Okaloosa County BOCC — April 1, 2014 — reading text

23 Packet Pg. 49  ARTICLE IV REVENUES AND FUNDS SECTION 4.1. SOURCE OF PAYMENT OF BONDS. The Bonds herein authorized and all payments to be made by the Issuer thereon and into the various Funds established under this Bond Indenture are not general obligations of the Issuer but are special limited obligations payable solely from amounts payable under the Loan Agreement pledged hereunder (it being understood that such pledged payments do not include the fees and expenses of the Issuer and amounts payable to the Issuer as indemnification under certain circumstances), and amounts on deposit in the Funds created hereunder (other than the Rebate Fund). SECTION 4.2. BOND SINKING FUND. The Issuer shall establish with the Bond Trustee and maintain so long as any of the Bonds are outstanding a separate account to be known as the "Bond Sinking Fund – Auburn Water System, Inc." (hereinafter called the "Bond Sinking Fund"). The Bond Sinking Fund shall be held by the Bond Trustee and shall be funded in accordance with Section 4.1 of the Loan Agreement. Except as provided in this paragraph, in Sections 7.6 or 8.2 hereof and as directed by the Borrower pursuant to the Tax Exemption Agreement, moneys in the Bond Sinking Fund shall be used solely for the payment of interest on and principal of the Bonds as the same shall become due and payable and to redeem the Bonds in accordance with the mandatory Bond Sinking Fund redemption schedule provided in Section 5.1 hereof. The Bond Trustee shall at all times maintain accurate records of deposits into the Bond Sinking Fund, and the sources and dates of such deposits. In lieu of such mandatory Bond Sinking Fund redemption the Bond Trustee may, at the written request of the Borrower, purchase an equal principal amount of Bonds with the same Maturity Date in the open market at prices not exceeding the principal amount of the Bonds being purchased plus accrued interest. In addition, the amount of Bonds to be redeemed on any date pursuant to the mandatory Bond Sinking Fund redemption schedule shall be reduced by the principal amount of Bonds with the same Maturity Date which are acquired by the Borrower and delivered to the Bond Trustee for cancellation. SECTION 4.3. REDEMPTION FUND. The Issuer shall establish with the Bond Trustee and maintain so long as any of the Bonds are outstanding a separate account to be known as the "Redemption Fund – Auburn Water System, Inc. Project" (the "Redemption Fund"). In the event of (i) prepayment by or on behalf of the Borrower under the Loan Agreement, (ii) receipt by the Bond Trustee of condemnation awards or insurance proceeds for purposes of redeeming Bonds, or (iii) deposit with the Bond Trustee by the Borrower or the Issuer of moneys from any other source for redeeming Bonds, except as otherwise provided in Section 4.2 of this Bond Indenture, such moneys shall be deposited in the Redemption Fund. Moneys on deposit in the Redemption Fund shall be used first to make up any deficiencies existing in the Bond Sinking Fund, and second for the purchase or redemption of Bonds in accordance with the provisions of Article V hereof. SECTION 4.4. INVESTMENT OF FUNDS; INCOME. (a) Moneys in the Bond Sinking Fund, Expense Fund, Project Fund and Redemption Fund shall be invested in Qualified Investments upon a Written Request of the Borrower filed with the Bond Trustee; provided, however, that moneys held in the Redemption Fund shall only 24 Packet Pg. 50 be invested in United States Government Obligations with a term not exceeding the earlier of 30 days from the date of investment of such moneys or the date such moneys are anticipated to be required. Absent a written request regarding investment instructions, the Bond Trustee shall invest the subject moneys in any investment vehicle described in item D of the term "Qualified Investments." Such investments shall be made so as to mature on or prior to the date or dates that moneys therefrom are anticipated to be required. The Bond Trustee, when authorized by the Borrower, may trade with itself in the purchase and sale of securities for such investments; provided, however, that in no case shall any investment be otherwise than in accordance with the investment limitations contained herein. The Bond Trustee shall not be liable or responsible for any loss resulting from any such investments. Any purchase or sale of securities may be accomplished through the Bond Trustee's bond department. (b) All income derived from the investment of moneys on deposit in the following funds shall be deposited as follows: (i) income derived from the investment of moneys on deposit in the Redemption Fund, Expense Fund and the Bond Sinking Fund shall be retained in such Funds; and (ii) income derived from the investment of moneys on deposit in the Project Fund (A) prior to the completion of the Project, shall be retained in the Project Fund, and (B) after completion of the Project, shall be applied in accordance with Section 3.2 hereof. SECTION 4.5. TRUST FUNDS. All moneys received by the Bond Trustee under the provisions of this Bond Indenture shall be trust funds under the terms hereof for the benefit of all Outstanding Bonds and shall not be subject to lien or attachment of any creditor of the Issuer or the Borrower. Such moneys shall be held in trust and applied in accordance with the provisions of this Bond Indenture. SECTION 4.6. EXCLUDED FUNDS; TRANSFERS TO REBATE FUND. The foregoing provisions of this Article IV notwithstanding, (i) the Rebate Fund shall not be considered a part of the "trust estate" created by this Bond Indenture, and (ii) the Bond Trustee shall be permitted to transfer moneys on deposit in any of the trust funds established under this Article IV to the Rebate Fund in accordance with the Written Request of the Borrower purported to be pursuant to the provisions of the Tax Exemption Agreement. 