HomeMy WebLinkAboutExhibit - Draft Loan AgreementFile No. 2346 — DRAFT SUBJECT TO ONGOING NEGOTIATIONS
LOAN AGREEMENT
between
CITY OF MIAMI, FLORIDA
and
DNT ASSET TRUST
Dated as of June 1, 2017
Relating to:
CITY OF MIAMI, FLORIDA
LIMITED AD VALOREM TAX
REFUNDING BOND, SERIES 2017
(which refunds the outstanding City of Miami, Florida Limited Ad Valorem Revenue Refunding
Bonds, Series 2007A (Homeland Defense/Neighborhood Capital Improvement Projects) and
City of Miami, Florida Limited Ad Valorem Tax Bonds, Series 2009 (Homeland
Defense/Neighborhood Capital Improvement Projects))
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TABLE OF CONTENTS
ARTICLE I.
DEFINITION OF TERMS
Page
Section 1.01.
Definitions....................................................................................... 2
Section 1.02.
Interpretation................................................................................... 8
Section 1.03.
Titles and Headings......................................................................... 8
Section 1.04.
Incorporation of Whereas Clauses .................................................. 8
ARTICLE II.
REPRESENTATIONS, WARRANTIES AND COVENANTS;
SECURITY FOR THE BOND; ADDITIONAL OBLIGATIONS
Section 2.01.
Representations by the City............................................................
9
Section 2.02.
General Representations, Warranties and Covenants of the
Purchaser.
10
Section 2.03.
Making of Loan.............................................................................
10
Section 2.04.
Tax Covenants..............................................................................
10
Section 2.05.
Bond not to be Indebtedness of the City or State ..........................
11
Section 2.06.
Levy of Limited Ad Valorem Tax; Payment and Pledge .............
11
Section 2.07.
Covenant to Budget and Appropriate ...........................................
12
Section 2.08.
Security for Bond..........................................................................
12
Section 2.09.
Payment Covenant........................................................................
13
Section 2.10.
Additional Covenants....................................................................
13
Section 2.11.
Additional Bonds..........................................................................
13
ARTICLE III.
DESCRIPTION OF BOND; PAYMENT TERMS;
OPTIONAL PREPAYMENT
Section 3.01. Description and Payment Terms of the Bond ............................... 13
Section 3.02. Registration; Assignment and Transfer ........................................ 16
Section 3.03. Optional Prepayment.................................................................... 17
Section 3.04. Bond Fund..................................................................................... 17
ARTICLE IV.
ISSUANCE OF BOND
Section 4.01. Issuance of Bond........................................................................... 18
Section 4.02. Application of Bond Proceeds...................................................... 19
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ARTICLE V.
EVENTS OF DEFAULTS; REMEDIES
Section 5.01. Events of Default.......................................................................... 20
Section5.02. Remedies....................................................................................... 21
ARTICLE VI.
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MISCELLANEOUS
Section 6.01.
Section 6.02.
Section 6.03.
Section 6.04.
Section 6.05.
Section 6.06.
Section 6.07.
Section 6.08.
Section 6.09.
Section 6.10.
Section 6.11.
Section 6.12.
Section 6.13.
Amendments, Changes or Modifications to the Agreement......... 21
Counterparts..................................................................................
21
Severability..................................................................................
21
Term of Agreement.......................................................................
22
Assignment...................................................................................
22
Notices..........................................................................................
22
ApplicableLaw.............................................................................
22
JuryWaiver...................................................................................
22
Consent to Jurisdiction; Venue; Attorneys' Fees ..........................
23
Public Records Laws.....................................................................
23
Indemnification.............................................................................
24
Bondholder Representative...........................................................
24
Incorporation by Reference...........................................................
25
Exhibit A - Form of Bond
Exhibit B- Composite Certificates
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LOAN AGREEMENT
This LOAN AGREEMENT (this "Agreement") is made and entered into as of June
1, 2017, between the CITY OF MIAMI, a municipality created and existing under and by virtue
of the laws of the State of Florida (the "City"), and DNT ASSET TRUST, and its successors and
assigns (the "Purchaser");
WITNESSETH:
WHEREAS, the City is authorized pursuant to Chapter 166, Part II, Florida
Statutes, as amended, and other applicable provisions of law (the "Act"), to, among other things,
(a) undertake capital projects in and for the City, (b) borrow money to finance or refinance the cost
of such projects as provided in the Act, and (c) pledge the funds of the City for payment of such
debts as provided in the Act; and
WHEREAS, the City deems it necessary, desirable and in the best interest of the
City that the City refund all of its outstanding City of Miami, Florida Limited Ad Valorem Tax
Revenue Refunding Bonds, Series 2007A (Homeland Defense/Neighborhood Capital
Improvement Projects) (the "Refunded Series 2007A Bonds") and a portion of its outstanding City
of Miami, Florida Limited Ad Valorem Tax Bonds, Series 2009 (Homeland
Defense/Neighborhood Capital Improvement Projects) (the "Refunded Series 2007A Bonds" and
together with the "Refunded Series 2009 Bonds, the "Refunded Bonds"); and
WHEREAS, the City's Finance Committee has recommended on May 17, 2017
and the City Commission on June 22, 2017, pursuant to Resolution R-17-1136, has authorized
such refunding of the Refunded Bonds; and
WHEREAS, the Purchaser is willing to make available to the City
Dollars 00/100 Cents ( ) (the "Loan Amount") which the City
will use to finance (i) the cost of currently refunding the Refunded Series 2007A Bonds, (ii) the
cost of advance refunding the Refunded Series 2009 Bonds and (ii) related closing costs
(collectively, the "Refunding"); and
WHEREAS, the Purchaser is authorized to loan the Loan Amount to the City
pursuant to applicable law and the Purchaser's internal procedures and the City is authorized to
borrow the Loan Amount and agree to repay such amount as provided herein.
NOW, THEREFORE, THIS AGREEMENT WITNESSETH:
That the parties hereto, intending to be legally bound hereby and in consideration
of the mutual covenants hereinafter contained, DO HEREBY AGREE as follows:
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ARTICLE I.
DEFINITION OF TERMS
Section 1.01. Definitions.
The terms defined in this Article 1 shall, for all purposes of this Agreement, have
the meanings specified in this Article 1, unless the context clearly otherwise requires.
"Act" shall mean Chapter 166, Part 11, Florida Statutes, as amended, and other
applicable provisions of law. - on
"Agreement" shall mean this Loan Agreement dated as of June 1, 2017, between
the City and the Purchaser and any and all modifications, alterations, amendments and supplements
hereto made in accordance with the provisions hereof.
"Annual Debt Service Requirement" means with respect to the Bond, for a given
Fiscal Year, the sum of: (i) the amount required to pay the interest coming due on the outstanding
Bond during that Fiscal Year, and (ii) the amount required to pay the principal coming due on the
outstanding Bond for that Fiscal Year.
"Applicable Interest Period" means the period from the date of issuance of the Bond
to the final maturity date of the Bond.
"Authorized City Officer" for the performance on the behalf of the City of any act
of the City or the execution of any document or instrument on behalf of the City shall mean any
person authorized by resolution or certificate of the City to perform such act or sign such document
or instrument.
"Authorized Depository" means (i) with respect funds held in the accounts under
this Agreement, the State Board of Administration of Florida or a bank or trust company in the
State which is eligible under the laws of the State to receive funds of the City or (ii) with respect
to funds held in the escrow accounts under the Escrow Deposit Agreement, The Bank of New York
Mellon Trust Company, N.A.
"Authorized Investments" shall mean any of the following which shall be
authorized from time to time by applicable laws of the State of Florida for deposit or purchase by
the City for the investment of its funds:
(a) Direct obligations of (including obligations issued or held in book entry
form on the books of the Department of the Treasury of the United States of America and stripped
and zero coupon obligations), or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America.
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(b) Bonds, debentures or notes or other evidences of indebtedness payable in
cash issued by any one or a combination of any of the following federal agencies whose obligations
represent the full faith and credit of the United States of America: Export Import Bank of the
United States, Federal Financing Bank, Farmers Home Administration, Federal Housing
Administration, Maritime Administration, Public Housing Authority and Government National
Mortgage Association.
(c) Certificates of deposit properly secured at all times by collateral security
described in either or both of paragraphs (a) and (b) of this definition or in the collateral provisions
of Chapter 280, Florida Statutes, as amended, and issued by commercial banks, savings and loan
associations or mutual savings banks chartered by the State of Florida or the United States of
America, and bank trust receipts issued by commercial banks or trust companies chartered by the
State of Florida or the United States of America upon any securities described in paragraph (a) of
this definition.
