4604
City Attorney
ATTEST :
By:
Donna L . Bartle
City Clerk
00362197-4
2
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
EXHIBITS
TO
RESOLUTION
Exhibit A — June 9, 2014 Letter of TD Bank, N.A.
Exhibit B — Loan Agreement
Exhibit C — Escrow Deposit Agreement
00362197-4
3
AMENDED AGENDA ITEM # 6A
AUGUST 11, 2014
Exhibit A
June 9, 2014 Letter of TD Bank, N .A.
00362197-4
4
AMENDED AGENDA ITEM#6A
AUGUST 11,2014
TD Bank, N.A,
ID Bank 9715 Gate Parkway N.
Jacksonville, FL 32246
America's Most Convenient dank°
June 9, 2014
Ms. Jeri Benjamin
Deputy Finance Director
City of Atlantic Beach, FL
800 Seminole Rd
Atlantic Beach, FL 32233
RE: Non Bank Qualified, Tax Exempt Bank Term Loan
Dear Ms. Benjamin:
In response to your request to refund the City's Series 2004 Bonds, Series 2010A-1 Bonds, and Series 2010B
Bonds we are pleased to provide you the following response to your request for proposals.
The Bank's Loan Proposal is subject to formal credit approval and written acceptance by Borrower prior to 3:00 pm
eastern standard time on August 12, 2014 and is contingent upon a Loan Closing with mutually acceptable
documents. The structure of the proposed Credit Accommodations) is outlined in the attached term sheet(s) 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. (the"Bank") has not approved the
Credit Accommodations. The Bank shall not be liable to the Company or any other person for any losses, damages
or consequential damages which may result from the Company's reliance upon this proposal letter or the proposed
Credit Accommodations, the proposed term sheet(s)or any transaction contemplated hereby.
This letter 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.
We appreciate this opportunity and are delighted to provide this Loan 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: ----
Coley nes
Vice President
1
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
Exhibit A
TD Bank, N. A . ("BANK")
TERMS AND CONDITIONS OF CREDIT ACCOMMODATION Dated 6/9/2014
(" Loan ")
THIS IS A STATEMENT OP TERMS AND CONDITIONS AND NOT A COMMITMENT TO LEND. ALL CREDIT
ACCOMMODATIONS ARE SUBJECT TO FORMAL CREDIT UNDERWRITING AND APPROVAL.
1 . Proposed Bank Loans ' Terms & Structure :
Borrower: City of Atlantic Beach , FL
Facility Amount : Up To $ 14 , 000 , 000
Facility Type: Non-Bank Qualified Tax- Exempt Bank Term Loan
Purpose of Facility : To provide available funds of up to $ 14, 000 ,000, as
needed , to the City to refund all senior debt currently
outstanding under the City's Series 2004 Bonds, Series
2010A- 1 Bonds , and Series 2010B Bonds .
Maturity bate: October 1 , 2025 .
Interest Rate : Non-Bank Qualified Tax Exempt Indicative Fixed Rate as
of June 9, 2014 .
Option 1 : The Non-Bank Qualified , Tax Exempt loan
shall bear interest at an indicative fixed per annum rate
equal to 2 . 33% on the basis of a 30-day month and a
360-day year.
The actual interest rate shall be set three business days
prior to Closing using the greater of the formula below:
70% of the 10 year LIBOR swap rate plus 43bps .
Option 2 : The Non-Bank Qualified , Tax Exempt loan
shall bear interest at an indicative fixed per annum rate
equal to 2 . 56% on the basis of a 30-day month and a
360-day year.
The actual interest rate shall be set three business days
prior to Closing using the greater of the formula below:
70% of the 10 year LIBOR swap rate plus 66bps .
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
The Bank will also make available the option to lock-in
the above quoted loan rate for the Borrower through the
expected transaction closing, which is subject to the
Borrower executing the Bank 's Rate Lock Agreement.
A premium of 12 basis points will be added to the quoted
rate in order to hold the stated rate through the expected
closing date of Aug . 18 , 2014 .
Repayment Terms : Principal and Interest — Interest will be paid semi-annually
beginning on April 1 , 2015 through October 1 , 2025 .
Principal will be paid annually beginning October 1 , 2015
through October 1 , 2025 ,
Default Rate of Interest:, The "default rate of interest" shall be six (6) percentage
points in excess of the rate of interest charged prior to the
occurrence of the event of default .
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 .
Prepayment Premium: Option 1 At the time of any full or partial prepayment, a
fee 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 Note rate, or default
rate if applicable. 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 scheduled
outstanding principal balance for each remaining monthly
period of the "Remaining Term ." Each resulting amount
shall be divided by 360 and multiplied by the number of
days in the monthly period . Said amounts shall be
reduced to present values calculated by using the above
reference current costs of funds divided by 12 . The
resulting sum of present values shall be the yield
maintenance fee due to the Bank upon prepayment of the
principal of the loan plus any accrued interest due as of
the prepayment date .
"Remaining Term " as used herein shall mean the shorter
of (i) the remaining term of this Note , or (ii ) the remaining
term of the then current fixed interest rate period .
Option 2 : No prepayment premium .
2
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
2 . Fees and Expenses :
No Bank Fee - Waived .
The Borrower is responsible for Bank Counsel Fees for the review of the loan documentation which will be
prepared by the Borrower's Counsel , Bank Counsel Fees shall not to exceed 6,000 .
3 . Security :
Payment of the Series 2014 Bond shall be secured by a lien upon and pledge of the Net Revenues of the
combined and consolidated water and sewer system ( the " System " ), the System Development Charges (such
System Development Charges or impact fees are defined as Capital Facilities Charges in the various
ordinances of the City authorizing the issuance of bonds) , the moneys on deposit in the funds and accounts
created by the Ordinance , the Investment Earnings and the Special Assessments , all as defined in the
Ordinance .
4 . Legal Opinions :
Prior to closing , there shall be delivered to the Bank 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 ; and (4 ) Facility is Non Bank Qualified and Tax Exempt.
5 . Financial Reporting :
The Borrower shall furnish the following financial reports :
Type of Reports Frequency Due Date
Financial Statements Annually 270 days after end of fiscal year.
Audited
Approved Budget Annually 60 days after completion and
approval
Covenant Compliance Annually 270 days after completion of
Certificate fiscal year.
6 . Rate Covenant I Additional Bonds Test :
Rate Covenant:
Net Revenues to provide a minimum of a ) 110% coverage of the annual debt service requirement for all
funded debt paid in the year tested and b) 100 % of the reserve account & the renewal and replacement fund .
To be tested annually.
3
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
Additional Bonds :
Prior to the issuance of any parity bonds Net Revenues to provide a minimum a) 110% coverage of the
maximum annual debt service requirement on all debt and b) 100% of the reserve account & the renewal and
replacement fund inclusive of consideration for the new debt. Net Revenues to be tested off the most recent
fiscal year exclusive of transfers from the Rate Stabilization fund .
7. Other Conditions :,
a ) The Loan will be issued on parity and cross defaulted as applicable with the other similarly pledged revenue
b) Standard gross up language with respect to changes in Corporate Tax Rate or Tax Status of the loan .
c) No Material Adverse Change to the Borrower
d ) Periodic loan payments shall be settled via auto debit
e ) 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 ,
0 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 .
g ) 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 . The Bank complies with the US
Patriot Act of 2001 (the "Act" ) , including , but not limited to; those sections relating to customer identification ,
monitoring and reporting of suspicious activities , and the prevention of money laundering . This Act mandates
that we verify certain information about the borrower and any guarantor while processing the Credit
Accommodation request. Furthermore, certain assumptions are made for this proposal which, if altered , could
affect the overall credit approval and or the terms of the proposed Credit Accommodation
h ) All Standard terms and conditions for a loan of this type including but not limited to acceleration as a remedy
for an event of default .
4
AMENDED AGENDA ITEM#6A
AUGUST 11,2014
City of Atlantic Beach,Florida
Utilities System Revenue Refunding Bond,Series 2014
APPENDIX
REQUEST FOR PROPOSAL
$14,000,000*
CITY OF ATLANTIC BEACH,FLORIDA
UTILITIES SYSTEM REVENUE REFUNDING BOND,SERIES 2014
1. Name&Address of Proposer: '1 d I�
p{ I5 ( ii1-t KuaA.LA M. -
r)aj•ksenvitit )f=L 3zly it()
2. Contact Person of Proposer: CAeiA �)artas
Title: V Q EJ
Phone#: 4i uy - toy-
Fax#: cIvN -ato5- o 9'?-
3. Expenses to be paid by City:
Item Cost
'2LnK CutrI6e� r c 4'(eoCO
4. Interest Rate: Ni-an *t)•31). qtklo Q_ 0.514
lis4136s b one plus I., iv
Formula: O�1 r (= �0 Y. 10 (-i-15 i fi�t3',��J�, gait (� P 14
Interest Rate Held Until: al -111 hOlc& 9_04e Lin ick 8b8 Cyr `cick' 119ps
Breakage Fee Penalty for forward rates,if any: NO
Signature of Proposer Cc —
Date GI
*Estimated Not-to-Exceed Amount
10
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
City of Atlantic Beach, Florida
Utilities System Revenue Refunding Bond, Series 2014
SWORN STATEMENT UNDER SECTION 287 . 133 (3) (A)
FLORIDA STATUTES, ON PUBLIC ENTITY CRIMES
This form must be signed in the presence of a Notary Public or other Officer authorized to administer
oaths.
1 . This sworn statement is submitted to:
Ci o A } lu..n4. 1C. %e--«ch
(Prih9namo of the Public Entity.)
by: CoI ' .0 1; l1r .
(Print rndit ual's name and title.)
for: Y D Beun ft
(Print name of Entity submitting sworn statement.)
whose business address is :
Rkr �'CW (ii� N
,\ cxr . c nvikte - R. 32L (P
and , if applicable , its Federal Employer Identification Number (FEIN ) is
ptr - 0I4I t8aa
( If the Entity has no FEIN , please include the Social Security
Number of the individual signing this sworn statement):
2. I understand that a "public entity crime" as defined in Paragraph 287. 133 ( 1 ) (g ), Florida Statutes , means a
violation of any state or federal law by a person with respect to and directly related to the transaction of
business with any public entity or with an agency or political subdivision of any other state or of the United
States , including but not limited to, any bid or contract for goods or services to be provided to any public
entity or an agency or political subdivision of any other state or of the United States and Involving antitrust,
fraud , theft, bribery, collusion , racketeering , conspiracy, or material misrepresentation .
