Resolution No. 21-24RESOLUTION NO. 21-24
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
ATLANTIC BEACH, FLORIDA; SUPPLEMENTING ORDINANCE
NO. 15-21-16; AUTHORIZING THE ISSUANCE OF A $5,193,000
UTILITIES SYSTEM REVENUE REFUNDING BOND, SERIES
2021; AUTHORIZING AWARD OF THE BOND TO KEY
GOVERNMENT FINANCE, INC. FOLLOWING SOLICITATION
OF COMPETITIVE PROPOSALS; AUTHORIZING THE
EXECUTION AND DELIVERY OF THE BOND AND THE LOAN
AGREEMENT; DESIGNATING THE BOND AS A QUALIFIED
TAX-EXEMPT OBLIGATION PURSUANT TO SECTION
265(b)(3)(B) OF THE INTERNAL REVENUE CODE;
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 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-
21-16 (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 Key
Government Finance Inc. (the "Bondholder") 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.
(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 and has determined that the proposal of the Bondholder, set forth by letter
dated March 29, 2021 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
Bondholder, 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
01486651-2
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 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 Bondholder. 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 Bondholder.
Section 4. BANK QUALIFIED ISSUE. The City hereby designates the Bond to be
a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3)(B) of the Internal
Revenue Code.
Section 5. 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 and the Loan 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 and the Loan Agreement, which are not inconsistent with the terms and
provisions of the Ordinance and this Resolution.
Section 6. 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 10th day of May, 2021.
CITY OF ATLANTIC BEACH, FLORIDA
By: �rI4
len Glasser
Mayor
Approved as to form, sufficiency
and correctness:
By: V v'j
re a M. D
City Attorney
ATTEST:
By:
Donna L. Bartle
City Clerk
01486651-2 2
EXHIBITS
TO
RESOLUTION
Exhibit A — March 29, 2021 Proposal of Key Government Finance Inc.
Exhibit B — Loan Agreement
01486651-2
Exhibit A
March 29, 2021 Proposal of Key Government Finance Inc.
01486651-2
EXHIBIT A
Ciry of Atlantic Beach, rL
M:ffltry System Revenue Refu ndhng Bonds,, Series 2021
Summary of Terms and Conditions
Mearrch 29, 2021
This Financing proposal is provided for discussion purposes only and does not represent a commitment from Key
Government Finance, Inc. (`KGF'). This proposal and its terms are submitted on a confidential basis and shall not be
disclosed to third parties (other than the Borrower's officers, directors, employees and advisors charged with reviewing
and/or implementing the transactions contemplated hereby) without KGF's consent. This proposal is intended as an outline
of certain material terms of the Facility and does not purport to summarize all of the conditions, covenants, representations,
warranties and other provisions which would be contained in definitive documentation for the Facility contemplated hereby.
Key Government Finance, Inc., ("Lender") is pleased to provide the following term sheet for a direct purchase financing
structure to the City of Atlantic Beach, FL.
Lender:
Key Government Finance, Inc. ("Lender").
Borrower:
City of Atlantic Beach, FL (the "City" or "Borrower").
Issue:
Utility System Revenue Refunding Bonds, Series 2021 (the "2021 Bonds").
Facility:
Direct Purchase of the 2021 Bonds by the Lender.
Tax Treatment:
Tax -Exempt.
Amount:
$5,300,000.
Use of Proceeds:
The proceeds of the 2021 Bonds will be to used to (1) refund the City's obligations pursuant to
the City's Drinking Water and Clean Water State Revolving Fund Construction Loan
Agreement WWI 60700 and DW 160710 (2) pay costs of issuance for the 2021 Bonds.
Drawdown:
All funds will be drawn down at closing.
Final Maturity Date:
May 15, 2032.
Repayment:
Principal and interest due semi-annually on May 15 and November 15, commencing on
November 15, 2021 to the Final Maturity Date as shown in the RFP.
Facility Term:
The anticipated closing date for this Facility is by May 17, 2021. KGF will purchase the 2021
Bonds through the Final Maturity Date.
/fey Government Finance Page 1 t
Interest Rate Lock: At the Borrower's request, the Lender can provide an interest rate lock option ("Interest Rate
Lock") good through a May 17, 2021 closing date. The Interest Rate Lock will require a two
party e-mail confirmation between Lender and Borrower to confirm the terms of the Interest
Rate Lock as provided by Lender, provided however, the Borrower will not be subject to any
breakage fees if the Facility does not close for any reason. If the Interest Rate Lock
confirmation is not received by Lender within the specified time, or the Facility closes after the
agreed upon lock period, the final interest rate will be subject to index between the proposal
date and the closing date based on the change in the KeyCorp Cost of Funds index.