(d) The following investments fully insured by the Federal Deposit Insurance
Corporation: (i) certificates of deposit, (ii) savings accounts, (iii) deposit accounts, or (iv)
depository receipts of a bank, savings and loan association or mutual savings bank.
(e) Commercial paper rated in one of the two highest rating categories by at
least two nationally recognized rating agencies or commercial paper backed by a letter of credit or
line of credit rated in one of the two highest rating categories by Moody's and S&P.
(f) Written repurchase agreements with any bank, savings institution or trust
company which is insured by the Federal Deposit Insurance Corporation, or with any broker-dealer
with retail customers which falls under Securities Investors Protection Corporation protection,
provided that such repurchase agreements are fully secured by collateral described in (a) above or
obligations of any agency or instrumentality of the United States of America, and provided further
that (i) such collateral is held by a bank or trust company chosen by the City which has no interest
in the repurchase agreement during the term of such repurchase agreement, (ii) such collateral is
not subject to liens or claims of third parties, (iii) such collateral has a market value (determined
at least once every 30 days) at least equal to the amount invested in the repurchase agreement, (iv)
the entity holding the collateral has a perfected first security interest in the collateral for the benefit
of the Bondholder, (v) the agreement shall be for a term not longer than 270 days and (vi) the
failure to maintain such collateral at the level required in (iii) above will require the entity holding
the collateral to liquidate the collateral.
(g) Money market funds rated in the highest rating category by Moody's and
S&P.
(h) Units of participation in the Local Government Surplus Funds Trust Fund
established pursuant to Chapter 218, Part IV, Florida Statutes, as amended, or any similar common
trust fund which is established pursuant to the law of the State of Florida as a legal depository of
public moneys.
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(i) Obligations of state or local government municipal bond issuers that are
rated in one of the two highest rating categories by Moody's and S&P.
0) Such other obligations as shall be permitted to be legal investments of the
City by the laws of the State of Florida.
Rating categories when referred to herein shall be without regard to gradations
within such categories, such as "plus" or "minus."
"Bank" mean JPMorgan Chase Bank, N.A., its successors and assigns.
documenj
"Base Rate" means the higher of (i) the Prime Rate and (ii) 2.5% plus One -Month
LIBOR Rate.
"Bond" shall mean the limited ad valorem tax refunding bond authorized by the
Initial Ordinance and the Resolution and delivered by the City to the Purchaser in accordance with
the requirements set forth in ARTICLE IV hereof.
"Bondholder" shall mean the Purchaser as the holder of the Bond, or any other
registered holder of or participant in the Bond.
"Bond Counsel" shall mean Foley & Lardner LLP, Jacksonville, Florida or any
other attorney at law or firm of attorneys of nationally recognized standing in matters pertaining
to the federal tax exemption of interest on obligations issued by states and political subdivisions,
and duly admitted to practice law before the highest court of any state of the United States of
America.
"Bond Fund" means the Bond Fund established pursuant to Section 3.04 hereof.
"Business Day" or "business day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions within the State are authorized by law to remain
closed.
"City" shall mean the City of Miami, Florida.
"City Clerk" shall mean the City Clerk of the City and such other person as may be
duly authorized to act on his or her behalf.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and applicable
rules and regulations thereto and thereunder.
"Debt Millage" means the ad valorem tax millage levied with respect to voter
approved bond referenda, as of November 13, 2001, excluding the debt millage with respect to
Voter Approved Bonds.
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"Default Rate" means a rate equal to the lesser of (x) the Base Rate plus 4.00% or
(y) the maximum rate permitted by law.
of Taxabilm
"Determination of Taxability" shall mean the circumstance of interest paid or
payable on a Bond becoming includable for federal income tax purposes in the gross income of
the Bondholder as a consequence of any act or omission of the City. A "Determination of
Taxability" shall be deemed to occur upon (i) the issuance by the Internal Revenue Service of a
statutory notice of deficiency or other written notification which holds in effect that the interest
payable on the Bond is includable for federal income tax purposes in the gross income of the
Bondholder, or (ii) a determination by a court of competent jurisdiction that the interest payable
on the Bond is includable for federal income tax purposes in the gross income of the Bondholder,
which determination either is final and non -appealable or is not appealed within the requisite time
period for appeal, or (iii) the admission in writing by the City or an opinion of Bond Counsel to
the effect that interest on the Bond is includable for federal income tax purposes in the gross
income of the Bondholder. For all purposes of this definition, a Determination of Taxability will
be deemed to occur on the date as of which the interest on the Bond is deemed includable in the
gross income of the Bondholder. A Determination of Taxability shall not occur solely from the
fact that such interest is taken into account in determining adjusted current earnings for the purpose
of the alternative minimum income tax imposed on corporations.
"Escrow Agent" means The Bank of New York Mellon Trust Company, N.A., the
escrow agent of the Refunded Series 2009 Bonds.
"Escrow Deposit Agreement" means the Escrow Deposit Agreement dated as of
June 1, 2017, between the City and the Escrow Agent, providing, among other things, instructions
to the Escrow Agent relating to the refunding of the Refunded Series 2009 Bonds.
"Finance Director" means the Finance Director of the City or his or her designee.
"Fiscal Year" shall mean the period commencing on October 1 of each year and
continuing through the next succeeding September 30, or such other period as may be prescribed
by law.
"Fitch" means Fitch Ratings, Inc.
"Fixed Rate" means [2.21]% per annum.
"Initial Ordinance" means Ordinance No. 12137 enacted by the Commission on
October 11, 2011 providing for the issuance for the Voter Approved Bonds, authorizing the
Homeland Defense/Neighborhood Capital Improvements Projects (as defined therein) and calling
for a bond referendum.
"Interest Payment Date" means January 1 and July 1 of each year, commencing
January 1, 2018.
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"Limited Ad Valorem Tax" means an ad valorem tax levied by the City on all of
the taxable property within the City (excluding exemptions as provided by applicable law) for the
purpose of paying the principal of, Accreted Value (with respect to Capital Appreciation Bonds),
redemption premium, if any, and interest (with respect to Current Interest Bonds) on the Voter
Approved Bonds; provided, however, that such ad valorem tax shall be levied at such millage rate,
that when added together with the City's other Debt Millage, results in an aggregate millage rate
that does not exceed 1.218 mills (it being understood that this millage rate limitation applies only
to the Voter Approved Bonds, and does not apply to, or in any way affect, the City's obligation to
assess, levy and collect ad valorem taxes, without limitation as to rate or amount, on all taxable
property within the corporate limits of the City, for the payment of the principal of and interest on
the City's full faith and credit general obligation bonds).
"Loan Amount" means Dollars and 00/100 Cents
($ ), which equals the original principal amount of the Bond.
"Maximum Annual Debt Service" means the greatest Annual Debt Service
Requirement due or coming due in the then current or any subsequent Fiscal Year.
"Mayor" means the Mayor of the City and such other person as may be duly
authorized to act on his or her behalf.
"Moody's" means Moody's Investors Service, Inc.
"Non -Ad Valorem Revenues" means all revenues of the City derived from any
source whatsoever other than revenues derived from ad valorem taxes imposed on real or personal
property, but only to the extent that such revenues are legally available to pay the principal of and
interest on the Bond.
"One Month LIBOR Rate" means the London interbank offered rate as
administered by ICE Benchmark Administration (or any other person that takes over the
administration of such rate for Dollars) for U.S. dollar deposits with a one-month term as displayed
on pages LIBOROI or LIBOR02 of the Reuters screen that displays such rate (or, in the event such
rate does not appear on a Reuters page or screen, on any successor or substitute page on such
screen that displays such rate, or on the appropriate page of such other information service that
publishes such rate from time to time as shall be selected by the Bank in its reasonable discretion;
in each case, the "LIBOR Screen Rate") at approximately 11:00 a.m., London time, two (2)
business days prior to the commencement of such interest period; provided that, if any LIBOR
Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of the
Bond. If no LIBOR Screen Rate is available to the Bank, the applicable LIBOR Rate for the
relevant interest period shall instead be the rate determined by the Bank to be the rate at which the
Bank offers to place U.S. dollar deposits having a maturity equal to one month with first-class
banks in the London interbank market at approximately 11:00 A.M. (London time) two business
days prior to the first day of such Interest Period.
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"Payments" means all amounts payable by the City of principal, interest and
prepayment penalty, if any, on the Bond, and all other amounts payable by the City pursuant to the
Loan Agreement.
"Paying Agent" means the Finance Director.
"Pledged Funds" means collectively the amounts on deposit in the Bond Fund and
any other funds and accounts created pursuant to this Agreement and herein pledged to secure the
Bond (with the exception of any Rebate Fund).
"Prepayment Price" means the principal amount of the Bond being prepaid plus the
sum of the differences between (a) each scheduled interest payment which would have been made
on the redeemed amount if such redemption/prepayment had not occurred and (b) the
corresponding fixed-rate interest payment which would be received under an interest rate swap
which the Bank shall be deemed to have entered into as of the date of such redemption/prepayment
(the "Replacement Swap") covering its payment obligations under an interest rate swap which the
Bank shall be deemed to have entered into when the redeemed amount was originally funded, with
each such difference discounted to a present value as of the date of redemption using the fixed
interest rate of the Replacement Swap as the applicable discount rate. The City acknowledges that
the Bank might not fund or hedge its fixed-rate loan portfolio or any redemption thereof on a loan -
by -loan basis at all times, and agrees that the foregoing is a reasonable and appropriate method of
calculating liquidated damages for any redemption/prepayment irrespective of whether any of the
foregoing hedging transactions have in fact occurred or occurred precisely as stated with respect
to the loan evidenced by the Bond. All calculations and determinations by the Bank of the amounts
payable pursuant to the preceding provisions or of any element thereof, if made in accordance with
its then standard procedures for so calculating or determining such amounts, shall be conclusive
absent manifest arithmetic error.
"Prime Rate" means a rate of interest equal to the announced prime commercial
lending rate per annum of the Bank. The Prime Rate is a reference rate for the information and
use of the Bank in establishing the actual rate to be charged to the City. The Prime Rate is purely
discretionary and is not necessarily the lowest or best rate charged any customer. The Prime Rate
shall be adjusted from time to time without notice or demand as of the effective date of any
announced change thereof.
2018.
"Principal Payment Date" means January 1 of each year, commencing January 1,
"Rating Agencies" means Moody's, S&P and Fitch.
"Resolution" shall mean the resolution approved by the City on June 22, 2017, as
amended and supplemented, which among other things authorized the execution and delivery of
this Agreement and the issuance of the Bond.
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"S&P" means Standard & Poor's Financial Services LLC, a division of The
McGraw Hill Companies, Inc.
"State" shall mean the State of Florida.
"Taxable Period" shall have the meaning ascribed to such term in Section 3.01(c)
hereof.
"Tax Certificate" shall have the meaning ascribed to such term in Section 2.04
hereof.
"Taxable Date" means the date on which interest on all or any portion of the Bond
is first includable in gross income of the Bondholder (including, without limitation, any previous
Bondholder), as such date is established by a Determination of Taxability.
"Taxable Rate" shall mean []% per annum.
"Voter Approved Bonds" means the Limited Ad Valorem Tax Bonds authorized to
be issued under the Initial Ordinance in the aggregate principal amount of $250,000,000, which
includes the Bond.
Section 1.02. Interpretation.
Unless the context clearly requires otherwise, words of the masculine gender shall
be construed to include correlative words of the feminine and neuter genders and vice versa, and
words of the singular number shall be construed to include correlative words of the plural number
and vice versa. Any capitalized terms used in this Agreement not herein defined shall have the
meanings ascribed to such terms in the Resolution. This Agreement and all the terms and
provisions hereof shall be construed to effectuate the purpose set forth herein and to sustain the
validity hereof.
Section 1.03. Titles and Headings.
The titles and headings of the articles and sections of this Agreement, which 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.
Section 1.04. Incorporation of Whereas Clauses.
The recitals and findings contained in the Whereas clauses of this Agreement are
hereby incorporated as if fully set forth in this Agreement.
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ARTICLE II.
REPRESENTATIONS, WARRANTIES AND COVENANTS;
SECURITY FOR THE BOND; ADDITIONAL OBLIGATIONS
Section 2.01. Representations by the City.
The City represents, warrants and covenants that:
(a) The City is a municipality validly created and existing under the laws of the
State. Pursuant to the Resolution, the City (i) has duly authorized the execution and delivery of
this Agreement and the performance by the City of all of its obligations hereunder, and (ii) has
duly authorized the Bond issued hereunder and the performance by the City of all its obligations
relating thereto.
(b) The City has complied with all of the provisions of the Constitution and
laws of the State, and has full power and authority to enter into and consummate all transactions
contemplated by this Agreement or under the Bond, and to perform all of its obligations hereunder
and the transactions contemplated hereby do not conflict with the terms of any statute, order, rule,
regulation, judgment, decree, agreement, instrument or commitment to which the City is a party
or by which the City is bound.
(c) The City is duly authorized and entitled to issue the Bond in an amount
equal to the Loan Amount. This Agreement and the Bond constitute legal, valid and binding
obligations of the City enforceable in accordance with its terms, subject as to enforceability to
bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors'
rights generally, or by the exercise of judicial discretion in accordance with general principles of
equity.
(d) There are no actions, suits or proceedings pending or, to the best knowledge
of the City, threatened against or affecting the City, at law or in equity, or before or by any
governmental authority, that, if adversely determined, would materially impair the ability of the
City to perform the City's obligations under this Agreement or under the Bond.
(e) No authorization, consent, approval, license, exemption of or registration or
filing with any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, has been or will be necessary for the valid execution, delivery
and performance by the City of this Agreement, the Bond and the related documents, except such
as have been obtained, given or accomplished.
(f) The City is not in default in the payment when due of any indebtedness of
the City.
(g) The financial statements of the City for the fiscal year ending September
30, 2016, copies of which have been furnished to the Purchaser, have been prepared in accordance
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with generally accepted accounting principles and present fairly the financial condition of the City
as of such date and the results of its operations for the period then ended. Since September 30,
2016, there has been no material adverse change in the financial condition, revenues, properties or
operations of the City.
(h) Any written information, reports and other papers and data prepared by the
City and furnished to the Purchaser by the City were, at the time the same were so furnished,
complete and correct in all material respects to the extent necessary to give the Purchaser a true
and accurate knowledge of the subject matter thereof. There is no fact, circumstance or condition
which materially and adversely affects or, so far as the City can now foresee, will materially and
adversely affect, (i) the financial condition, revenues, properties or operations of the City or (ii)
the validity or enforceability of, or the authority or ability of the City to perform its obligations
under, this Agreement, the Bond and the related documents.
(i) The certificates required to be delivered by the City regarding the Limited
Ad Valorem Tax and the Non -Ad Valorem Revenues are attached hereto as Composite Exhibit B.
Section 2.02. General Representations, Warranties and Covenants of the
Purchaser.
The Purchaser hereby represents, warrants and agrees that it is a Delaware business
trust and wholly owned subsidiary of JPMorgan Chase Bank, N.A., authorized to execute and
deliver this Agreement and to perform its obligations hereunder, and such execution and delivery
will not constitute a violation of its charter, articles of incorporation or bylaws.
Section 2.03. Making of Loan.
Pursuant to the terms and provisions of this Agreement, the Purchaser agrees to
make a loan to the City in an amount equal to the Loan Amount for the purpose of financing the
cost of the Refunding.
Section 2.04. Tax Covenants.
(a) The City hereby covenants with the holder of the Bond that in order to
maintain the exclusion from gross income for purposes of federal income taxation of interest on
the Bond, it shall comply with each requirement of the Code applicable to the Bond. In furtherance
of the covenant contained in the preceding sentence, the City agrees to continually comply with
the provisions of the Nonarbitrage and Tax Law Compliance Certificate to be executed by the City
relating to the Bond, as such Certificate may be amended from time to time, as a source of guidance
for achieving compliance with the Code (referred to herein as the "Tax Certificate").
(b) The City hereby covenants with the holder of the Bond that it shall make
any and all payments required to be made to the United States Department of the Treasury in
connection with the Bond pursuant to Section 148(f) of the Code.
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(c) So long as necessary in order to maintain the exclusion from gross income
of interest on the Bond for federal income tax purposes, the covenants contained in this Section
2.04 shall survive the payment of the Bond and the interest thereon, including any payment or
defeasance thereof.
(d) The City hereby covenants with the holder of the Bond that it shall not take
or permit any action or fail to take any action which would cause the Bond to be an "arbitrage
bond" within the meaning of Section 148(a) of the Code.
Section 2.05. Bond not to be Indebtedness of the City or State.
The Bond shall not be or constitute a general indebtedness within the meaning of
any constitutional or statutory provision or limitation and the City is not obligated to levy any ad
valorem taxes other than the Limited Ad Valorem Tax for the payment thereof. Neither the full
faith and credit nor the ad valorem taxing power of the State of Florida or any political subdivision
or agency thereof (except the taxing power of the City, but only to the extent of the Limited Ad
Valorem Tax) is pledged to the payment of the Bond, and it is expressly agreed by the Registered
Owner of this Bond that, except for the Limited Ad Valorem Tax, such Registered Owner shall
never have any right to compel the exercise of the ad valorem taxing power of the City or taxation
in any form on any real or personal property for the payment of the principal of and interest on the
Bond or for the payment of any other amounts provided for in this Agreement.