25 Packet Pg. 51  ARTICLE V REDEMPTION OF BONDS SECTION 5.1. MANDATORY SINKING FUND REDEMPTIONS WITHOUT PREMIUM. (a) The Series 2014A Bonds maturing on ________ 1, ______ shall be subject to mandatory redemption and payment prior to maturity in the principal amounts below at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date, without premium. Pursuant to Section 4.2 of the Loan Agreement, the Borrower shall deposit in the Bond Sinking Fund a sum that, together with all amounts then on deposit in the Bond Sinking Fund and then available for the redemption of the Series 2014A Bonds, shall be sufficient to redeem (after credit as provided below) the following principal amounts of Series 2014A Bonds on the following sinking fund payment dates: _________1 Principal of the Year Amount $ *Final Maturity (b) The Series 2014B Bonds maturing on ________ 1, _____ shall be subject to mandatory redemption and payment prior to maturity in the principal amounts below at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date, without premium. Pursuant to Section 4.2 of the Loan Agreement, the Borrower shall deposit in the Bond Sinking Fund a sum that, together with all amounts then on deposit in the Bond Sinking Fund and then available for the redemption of the Series 2014B Bonds shall be sufficient to redeem (after credit as provided below) the following principal amounts of Series 2014B Bonds on the following sinking fund payment dates: ________ 1 Principal of the Year Amount $ *Final Maturity (c) On or before the thirtieth (30th) day prior to any sinking fund payment date, the Bond Trustee shall proceed to select for redemption (by lot in such manner as the Bond Trustee 26 Packet Pg. 52 may determine), from all Outstanding Bonds subject to mandatory sinking fund redemption on such date, an aggregate principal amount of such Bonds equal to the amount required to be on deposit in the Bond Sinking Fund with respect to such Bonds on such sinking fund payment date, and shall call such Bonds or portions thereof in Authorized Denominations for redemption from the Bond Sinking Fund on such sinking fund payment date and give notice of such call. At the option of the Borrower, to be exercised by delivery of a Written Request of the Borrower to the Bond Trustee on or before the sixtieth (60th) day next preceding any sinking fund payment date, it may (i) deliver to the Bond Trustee for cancellation Bonds or portions thereof in Authorized Denominations of the maturity relating to such sinking fund payment date in any aggregate principal amount desired by the Borrower, or (ii) specify a principal amount of Bonds or portions thereof in Authorized Denominations or the maturity relating to such sinking fund payment date which prior to said date have been purchased or redeemed (otherwise than through the operation of the Bond Sinking Fund) and cancelled by the Bond Trustee at the request of the Borrower and not theretofore applied as a credit against any sinking fund payment. Each such Bond or portion thereof so delivered or previously redeemed shall be credited by the Bond Trustee at one hundred percent (100%) of the principal amount thereof against the obligation of the Issuer on such sinking fund payment date with respect to Bonds of such maturity. Any excess shall be credited against the next sinking fund payment relating to the Bonds of such maturity. In the event the Borrower shall avail itself of the provisions of clause (i) of the second sentence of this paragraph, the Written Request shall be accompanied by the Bonds or portions thereof to be cancelled. (d) The amount of mandatory Bond Sinking Fund redemption requirement shall be reduced by the amount of Bonds acquired and delivered in accordance with Section 4.3 hereof in satisfaction of such Bond Sinking Fund requirement. Payment or redemption of the Bonds through the Bond Sinking Fund shall be without premium. The Bonds shall be redeemed by the Bond Trustee pursuant to the provisions of this paragraph without any notice from or direction by the Issuer or the Borrower. Interest is payable upon mandatory Bond Sinking Fund redemptions as set forth in Section 4.2 hereof. SECTION 5.2. OPTIONAL REDEMPTION. (a) The Series 2014 Bonds are not redeemable at the option of the Borrower or the Issuer prior to _______ 1, _____. The Series 2014 Bonds may be redeemed in whole or in part at the option of the Issuer (upon the direction of the Borrower) on any date on or after _______ 1, ______ at the following redemption prices (expressed as a percentage of the principal amount to be redeemed) plus accrued interest to the date fixed for redemption during the periods set forth below: