Fort Walton Beach Resolution — 2026-02 Authorizing Issuance of Revenue Note-Preston Hood Expansion Loan $7,500,000 — reading text

Council, provided the City has received an opinion of Bond Counsel to the effect that such transfer shall not adversely affect the exclusion of interest on the Note from gross income for purposes of federal income taxation. F. Anti-Dilution. The City shall not incur additional debt secured by a lien on all or a portion of the Non-Ad Valorem Revenues or by a covenant to budget and appropriate from Non-Ad Valorem Revenues, unless it shall have delivered to the Lender a written certificate of the City Manager certifying that the Non-Ad Valorem Revenues, after provision for essential governmental services, is no less than 1. 25 times the maximum annual debt service on ( i) all debt secured by a covenant to budget and appropriate from Non-Ad Valorem Revenues, ( ii) any debt payable from a lien on one or more specific Non- Ad Valorem Revenue sources, and( iii) the proposed debt secured by a covenant to budget and appropriate or a specific lien on one or more Non-Ad Valorem Revenue sources. G. Notice to Lender. The City agrees to notify the Lender within five ( 5) Business Days if an Event of Default occurs hereunder, or of any event that, with the passage of time or giving of notice, would become an Event of Default, should occur. 10  SECTION 11. APPLICATION OF NOTE PROCEEDS. The proceeds of the Note shall first be applied by the City to pay the costs of preparation and issuance of the Note, which shall include payment of the fees and expenses of Bond Counsel and the fees and expenses of the Financial Advisor and fees of counsel to the Lender and thereafter shall be used by the City, together with other available funds, to pay costs of the Project. The Lender shall have no responsibility for the use of the proceeds of the Note, and the use of Note proceeds by the City shall in no way affect the rights of the Lender or the obligations of the City hereunder or under the Note. SECTION 12. CONDITIONS PRECEDENT. The obligation of the Lender to make the disbursement of proceeds is subject to the satisfaction of each of the following conditions precedent on or before the Closing Date: A. Action. The Lender shall have received copies of all action taken by the City approving the execution and delivery by the City of this Agreement and the financing documents to which the City is a party, including the Resolution, in each case certified as complete and correct as of the Closing Date. B. Incumbency of Officers. The Lender shall have received an incumbency certificate of the City in respect of each of the officers who is authorized to sign the Note, this Agreement and the financing documents to which it is a party on behalf of the City. C. Opinion of City Attorney. The Lender shall have received a written opinion of the City Attorney covering matters relating to the transaction contemplated by the Note, this Agreement and the financing documents, including legal authority to enter into this Agreement and issue the Note and the valid authorization, execution and delivery thereof by the City, in form and substance satisfactory to the Lender. D. Opinion of Bond Counsel. The Lender shall have received an opinion from Bond Counsel in respect of the Note, in form and substance satisfactory to the Lender. The opinion shall, at a minimum, address ( i) the enforceability of the Resolution and this Agreement, ( ii) that this Agreement and the Note creates a valid lien that each purports to create on the Pledged Funds and Non-Ad Valorem Revenues budgeted, appropriated and deposited by the City in the Sinking Fund in accordance with their respective terms, ( iii) the status of interest on the Note being excluded from gross income for federal income tax purposes under the provisions of Section 103 of the Code, and ( iv) that it is not necessary to register the Bond under the Securities Act. E. No Event of Default, Etc. No Event of Default shall have occurred and be continuing as of the Closing Date or will result from the execution and delivery of this Agreement or issuance of the Note; the representations and warranties made by the City shall be true and correct in all material respects on and as of the Closing Date, as if made 11 on and as of such date; and the Lender shall have received a certificate from the City to the foregoing effect. F. Documents. The Lender shall have received signed copies of the Note, this Agreement and such other documents, certificates and opinions as the Lender or its counsel shall have reasonably requested. SECTION 13. REPRESENTATIONS AND WARRANTIES. The City represents and warrants to the Lender that: A. Organization. The City is a municipal corporation duly organized and validly existing under the laws of the State of Florida. B. Authorization of the Note, the Agreement and Related Documents. The City has the power and has taken all necessary action to authorize the issuance of the Note and the execution, delivery and performance of the City's obligations under the Note, this Agreement and each of the financing documents to which it is a party in accordance with its respective terms. The Note and this Agreement have been duly executed and delivered by the City and are, and the Note, this Agreement and each of the financing