Section 2.06. Levy of Limited Ad Valorem Tax; Payment and Pledge.
In each Fiscal Year while the Bond is Outstanding, the City shall assess, levy and
collect the Limited Ad Valorem Tax to pay the principal of and interest on the Bond (as well as
the other Voter Approved Bonds) as the same shall become due.
The Limited Ad Valorem Tax shall be assessed, levied and collected in the same
manner and at the same time as other ad valorem taxes are assessed, levied and collected and the
proceeds of said tax shall be applied solely to the payment of the principal of, redemption premium,
if any, and interest on the Bond (and the other Voter Approved Bonds); provided, however, that
in the event of a deficiency in the amount of ad valorem taxes collected to pay the principal of and
interest on the City's full faith and credit general obligation bonds issued prior to November 13,
2001 or issued to refund general obligation bonds issued prior to November 13, 2001, revenues
collected from the levy of the Limited Ad Valorem Tax shall be applied to cure any such
deficiency, and then applied to pay the Voter Approved Bonds (proportionally if the amount
available therefor is insufficient). On our prior to each interest and principal payment date for the
Bond, the City shall transfer to the respective Bondholder the principal of, and interest on the Bond
then due and payable.
The Bond shall not be or constitute a general indebtedness within the meaning of
any constitutional or statutory provision or limitation and the City is not obligated to levy any ad
valorem taxes other than the Limited Ad Valorem Tax for the payment thereof. Neither the full
faith and credit nor the ad valorem taxing power of the State of Florida or any political subdivision
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or agency thereof (except the taxing power of the City, but only to the extent of the Limited Ad
Valorem Tax) is pledged to the payment of the Bond, and registered owners of the Bond shall
never have the right to compel the exercise of the ad valorem taxing power of the City or taxation
in any form on any real or personal property for the payment of the principal of, and interest on
the Bond or for the payment of any other amounts provided for in this Loan Agreement, other than
with respect to the Limited Ad Valorem Tax as provided herein and in the Resolution and the
Initial Ordinance.
Section 2.07. Covenant to Budget and Appropriate.
The City hereby covenants and agrees to prepare, approve and appropriate (in
accordance with applicable law and budgetary processes), in its annual budget for each Fiscal
Year, by amendment if necessary, and to transfer to the Bond Fund, legally available Non -Ad
Valorem Revenues of the City in an amount which, together with the proceeds of the Limited Ad
Valorem Tax on deposit therein and available, is sufficient to pay the principal of, redemption
premium, if any, and interest on the Bond then due and payable; provided however, the amount of
Non -Ad Valorem Revenues budgeted and appropriated with respect to the Bond in such Fiscal
Year shall not exceed 10% of the Maximum Annual Debt Service on the Bond. Such covenant
and agreement on the part of the City to budget and appropriate sufficient amounts of legally
available Non -Ad Valorem Revenues shall be cumulative, and shall continue until such legally
available Non -Ad Valorem Revenues in amounts sufficient to make all required payments on the
Bond and hereunder as and when due, including any delinquent payments, shall have been
budgeted, appropriated and actually paid into the appropriate funds and accounts hereunder;
provided, however, amounts so budgeted and appropriated shall not exceed ten percent (10%) of
the Maximum Annual Debt Service on the Bond in any given Fiscal Year. Such covenants shall
not constitute a lien, either legal or equitable, on any of the City's legally available Non -Ad
Valorem Revenues. The obligation of the City under this Section shall be secured only by the
legally available Non -Ad Valorem Revenues actually budgeted and appropriated and transferred
to the Purchaser, as provided herein. During the Fiscal Year, the City may not expend moneys not
appropriated or in excess of its current budgeted revenues for such Fiscal Year. The obligation of
the City to budget, appropriate and to make payments hereunder from its legally available Non -
Ad Valorem Revenues is subject to the availability of Non -Ad Valorem Revenues after satisfying
funding requirements for obligations having an express lien on or pledge of such revenues and
after satisfying funding requirements for essential governmental services of the City.
Section 2.08. Security for Bond.
The Bond shall be secured by and payable from the Pledged Funds. The City does
hereby irrevocably pledge the Pledged Funds to the payment of the Bond in accordance with the
provisions hereof. The pledge of and lien upon the Pledged Funds shall attach at the time of
delivery of the Bond. What about deposit of moneys into the Bond Funli
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Section 2.09. Payment Covenant.
The City covenants that it shall duly and punctually pay from the Pledged Funds
the principal of and interest on the Bond at the dates and place and in the manner provided herein
and in the Bond according to the true intent and meaning thereof and all other amounts due under
this Agreement.
Section 2.10. Additional Covenants.
(a) The City will furnish to the Purchaser, at no cost to the Purchaser, within
240 days of the end of each fiscal year (i) a comprehensive annual financial report of the City for
such fiscal year, which shall include a balance sheet as of the end of such fiscal year, audited
without scope limitations by independent certified public accountants of recognized standing
selected by the City and satisfactory to the Bondholder.
(b) The City will furnish to the Bondholder, budgets, forecasts and such other
information as the Bondholder may require.
Section 2.11. Additional Bonds.
The City Agrees not to issue any additional Limited Ad Valorem Tax Bonds
approved under the Initial Ordinance or full faith and credit general obligation bonds unless the
City provides the Bondholder with a certificate of its chief financial officer demonstrating that
based on the City's then current assessed valuation, taxes generated by applying the millage rate
of 1.218 mills will equal or exceed 1.Ox coverage of principal of and interest on: (i) the outstanding
Voter Approved Bonds, (ii) outstanding full faith and credit general obligation bonds and (iii) any
additional Voter Approved Bonds or full faith and credit general obligation bonds proposed to be
issued.
ARTICLE III.
DESCRIPTION OF BOND; PAYMENT TERMS;
OPTIONAL PREPAYMENT
Section 3.01. Description and Payment Terms of the Bond.
(a) The City shall, pursuant to authority granted under the Resolution, issue and
deliver the Bond to the Purchaser, which Bond shall equal DOLLARS
AND 00/100 CENTS ($ ) in principal amount. The Bond shall be designated as
"City of Miami, Florida, Limited Ad Valorem Tax Refunding Bond, Series 2017". The text of
the Bond shall be substantially in the form attached hereto as Exhibit A, with such omissions,
insertions and variations as may be necessary and desirable to reflect the terms of the Bond. The
provisions of the form of the Bond are hereby incorporated in this Agreement.
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(b) The Bond shall be dated the date of its delivery, shall be in the principal
amount set forth therein and payable as set forth therein and shall bear interest from its date at the
Fixed Rate subject to adjustment as provided in herein and in the Bond. The Bond shall be
executed in the name of the City by the Mayor and the City Manager and the seal of the City shall
be imprinted, reproduced or lithographed on the Bond and attested to and countersigned by the
City Clerk. In addition, the City Attorney shall sign the Bond, showing approval of the form and
correctness thereof, and the City's Director of Risk Management shall sign the Bond, showing
approval as to the City's insurance requirements. The signatures of the Mayor and the City
Manager, the City Clerk, and the City Attorney on the Bond may be by facsimile. If any officer
whose signature appears on the Bond ceases to hold office before the delivery of the Bond, his or
her signature shall nevertheless be valid and sufficient for all purposes. In addition, any Bond
may bear the signature of, or may be signed by, such persons as at the actual time of execution of
such Bond shall be the proper officers to sign such Bond, although at the date of such Bond or
the date of delivery thereof such persons may not have been such officers. Any Bond delivered
shall be authenticated by the manual signature of the Finance Director, and the registered owner
of any Bond so authenticated shall be entitled to the benefits of this Resolution.
(c) Interest on the Bond shall be payable semi-annually on each Interest
Payment Date. Principal of the Bond shall be payable on each Principal Payment Date, in the
manner set forth therein. Interest on the Bond shall be calculated on the basis of twelve 30 -day
months over a 360 -day year.
In the event a Determination of Taxability shall have occurred, the rate of interest on the
Bond shall be increased to the Taxable Rate, effective retroactively to the date on which the interest
payable on the Bond is includable for federal income tax purposes in the gross income of the
Bondholder. In addition, the Bondholder or any former Bondholder, as appropriate, shall be paid
an amount equal to any additions to tax, interest and penalties, and any arrears in interest that are
required to be paid to the United States of America by the Bondholder or former Bondholder as a
result of such Determination of Taxability. All such additional interest, additions to tax, penalties
and interest shall be paid by the Issuer within thirty (30) days following the Determination of
Taxability and demand by the Bondholder.