3 , I understand that "convicted" or "conviction" as defined in Paragraph 287 . 133 ( 1 ) ( b), Florida Statutes ,
means a. finding of guilt or a conviction of a public entity crime , with or without an adjudication of guilt, in
any federal or state trial court of record relating to charges brought by indictment or information after July
1 , 1989, as a result of a jury verdict, non -jury trial, or entry of a plea of guilty or nolo contendere.
4. I understand that an "affiliate" as defined in Paragraph 287. 133 ( 1 ) (a ), Florida Statutes, means :
a) A predecessor or successor of a person convicted of a public entity crime; or,
b ) An entity under the control of any natural person who Is active in the management of the entity and who
has been convicted of a public entity crime. The term "affiliate" includes those officers , directors,
executives , partners , shareholders, employees , members, and agents who are active in the management
of an affiliate. The ownership by one person of shares constituting a controlling interest in another person ,
or a pooling of equipment or Income among persons when not for fair market value under an arm's length
agreement, shall be a prima facie case that one person controls another person . A person who knowingly
enters into a Joint venture with a person who has been convicted of a public entity crime in Florida during
the preceding 36 months shall be considered an affiliate .
11
AMENDED AGENDA ITEM#6A
AUGUST 11,2014
City of Atlantic Beach,Florida
Utilities System Revenue Refunding Bond,Series 2014
5. I understand that a"person"as defined in Paragraph 287.133(1)(e), Florida Statutes, means any natural
person or entity organized under the laws of any state or of the United States with the legal power to enter
into a binding contract and which bids or applies to bid on contracts for the provision of goods or services
let by a public entity,or which otherwise transacts or applies to transact business with a public entity. The
term "person"includes those officers, directors, executives, partners, shareholders, employees, members,
and agents who are active in management of an entity.
6. Based on information and belief, the statement which I have marked below is true in relation to the entity
submitting this sworn statement. (Please indicate which statement applies.)
Neither the entity submitting this sworn statement, nor any officers, directors,executives, partners,
shareholders, employees, members, or agents who are active in management of the entity, nor any
affiliate of the entity has been charged with and convicted of a public entity crime subsequent to July 1,
1989.
The entity submitting this sworn statement, or one or more of its officers, directors, executives,
partners, shareholders, employees, members, or agents who are active in the management of the entity,
or an affiliate of the entity has been charged with and convicted of a public entity crime subsequent to July
1, 1989.
The entity submitting this sworn statement, or one or more of its officers, directors, executives,
partners, shareholders, employees, members, or agents who are active in the management of the entity,
or an affiliate of the entity has been charged with and convicted of a public entity crime subsequent to July
1, 1989. However, there has been a subsequent proceeding before a Hearing Officer of the State of
Florida, Division of Administrative Hearings,and the Final Order entered by the Hearing Officer determined
that it was not in the public interest to place the entity submitting this sworn statement on the convicted
vendor list. (Please attach a copy of the final order.)
I UNDERSTAND THAT THE SUBMISSION OF THIS FORM TO THE CONTRACTING OFFICER FOR
THE PUBLIC ENTITY IDENTIFIED IN PARAGRAPH ONE (1) ABOVE IS FOR THAT PUBLIC ENTITY
. ONLY AND, THAT THIS FORM IS VALID THROUGH DECEMBER 31 OF THE CALENDAR YEAR IN
WHICH IT IS FILED. I ALSO UNDERSTAND THAT I AM REQUIRED TO INFORM THE PUBLIC ENTITY
PRIOR TO ENTERING INTO A CONTRACT IN EXCESS OF THE THRESHOLD AMOUNT PROVIDED IN
SECTION 287.017, FLORIDA STATUTES, FOR CATEGORY TWO OF ANY CHANGE IN THE 0 INF*- • • 10N CONTAINED IN THIS FORM.
1
NU1Ar e 1-1y .3 0 14
Date it
STATE OF Fbb0ride,
COUNTY OF 1JuN/41
PERSONALLY APPEARED BEFORE ME, the undersigned authority, Co i e 5 Zfe"C S who, after
first being sworn by me,affixed his/her signature in (Name of individual signing.)
the space provided above on this LI day of 31r+ne- ,2014
L CLi11k 4. — 4 1►�Y P THERESA A.WHITE
My commission expires: . :1 Notary Public•Stale of Florida t
NOTARY PUBLIC ere5h.A.. W,'tr ,, �_
'1� t 0 N My Comm.Expires Aug 14,2016
Au�• t 4 „Ff Commission#EE 199563
12 • lb- _ ♦ 4 :41 ∎ : _ _ _ .... •
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
Exhibit B
Loan Agreement
00362197-4
5
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
LOAN AGREEMENT
This LOAN AGREEMENT is made and entered into as of August 12 , 2014, and is by
and between the CITY OF ATLANTIC BEACH, FLORIDA, a municipal corporation created
and existing under the laws of the State of Florida, and its successors and assigns (the "Issuer"),
and TD BANK, N.A. , a national banking association, and its successors and assigns, as holder(s)
of the hereinafter defined Note (the " Lender") .
The parties hereto, intending to be legally bound hereby and in consideration of the
mutual covenants hereinafter contained, DO HEREBY AGREE as follows :
ARTICLE I
DEFINITION OF TERMS
Section 1 . 01 Definitions . The words and terms used in capitalized form in this Agreement
shall have the meanings as set forth in the recitals above and the following words and terms as
used in this Agreement shall have the following meanings :
"Act" means Chapter 166, Florida Statutes, the Ordinance, and other applicable
provisions of law.
"Agreement" means this Agreement and any and all modifications, alterations,
amendments and supplements hereto made in accordance with the provisions hereof.
"Bond" means the Issuer' s Utilities System Revenue Refunding Bond, Series 2014,
issuable in the denomination of a single Bond of $ 13 , 960,000 principal amount in the form
attached hereto as Exhibit A.
" Bond Counsel" means any attorney at law or firm of attorneys retained by the Issuer, of
nationally recognized experience in matters pertaining to the validity of, and exclusion from
gross income for federal income tax purposes of interest on, the obligations of states and their
political subdivisions .
" Bond Year" means the annual period beginning on the first day of October of each year
and ending on the last day of the succeeding September.
" Business Day " means any day except any Saturday or Sunday or day on which the
Principal Office of the Lender is lawfully closed .
" City Manager" means the City Manager of the Issuer.
" Code " means the Internal Revenue Code of 1986, as amended, and applicable
corresponding provisions of any future laws of the United States of America relating to federal
income taxation, and except as otherwise provided herein or required by the context thereof,
includes interpretations thereof contained or set forth in the applicable regulations of the
Department of Treasury (including applicable final regulations, temporary regulations and
proposed regulations), the applicable rulings of the Internal Revenue Service (including
00352137-3
AMENDED AGENDA ITEM#6A
AUGUST 11,2014
published Revenue Rulings and private letter rulings), and applicable court rulings.
"Escrow Agent" means Wells Fargo Bank,N.A., and its successors and assigns.
"Escrow Deposit Agreement" means the Escrow Deposit Agreement dated as of August
12, 2014, between the Issuer and the Escrow Agent related to the refunding of the Refunded
Bonds.
"Event of Default" means an event of default specified in Article VI of this Agreement.
"Fiscal Year" means the period commencing on October 1 of each year and ending on the
succeeding September 30, or such other period of twelve consecutive months as may hereafter be
designated as the fiscal year of the Issuer by general law.
"Loan" means the loan by the Lender to the Issuer contemplated hereby.
"Loan Amount" means $13,960,000.
"Loan Documents" means this Agreement, the Bond and the Escrow Deposit Agreement.
"Mayor" means the Mayor or, in his or her absence or inability to perform, the Mayor Pro
Tem of the Issuer.
"Notice Address"means,
As to the Issuer: Deputy Finance Director
City of Atlantic Beach, FL
860 Seminole Road
Atlantic Beach, FL 32233
Email address: jbenjamin @coab.us
As to the Lender: TD Bank,N.A.
9715 Gate Parkway North
Jacksonville,FL 32246
Attn: Coley Jones
Email address: coley.jones @td.com
or to such other address (or email address for electronic communications) as either party may
have specified in writing to the other using the procedures specified in Section 7.06.
"Ordinance" means, collectively, Ordinance No. 15-95-7 enacted by the City
Commission of the Issuer on November 13, 1995, as supplemented by Ordinance No. 15-96-8,
enacted on March 11, 1996, and further supplemented by Ordinance No. 15-14-14, enacted on
August 11, 2014, and any ordinance and resolution amendatory thereof or supplemental thereto.
"Person" means an individual, corporation, partnership, association,joint stock company,
joint venture, trust, limited liability company, unincorporated organization or other judicial
entity.
00352137-3 2
AMENDED GENDr , ITEM # 6A
AUGUST"Pledged Revenues " means (a) the Net Revenues; (b) the Capital Facilities Charges ; (c)
the moneys on deposit in the Funds and Accounts; (d) the Investment Earnings, and (e) the
Special Assessments, all as defined in the Ordinance.
"Principal Office " means, with respect to the Lender, the office located at 9715 Gate
Parkway North, Jacksonville, Florida 32246, or such other office as the Lender may designate to
the Issuer in writing.
"Refunded Bonds " means the Issuer's outstanding Utilities System Revenue Refunding
Bonds, Series 2004, Utilities System Revenue Bonds, Series 2010A- 1 , and Utilities System
Revenue Refunding Bonds, Series 2010B .
" Sinking Fund " means the Utilities System Revenue Refunding Bond, Series 2014,
Sinking Fund established by the Ordinance from which the Issuer shall make payments of the
principal of, interest on and any redemption or prepayment premiums with respect to the Bond.
" State " means the State of Florida.
