Okaloosa County BOCC — August 6, 2013 — Resolution for Airport Revenue Refunding Bonds, Series 2013 — reading text

less than 125% of the aggregate Annual Debt Service with respect to Outstanding Bonds for such Fiscal Year. The County also covenants in the Indenture that if, upon the receipt of the audit report for a Fiscal Year, Amounts Available to Pay Debt Service in such Fiscal Year are less than the amounts specified in (A) or (B) above, the County will take all lawful and available measures to revise the schedule of rentals, rates, fees and charges for the use of the Airports so as to generate Amounts Available to Pay Debt Service sufficient to produce the amounts specified in (A) or (B) above in the Fiscal Year following the Fiscal Year covered by such audit report. In the event that Amounts Available to Pay Debt Service for any Fiscal Year are less than the amounts specified in (A) or (B) above, but the County promptly has taken in the next Fiscal Year all available lawful measures to revise the schedule of rentals, rates, fees and charges for the use of the Airports so as to generate amounts required in the preceding paragraph, the Indenture provides that there shall be no Event of Default under the Indenture. Nevertheless, if after taking the measures required above to revise the schedule of rentals, rates, fees and charges for use of the Airports, Amounts Available to Pay Debt Service in such next Fiscal Year during which such adjustments are required to be made (as evidenced by the audit report for such Fiscal Year) are still less than the amounts specified in (A) or (B) above, such failure shall constitute an Event of Default under the Indenture. Debt Service Reserve Fund The Indenture establishes a Debt Service Reserve Fund and provides for the establishment of separate accounts therein pursuant to Supplemental Indentures for each Series of Bonds issued under the Indenture. Amounts in each Series Account in the Debt Service Reserve Fund are to be used to pay debt service on the related Series of Bonds on the date such debt service is due when insufficient funds for that purpose are available in the Bond Fund; provided, however, that all amounts in an Account in the Debt Service Reserve Fund are to be used, together with other amounts available for such purpose under the Master Indenture as supplemented, to provide for payment of the related Series of Bonds when the aggregate of such amounts is sufficient for such purpose. Amounts in each Account of the Debt Service Reserve Fund will be pledged only to Holders of Bonds of the related Series; provided, however, if so provided in a Supplemental Indenture, upon the issuance of a Series of Refunding Bonds to refund a portion of a Series of Outstanding Bonds, amounts in the related Account of the Debt Service Reserve Fund securing the Series of Outstanding Bonds may be pledged both to the Holders of the unrefunded portion of the Series of Outstanding Bonds and the Holders of the Series of Refunding Bonds on a combined basis. The Third Supplemental Indenture establishes a 2013 Account in the Debt Service Reserve Fund and establishes the 2013 Debt Service Reserve Fund Requirement at an amount equal to the least of the following amounts: (a) 10% of the original proceeds of the Series 2013 Bonds; (b) the Maximum Annual Debt Service on the Series 2013 Bonds occurring in any Fiscal Year of the County; and (c) 125% of the average Annual Debt Service on the Series 2013 Bonds, ("Maximum Annual Debt Service” means the maximum amount of payments required to be made for principal, interest, sinking fund redemption, reimbursement payments to Credit 12 Providers, Credit Facility fees, Trustee, Paying Agent and other fiduciary fees and payments due under a Swap Agreement scheduled to come due within a specified Fiscal Year of the County or within one day thereafter, if any, with respect to the Series 2013 Bonds for any Fiscal Year during the term of the Series 2013 Bonds.) See "APPENDIX C -- Forms of the Master Indenture of Trust, the First Supplemental Indenture, the Second Supplemental Indenture and the Third Supplemental Indenture", herein. In the event that the balance in the 2013 Debt Service Reserve is less than the Debt Service Reserve Fund Requirement following a withdrawal therefrom or the occurrence of a deficiency resulting from a valuation or the sale of an investment amounts in the Revenue Fund are to be deposited in such account in equal monthly installments over a twelve (12) month period sufficient to restore the balance therein to the respective Debt Service Reserve Fund Requirement, in accordance with the priority of the flow of funds under