2
In the alternative, in the event that interest on the Bond during any period becomes partially
taxable as a result of a Determination of Taxability applicable to less than all of the Bond, then the
interest rate on the Bond shall be increased during such period by an amount equal to: (A -B) x C
where:
(A) "A" equals the Taxable Rate (expressed as a percentage);
(B) "B" equals the interest rate on the Bond (expressed as a percentage); and
(C) "C" equals the portion of the Bond the interest on which has become
taxable as the result of such tax change (expressed as a decimal).
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In addition, the Bondholder or any former Bondholder, as appropriate, shall be paid an amount
equal to any additions to tax, interest and penalties, and any arrears in interest that are required to
be paid to the United States by the Bondholder or former Bondholder as a result of such
Determination of Taxability. All such additional interest, additions to tax, penalties and interest
shall be paid by the Issuer within thirty (30) days following the Determination of Taxability and
demand by the Bondholder.
[In the event of a change in the Corporate Tax Rate (as hereinafter defined) during any
period where interest is accruing on a tax-exempt basis causes a reduction in the tax equivalent
yield on the Bond, the interest payable on the Bond will be increased to compensate for such
change in the effective yield to a rate calculated by multiplying the note interest rate by the ratio
equal to (1 minus A) divided by (1 minus B), where A equals the Corporate Tax Rate in effect as
of the date of the corporate tax rate adjustment as announced by the IRS and B equals the Corporate
Tax Rate in effect on the date of the original issuance of the Note. The Corporate Tax Rate will
mean the highest marginal statutory rate of federal income tax imposed on corporations and
applicable to the Bank (expressed as a decimal).]
The Bondholder shall promptly give notice in writing to the City of any adjustments
of the Fixed Rate to or the Taxable Rate. The Purchaser shall certify to the City in writing the
additional amount, if any due to the Purchaser as a result of such adjustment pursuant hereto. The
City shall pay such additional amount within thirty (30) days after the date such written notice is
delivered to the City. Notwithstanding any provision to the contrary, in no event shall the interest
rate on the Bond exceed the maximum rate permitted by law. If the amount of interest payable for
any period in accordance with the terms hereof or the Bond exceeds the maximum rate permitted
by law, then interest shall accrue at the maximum rate permitted by law and any interest that would
have been due and payable for any period but for the limitation of the maximum rate permitted by
law shall constitute an "excess interest amount" and if there is any accrued and unpaid excess
interest is payable shall bear interest at the maximum rate permitted by law until payment to the
Bondholder of the entire excess interest amount.
(d) All payments of principal of and interest on the Bond shall be payable in
any coin or currency of the United States which, at the time of payment, is legal tender for the
payment of public and private debts and shall be made to the Purchaser (i) in immediately
available funds, (ii) by delivering to the Purchaser no later than payment date a check drawn on
an account at any bank that is a member of the Federal Reserve System, or (iii) in such other
manner as the City and the Purchaser shall agree upon in writing.
(e) There will be no Purchaser fees to maintain the Loan and the Bond as
provided in this Agreement. The Purchaser shall pay for all of its costs relating to servicing the
Loan and the Bond. The City agrees to pay the legal fees and costs of counsel to the Purchaser
(not exceeding $6,500) and the legal fees and costs of Bond Counsel.
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Section 3.02. Registration; Assignment and Transfer.
The City shall keep at the office of the Finance Director in the City's records the
registration of the Bond and the registration of transfers of the Bond as provided in this Agreement.
The transfer of the Bond may be registered only upon the books kept for the registration of the
Bond and registration of transfer thereof upon surrender thereof to the City together with an
assignment duly executed by the Purchaser or its attorney or legal representative in the form of the
assignment set forth on the form of the Bond attached as Exhibit A to this Agreement; provided,
however
, T. Bona neeas-M-Mansijo
(see language from term sheet). In the case of any such registration of transfer, the City shall
execute and deliver in exchange for the Bond a new Bond registered in the name of the transferee.
In all cases in which the Bond shall be transferred hereunder, the City shall execute and deliver at
the earliest practicable time a new Bond in accordance with the provisions of this Agreement. The
City may make a charge for every such registration of transfer of a Bond sufficient to reimburse it
for any tax or other governmental charges required to be paid to an entity other than the City with
respect to such registration of transfer, but no other charge shall be made for registering the transfer
hereinabove granted. The Bond shall be issued in fully registered form and shall be payable in
any lawful coin or currency of the United States.
The registration of transfer of the Bond on the registration books of the City shall
be deemed to effect a transfer of the rights and obligations of the Purchaser under this Agreement
to the transferee. Thereafter, such transferee shall be deemed to be the Purchaser under this
Agreement and shall be bound by all provisions of this Agreement that are binding upon the
Purchaser. The City and the transferor shall execute and record such instruments and take such
other actions as the City and such transferee may reasonably request in order to confirm that such
transferee has succeeded to the capacity of Purchaser under this Agreement and the Bond.
The registered owner of the Bond is hereby granted power to transfer absolute title
thereof by assignment thereof to a bona fide purchaser for value (present or antecedent) r an
affiliate of the ? without notice of prior defenses or equities or claims of ownership enforceable
against such owner's assignor or any person in the chain of title and before the maturity of the
Bond; provided, however, that the Bond may be transferred only to an "accredited investor" or
"qualified institutional buyer" which transferee by acceptance of the Bond has deemed to certify
that it is an "accredited investor" or a "qualified institutional buyer." Every prior registered owner
of the Bond shall be deemed to have waived and renounced all of such owner's equities or rights
therein in favor of every such bona fide purchaser, and every such bona fide purchaser shall acquire
absolute title thereto and to all rights represented thereby.
In the event any Bond is mutilated, lost, stolen, or destroyed, the City shall execute
a new Bond of like date and denomination as that mutilated, lost, stolen or destroyed, provided
that, in the case of any mutilated Bond, such mutilated Bond shall first be surrendered to the City,
and in the case of any lost, stolen, or destroyed Bond, there first shall be furnished to the City
evidence of such loss, theft or destruction together with an indemnity satisfactory to it.
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Section 3.03. Optional Prepayment.
The City may prepay and redeem the Bond as a whole or in part, at any time or
from time to time, by paying to the Bondholder the Prepayment Price for the principal amount of
the Bond to be prepaid, together with the unpaid interest accrued on the amount of principal so
prepaid to the date of such prepayment; provided, however, that each such prepayment of the Bond
shall be in the amount of $1,000 or integral multiples thereof. Each prepayment of the Bond shall
be made on such date and in such principal amount as shall be specified by the City in a written
notice delivered to the Bondholder not less than five (5) days prior thereto specifying the principal
amount of the Bond to be prepaid and the date of such prepayment. Each prepayment of the Bond
shall be deemed to apply to those principal installments with the latest maturities on the Bond, in
inverse order, unless specified otherwise by the Purchaser. Notice having been given as aforesaid,
the portion of the outstanding balance of the principal amount of the Bond stated in such notice or
the whole thereof, as the case may be, shall become due and payable on the prepayment date stated
in such notice, together with interest accrued and unpaid to the prepayment date on the principal
amount then being paid; and the amount of principal interest and Prepayment Price then due and
payable shall be paid (a) in case the entire unpaid balance of the principal of the Bond is to be
prepaid, upon presentation and surrender of the Bond at the office of the City on the date specified
for prepayment, and (b) in case only part of the unpaid balance of principal of the Bond is to be
paid, upon presentation of the Bond at the office of the City for notation thereon of the amount of
principal and interest on the Bond then paid. If on the prepayment date moneys for the payment
of the principal amount to be prepaid on the Bond, together with interest to the prepayment date
on such principal amount, shall have been paid to the Bondholder as above provided and if notice
of prepayment shall have been given to the Bondholder as above provided, then from and after the
prepayment date interest on such principal amount of the Bond shall cease to accrue. If said
moneys shall not have been so paid on the prepayment date, such principal amount of the Bond
shall continue to bear interest until payment thereof at the rate or rates provided for in this
Agreement.
Section 3.04. Bond Fund.
(a) The City shall establish a "Bond Fund - Limited Ad Valorem Refunding
Bond, Series 2017" (the "Bond Fund") and therein a principal account (the "Principal Account")
and an interest account (the "Interest Account").
(b) Commencing on December 25, 2017, and continuing thereafter so long as
the Bond is outstanding, the City shall deposit to the credit of the Interest Account of the Bond
Fund on or before the twenty-fifth day of each June and December, from Pledged Funds, amounts
which, together funds on deposit therein, will be sufficient to pay the interest payable on the
Bonds on the immediately succeeding Interest Payment Date.
(c) Commencing on December 25, 2017, and continuing thereafter so long as
the Bond is outstanding, after deposit to the Interest Account pursuant to paragraph (a) above, the
City shall deposit to the credit of the Principal Account of the Bond Fund on or before the twenty-
fifth day of each June, from Pledged Funds, amounts which, together funds on deposit therein,
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will be sufficient to pay the principal payable on the Bonds on the immediately succeeding
Principal Payment Date.