Section 1 . 02 Titles and Headings . The titles and headings of the articles and sections of
this Agreement have been inserted for convenience of reference only and are not to be
considered a part hereof, shall not in any way modify or restrict any of the terms and provisions
hereof, and shall not be considered or given any effect in construing this Agreement or any
provision hereof or in ascertaining intent, if any question of intent should arise .
ARTICLE II
REPRESENTATIONS OF ISSUER
The Issuer represents and warrants to the Lender, which representations and warranties
shall be deemed made on the date hereof, that :
Section 2 . 01 Powers of Issuer. The Issuer is a municipal corporation, duly organized and
validly existing under the laws of the State. The Issuer has the power under the Act to adopt the
Ordinance, to borrow the Loan Amount provided for in this Agreement, to execute and deliver
the Loan Documents, to secure this Agreement and the Bond in the manner contemplated hereby
and to perform and observe all the terms and conditions of the Loan Documents on its part to be
performed and observed and to carry out and consummate all other transactions contemplated
hereby. The Issuer may lawfully borrow funds hereunder in order to provide funds to refund the
Refunded Bonds and to pay costs of issuance of the Loan and the Bond.
Section 2 . 02 Authorization of Loan. The Issuer had, has, or will have on the date of. the
Bond and at all relevant times, full legal right, power and authority to execute and deliver the
Loan Documents, to issue the Bond, and to carry out and consummate all other transactions
contemplated hereby, and the Issuer has complied and will comply with all provisions of
applicable law in all material matters relating to such transactions . The Issuer has duly
authorized the borrowing of the Loan Amount provided for in this Agreement, the execution and
delivery of this Agreement, and the issuance and delivery of the Bond to the Lender, and to that
end the Issuer warrants that it will, subject to the terms hereof and of the Bond, take all action
00352137-3 3
AMENDED AGENDA ITEM if 6A
AUGUST 11 , 2014
and do all things which it is authorized by law to take and to do in order to fulfill all covenants
on its part to be performed and to provide for and to assure payment of the Bond. The Bond has
been duly authorized, executed, issued and delivered to the Lender and constitutes the legal,
valid and binding obligation of the Issuer enforceable in accordance with the terms thereof and
the terms hereof, and is entitled to the benefits and security of this Agreement, subject to the
provisions of the bankruptcy laws of the United States of America and to other applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting
creditors' rights, heretofore or hereinafter enacted, to the extent constitutionally applicable, and
provided that its enforcement may also be subject to equitable principles that may affect
remedies or other equitable relief, or to the exercise of judicial discretion in appropriate cases .
All approvals, consents, and orders of and filings with any governmental authority or agency
which would constitute a condition precedent to the issuance of the Bond or the execution and
delivery of or the performance by the Issuer of its obligations under this Agreement and the
Bond have been obtained or made and any consents, approvals, and orders to be received or
filings so made are in full force and effect. NOTWITHSTANDING THE FOREGOING,
HOWEVER, OR ANYTHING ELSE HEREIN OR IN THE BOND TO THE CONTRARY,
NEITHER THIS AGREEMENT NOR THE BOND SHALL CONSTITUTE A GENERAL
OBLIGATION OR A PLEDGE OF THE FAITH AND CREDIT OF THE ISSUER, THE
STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE
MEANING OF ANY CONSTITUTIONAL, LEGISLATIVE OR CHARTER PROVISION OR
LIMITATION, BUT SHALL BE PAYABLE SOLELY FROM THE PLEDGED REVENUES
IN THE MANNER AND TO THE EXTENT PROVIDED HEREIN AND IN THE
ORDINANCE, . No holder or owner of the Bond shall ever have the right, directly or indirectly,
to require or compel the exercise of the ad valorem taxing power of the Issuer or any other
political subdivision of the State of Florida or taxation in any form on any real or personal
property for any purpose, including, without limitation, for the payment of debt service with
respect thereto, or to maintain or continue any activities of the Issuer which generate user service
charges, regulatory fees or other non-ad valorem revenues, nor shall any holder or owner of the
Bond be entitled to payment of such principal and interest from any other funds of the Issuer
other than the Pledged Revenues, all in the manner and to the extent herein and in the Ordinance
provided.
Section 2 . 03 Ordinance . The Ordinance has been duly enacted by the Issuer, is in full
force and effect and has not been amended, altered, repealed or revoked in any way. The terms
and covenants of the Ordinance, except Article V, Section 5 . 04 thereof, relating to continuing
disclosure, are incorporated by reference herein and shall apply to the Loan for the benefit of the
Lender as fully as if set forth herein; provided, however, that no amendment or modification of
such provisions of the Ordinance or any waiver of compliance therewith shall constitute an
amendment, modification or waiver of any provision thereof or incorporated herein unless the
Lender shall have received from the Issuer written notification of such amendment, modification
or waiver and agreed in writing to such amendment modification or waiver. Pursuant to the
Ordinance, the Issuer has the right to establish separate Reserve Accounts for different series of
bonds issued thereunder. The Issuer elects to establish a separate Reserve Account for the Bond
and the Lender hereby waives the requirement that a separate Reserve Account for the Bond be
funded .
The Lender hereby consents to the requirement for the Renewal and Replacement Fund
00352137-3 4
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
to be set at $250,000 .
Section 2 . 04 No Violation of Law or Contract. The Issuer is not in default in any material
respect under any agreement or other instrument to which it is a party or by which it may be
bound, the breach of which could result in a material and adverse impact on the financial
condition of the Issuer or the ability of the Issuer to perform its obligations hereunder and under
the Bond. The making and performing by the Issuer of this Agreement and the Bond will not
violate any applicable provision of law, and will not result in a material breach of any of the
terms of any agreement or instrument to which the Issuer is a party or by which the Issuer is
bound, the breach of which could result in a material and adverse impact on the financial
condition of the Issuer or the ability of the Issuer to perform its obligations hereunder and under
the Bond.
Section 2 . 05 Pending or Threatened Litigation. Except as has been disclosed to the
Lender in writing, there are no actions or proceedings pending against the Issuer or affecting the
Issuer or, to the knowledge of the Issuer, threatened, which, either in any case or in the
aggregate, might result in any material adverse change in the financial condition of the Issuer, or
which questions the validity of this Agreement or the Bond or of any action taken or to be taken
in connection with the transactions contemplated hereby or thereby.
Section 2 . 06 Financial Information. The financial information regarding the Issuer
furnished to the Lender by the Issuer in connection with the Loan is complete and accurate, and
there has been no material and adverse change in the financial condition of the Issuer from that
presented in such information.
ARTICLE III
COVENANTS OF THE ISSUER
Section 3 . 01 Affirmative and Negative Covenants . For so long as any of the principal
amount of or interest or any redemption or prepayment premium on the Bond is outstanding or
any duty or obligation of the Issuer hereunder or under the Bond remains unpaid or unperformed,
the Issuer covenants to the Lender as follows :
fa) Payment. The Issuer shall pay the principal of and the interest or any redemption
or prepayment premium on the Bond and any other amounts due and payable under this
Agreement or the Bond at the time and place and in the manner provided herein and in the Bond.
(b) Use of Proceeds . Proceeds from the Bond will be used only to (i) deposit funds
under the hscrow Deposit Agreement to refund the Refunded Bonds, and (ii) to pay closing costs
of the Loan and costs of issuance of the Bond.
(cc,) Maintenance of Existence. The Issuer will take all reasonable legal action within
its control in order to maintain its existence until all amounts due and owing from the Issuer to
the Lender under this Agreement and the Bond have been paid in full .
(d) Records . The Issuer agrees that any and all records of the Issuer with respect to
the Loan shall be open to inspection by the Lender or its representatives at all reasonable times
00352137-3 5
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
and after receipt by the Issuer of reasonable notice from the Lender at the offices the Issuer.
(e) Financial Statements and Budget. The Issuer will cause an audit to be completed
of its books and accounts and shall make available electronically to the Lender audited year-end
financial statements of the Issuer, including a balance sheet as of the end of such Fiscal Year and
related statements of revenues, expenses and changes in net assets, certified by an independent
certified public accountant to the effect that such audit has been conducted in accordance with
generally accepted auditing standards and stating whether such financial statements present fairly
in all material respects the financial position of the Issuer and the results of its operations and
cash flows for the periods covered by the audit report, all in conformity with generally accepted
accounting principles applied on a consistent basis . The Issuer shall make available
electronically to the Lender the audited financial statements for each Fiscal Year ending on or
after September 30, 2014, within 270 days after the end thereof and shall make available
electronically to the Lender an annual budget within 60 days after the same shall have been
approved by the City Commission of the Issuer. The Issuer shall also provide to the Lender,
together with the annual audited financial statements referred to in this paragraph, a certificate of
an officer of the Issuer to the effect that the Issuer is not in breach of any of the covenants set
forth in this Article III .
(f) Insurance. The Issuer shall maintain such liability, casualty and other insurance as,
or shall self-insure in a manner as, is reasonable and prudent for similarly situated governmental
entities of the State of Florida.
(g) Compliance with Laws . The Issuer shall comply with all applicable federal, state
and local laws and regulatory requirements, the violation of which could reasonably be expected
to have a material and adverse effect upon the financial condition of the Issuer or upon the ability
of the Issuer to perform its obligation hereunder or under the Bond.
(i) Payment of Document Taxes . In the event the Bond or this Agreement should be
subject to the excise tax on documents of the State, the Issuer shall promptly upon the Lender's
written demand for same pay such taxes or reimburse the Lender for any such taxes paid by it.
Section 3 . 02 Registration and Exchange of Bond. The Bond shall initially be owned by
the Lender. The ownership of the Bond may only be transferred, and the Issuer will transfer the
ownership of the Bond, upon written request of the Lender to the Issuer specifying the name,
address and taxpayer identification number of the transferee, and the Issuer will keep and
maintain at all times a record setting forth the identification of the owner of the Bond. For every
such exchange or transfer of the Bond, the Issuer may make a charge sufficient to reimburse it
for any tax, fee, expense or other governmental charge required to be paid with respect to such
exchange or transfer. The Bond may only be sold, assigned or otherwise transferred to an
" accredited investor, " as defined in Rule 501 (A)( 1 ) , (2) or (3 ) under Regulation D of the
Securities Act of 1933 , as amended, or a " qualified institutional buyer" within the meaning of
Rule 144A promulgated under the Securities Act of 1933 , as amended . The Person in whose
name the Bond shall be registered shall be deemed and regarded the absolute owner thereof for
all purposes, and payment of principal and interest on such Bond shall be made only to or upon
the written order of such Person. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Bond to the extent of the sum or sums so paid.