Based on market conditions as of March 29, 2021, the Interest Rate Lock option is quoted
below. Any revision to the amortization that increases the average life of the financing may
result in a re -pricing of the Interest Rate Lock provided.
This Interest Rate Lock needs to be accepted by the Borrower no later than April 5, 2021 and
would be valid for closing on or before May 17, 2021.
Interest Rate Lock
Final Maturity Date Wei hted Average Life (Months) Tax -Exempt Interest Rate
2021 Bonds I May 15, 2032 70 1.693%
Up -Front Fee: $0
Costs of Issuance: Lender plans to use Kutak Rock LLP as outside legal counsel. Lender's Counsel fee to be paid
by the Lender. Attorney contact information is provided below:
Andrew Romshek
Kutak Rock LLP
1650 Famam Street
Omaha, NE 68102
(402)231-8797
Andrew.Romshek(&KutakRock.com
Bradley Nielsen
Kutak Rock LLP
650 Farnam Street
Omaha, NE 68102
(402) 231-8780
bradley. nielsen(a)KutakRock. com
Prepayment: The Facility may be prepaid in whole or in part at any time at par.
Security: The 2021 Bonds will be secured a senior 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.
Financial Reporting: Borrower shall provide directly to the Lender:
1. Annual audited financial statements including operating data within 270 days of
Borrower's fiscal year end.
Financial Covenants: DSC ratio of 1.25x. ABT of 1.25x. Rate covenant of 1.25x. All covenants will use the same
definitions as currently defined.
Default Rate: 3% above the current interest rate for any outstanding payments in default, upon the occurrence
of a payment default longer than 90 days, the default interest rate shall apply to all outstanding
principal, until the payment default has been cured.
Event of Taxability and An Event of Taxability will be based only on action or non -action of County. In the Event of
Gross -Up Rate: Taxability, the tax-exempt interest rate would convert to the taxable interest rate of 2.143%.
Page 2
Increased Cost: No increased cost provisions will be required by the Lender.
Documents: All documents shall be attorney prepared and in a form and substance acceptable to the Lender
and its legal counsel, including legal opinions customary for transactions of this nature. Bond
counsel will provide a Validity Opinion regarding the legality, validity, and enforceability of
the Facility and a Tax Opinion regarding the tax-exempt nature of the interest earnings on the
financing.
No consent or waiver, express or implied, to or of any breach or default in the performance of
any obligation under this Agreement shall constitute a consent or waiver to or of any other
breach or default in the performance of the same or any other obligation
Credit Approval: Lender has received a positive credit pre-screen for this transaction. The estimated amount of
time required to obtain final credit approval is 1-3 business days after receipt of formal award
assuming timely receipt of the following information:
1. Total assessed value of the City and the top 10 taxpayers as a percentage of total
assessed value for the past 3 years.
Conditions Precedent to Borrower's obligation will be subject to such terms and conditions that Lender may require
Closing: with respect to this transaction, or as are customarily required with respect to similar credits and
as set forth in the facility documents. Without limitation, such terms and conditions shall
include:
1. Absence of Default.
2. Accuracy of Representations and Warranties.
3. Negotiation and Execution of satisfactory closing documents.
4. Absence of material adverse change in financial condition of Borrower during the
period from the date hereof to the Closing Date.
5. Formal credit approval by the Lender.
Violations / Litigation: The Lender is not presently in violation of any statutes or regulatory rules that may impact our
operations. The Lender is also not been party to any litigation (previous or pending) over the
past three (3) years.
Firm Experience: The Lender is a subsidiary of KeyBank, N.A. KGF's portfolio consists of over $4.5 billion of
tax-exempt and taxable leases, loans, and bonds for municipalities, not -for -profits, and
manufacturers across the United States.
Other: The Lender will make a loan by purchasing the 2021 Bonds under the following additional
conditions: (i) the 2021 Bonds are not being registered under the Securities Act of 1933 and is
not being registered or otherwise qualified for sale under the "Blue Sky" laws and regulations
of any state; (ii) the Lender will hold the 2021 Bonds as one single debt instrument; (iii) no
CUSIP numbers will be obtained for the 2021 Bonds; (iv) no final official Statement has been
prepared in connection with the private placement of the 2021 Bonds; (v) the 2021 Bonds will
not close through the DTC or any similar repository and will not be in book entry form; and (vi)
the 2021 Bonds are not listed on any stock or other securities exchange.