documents to which it is a party when executed and delivered will be, legal, valid and binding obligations of the City enforceable against the City in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization or moratorium applicable to the City and general equitable principles regarding the availability of specific performance. C. Non-Ad Valorem Revenues. The City currently receives the Non-Ad Valorem Revenues, and is legally entitled to covenant to budget and appropriate from such Non-Ad Valorem Revenues sufficient amounts in each Fiscal Year to pay the principal of and interest on the Note, when due, subject to any prior liens or encumbrances on such Non-Ad Valorem Revenues, whether now existing or hereafter created. The Non-Ad Valorem Revenues are estimated to be sufficient to pay the principal of and interest on the Note as the same becomes due and to make all other payments required to be made from such Non-Ad Valorem Revenues by the terms of this Agreement or other instruments to which the City is a party or pursuant to which all or any portion of the Non-Ad Valorem Revenues may be obligated. D. Financial Statements. The financial statements of the City for the year ended September 30, 2025, copies of which have been furnished to the Lender, have been prepared in accordance with generally accepted accounting principles applicable to governmental entities such as the City 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 such date, there has been no material adverse change in the financial condition, revenues ( including, without limitation, Non Ad-Valorem Revenues), properties or operations of the City. 12  E. No Violation of Law or Contract. The City 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 City or the ability of the City to perform its obligations hereunder and under the Note. The making and performing by the City of this Agreement and the Note 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 City is a party or by which the City is bound, the breach of which could result in a material and adverse impact on the financial condition of the City or the ability of the City to perform its obligations hereunder and under the Note. F. Pending or Threatened Litigation. There are no actions or proceedings pending against the City or affecting the City or, to the knowledge of the City, threatened, which, either in any case or in the aggregate, might result in any material adverse change in the condition of the City, financial or otherwise, or which question the validity of this Agreement or the Note or of any action taken or to be taken in connection with the transactions contemplated hereby or thereby. G. Privately Negotiated Loan. The City acknowledges and agrees that the Lender is purchasing the Note in evidence of a privately negotiated loan and in that connection the Note shall not be ( i) assigned a separate rating by any municipal securities rating agency, ( ii) registered with The Depository Trust Company or any other securities depository, ( iii) issued pursuant to any type of offering document or official statement or iv) assigned a CUSIP number by Standard & Poor's CUSIP Service or any similar identifying number by any other similar service. SECTION 14. TAX COMPLIANCE. Neither the Council, the City, nor any third party over whom the Council or the City have control, will make any use of the proceeds of the Note or the Pledged Funds at any time during the term thereof which would cause the Note to be a " private activity bond" within the meaning of Section 103( b)( 1) of the Code or " arbitrage bond" within the meaning of Section 103( b)( 2) of the Code. The City covenants throughout the term of the Note, to comply with the requirements of the Code and the Regulations, as amended from time to time. The City hereby represents and finds that the Note is hereby " deemed designated" as a " qualified tax-exempt obligation" under Section 265( b)( 3) of the Code. SECTION 15. NOTICES. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when hand delivered or mailed by first class registered or certified mail, postage prepaid, to the parties at the following addresses: City: City of Fort Walton Beach, Florida 107 Miracle Strip Parkway SW Fort Walton Beach, Florida 32548- 6614 13  Attention: City Manager, City Attorney, Finance Director and City Clerk Lender: Webster Bank Public Finance Corporation do Webster Bank, National Association 200 Elm Street Stamford, Connecticut 06901 Attention : Public Sector Finance Email: PublicFinance@websterbank. com Any of the above parties may, by notice in writing given to the others, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. Any communication to the Lender via email shall be confirmed by delivery of a hard copy thereof to the Lender not later than two Business Days after such communication by email. Notices to the Paying Agent shall be effective only upon the receipt thereof by the Paying Agent. SECTION 16. EVENTS OF DEFAULT DEFINED. The following shall be Events of Default" under this Agreement and the term " Events of Default" shall mean except where the context clearly indicates otherwise), whenever such term is used in this Agreement, any one or more of the following events: A. Failure by the City to pay any amount due hereunder by the date on which such amount is due and payable (