00352137-3 6
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
Section 3 . 03 Bond Mutilated, Destroyed, Stolen or Lost. In case the Bond shall become
mutilated, or be destroyed, stolen or lost, the Issuer shall issue and deliver a new Bond, in
exchange and in substitution for such mutilated Bond, or in lieu of and in substitution for the
Bond destroyed, stolen or lost and upon the Lender furnishing the Issuer proof of ownership
thereof, an affidavit of lost or stolen instrument and indemnity reasonably satisfactory to the
Issuer and paying such expenses as the Issuer may reasonably incur in connection therewith.
Section 3 . 04 Payment of Principal and Interest; Limited Obligation. The Issuer
promises that it will promptly pay the principal of and interest on and any prepayment or
redemption premium or fee on the Bond, at the place, on the dates and in the manner provided
therein according to the true intent and meaning hereof and of the Bond, provided that the Issuer
may be compelled to pay the principal of and interest on and any prepayment premium or fee
with respect to the Bond solely from the Pledged Revenues, and nothing in the Bond, this
Agreement or the Ordinance shall be construed as pledging any other funds or assets of the
Issuer to such payment or as authorizing such payment to be made from any other source . The
Issuer is not and shall not be liable for the payment of the principal of and interest on the Bond
and any prepayment premium or fee with respect to or for the performance of any pledge,
obligation or agreement for payment undertaken by the Issuer hereunder, under the Bond or
under the Ordinance from any property other than the Pledged Revenues . The Lender shall not
have any right to resort to legal or equitable action to require or compel the Issuer to make any
payment required by the Bond or this Agreement from any source other than the Pledged
Revenues and only to the extent and in the manner provided herein.
Section 3 . 05 Pledge. The payment of the principal of, premium, if any, and interest on
the Bond and all other amounts due and payable under this Agreement and the Bond shall be
secured by an irrevocable lien on the Pledged Revenues, all in the manner and to the extent
provided herein and in the Ordinance . The Issuer does hereby pledge such Pledged Revenues to
the principal of premium, if any, and interest on the Bond and for all other payments provided
for herein.
Section 3 . 06 Sinking Fund. The Issuer shall apply all moneys on deposit in the Sinking
Fund to the timely payment of the principal of, premium, if any, and interest on the Bond and
other amounts due and payable under this Agreement and the Bond. The Issuer shall deposit the
proceeds of the Bond in an amount sufficient with other available funds of the Issuer to defease
the Refunded Bonds with the Escrow Agent under the Escrow Deposit Agreement and the
remainder shall be applied to pay the costs of the Loan and costs of issuance of the Bond.
Section 3 . 07 Officers and Employees of the Issuer Exempt from Personal Liability. No
personal recourse under or upon any obligation, covenant or agreement of this Agreement or the
Bond or for any claim based hereon or thereon or otherwise in respect thereof, shall be had
against any officer, agent or employee, as such, of the Issuer, past, present or future, it being
expressly understood (a) that the obligation of the Issuer under this Agreement and under the
Bond is solely a corporate one, limited as provided herein, (b) that no personal liability
whatsoever shall attach to, or is or shall be incurred by, the officers, agents, or employees, as
such, of the Issuer, or any of them, under or by reason of the obligations, covenants or
agreements contained in this Agreement or implied therefrom, and (c) that any and all such
personal liability of, and any and all such rights and claims against, every such officer, agent, or
00352137-3
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
employee, as such, of the Issuer under or by reason of the obligations, covenants or agreements
contained in this Agreement and under the Bond, or implied therefrom, are waived and released
as a condition of, and as a consideration for, the execution of this Agreement and the issuance of
the Bond on the part of the Issuer.
Section 3 . 08 Business Days . In any case where the due date of interest on or principal
of the Bond is not a Business Day, then payment of such principal or interest need not be made
on such date but may be made on the next succeeding Business Day, provided that credit for
payments made shall not be given until the payment is actually received by the Lender.
Section 3 . 09 Tax Representations, Warranties and Covenants of the Issuer. It is the
intention of the Issuer that the interest on the Bond be and remain excluded from gross income of
the holders and owners of the Bond for federal income tax purposes. The Issuer hereby
covenants and represents that it has taken and caused to be taken and shall make and take and
cause to be made and taken all actions that may be required of it for the interest on the Bond to
be and remain excluded from the gross income of the registered owner and holder thereof for
federal income tax purposes to the extent set forth in the Code, and that to the best of its
knowledge it has not taken or permitted to be taken on its behalf, and covenants that to the best
of its ability and within its control, it shall not make or take, or permit to be made or taken on its
behalf, any action which, if made or taken, would adversely affect such exclusion under the
provisions of the Code .
The Issuer acknowledges that the continued exclusion of interest on the Bond from gross
income for federal income tax purposes depends, in part, upon compliance with the arbitrage
limitations imposed by Sections 103 (b)(2) and 148 of the Code. The Issuer hereby
acknowledges responsibility to take all reasonable actions necessary to comply with these
requirements . The Issuer hereby agrees and covenants that it shall not permit at any time or times
any of the proceeds of the Bond or other funds of the Issuer to be intentionally used, directly or
indirectly, to acquire or to replace funds which were used directly or indirectly to acquire any
higher yielding investments (as defined in Section 148 of the Code), the acquisition of which
would cause the Bond to be an arbitrage bond for purposes of Sections 103 (b)(2) and 148 of the
Code . The Issuer further agrees and covenants that it shall do and perform all acts and things
necessary in order to assure that the requirements of Section 103 (b)(2) and Part IV of Subchapter
B of Chapter 1 of Subtitle A of the Code are met.
Specifically, without intending to limit in any way the generality of the foregoing, the
Issuer covenants and agrees :
( 1 ) to make or cause to be made all necessary determinations and calculations
of the excess of the amount earned on all non-purpose investments (as defined in 26 C .F .R. §
1 . 148-3 ) over the amount which would have been earned if such non-purpose-investments were
invested at a rate equal to the yield on the Bond, plus any income attributable to such excess, but
not including any amount exempted under 26 C . F .R. § 1 . 148 -3 of the Code (the "Rebate
Amount");
(2) to pay the Rebate Amount to the United States of America from legally
available funds of the Issuer at the times and to the extent required pursuant to Section 148 (f) of
00352137-3 8
AMENDED AGENDA ITEM # 6A
AUGUST 1 I , 2014
the Code ;
(3 ) to maintain and retain all records pertaining to and to be responsible for
making or causing to be made all determinations and calculations of the Rebate Amount and
required payments of the Rebate Amount for at least six years after the final maturity of the
Bond or such other period as shall be necessary to comply with the Code;
(4) to refrain from taking any action that would cause the Bond to be classified
as "private activity bond" under Section 141 (a) of the Code ; and
(5 ) to refrain from taking any action that would cause the Bond to become an
arbitrage bond under Section 148 of the Code .
The Issuer understands that the foregoing covenants impose continuing obligations on it
to comply with the requirements of Section 103 and Part IV of Subchapter 13 of Subpart A of
Chapter 1 of the Code so long as such requirements are applicable .
The terms " debt service, " " gross proceeds, " "net proceeds, " "proceeds, " and " yield" have
the meanings assigned to them for purposes of Section 148 of the Code .
Section 3 . 10 Separate Accounts . The moneys required to be accounted for the
foregoing funds established herein may be deposited in a single bank account, and funds
allocable to any fund or account 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 any funds or accounts and by this Agreement 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.
ARTICLE IV
CONDITIONS OF LENDING
The obligations of the Lender to lend hereunder are subject to the following conditions
precedent :
Section 4 . 01 Representations and Warranties . The representations and warranties of the
Issuer set forth in this Agreement and the Bond are true and correct on and as of the date hereof
Section 4 . 02 No Default. On the date hereof, the Issuer shall be in compliance with all the
terms and provisions set forth in this Agreement and the Bond on its part to be observed or
performed, and no Event of Default or any event that, upon notice or lapse of time or both,
would constitute such an Event of Default, shall have occurred and be continuing at such time .
00352137-3 9
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
Section 4 . 03 Supporting Documents . On or prior to the date hereof, the Lender shall have
received the following supporting documents, all of which shall be satisfactory in fonn and
substance to the Lender (such satisfaction to be evidenced by the purchase of the Bond by the
Lender) :
(a) The opinion of the attorney for the Issuer and/or bond counsel to the Issuer,
regarding the due authorization, execution, delivery, validity and enforceability of the Ordinance
authorizing this Agreement, the Bond and the Escrow Deposit Agreement, the Bond constituting
an Additional Parity Bond, as such term is defined in the Ordinance, and such other items as the
Lender shall reasonably request;
(b) The opinion of Bond Counsel to the Issuer to the effect that (i) the interest on the
Bond is excluded from gross income for federal income tax purposes and the Bond is not an item
of tax preference under Section 57 of the Code, (ii) the Bond is an exempt security within the
meaning of the Securities Act of 1933 , as amended, and it is not necessary in connection with the
sale of the Bond to register the Bond under the Securities Act of 1933 , as amended, or qualify the
Ordinance under the Trust Indenture Act of 1939 , as amended, and (iii) such other items as the
Lender shall reasonably request; and
(c) Such additional supporting documents as the Lender may reasonably request.
ARTICLE V
FUNDING THE LOAN
Section 5 . 01 The Loan. The Lender hereby agrees to lend to the Issuer the Loan Amount
to provide funds for the purposes described herein upon the terms and conditions set forth in this
Agreement. The Issuer agrees to repay the principal amount borrowed plus interest thereon upon
the terms and conditions set forth in this Agreement and the Bond.
Section 5 . 02 Description and Payment Terms of the Bond. To evidence the obligation of
the Issuer to repay the Loan, the Issuer shall issue and deliver to the Lender the Bond in the form
attached hereto as Exhibit "A. " Prepayment of principal may be made only as provided in the
Bond and the rate of interest on the Bond, including any adjustments thereto, shall be as provided
in the Bond .