Expiration Date: April 5, 2021
Page 3
Proposal Acceptance/Expiration
This proposal is issued in reliance upon the accuracy of all information presented by you to us and is contingent upon the
absence of any material adverse change in your condition, financial or otherwise, from the condition as it was represented to
us at the time of this proposal. This proposal is subject to our formal approval and the execution of documentation
acceptable to each of us. IT IS NOT A COMMITMENT BY US TO ENGAGE IN THIS TRANSACTION.
(a) Key Government Finance ("KGF") is not acting as an advisor to you and does not owe a fiduciary duty pursuant to
Section 15B of the Exchange Act to you with respect to the information and material contained in this communication; (b)
KGF is acting for its own interests; and (c) you should discuss any information and material contained in this
communication with any and all internal or external advisors and experts that you deem appropriate before acting on this
information or material.
KGF (i) is an entity directly or indirectly controlled by a bank or under common control with a bank, other than a broker,
dealer or municipal securities dealer registered under the Securities Exchange Act of 1934, and (ii) the present intent of the
KGF, is to hold the municipal securities to maturity or earlier redemption or mandatory tender. Any placement agent,
broker or financial advisor may rely upon the representations and warranties contained in this paragraph.
Lender notifies Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56, as amended
and supplemented) (the "Patriot Act"), that Lender is required to obtain, verify and record all information that identifies
Borrower, which information includes the name and address of Borrower and other information that will assist Lender to
identify Borrower in accordance with the Patriot Act."
Lender acknowledges that, in connection with Borrower's compliance with any continuing disclosure undertakings (each, a
"Continuing Disclosure Agreement") entered into by Borrower pursuant to SEC Rule 15c2-12 promulgated pursuant to the
Securities and Exchange Act of 1934, as amended (the "Rule"), Borrower may be required to file with the Municipal
Securities Rulemaking Board's Electronic Municipal Market Access system, or its successor ("EMMA"), notice of its
incurrence of its obligations under this Facility and notice of any accommodation, waiver, amendment, modification of
terms or other similar events reflecting financial difficulties in connection with this Facility, in each case including a
description of the material terms thereof (each such notice, an `EMMA Notice"). Borrower shall not file or submit or
permit the filing or submission of any EMMA Notice that includes any of the following unredacted information regarding
Lender or any Escrow Agent: physical or mailing addresses, account information, e-mail addresses, telephone numbers, fax
numbers, tax identification numbers, or titles or signatures of officers, employees or other signatories. Borrower
acknowledges and agrees that Lender is not responsible in connection with any EMMA Notice relating to this Facility for
Borrower's compliance or noncompliance (or any claims, losses or liabilities arising therefrom) with the Rule, any
Continuing Disclosure Agreement or any applicable securities laws, including but not limited to those relating to the Rule.
If the outlined foregoing proposal is satisfactory, reflects an arrangement that suits the need of your organization and you
would like Key to commence its due diligence process, please sign and return this proposal. The terms described in this
proposal will expire on April 5, 2021 if we have not received an authorized signed copy on or before such date.
Thank you for allowing us the opportunity to present this Proposal. If you have any questions, please call me at 315-470-
5180.
Sincerely,
Key Government Finance, Inc.
By:
David Zapata
VP & East Region Manager
201 South Warren Street, 4°1 Floor
Syracuse, NY 13202
David—Zapata@keybank.com
Exhibit B
Loan Agreement
01486651-2
EXHIBIT B
LOAN AGREEMENT
This LOAN AGREEMENT is made and entered into as of May 17, 2021, 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
KEY GOVERNMENT FINANCE, INC. and its successors and assigns, as holder(s) of the
hereinafter defined Bond (the "Lender").
WHEREAS, the Issuer has, by adoption of Ordinance No. 15-21-16 (the "Ordinance") on
April 26, 2021, authorized the refunding of the Issuer's outstanding obligations pursuant to the
Issuer's Drinking Water State Revolving Fund Construction Loan Agreement DW160710 and the
Issuer's Clean Water State Revolving Fund Construction Loan Agreement WW160700
(collectively, the "Refunded Bonds") by a loan (the "Loan") from the Lender and the issuance of
the Bond in the principal amount of $5,300,000 to the Lender to secure the Loan; and
WHEREAS, the Issuer has, by Resolution No. 21-24, adopted on May 10, 2021 (the
"Resolution") determined to obtain the Loan from the Lender and to issue the Bond to secure the
Loan;
NOW THEREFORE, in consideration of the premises and the respective representations
and covenants herein contained, the parties hereto 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 2021,
issuable in the denomination of a single Bond of $5,300,000 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
01486238-1
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 published
Revenue Rulings and private letter rulings), and applicable court rulings.