Moneys on deposit in the accounts of the Bond Fund shall be used solely for the payment of the
principal, Purchase Price, if any, and interest on the Bonds. The amounts required to be accounted
for in accounts of the Bond Fund may be deposited in a single bank account with other funds of
the City, provided that adequate accounting records are maintained to reflect and control the
restricted allocation of the cash on deposit therein and such investments for the purposes of the
Bond Fund, as herein provided, including, but not limited to, demonstrating compliance with the
rebate requirements of the Code.
(d) On each Interest Payment Date and each Principal Payment Date, the City
shall transfer from the applicable account of the Bond Fund to the Bondholder sufficient moneys
to pay interest and principal then due and payable on such Interest Payment Date or Principal
Payment Date with respect to the Bond.
(e) All funds or other property which at any time may be owned or held in the
possession of or deposited with the City or an Authorized Depository designated by the City for
application in accordance with the terms and provisions of this Agreement shall be held in trust
and applied only in accordance with the provisions of this Agreement.
(f) Moneys held for the credit of the Bond Fund may be invested by the City in
Authorized Investments. Such investments or reinvestments shall mature or become available
not later than the respective dates, as estimated by the City, that the moneys held for the credit of
the Bond Fund will be needed to pay principal or interest on the Bond when due.
ARTICLE IV.
ISSUANCE OF BOND
Section 4.01. Issuance of Bond.
(a) The Purchaser shall not be obligated to make any loan under this Agreement
unless at or prior to the date of issuance of the Bond the City delivers to the Purchaser the
following items in form and substance acceptable to the Purchaser:
(i) a certificate of the Finance Director, dated as of the date of issuance
of the Bond, to the effect that the representations and warranties of the City
contained in Section 2.01 hereof are true and correct as of such date and that there
is currently no Event of Default or event that with notice or lapse of time or both
would become an Event of Default hereunder;
(ii) a fully executed Tax Certificate relating to the Bond;
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(iii) a copy of a completed and executed Form 8038-G relating to the
Bond to be filed with the Internal Revenue Service;
(iv) an opinion of Bond Counsel in form and substance to the effect that
(A) this Agreement and the Bond have been duly authorized by the City and are
enforceable obligations in accordance with their terms and the Resolution has been
duly adopted and is enforceable in accordance with its terms (enforceability of such
instruments may be subject to standard bankruptcy exceptions and the like), and
(B) interest on the Bond shall be excluded from gross income for federal income
tax purposes and shall not be treated as a preference item for purposes of computing
the alternative minimum tax imposed by Section 55 of the Code (however, the
interest on the Bond owned by corporations may be subject to the federal alternative
minimum tax which is based in part on adjusted current earnings); Florida
Taxation
(v) a certificate of the Finance Director, dated the date of issuance of
the Bond, to the effect that the interest rate on the Bond is in compliance with the
applicable maximum interest rate provisions contained in Section 215.84, Florida
Statutes, as amended;
(vi) the fully executed Bond;
(vii) an opinion of counsel to the City regarding the due authorization,
validity and enforceability of this Agreement and the Bond, the due adoption of the
Resolution (enforceability may be subject to standard bankruptcy exceptions and
the like) and covering the matters contained in Sections 2.01(b) and 2.01(d) herein;
and
(viii) the fully executed Escrow Deposit Agreement;
(ix) an opinion of Bond Counsel in form and substance acceptable to the
Bondholder to the effect that the Refunded Bonds have been defeased; and
(x) such additional certificates, instruments and other documents as the
Purchaser, or its counsel or Bond Counsel, or counsel to the City, may deem
necessary or appropriate.
Section 4.02. Application of Bond Proceeds.
The proceeds of the Bond shall be applied simultaneously with the delivery of the
Bond to the Purchaser as follows:
(i) $ to TD Bank, NA., as registrar and paying agent for the
Refunded Series 2007A Bonds, to be applied to redeem and discharge the Refunded
Series 2007A Bonds;
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(ii) $ shall be irrevocably deposited with the Escrow Agent
under the Escrow Deposit Agreement for the Refunded Series 2009 Bonds and
applied only in the manner described therein; and
(iii) $ shall be applied to pay the costs and expenses of
issuing the Bond, including the payment of fees of counsel to the Purchaser;
Can this be addressed in
wire funds to ra
as provided in written instructions to be delivered by the City in connection with the issuance of
the Bond.
ARTICLE V.
EVENTS OF DEFAULTS; REMEDIES
Section 5.01. Events of Default.
An "Event of Default" shall be deemed to have occurred under this Agreement if.
(a) The City shall fail to make payment of principal or interest then due on the
Bond; or
(b) Failure by the City to observe and perform any covenant, condition or
agreement on its part to be observed or performed by it under this Agreement or the Resolution
other than as referred to in clause (a) of this Section, for a period of forty-five (45) days after
written notice specifying such failure and requesting that it be remedied has been given to the
City by the Bondholder; provided, however, that if, in the reasonable judgment of the Bondholder,
the City shall proceed to take such curative action which, if begun and prosecuted with due
diligence, cannot be completed within a period of forty-five (45) days, then such period shall be
increased to such extent as shall be necessary to enable the City to diligently complete such
curative action; or
(c) There shall occur the dissolution or liquidation of the City, or the filing by
the City of a voluntary petition in bankruptcy, or the commission by the City of any act of
bankruptcy, or adjudication of the City as a bankrupt, or assignment by the City for the benefit of
its creditors, or appointment of a receiver for the City, or the entry by the City into an agreement
of composition with its creditors, or the approval by a court of competent jurisdiction of a petition
applicable to the City in any proceeding for its reorganization instituted under the provisions of
the Federal Bankruptcy Act, as amended, or under any similar act in any jurisdiction which may
now be in effect or hereafter amended; or
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(d) Any representation or warranty made by the City in connection with the
transactions contemplated hereunder proves to be untrue in any material respect as of the date
made or deemed made; or
(e) Default shall occur in the payment of the principal of or interest on any
obligation of the City for borrowed money payable from legally available non -ad valorem
revenues of the City, as and when the same shall become due, which results in the acceleration of
such indebtedness, unless the City shall be contesting its liability therefor in good faith; or
(f) Non -appealable judgments in an amount in the aggregate in excess of
$5,000,000 shall be entered or filed against the City and remain unvacated, unpaid, unbonded or
unstayed for a period of seventy-five (75) days.
Section 5.02. Remedies.
If any such Event of Default shall have occurred, the Bondholder may seek
enforcement of all remedies available to it under law. If an Event of Default shall have occurred
and be continuous, the Bondholder may declare the Bond to be immediately due and payable.
Any amounts due on the Bond which shall remain unpaid past the scheduled payment dates, shall
bear interest at the Default Rate until all amounts then due under the Bond are paid in full. The
Purchaser shall be entitled to its reasonable costs and expenses (including reasonable fees and
expenses of counsel) incurred in enforcing any of its rights under this Agreement after an Event
of Default.
ARTICLE VI.
MISCELLANEOUS
Section 6.01. Amendments, Changes or Modifications to the Agreement.
This Agreement shall not be amended, changed or modified except by written
instrument executed by the Purchaser and the City.
Section 6.02. 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 6.03. Severability.
If any clause, provision or section of this Agreement shall be held illegal or invalid
by any court, the invalidity of such provisions or sections shall not affect any other provisions or
sections hereof, and this Agreement shall be construed and enforced to the end that the
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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 6.04. Term of Agreement.
This Agreement shall be in full force and effect from the date hereof and shall
continue in effect as long as the Bond is outstanding.
Section 6.05. Assignment.
to Bank affilia
The Bank acknowledges and agrees that it is treating the transactions contemplated
hereunder as loan transactions and not as the sale and purchase of securities. The Bank further
acknowledges and agrees that it presently intends to hold the Bond through its final maturity date.
The Bank may assign the Bond or its obligations hereunder; provided, however, the Purchaser
shall give the City ten (10) days prior written notice of any such assignment and, provided further,
the Purchaser shall comply with all applicable securities laws at the time of such assignment.
Section 6.06. Notices.
Any notices or other communications required or permitted hereunder shall be
sufficiently given if delivered personally or sent registered or certified mail, postage prepaid, to
the City, City of Miami, 444 S.W. 2nd Avenue, Miami, FL 33130, Attention: Finance Director,
and to the Purchaser, c/o JPMorgan Chase Bank, N.A., 1450 Brickell Avenue, 33rd Floor, Miami,
Florida 33131, Mail Code FL6-1433 or at such other address as shall be furnished in writing by
any such party to the other, and shall be deemed to have been given as of the date so delivered or
deposited in the United States mail.