ARTICLE VI
EVENTS OF DEFAULT
Section 6 . 01 General . An " Event of Default" shall be deemed to have occurred under this
Agreement if:
(a) The Issuer shall fail to make any payment of the principal of premium, if any, or
interest on the Bond when the same shall become due and payable; or
(b) The Issuer shall default in the performance of or compliance with any term or
covenant contained in this Agreement or the Bond, other than a term or covenant a default in the
00352137-3 10
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
performance of which or noncompliance with which is elsewhere specifically dealt with in this
Section 6 . 01 , which default or non-compliance shall continue and not be cured within thirty (30)
days after written notice thereof to the Issuer by the Lender; or
(c) Any representation or warranty made in writing by or on behalf of the Issuer in
this Agreement or the Bond shall prove to have been false or incorrect in any material respect on
the date made or reaffirmed; or
(d) The Issuer admits in writing its inability to pay its debts generally as they become
due or files a petition in bankruptcy or makes an assignment for the benefit of its creditors or
consents to the appointment of a receiver or trustee for itself; or
(e) The Issuer is adjudged insolvent by a court of competent jurisdiction, or it is
adjudged a bankrupt on a petition in bankruptcy filed by the Issuer, or an order, judgment or
decree is entered by any court of competent jurisdiction appointing, without the consent of the
Issuer, a receiver or trustee of the Issuer or of the whole or any part of its property, and if the
aforesaid adjudications, orders, judgments or decrees shall not be vacated or set aside or stayed
within ninety (90) days from the date of entry thereof; or
(0 The Issuer shall file a petition or answer seeking reorganization or any
arrangement under the federal bankruptcy laws or any other applicable law or statute of the
United States of America or the State .
Notwithstanding the provisions of clause (b) above or anything to the contrary in Section
6 . 02 below, a default of any of the covenants contained in Section 3 . 09 hereof shall not be an
"Event of Default" hereunder and the sole remedy of the Lender shall be an adjustment of the
interest rate on the Bond to the Taxable Rate (as defined in the Bond) and the payment of the
Additional Amount (as defined in the Bond) to the extent and in the manner described in the
Bond.
Section 6 . 02 Effect of -vent of Default. The Lender may either at law or in equity, by
suit, mandamus or other proceedings in any court of competent jurisdiction, protect and enforce
any and all rights under the laws of the State, or granted or contained in the Bond and this
Agreement, and may enforce and compel the performance of all duties required by the Bond, this
Agreement or by any applicable statute to be performed by the Issuer for performance hereunder
or under the Bond . All payments made on the Bond, after an Event of Default, shall be first
applied to accrued interest then to any reasonable costs or expenses, including reasonable legal
fees and expenses, that the Lender may have incurred in protecting or exercising its rights under
the Loan Documents and the balance thereof shall apply to the principal sum due.
ARTICLE VII
MISCELLANEOUS
Section 7 . 01 No Waiver; Cumulative Remedies . No failure or delay on the part of the
Lender in exercising any right, power, remedy hereunder or under the Bond shall operate as a
waiver of the Lender's rights, powers and remedies hereunder, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further exercise thereof, or the
00352137-3 11
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
exercise of any other right, power or remedy hereunder or thereunder. The remedies herein and
therein provided are cumulative and not exclusive of any remedies provided by law or in equity.
Section 7 . 02 Amendments, Changes or Modifications to this Agreement. This Agreement
shall not be amended, changed or modified except in writing signed by the Lender and the Issuer.
The Issuer agrees to pay all of the Lender's costs and reasonable attorneys' fees incurred in
modifying and/or amending this Agreement at the Issuer's request or behest.
Section 7 . 03 Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when so executed and delivered, shall be an original ; but such
counterparts shall together constitute but one and the same Agreement, and, in making proof of
this Agreement, it shall not be necessary to produce or account for more than one such
counterpart.
Section 7 . 04 Severability. If any clause, provision or section of this Agreement shall be
held illegal or invalid by any court, the Invalidity of such clause, provision or section shall not
affect any other provisions or sections hereof, and this Agreement shall be construed and
enforced to the end that the transactions contemplated hereby be effected and the obligations
contemplated hereby be enforced, as if such illegal or invalid clause, provision or section had not
been contained herein.
Section 7 . 05 Term of Agreement. F4;xcept as otherwise specified in this Agreement, this
Agreement and all representations, warranties, covenants and agreements contained herein or
made in writing by the Issuer in connection herewith shall be in full force and effect from the
date hereof and shall continue in effect until as long as the Bond is outstanding.
Section 7 . 06 Notices . All notices, requests, demands and other communications which
are required or may be given under this Agreement shall be in writing and shall be deemed to
have been duly given when received if personally delivered; when transmitted if transmitted by
telecopy, electronic telephone line facsimile transmission or other similar electronic or digital
transmission method (provided customary evidence of receipt is obtained) ; the day after it is
sent, if sent by overnight common carrier service; and five days after it is sent, if mailed,
certified mail, return receipt requested, postage prepaid. In each case notice shall be sent to the
Notice Address .
Section 7 . 07 Applicable Law; Venue. This Agreement shall be construed pursuant to and
governed by the substantive laws of the State . The Issuer and the Lender waive any objection
either might otherwise have to venue in any judicial proceeding brought in connection herewith
lying in Duval County, Florida.
Section 7 . 08 Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the successors in interest and permitted assigns of the parties . The Issuer
shall have no rights to assign any of its rights or obligations hereunder without the prior written
consent of the Lender.
Section 7 . 09 No Third Party Beneficiaries. It is the intent and agreement of the parties
hereto that this Agreement is solely for the benefit of the parties hereto and no person not a party
hereto shall have any rights or privileges hereunder.
00352137-3 12
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
Section 7 . 10 Attorneys Fees . To the extent legally permissible, the Issuer and the Lender
agree that in any suit, action or proceeding brought in connection with this Agreement or the
Bond (including any appeal(s)), the prevailing party shall be entitled to recover costs and
reasonable attorneys' fees from the other party.
Section 7 . 11 Entire Agreement. Except as otherwise expressly provided, this Agreement
and the Bond embody the entire agreement and understanding between the parties hereto and
supersede all prior agreements and understandings relating to the subject matter hereof.
Section 7 . 12 Further Assurances . The parties to this Agreement will execute and deliver,
or cause to be executed and delivered, such additional or further documents, agreements or
instruments and shall cooperate with one another in all respects for the purpose of carrying out
the transactions contemplated by this Agreement.
Section 7 . 13 Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE
BOND AND ANY DOCUMENT CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO
THIS AGREEMENT.
00352137-3 13
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
IN WITNESS WHEREOF, the parties have executed this Agreement to be effective
between them as of the date first set forth above.
CITY OF ATLANTIC BEACH, FLORIDA
By :
City Manager
ATTEST :
By :
City Clerk
APPROVED AS TO FORM AND
LEGALITY :
By:
City Attorney
00352137-3 14
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
TD BANK, N.A.
By
Vice President
00352137-3 15
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
EXHIBIT "A"
FORM OF BOND
THIS BOND IS SUBJECT TO TRANSFER RESTRICTIONS , MORE FULLY
DESCRIBED IN THE LOAN AGREEMENT REFERRED TO HEREIN, AND MAY NOT BE
TRANSFERRED EXCEPT TO AN ACCREDITED INVESTOR WITHIN THE MEANING OF
REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933 , OR A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
PROMULGATED UNDER THE SECURITIES ACT OF 1933 .
$ 13 ,960,000
CITY OF ATLANTIC BEACH, FLORIDA
UTILITIES SYSTEM REVENUE REFUNDING BOND, SERIES 2014
The CITY OF ATLANTIC BEACH, FLORIDA (the "Issuer"), a municipal corporation
duly created and existing under the laws of the State of Florida, for value received, promises to
pay, but solely from the sources hereinafter provided, to the order of TD BANK, N .A. or
registered assigns (together with any other registered owner of this Bond, hereinafter, the
" Lender"), the principal sum of Thirteen Million Nine Hundred Sixty Thousand Dollars
($ 13 ,960,000) or such lesser amount as shall be outstanding hereunder, together with interest on
the principal balance outstanding at the Interest Rate (defined below), calculated based upon a
year of 360 days consisting of twelve 30-day months, such amounts to be payable as provided
herein. This Utilities System Revenue Refunding Bond, Series 2014 (this "Bond " ), is issued
pursuant to the Ordinance enacted by the City Commission of the Issuer on November 13 , 1995 ,
as amended and supplemented (collectively, the " Ordinance ") and in conjunction with a Loan
Agreement, dated of even date herewith, between the Issuer and the Lender (the " Loan
Agreement") and is subject to all the terms and conditions of the Loan Agreement. All terms
used herein in capitalized form and not otherwise defined herein shall have the meanings
ascribed thereto , or referenced, in the Loan Agreement.
Principal of and interest on this Bond are payable in immediately available funds
constituting lawful money of the United States of America at the Principal Office or such place
as the Lender may designate in writing to the Issuer and shall be settled via wire transfer.
The Issuer shall pay the Lender interest on the outstanding principal balance of this Bond
in arrears, on April 1 , 2015 , and on the first day of each October and April thereafter, to and
including the Final Maturity Date (hereinafter defined) . The principal amount of this Bond shall
be payable in annual installments in the amounts set forth on Schedule A hereto, payable on
October I of each year, commencing October 1 , 2015 , with the final installment payable October
1 , 2025 (the "Final Maturity Date ") . If any date for the payment of principal or interest is not a
Business Day, such payment shall be due on the next succeeding Business Day in the manner
provided in the Loan Agreement .
All payments by the Issuer pursuant to this Bond shall apply first to accrued interest, then
00352137-3
A- 7
1
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
to other charges due the Lender, and the balance thereof shall apply to the principal sum due;
provided, however, in an Event of Default, payment shall be applied in accordance with Section
6 . 02 of the Loan Agreement. If any payment of principal or interest due hereunder is not paid
within fifteen ( 15 ) days after the date due hereunder, the Issuer shall pay the Lender upon
demand a late payment fee equal to six percent (6%) of the amount not paid when due . The
foregoing right to a late payment fee is in addition to and not in limitation of any right the Lender
may have upon the Issuer' s failure to timely pay such scheduled payment on the Bond.