"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 $5,300,000.
"Loan Documents" means this Agreement and the Bond.
"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: Shane Corbin
City Manager
City of Atlantic Beach, FL
800 Seminole Road
Atlantic Beach, FL 32233-5445
Email address: scorbin@coab.us
As to the Lender:
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 Ordinance No. 15-21-16, enacted on April 26, 2021, and any ordinance and resolution
01486238-1
2
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.
"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
, or such other office as the Lender may designate to the Issuer in writing.
"Refunded Bonds" means the City's outstanding obligations pursuant to the City's
Drinking Water State Revolving Fund Construction Loan Agreement DWI 60710 and the City's
Clean Water State Revolving Fund Construction Loan Agreement WWI 60700.
"Sinking Fund" means the Utilities System Revenue Refunding Bond, Series 2021, 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
01486238-1
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 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
01486238-1
4
funded.
The Lender hereby consents to the requirement for the Renewal and Replacement Fund 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.
Section 2.07 Qualified Tax -Exempt Obli ag tion. The Issuer hereby represents and finds
that it reasonably anticipates not more than $10,000,000 of tax-exempt obligations (other than
certain private activity bonds) will be issued by the Issuer and its subordinate governmental entities
in calendar year 2021. The Issuer hereby directs its Mayor, or the City Manager, or their delegates,
to recertify these representations upon issuance of the Bond, and the Bond is hereby designated as
a "qualified tax-exempt obligation" under Section 265(b)(3) of the Code.
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:
La) Pam 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.
01486238-1
(b) Use of Proceeds. Proceeds from the Bond will be used only to (i) refund the
Refunded Bonds, and (ii) to pay closing costs of the Loan and costs of issuance of the Bond.
(c) 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 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, 2021, 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
01486238-1
6
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.
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
01486238-1
7
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 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. §
01486238-1
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
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
01486238-1
9
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.
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 form 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 and the Bond, 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 -
01486238 -1
10
(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
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
(f) 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 Event 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
01486238-1
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
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. Except 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
01486238-1
12
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.
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.
01486238-1
13
IN WITNESS WHEREOF, the Issuer and the Lender have executed and delivered this
Loan Agreement as of May 17, 2021.
(SEAL)
ATTEST:
By:
Donna Bartle
City Clerk
APPROVED AS TO FORM AND
LEGALITY:
IN
Brenna M. Durden
City Attorney
01486238-1
14
CITY OF ATLANTIC BEACH, FLORIDA
ME
Ellen Glasser
Mayor
KEY GOVERNMENT FINANCE, INC.
IN
Its:
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.
$5,300,000
CITY OF ATLANTIC BEACH, FLORIDA
UTILITIES SYSTEM REVENUE REFUNDING BOND, SERIES 2021
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 KEY GOVERNMENT
FINANCE, INC. or registered assigns (together with any other registered owner of this Bond,
hereinafter, the "Lender"), the principal sum of Five Million Three Hundred Thousand Dollars
($5,300,000) 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 2021 (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 November 15, 2021, and on May 15 and November 15 of each year 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
May 15 of each year, commencing May 15, 2022, with the final installment payable May 15, 2032
(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
to other charges due the Lender, and the balance thereof shall apply to the principal sum due;
01486622-1
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 1.693% per annum unless adjusted as
provided herein.
In the event of a Determination of Taxability, the Interest Rate shall convert to the rate of
2.143% (the "Taxable Rate"), effective retroactively to the date on which such Determination of
Taxability was made. 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.
Upon the occurrence and during the continuance of a payment Event of Default longer than
ninety days under the Loan Agreement, the Interest Rate shall be equal to the Interest Rate that
was applicable prior to such Event of Default plus three percent (3%) 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.
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 AGREEMENT, THIS BOND AND THE
01486622-1
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.
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 May 17, 2021.
CITY OF ATLANTIC BEACH, FLORIDA
By: _
Mayor
(SEAL)
ATTESTED AND COUNTERSIGNED:
By:
City Clerk
APPROVED AS TO FORM AND
LEGALITY:
By:
City Attorney
01486622-I
SCHEDULE A
City of Atlantic Beach, Florida
Utilities System Revenues Refunding Bond, Series 2021
Date Principal Amount
(May 15)
2022 $
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
TOTAL $5,300,000
01486622-1