Section 6.07. Applicable Law.
The substantive laws of the State of Florida shall govern this Agreement.
Section 6.08. Jury Waiver.
IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN
CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT, THE BOND, OR ANY
INSTRUMENT OR DOCUMENT DELIVERED PURSUANT TO THIS AGREEMENT, OR
THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT
THEREOF, OR ANY OTHER CLAIM OR DISPUTE HOW SO EVER ARISING BETWEEN
THE CITY AND THE BANK, THE CITY AND THE BANK HEREBY WAIVE TRIAL BY
JURY IN CONNECTION WITH ANY SUCH LITIGATION.
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Section 6.09. Consent to Jurisdiction; Venue; Attorneys' Fees.
In the event that any action, suit or other proceeding is brought with respect to, in
connection with or arising out of this Agreement or the Bond, or any instrument delivered pursuant
to this Agreement or the validity, protection, interpretation, collection or enforcement thereof, to
the extent permitted by law, the City and the Purchaser hereby (i) irrevocably consent to the
exercise of jurisdiction by the United States District Court, South District of Florida and by the
Circuit Court, Miami -Dade County, Florida, and (ii) irrevocably waive any objection it might now
or hereafter have or assert to the venue of any such proceeding in any court described in clause (i)
above. In connection with any such action, suit or proceeding, the City and the Purchaser shall
each be responsible for paying their respective attorneys' fees and expenses, except as otherwise
required by applicable law.
Section 6.10. Public Records Laws.
Regarding the provisions of § 119.0701, Florida Statutes, as amended, the City and
the Purchaser acknowledge and agree that this Agreement and the Bond are public contracts and
that each of the City and the Purchaser must comply with the Florida public records laws,
specifically by:
(a) Keeping and maintaining public records that ordinarily and necessarily would
be required by public agencies in order to perform the services in relation to this Loan Agreement
and the Bond; and
(b) Providing the public with access to public records on the same terms and
conditions that public agencies would provide the records and at a cost that does not exceed the
cost provided in Chapter 119, Florida Statutes, or as otherwise provided by law; and
(c) Ensuring that public records that are exempt or confidential and exempt from
public records disclosure requirements are not disclosed except as authorized by law; and
(d) Meeting all requirements for retaining public records and transfer, at no cost,
to the City as a public agency all public records requested by the City and in possession of the
Bank upon termination of this Loan Agreement and final payment of the Bond, and destroying any
duplicate public records that are exempt or confidential and exempt from public records disclosure
requirements. All records stored electronically must be provided by the Purchaser to the City as a
public agency in a format that is compatible with the information technology systems of the City
as a public agency.
(a) Additionally, should the City receive any public records request that
requires the City to obtain such records from the Purchaser, the City shall forward such public
records request to the Purchaser in writing and the City and the Purchaser shall work together
expeditiously to comply. Should the Purchaser believe that any public records request is subject
to an exemption for the Purchaser under the Florida Public Records laws, then the Purchaser shall
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have the ability, at no cost, expense or liability to the City, to proceed in the Florida court system
to establish such exemption for the Purchaser to the public records request in question.
Section 6.11. Indemnification.
To the extent permitted by law (including, but not limited to, the provisions and
limitations of section 768.28, Florida Statutes, as amended from time to time), rights or limitations
inuring to the benefit of the City, as a Florida municipal corporation, the City agrees to indemnify
the Purchaser and its respective directors, officers and employees (the "Indemnified Parties"), and
to defend and hold each Indemnified Party harmless from and against any and all litigation,
awarded damages, actual financial losses, actual financial liabilities, and reasonable expenses
(including all reasonable fees and charges of external counsel and all reasonable expenses of
litigation and preparation therefor) which any Indemnified Party may incur in connection with or
arising out of or relating to the litigation of matters referred to in this Agreement or the Bond,
whether (a) arising from or incurred in connection with any breach of a representation, warranty
or covenant by the City, or (b) arising out of or resulting from any actual suit, action, proceeding
or governmental investigation, whether based on statute, regulation or order, or contract, before
any court or governmental authority; provided, however, that the foregoing indemnity agreement
shall not apply to any litigation, damages, losses, liabilities, fees, charges, and expenses solely
attributable to an Indemnified Party's negligence or willful misconduct, nor to any of the
foregoing in pro rata contribution amount attributable to such Indemnified Party's negligence or
willful misconduct. The City may participate at its expense in the defense of any such action or
claim.
Section 6.12. Bondholder Representative.
The Bondholder may appoint a representative or agent, by giving signed, written
notice of such appointment to the City, to act on behalf of such Bondholder to give any consents,
authorizations, or approvals; exercise any rights; or take any other action as may be taken by the
Bondholder under this Agreement on such terms and conditions as such Bondholder may deem
advisable (the "Bondholder Representative"). Upon such appointment, the City shall accept the
consent, authorization, or direction of such Bondholder Representative to the extent specified in
such notice, as it would accept such action from such Bondholder. As of the date of execution
and delivery of this Agreement, the initial Bondholder Representative shall be JPMorgan Chase
Bank, N.A., and such Bondholder have all the rights to consent, authorize or direct any action
that the Bondholder may do under this Loan Agreement until further notification from the
Bondholder in accordance with this Section. Such Bondholder Representative shall be the sole
representative of such Bondholder with respect to all matters specifically listed in such notice for
which such Bondholder is authorized to act under this Loan Agreement, until a signed, written
notice of the removal of the Bondholder Representative shall be delivered to the City by the
Bondholder. The Bondholder Representative may resign at any time by delivering written notice
thereof to the City. Any notice of removal or resignation meeting the foregoing requirements
shall be effective immediately upon receipt thereof by the City.
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Section 6.13. Incorporation by Reference.
All of the terms and obligations of the Resolution are hereby incorporated herein
by reference as if said Resolution was fully set forth in this Agreement.
[The remainder of this page is intentionally left blank; signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first set forth herein.
(OFFICIAL SEAL)
ATTESTED AND COUNTERSIGNED:
IN
Todd Hannon, City Clerk
CITY OF MIAMI, FLORIDA
LIM
Tomas Regalado, Mayor
Daniel J. Alfonso, City Manager
Approved as to Form and Correctness:
Victoria Mendez, City Attorney
Approved as to Insurance Requirements of the
City:
Anne -Marie Sharpe, Director of Risk
Management
[Signature Page to Loan Agreement]
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DNT ASSET TRUST
Jackie Watson, Authorized Officer
[Signature Page to Loan Agreement]
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Exhibit A
Form of Bond
EACH HOLDER OF THIS BOND ACKNOWLEDGES BY BECOMING A HOLDER
THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER," AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
AN ACCREDITED INVESTOR WITHIN THE MEANING OF REGULATION D OF THE
SECURITIES ACT.
Principal Sum
UNITED STATES OF AMERICA
STATE OF FLORIDA
CITY OF MIAMI
LIMITED AD VALOREM TAX
REFUNDING BOND, SERIES 2017
Interest Rate Date of Issuance Maturity Date
[2.21]'"% June 29, 2017 January 1, 2029
The CITY OF MIAMI (the "City"), a municipality created and existing under and by virtue
of the laws of the State of Florida, for value received, hereby promises to pay, solely from the
Pledged Funds described herein, to the order of DNT ASSET TRUST as the registered owner of
this Bond or its successors or assigns (the `Bondholder"), the Principal Sum specified above
loaned to the City pursuant to that certain Loan Agreement by and between the City and DNT
Asset Trust, dated as of June 1, 2017 (the "Agreement"), and to pay interest on the outstanding
balance of such Principal Sum from the Date of Issuance specified above or from the most recent
date to which interest has been paid at the Interest Rate per annum specified above (the "Fixed
Rate," subject to adjustment as hereinafter provided) on January 1 and July 1 of each year,
commencing January 1, 2018, until such Principal Sum shall have been paid, mailed by draft or
check to the Bondholder as it appears on the books of the Finance Director of the City, as bond
registrar (the "Bond Registrar"), at the close of business on the fifteen (15a') day (whether or not a
business day) before such payment is due or as otherwise provided in writing. The Principal Sum
hereof shall be payable annual installment payments on the dates and in the amounts as follows:
Principal
Payment Date Amount
1/1/2018
1/1/2019
1/1/2020
*Subject to adjustment as provided in the Agreement.
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1/1/2021
1/1/2022
1/1/2023
1/1/2024
1/1/2025
1/1/2026
1/1/1027
1/1/2028
1/1/2029
Such Principal Sum and interest is payable in any coin or currency of the United States of America
which, at the time of payment, is legal tender for the payment of public and private debts.