The " Interest Rate, " as used herein, shall mean (a) two and thirty-three hundredths per
centum (2 . 33 %) multiplied, prior to a Determination of Taxability, by (b) the Margin Rate
Factor, and after a Determination of Taxability by the Taxable Rate, per annum unless adjusted
as provided herein.
In the event of a Determination of Taxability, the Interest Rate shall be adjusted to cause
the after-tax yield on this Bond to the Lender after such Determination of Taxability to equal
what the yield would have been to the Lender in the absence of such Determination of Taxability
(the "Taxable Rate "), effective retroactively to the date on which such Determination of
Taxability was made . In addition, immediately upon a Determination of Taxability, the Issuer
agrees to pay to the Lender the Additional Amount. "Additional Amount" means (i) the
difference between (a) interest on this Bond for the period commencing on the date on which the
interest on this Bond ceases to be excludable from gross income for federal income tax purposes
and ending on the earlier of the date this Bond ceased to be outstanding or such adjustment is no
longer applicable to this Bond (the "Taxable Period") at a rate per annum equal to the Taxable
Rate, and (b) the aggregate amount of interest paid on this Bond for the Taxable Period under the
provisions of this Bond without considering the Determination of Taxability, plus (ii) any
penalties and interest paid or payable by the Lender to the Internal Revenue Service by reason of
such Determination of Taxability. As used herein, " Determination of Taxability" means a final
decree or judgment of any federal court or a final action of the Internal Revenue Service or of the
United States Treasury Department determining that any interest payable on this Bond is
includable in the gross income of the Lender for federal income tax purposes . No such decree or
action shall be considered final for the purposes of this paragraph unless the Issuer has been
given written notice thereof and, if it is so desired by the Issuer and is legally permissible, the
Issuer has been afforded the opportunity to contest the same, at its own expense, either directly
or in the name of the Lender and until the conclusion of any appellate review, if sought.
"Margin Rate Factor" shall mean the fraction the numerator of which is equal to one ( 1 )
minus the Maximum Federal Corporate Tax Rate on the date of calculation and the denominator
of which is 0 . 65 . The Margin Rate Factor shall be 0 . 65/0 . 65 or 1 . 0 so long as the Maximum
Federal Corporate Tax Rate shall be 35 %, and thereafter shall increase from time to time
effective as of the effective date of any decrease in the Maximum Federal Corporate Tax Rate .
"Maximum Federal Corporate Tax Rate " is the highest marginal federal income tax rate
charged to U. S . corporations in effect at the time of the prepayment calculation. The "Maximum
Federal Corporate Tax Rate " is currently 35 % (or 0 . 35 in numerical terms) .
00352137-3
A-2
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
Upon the occurrence and during the continuance of an Event of Default under the Loan
Agreement, the Interest Rate shall be equal to the Interest Rate that was applicable prior to such
Event of Default plus six percent (6%) per annum (the " Default Rate ") .
Notwithstanding the foregoing, in no event shall the Interest Rate exceed the maximum
rate permitted by applicable law.
This Bond shall be prepayable at any time, in whole or in part, upon five (5) days' prior
written notice from the Issuer to the Lender, at the amount of principal of this Bond being
prepaid, plus interest accrued on the principal being prepaid to the date of prepayment plus, to
the extent applicable, a Yield Maintenance Fee . Prepayments in part shall be applied against
remaining installments of principal due hereunder in such order as the Issuer shall select.
The Yield Maintenance Fee shall be calculated as follows :
The cu1Tent 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" (as defined below), shall be subtracted
from the Interest Rate or Default Rate, if applicable . 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 scheduled outstanding principal balance for
each remaining monthly period of the " Remaining Term. " Each resulting amount shall be
divided by 360 and multiplied by the number of days in the monthly period. Said amounts shall
be reduced to present values calculated by using the above-referenced current costs of funds
divided by 12 . The resulting sum of such present values shall be the Yield Maintenance Fee .
"Remaining Term" as used herein shall mean the remaining term of this Bond from the
date of prepayment.
The Issuer to the extent permitted by law hereby waives presentment, demand, protest
and notice of dishonor.
This Bond is payable solely from the Pledged Revenues to the extent provided in the
Loan Agreement and subject to the pledge of the Pledged Revenues as more specifically
provided in the Ordinance and the Loan Agreement. Notwithstanding any other provision of this
Bond, the Issuer is not and shall not be liable for the payment of the principal of and interest on
this Bond or otherwise monetarily liable in connection herewith from any property other than as
provided in the Loan Agreement and the Ordinance.
NOTWITHSTANDING ANYTHING HEREIN OR IN THE LOAN AGREEMENT OR
THE ORDINANCE TO THE CONTRARY, THIS BOND AND THE INTEREST HEREON
DOES NOT AND SHALL NOT CONSTITUTE A GENERAL OBLIGATION OF THE
ISSUER BUT SHALL BE PAYABLE SOLELY FROM THE MONEYS AND SOURCES
DESIGNATED THEREFORE PURSUANT TO THE LOAN AGREEM1 NT, THIS BOND
AND THE ORDINANCE. NEITHER THE FAITH AND CREDIT NOR ANY AD VALOREM
TAXING POWER OF THE ISSUER IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL
OF OR INTEREST ON THIS BOND OR OTHER COSTS INCIDENTAL HERETO .
00352137-3
A-3
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
All terms, conditions and provisions of the Loan Agreement are by this reference thereto
incorporated herein as a part of this Bond.
This Bond may be exchanged or transferred but only as provided in the Loan Agreement.
It is hereby certified, recited and declared that all acts, conditions and prerequisites
required to exist, happen and be performed precedent to and in connection with the execution,
delivery and the issuance of this Bond do exist, have happened and have been performed in due
time, form and manner as required by law, and that the issuance of this Bond is in full
compliance with and does not exceed or violate any constitutional or statutory limitation.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed in its name as
of the date hereinafter set forth.
The date of this Bond is August 12 , 2014 .
CITY OF ATLANTIC BEACH, FLORIDA
By :
Mayor
(SEAL)
ATTESTED AND COUNTERSIGNED :
By :
City Clerk
APPROVED AS TO FORM AND
LEGALITY:
By :
City Attorney
00352137-3
A-4
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
SCHEDULE A
City of Atlantic Beach, Florida
Utilities System Revenues Refunding Bond, Series 2014 •
Date Principal Amount
(October I)
2015 $ 1 ,090,000
2016 1 , 160,000
2017 1 , 185 ,000
2018 1 ,215 ,000
2019 1 ,240,000
2020 1 ,265 ,000
2021 1 ,300,000
2022 1 ,330,000
2023 1 ,360,000
2024 1 ,390,000
2025 1 ,425 ,000
TOTAL $ 13 ,960 ,000
00352137-3
A-5
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
Exhibit C
Escrow Deposit Agreement
00362197-4
6
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
ESCROW DEPOSIT AGREEMENT
THIS ESCROW DEPOSIT AGREEMENT, dated as of August 12, 2014, by and between the
CITY OF ATLANTIC BEACH, FLORIDA (the "City"), and WELLS FARGO BANK, N.A., a
national banking association, as Escrow Holder and its successors and assigns (the "Escrow Holder");
WITNESSETH :
WHEREAS, the City has previously authorized and issued its Utilities System Revenue
Refunding Bonds, Series 2004 (the "2004 Bonds"), as to which the Total Debt Service (as
hereinafter defined) is set forth on Schedule A; and
WHEREAS, the City has previously authorized and issued its Utilities System Revenue
Bonds, Series 2010A- 1 (the "2010 A- 1 Bonds"), as to which the Total Debt Service (as
hereinafter defined) is set forth on Schedule At and
WHEREAS, the City has previously authorized and issued its Utilities System Revenue
Refunding Bonds, Series 2010B (the "2010B Bonds"), as to which the Total Debt Service (as
hereinafter defined) is set forth on Schedule At and
WHEREAS, the 2004 Bonds, the 2010A- 1 Bonds and the 2010B Bonds are collectively
referred to as the "Refunded Bonds"; and
WHEREAS, the City has determined to provide for payment of the Total Debt Service of
the Refunded Bonds by depositing with the Escrow Holder an amount which held in cash is at
least equal to such Total Debt Service; and
WHEREAS, the execution of this Escrow Deposit Agreement and full performance of the
provisions hereof shall defease the obligations of the City with respect to the Refunded Bonds;
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the City and the hscrow Holder agree as follows :
SECTION 1 . DEFINITIONS. As used herein, the following terms mean:
(a) "Agreement" means this Escrow Deposit Agreement.
(b) "Annual Debt Service " means the interest and principal on the Refunded Bonds
coming due in such year as shown on Schedule A attached hereto and made a part hereof.
(c) "Call Date" means with respect to the 2004 Bonds and the 2010B Bonds, October
1 , 2014 and with respect to the 2010A- 1 Bonds, August 18 , 2014 .
(d) "Escrow Account" means the account hereby created and entitled Escrow
Account established and held by the Escrow Holder pursuant to this Agreement, in which cash
00361211-6
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
will be held for eventual payment of the principal of and accrued interest on the Refunded Bonds
as they become due and payable.
(e) "Escrow Holder" means Wells Fargo Bank, N.A. , Jacksonville, Florida, and its
successors and assigns .
(f) "Escrow Requirement" means, as of any date of calculation, the sum of cash will
be sufficient to pay the Total Debt Service on the Refunded Bonds in accordance with Schedule
A.
(g) "2004 Bonds " means the outstanding City of Atlantic Beach, Florida, Utilities
System Revenue Refunding Bonds, Series 2004, originally issued in the aggregate amount of
$ 19, 500,000, as identified on Schedule A attached hereto .
(h) "2010A- 1 Bonds " means the outstanding City of Atlantic Beach, Florida, Utilities
System Revenue Bonds, Series 2010A- 1 , originally issued in the aggregate amount of $ 892, 560,
as identified on Schedule A attached hereto .
(i) "2010B Bonds" means the outstanding City of Atlantic Beach, Florida Utilities
System Revenue Refunding Bonds, Series 2010B , originally issued in the aggregate amount of
$ 690,000, as identified in Schedule A attached hereto .
0) "2014 Bond" or "Bond" means the City of Atlantic Beach, Florida, Utilities
System Revenue Refunding Bond, Series 2014, issued in the aggregate amount of $ 13 ,960,000,
in order to refund the Refunded Bonds.
(k) "Total Debt Service " means the sum of the principal, premium and interest
remaining unpaid with respect to the Refunded Bonds in accordance with Schedule A attached
hereto .
SECTION 2. DEPOSIT OF FUNDS. The City hereby deposits $ 15 , 189, 192 . 03 with the
Escrow Holder for deposit into the Escrow Account, in immediately available funds, which
funds the Escrow Holder acknowledges receipt of, to be held in irrevocable escrow by the
Escrow Holder separate and apart from other funds of the Escrow Holder and applied solely as
provided in this Agreement. The proceeds of the Bond being deposited into the Escrow Account
equal$ 13 ,912,716 . 65 . The funds deposited by the City into the Escrow Account from the
Sinking Fund from the Refunded Bonds equal $ 1 ,276 ,475 . 38 . The City represents that such
funds are at least equal to the Escrow Requirement as of the date of such deposit.
SECTION 3 . USE AND INVESTMENT OF FUNDS. The Escrow Holder
acknowledges receipt of the sum described in Section 2 and agrees :
(a) to hold the funds in irrevocable escrow during the term of this Agreement for the
sole benefit of the holders of the Refunded Bonds ;
(b) to hold such funds in cash in accordance with the terms of this Agreement for the
payment of the Refunded Bonds ;
00361211-6 2
AMENDED AGENDA. ITEM # 6A
AUGUST 11 , 2014
SECTION 4. PAYMENT OF REFUNDED BONDS AND EXPENSES.
(a) 2004 Bonds . On the date and in the amount set forth on Schedule A, the Escrow
Holder shall transfer to Wells Fargo Bank, N.A. , the Paying Agent for the 2004 Bonds (the
"Paying Agent"), in immediately available funds solely from amounts available in the Escrow
Account, a sum sufficient to pay the redemption price for the 2004 Bonds on the date as shown
on Schedule A.
(b) 2010A- 1 Bonds . On the date and in the amount set forth on Schedule A, the
Escrow Holder shall transfer to SunTrust Bank, the holder of the 2010A- 1 Bonds, in immediately
available funds solely from amounts available in the Escrow Account, a sum sufficient to pay the
principal of and the interest on the 2010A- 1 Bonds on the date shown on Schedule A. The wire
instructions are : SunTrust Bank — ABA # 061000104 — Account #9088000112 — Loan Account
#0050668811 -67 .
(c) 2010B Bonds . On the date and in the amount set forth on Schedule A, the Escrow
Holder shall transfer to Branch Banking and Trust Company, the holder of the 2010B Bonds, in
immediately available funds solely from amounts available in the Escrow Account, a sum
sufficient to pay the principal of, redemption premium, and the interest on, the 2010B Bonds on
the date shown on Schedule A. The wire instructions are : Branch Banking and Trust Company,
BB &T Governmental Finance, 233 West Nash Street, Wilson, NC 27893 — ABA # 053101121
— Account #5214994315—Contract #9909000014-00001 .
(d) Surplus . After transferring the amounts on deposit in the Fa;scrow Account to the
holders of the 2010A- 1 Bonds and the 2010B Bonds and after making the payment from the
Escrow Account described in Subsection 4(a) above, the Escrow Holder shall retain in the
Escrow Account any remaining cash in the Escrow Account in excess of the Escrow
Requirement until the termination of this Agreement, and shall then pay any remaining funds to
the City.
SE( I ION 5. NO REINVESTMENT OF FUNDS. 'the Escrow Holder shall have no power or
duty to invest any funds held under this Agreement.
SECTION 6. REQUIRED NOTICES. The Escrow Agent shall cause notices to be
given of such redemption of the 2004 Bonds at such time and in such mariner as provided by the
ordinance authorizing the issuance of the 2004 Bonds . Such notice shall be in substantially the
form set forth as Exhibit 1 , attached hereto .
The Escrow Agent shall also cause a Notice of Refunding and Defeasance to be mailed to
each Registered Owner of the 2004 Bonds not more than 30 business days after the date of the
establishment of the Escrow Deposit Trust Fund. Such notice shall be in substantially the form set
forth as Fi,xhibit 2, attached hereto.
SECTION 7. INDEMNITY. To the extent permitted by law, the City hereby assumes
liability for, and hereby agrees to indemnify, protect, save and keep harmless the Escrow Holder
and its respective successors, assigns, agents and servants, from and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements
00361211-6 3
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
(including reasonable legal fees and disbursements) of whatsoever kind and nature which may be
imposed on, incurred by, or asserted against at any time, the Escrow Holder (whether or not also
indemnified against the same by the City or any other person under any other agreement or
instrument) and in any way relating to or arising out of the execution and delivery of this
Agreement, the establishment of the Escrow Account established hereunder, the acceptance of the
funds deposited therein, and any payment, transfer or other application of funds by the Escrow
Holder in accordance with the provisions of this Agreement; provided, however, that the City shall
not be required to indemnify the Escrow Holder against its own negligence or willful misconduct. In
no event shall the City be liable to any person by reason of the transactions contemplated hereby
other than to the Escrow Holder as set forth in this Section. The indemnities contained in this
Section shall survive the termination of this Agreement and the resignation or removal of the
Escrow Holder. The Escrow Holder shall not be liable for any deficiencies in the amounts necessary
to pay the Escrow Requirement. Furthermore, the Escrow Holder shall not be liable for the accuracy
of the calculation as to the sufficiency of moneys to pay the Escrow Requirement. Anything in this
Agreement to the contrary notwithstanding, in no event shall the Escrow Holder be liable for
special, indirect or consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Escrow Holder has been advised of the likelihood of such loss or damage
and regardless of the form of action.
SECTION 8. RESPONSIBILITIES OF ESCROW HOLDER; AGENTS, ETC. The
Escrow Holder and its respective successors, assigns, agents and servants shall not be held to any.
personal liability whatsoever, in tort, contract, or otherwise, in connection with the execution and
delivery of this Agreement, the establishment of the Escrow Account, the acceptance of the funds
deposited therein, the retention of such funds or for any payment, transfer or other application of
moneys by the Escrow Holder in accordance with the provisions of this Agreement or by reason of
any non-negligent or non-willful act, omission or error of the Escrow Holder made in good faith in
the conduct of its duties . The Escrow Holder shall, however, be responsible for its negligent or
willful failure to comply with its duties required hereunder, and its negligent or willful acts,
omissions or errors hereunder. The duties and obligations of the Escrow Holder shall be deteimined
by the express provisions of this Agreement and no implied duties or obligation shall be read into
this Agreement against the Escrow Holder. The Escrow Holder may consult with counsel, who may
or may not be counsel to the City, at the City' s expense and in reliance upon the opinion of such
counsel shall have full and complete authorization and protection in respect of any action taken,
suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Holder shall
deem it necessary or desirable that a matter be proved or established prior to taking, suffering or
omitting any action under this Agreement, such matter may be deemed to be conclusively
established by a certificate signed by an authorized officer of the City.
The Escrow Holder has the right to perform any of its duties hereunder through agents,
attorneys, custodians or nominees .
SECTION 9. RESIGNATION OF ESCROW HOLDER. The Escrow Holder may
resign and thereby become discharged from the duties and obligations hereby created, by notice in
writing given to the City, any rating agency then providing a rating on the 2004 Bonds and the
Paying Agents for the Refunded Bonds not less than thirty (30) days before such resignation shall
00361211-6 4
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
take effect. Such resignation shall not take effect until the appointment of a new Escrow Holder
hereunder.
SECTION 10. REMOVAL OF ESCROW HOLDER.
(a) The Escrow Holder may be removed at any time by an instrument or concurrent
instruments in writing, executed by the holders of not less than fifty-one percent (51 %) in
aggregate principal amount of the Refunded Bonds then outstanding, such instruments to be filed
with the City, and notice in writing given by such holders to the original purchaser or purchasers
of the Bonds not less than thirty (30) days before such removal is to take effect as stated in said
instrument or instruments. A photographic copy of any instrument filed with the City under the
provisions of this paragraph shall be delivered by the City to the Escrow Holder.
(b) The Escrow Holder may also be removed at any time for any breach of trust or for
acting or proceeding in violation of or for failing to act or proceed in accordance with, any provisions
of this Agreement with respect to the duties and obligations of the Escrow Holder by any court of
competent jurisdiction upon the application of the City or the holders of not less than five percentum
(5%) in aggregate principal amount of the Refunded Bonds then outstanding.
(c) The Escrow Holder may not be removed until a successor Escrow Holder has
been appointed in the manner set forth herein.
SECTION 11 . SUCCESSOR ESCROW HOLDER.
(a) If at any time hereafter the Escrow Holder shall resign, be removed, be dissolved or
otherwise become incapable of acting, or shall be taken over by any governmental official, agency,
department or City, the position of Escrow Holder shall thereupon become vacant. If the position
of Escrow Holder shall become vacant for any of the foregoing reasons or for any other reason,
the City shall appoint an Escrow Holder to fill such vacancy. The City shall mail a notice of
any such appointment made by it to the Holders of the 2004 Bonds within thirty (30) days after
such appointment.
(b) At any time within thirty (30) days after such vacancy shall have occurred, the
holders of a majority in principal amount of the Refunded Bonds then outstanding, by an
instrument or concurrent instruments in writing, executed by either group of such bondholders and
filed with the governing body of the City, may appoint a successor Escrow Holder, which shall
supersede any Escrow Holder theretofore appointed by the City. Photographic copies of each such
instrument shall be delivered promptly by the City, to the predecessor Escrow Holder and to the
Escrow Holder so appointed by the holders of the Refunded Bonds . In the case of conflicting
appointments made by holders of the Refunded Bonds under this paragraph, the first effective
appointment made during the one year period shall govern.
(c) If no appointment of a successor Escrow Holder shall be made pursuant to the
foregoing provisions of this Section, the holder of any Refunded Bonds then outstanding, or any
retiring Escrow Holder may apply to any court of competent jurisdiction to appoint a successor
00361211-6 5
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
Escrow Holder. Such court may thereupon, after such notice, if any, as such court may deem proper
and prescribe, appoint a successor Escrow Holder.