This Bond (the "Bond") is authorized to be issued under the authority of and in full
compliance with the Constitution and laws of the State of Florida, including, particularly Article
VII, Section 12 of the Constitution, the Charter of the City, Chapter 166, Part II, Florida Statutes,
to the extent not inconsistent with and repealed by the provisions of Section 166.021, Florida
Statutes, the Charter of the City of Miami, Ordinance No. 12137 duly enacted by the City on
October 11, 2001 and Resolution No. 17-1136 duly adopted by the City on June 22, 2017 (the
"Resolution"), and is subject to all terms and conditions of the Resolution and the Agreement.
Any term used in this Bond and not otherwise defined herein shall have the meaning ascribed to
such term in the Agreement.
This Bond is being issued to (i) refund, on a current basis, all of its outstanding City
of Miami, Florida Limited Ad Valorem Revenue Refunding Bonds, Series 2007A (Homeland
Defense/Neighborhood Capital Improvement Projects), (ii) refund, on an advance basis, a portion
of its outstanding City of Miami, Florida Limited Ad Valorem Tax Bonds, Series 2009 (Homeland
Defense/Neighborhood Capital Improvement Projects), and (iii) pay related closing costs.
This Bond shall not be or constitute a general indebtedness within the meaning of
any constitutional or statutory provision or limitation and the City is not obligated to levy any ad
valorem taxes other than the Limited Ad Valorem Tax (as defined in the Loan Agreement) for the
payment thereof. Neither the full faith and credit nor the ad valorem taxing power of the State of
Florida or any political subdivision or agency thereof (except the taxing power of he City, but only
to the extent of the Limited Ad Valorem Tax) is pledged to the payment of this Bond, and it is
expressly agreed by the Registered Owner of this Bond that, except for the Limited Ad Valorem
Tax, such Registered Owner shall never have any right to compel the exercise of the ad valorem
taxing power of the City or taxation in any form on any real or personal property for the payment
of the principal of and interest on this Bond or for the payment of any other amounts provided for
in the Agreement.
This Bond is a special limited obligation of the City payable from (i) the Limited
Ad Valorem Tax to be levied annually on all taxable property in the City, and (ii) to the extent
provided in the Loan Agreement, a covenant to budget and appropriate, in each Fiscal Year, legally
available Non -Ad Valorem Revenues of the City in an amount which together with the amounts
on deposit in the Principal Account and Interest Account which is sufficient to pay the principal
of, redemption premium, if any, and interest on the Bond then due and payable; provided, however,
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that not more than 10% of the Maximum Annual Debt Service on the Bond may be paid from such
Non -Ad Valorem Revenues in any Fiscal Year. In the event of a deficiency in the amount of ad
valorem taxes collected to pay the principal of and interest on the City's full faith and credit general
obligation bonds issued prior to November 13, 2001, or issued to refund general obligation bonds
issued prior to November 13, 2001, revenues collected from the levy of the Limited Ad Valorem
Tax shall be applied first to cure any such deficiency, then to pay the Voter Approved Bonds
(proportionately if the amount available therefor is insufficient).
Reference is made to the Agreement for the provisions, among others, relating to
the terms, lien and security for the Bond, the custody and application of the proceeds of the Bond,
the rights and remedies of the holders of the Bond, and the extent of and limitations on the City's
rights, duties and obligations, to all of which provisions the registered owner hereof assents by
acceptance hereof.
This Bond shall bear interest from its Date of Issuance at the Interest Rate per
annum specified above on the basis of twelve 30 -day months over a 360 -day year. The Fixed Rate
specified above is subject to adjustment to the Taxable Rate in the event of a Determination of
Taxability, all as provided in Section 3.01(c) of the Agreement.
Notwithstanding any provision in this Bond to the contrary, in no event shall the
interest contracted for, charged or received in connection with this Bond (including any other costs
or considerations that constitute interest under the laws of the State of Florida which are contracted
for, charged or received) exceed the maximum rate of interest allowed under the State of Florida
as presently in effect. In the event the maturity of this Bond is accelerated or prepaid in accordance
with the provisions hereof or of the Agreement, then such amounts that constitute payments of
interest, together with any costs or considerations which constitute interest under the laws of the
State of Florida, may never exceed an amount which would result in payment of interest at a rate
in excess of (a) the applicable maximum rate of interest allowed by Sections 215.84, Florida
Statutes, as amended, or (b) the nonusurious interest allowed by the laws of the State of Florida or
the United States, to the extent applicable, as presently in effect and to the extent an increase is
allowable by such laws; and excess interest, if any, shall be cancelled automatically as of the date
of such acceleration, or, if theretofore paid, shall be credited on the principal amount of this Bond
unpaid, but such crediting shall not cure or waive any default under this Agreement.
All payments made by the City hereon shall apply first to accrued interest, and then to the
principal amount then due on this Bond.
The City may prepay this Bond as a whole or in part, at any time or from time to time, by
paying to the Bondholder an amount equal to the Prepayment Price for the outstanding amount of
the Principal Sum of the Bond to be prepaid and the unpaid interest accrued on the amount of
principal so prepaid to the date of such prepayment, as more particularly set forth in the
Agreement; provided, however, that such each such prepayment of the Bond shall be in the amount
of $1,000 or integral multiples thereof. Each prepayment of this Bond shall be made on such date
and in such principal amount as shall be specified by the City in a written notice delivered to the
Bondholder not less than five (5) days prior thereto. Each prepayment of the Bond shall be deemed
to apply to those principal installments with the latest maturities on the Bond, in inverse order,
unless specified otherwise by the Bondholder. Notice having been given as aforesaid, the portion
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of the outstanding balance of the Principal Sum of this Bond stated in such notice or the whole
thereof, as the case may be, shall become due and payable on the prepayment date stated in such
notice, together with interest accrued and unpaid to the prepayment date on the principal amount
then being paid; and the amount of principal and interest then due and payable shall be paid (a) in
case the entire unpaid balance of the principal of this Bond is to be paid, upon presentation and
surrender of this Bond at the office of the City, and (b) in case only part of the unpaid balance of
principal of this Bond is to be paid, upon presentation of this Bond at the office of the City for
notation thereon of the amount of principal and interest on this Bond then paid. If on the
prepayment date moneys for the payment of the principal amount to be prepaid on this Bond,
together with interest to the prepayment date on such principal amount, shall have been paid to the
Bondholder as above provided and if notice of prepayment shall have been given to the Bondholder
as above provided, then from and after the prepayment date interest on such principal amount of
this Bond shall cease to accrue. If said moneys shall not have been so paid on the prepayment
date, such principal amount of this Bond shall continue to bear interest until payment thereof at
the rate or rates provided for in the Agreement.
Upon the occurrence of an Event of Default relating to this Bond, the Principal Sum of this
Bond may become or be declared due and payable before the maturity date hereof in the manner,
with the effect and subject to the conditions set forth in the Agreement and the Resolution. The
Bondholder shall also have such other remedies as described in the Agreement.
If this Bond shall be declared to be immediately due and payable or any amounts due on
this Bond shall remain unpaid past any scheduled payment date, this Bond shall bear interest at
the lesser of the Default Rate (as defined in the Agreement) or the maximum rate permitted by law
until all amounts then due under this Bond are paid in full.
The City hereby waives demand, protest and notice of dishonor.
No obligation under the Agreement or this Bond shall be or be deemed to be an obligation
of any member of the City Commission or any officer, employee or agent of the City in his or her
individual capacity, and none of such persons executing the Agreement or this Bond shall be liable
personally thereon or hereon by reason thereof.
It is certified, recited and declared that all acts, conditions and things required to exist,
happen and be performed precedent to and in connection with the execution and delivery of the
Agreement 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, together with all
other obligations of the City under the Agreement, does not exceed or violate any constitutional
or statutory limitation.
[Remainder of Page Intentionally Left Blank; Signature Page Follows.]
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IN WITNESS WHEREOF, the City of Miami, Florida, caused this Bond to be
signed by the manual signature of its Mayor and its City Manager and its official seal to be affixed
hereto or imprinted or reproduced hereon, and attested and countersigned by the manual signature
of its City Clerk, and this Bond to be dated the Date of Issuance set forth above.
(SEAL)
CITY OF MIAMI, FLORIDA
Tomas Regalado, Mayor
By:
Daniel J. Alfonso, City Manager
ATTESTED AND COUNTERSIGNED: Approved as to Form and Correctness:
Todd Hannon, City Clerk
4833-3584-2377.3
Victoria Mendez, City Attorney
Approved as to Insurance Requirements of the City:
Anne -Marie Sharpe, Director of Risk
Management
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CERTIFICATE OF AUTHENTICATION
This Bond is a Bond designated in and executed under the provisions of the within
mentioned Agreement.
Date of Authentication: June 29, 2017
City of Miami, Florida, Finance Director, as Bond
Registrar
ME
Jose M. Fernandez
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