(d) Any corporation or association into which the Escrow Holder may be converted or
merged, or with which it may be consolidated, or to which it may sell or transfer its corporate trust
business and assets as a whole or substantially as a whole, or any corporation or association
resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party,
ipso facto, shall be and become successor Escrow Holder hereunder and vested with all the trust,
powers, discretions, immunities, privileges and all other matters as was its predecessor, without the
execution or filing of any instrument or any further act, deed or conveyance on the part of any
parties hereto, anything herein to the contrary notwithstanding, provided that such successor
Escrow Holder assume in writing all the trust, duties and responsibilities of the Escrow Holder
hereunder.
SECTION 12 . PAYMENT TO ESCROW HOLDER. The Escrow Holder hereby
acknowledges that it has agreed to accept compensation under the Agreement in the sum of
payable upfront, for services to be performed by the Escrow Holder pursuant to this Agreement,
out-of-pocket expenses and legal expenses to be reimbursed at cost from legally available funds
of the City. The Escrow Holder shall have no lien or claim against funds in the Escrow Account
for payment of obligations due it under this Section.
SECTION 13. TERM. This Agreement shall commence upon its execution and delivery and
shall terminate when the Refunded Bonds have been paid and discharged in accordance with the
proceedings authorizing the Refunded Bonds, except as provided in Section 10 .
SECTION 14. SEVERABILITY. . If any one or more of the covenants or agreements
provided in this Agreement on the part of the City or the Escrow Holder to be performed should
be determined by a court of competent jurisdiction to be contrary to law, such covenant or
agreements herein contained shall be null and void and shall in no way affect the validity of the
remaining provisions of this Agreement.
SECTION 15. AMENDMENTS TO THIS AGREEMENT. This Agreement is made for the
benefit of the City and the holders from time to time of the Refunded Bonds and it shall not be
repealed, revoked, altered or amended in whole or in part without the written consent of all affected
holders, the 1-;scrow Holder and the City; provided, however, that the City and the Escrow Holder
may, without the consent of or notice to, such holders, enter into such agreements supplemental to
this Agreement as shall not adversely affect the rights of such holders and as shall not be
inconsistent with the terms and provisions of this Agreement, for any one or more of the following
purposes :
(a) to cure any ambiguity or foiinal defect or omission in this Agreement;
(b) to grant to, or confer upon, the Escrow Holder, for the benefit of the holders of the
Refunded Bonds any additional rights, remedies, powers or authority that may lawfully be
granted to, or conferred upon, such holders or the escrow Holder;
00361211 -6 6
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
(c) to subject to this Agreement additional funds, securities or properties; and
(d) to accommodate the transfer of the funds to the Escrow Holder pursuant to the
provisions hereof
The Escrow Holder shall, at its option, be entitled to request at the City's expense and rely
exclusively upon an opinion of nationally recognized attorneys on the subject of municipal bonds
acceptable to the City with respect to compliance with this Section, including the extent, if any, to
which any change, modification, addition or elimination affects the rights of the holders of the
Refunded Bonds or that any instrument executed hereunder complies with the conditions and
provisions of this Section.
SECTION 16. COUNTERPARTS. This Agreement may be executed in several
counterparts, all or any of which shall be regarded for all purposes as one original and shall
constitute and be but one and the same instrument.
SECTION 17. GOVERNING LAW. This Agreement shall be construed under the laws of
the State of Florida.
[Remainder of page intentionally left blank]
00361211-6 7
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers and their corporate seals to be hereunto affixed and attested as
of the date first above written.
CITY OF ATLANTIC BEACH, FLORIDA
By:
Name : Nelson Van Liere
Title : City Manager
ATTEST :
By :
Name : Donna L . Bartle
City Clerk
APPROV F'D AS TO FORM AND
LEGALITY
By:
City Attorney
00361211 -6 8
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
WELLS FARGO BANK, N.A., Escrow
Holder
By:
Name :
Title :
00361211-6 9
AMENDED AGENDA ITEM # 6A
AUGUST 1 I , 2014
SCHEDULE A
TOTAL DEBT SERVICE
FOR
City of Atlantic Beach, Florida
Utilities System Revenue Refunding Bonds, Series 2004
Period Ending Principal Interest Total
10/01 /2014 $ 13 , 545 ,000 $279, 571 . 88 $ 13 , 824,571 . 88
City of Atlantic Beach, Florida
Utilities System Revenue Bonds, Series 2010 A- 1 Bonds
Period Ending Principal Interest Total
8/ 18/2014 $757,386. 90 $ 10,347 . 38 $ 767,734.28
City of Atlantic Beach, Florida
Utilities System Revenue Refunding Bonds , Series 2010B Bonds
Period Ending Principal Interest Redemption Total
Premium
10/01 /2014 $ 580,784 . 16 $ 10,686 .43 $ 5 ,415 .28 $ 596, 885 . 87
00361211-6 1 0
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
Exhibit 1 :
NOTICE OF REDEMPTION
CITY OF ATLANTIC BEACH, FLORIDA
UTILITIES SYSTEM REVENUE REFUNDING BONDS,
SERIES 2004
Dated : August 18, 2014
Maturing: October 1, 2015 through October 1, 2025
NOTICE IS HEREBY GIVEN,N, on behalf of the City of Atlantic Beach, Florida, that the
outstanding Series 2004 Bonds maturing in the years 2015 through 2025 , inclusive, will be
redeemed on October 1 , 2014, at the redemption price of the principal amount of each Series
2004 Bond to be redeemed together with interest accrued thereon to October 1 , 2014 .
The Series 2004 Bonds to be redeemed are :
Maturity Principal Interest Redemption CUSIP No.
(October 1 ) Amount Rate Price
2015 $ 940,000 3 . 750% 100% 04825P BB4
2016 975 ,000 3 . 875 % 100% 04825P BC2
2017 1 ,010,000 4. 000% 100% 04825P BDO
2018 1 ,050,000 4 . 000% 100% 04825P BE8
2019 1 ,090,000 4 . 000% 100% 04825P BF5
2020 1 , 130,000 4. 125 % 100% 04825P BG3
2021 1 , 185 ,000 4 .250% 100% 04825P BH1
2022 1 ,235 ,000 4 . 250% 100% 04825P BJ7
2023 1 ,285 ,000 4 . 375 % 100% 04825P BK4
2024 1 ,340,000 4 . 375 % 100% 04825P BL2
2025 1 ,400,000 4 . 500% 100% 04825P BMO
Payment of the redemption price, including accrued interest on such Series 2004 Bonds to
the date of redemption will be made on or after such redemption date at the office of the Paying
Agent for the Series 2004 Bonds upon surrender thereof Interest on such Series 2004 Bonds will
cease to accrue from and after such redemption date .
NOTE : The CUSIP numbers appearing herein have been included solely for the
convenience of holders of the Series 2004 Bonds . No representation has been made as to the
correctness or accuracy of the CUSIP numbers, either as printed on the Series 2004 Bonds or as
contained in this Notice of Redemption.
00361211 -6 1 1
AMENDED AGENDA ITEM # 6A
AUGUST 1 I , 2014
IMPORTANT TAX INFORMATION. Under the Jobs and Growth Tax Relief
Reconciliation Act of 2003 , the Paying Agent may be required to withhold 28 % of any
redemption proceeds (including accrued interest) made to the holders of the referenced Series
2004 Bonds who fail to provide and certify under penalty of perjury, a correct taxpayer
identification number on or before the date the Series 2004 Bonds are presented for payment.
Those holders who are required to provide their correct taxpayer identification number or
Internal Revenue Service Foul' W-9 and who fail to do so may also be subject to a penalty.
DATED the 12th _day of August, 2014 .
00361211-6 12
AMENDED AGENDA ITEM # 6A
AUGUST 11 , 2014
Exhibit 2
NOTICE OF REFUNDING AND DEFEASANCE
CITY OF ATLANTIC BEACH, FLORIDA,
UTILITIES SYSTEM REVENUE REFUNDING BONDS, SERIES 2004
NOTICE IS HEREBY GIVEN, that the City of Atlantic Beach, Florida has irrevocably
deposited on August 12, 2014, with Wells Fargo Bank, N.A, as Escrow Agent (the "Escrow Agent"),
in trust, and has set aside for such payment, sufficient moneys to pay the principal of and interest
thereon to the redemption of the City of Atlantic Beach, Florida, Utilities System Revenue Refunding
Bonds Series, 2004 maturing in the years 2015 through 2025, inclusive (the "Refunded Series 2004
Bonds") on October 1 , 2014.
The Refunded Series 2004 Bonds consist of the following:
Maturity Principal Interest Redemption CUSIP No.
(October 1 ) Amount Rate Price
2015 $ 940,000 3 . 750% 100% 04825P BB4
2016 975 ,000 3 . 875 % 100% 04825P BC2
2017 1 ,010,000 4 . 000% 100% 04825P BD0
2018 1 ,050,000 4 . 000% 100% 04825P BE8
2019 1 ,090,000 4 . 000% 100% 04825P BF5
2020 1 , 130,000 4 . 125 % 100% 04825P BG3
2021 1 , 185 ,000 4 . 250% 100% 04825P BH1
2022 1 ,235 ,000 4 . 250% 100% 04825P BJ7
2023 1 ,285 ,000 4 . 375 % 100% 04825P BK4
2024 1 ,340,000 4 . 375 % 100% 04825P BL2
2025 1 ,400,000 4 . 500% 100% 04825P BMO
The Refunded Series 2004 Bonds have been refunded, and will be redeemed on October
1 , 2014, at a price equal to the principal amount of such bonds to be redeemed, plus accrued
interest.
The lien of the Refunded Series 2004 Bonds on the Pledged Revenues has been defeased
as of the date hereof.
A notice of redemption will be mailed to the registered owners of the Refunded Series
2004 Bonds at least thirty days prior to the scheduled redemption date of October 1 , 2014 .
Dated : August 12, 2014
WELLS FARGO BANK, N.A. , as Escrow Agent
This notice is for your information only; you are not required to take any action at this time .
00361211-6 13