the Indenture. See "FLOW OF FUNDS - Revenues" herein. Under the Third Supplemental Indenture, deficiencies in the 2013 Debt Service Reserve Requirement are also required to be funded by monthly deposits of PFC Revenues, to the extent PFC Revenues are legally available for debt service on the Series 2013 Bonds. As noted below, % of debt service on the Series 2013 Bonds is expected to be eligible for payment from PFC Revenues. The Indenture provides that in lieu of or in addition to cash or investments, at any time the County may cause to be deposited to the credit of a Series Account in the Debt Service Reserve Fund any form of Credit Facility in an amount which, together with cash, investments and any other Credit Facilities on deposit in such Debt Service Reserve Fund, will equal the amount of the related Series Debt Service Reserve Fund Requirement as provided for in the appropriate Supplemental Indenture, irrevocably payable to the Trustee as beneficiary for the holders of the related Series of Bonds. The Credit Provider will be required to notify the County and the Trustee at least twenty-four (24) months prior to expiration of the Credit Facility. If (A) the County receives such expiration notice and the Credit Provider does not extend its expiration date, (B) the County and the Trustee receive notice of the termination of the Credit Facility or (C) the credit rating of the Credit Provider is no longer in the two highest credit rating categories by two Rating Agencies, the County must (x) provide a substitute Credit Facility that meets the requirements set forth in the foregoing sentences, (y) deposit the applicable Series Debt Service Reserve Fund Requirement to the related Series Account in the Debt Service Reserve Fund (1) in equal monthly installments over the next succeeding twelve (12) months, in the case of receipt of an expiration notice, (2) prior to the termination date, in the case of receipt of a termination notice, or (3) within 180 days, in the case of such reduction in credit rating, or (z) instruct the Trustee to draw on such Credit Facility in the amount of the related Series Debt Service Reserve Fund Requirement (1) twelve (12) months prior to expiration of the Credit Facility in the case of receipt of an expiration notice, (2) prior to the termination date in the case of receipt of a termination notice, or (3) after 180 days in the case of such reduction, in credit rating. The Trustee shall deposit the proceeds of such drawing to such Series Account in the Debt Service Reserve Fund. 13 The 2013 Debt Service Reserve Fund Requirement for the Series 2013 Bonds is $ and will be funded on the date of issuance of the Series 2013 Bonds from amounts on deposit in the 2003 Debt Service Reserve Account. Additional Bonds General. The Indenture permits the issuance of Additional Bonds payable from Net Revenues on a parity with the Series 2013 Bonds, under certain circumstances as set forth below. Additional Bonds. Additional Bonds may be issued under the Indenture, so long as the County is not in default, as evidenced by a Certificate of No Default executed by an Authorized Representative, upon satisfaction of one of the following conditions: (i) for each of the next five (5) full Fiscal Years following issuance of the Additional Bonds, or each full Fiscal Year from issuance of the Additional Bonds through three (3) full Fiscal Years following completion of the project or projects financed by the Additional Bonds proposed to be issued, whichever is later, (i) an Airport Consultant has provided to the Trustee a certificate stating that, based upon reasonable assumptions set forth therein, Amounts Available to Pay Debt Service are projected to be equal to at least 125% of Annual Debt Service (disregarding any Bonds that have been paid or discharged or will be paid or discharged immediately after the issuance of the Additional Bonds proposed to be issued) provided, however, that if capitalized interest on any Bonds and proposed Additional Bonds is to be applied in the last Fiscal Year of the period described in this sentence, the Airport Consultant shall extend the test through the first three (3) full Fiscal Years for which there is no longer capitalized interest, or (ii) the County has provided to the Trustee a certificate stating that in the most recent completed Fiscal Year for which an independent audit is available or any consecutive twelve (12) month period out of the last eighteen (18) months Amounts Available to Pay Debt Service were not less than 125% of (A) Annual Debt Service on Bonds Outstanding in such Fiscal Year or such period (disregarding any Bonds that have been paid or discharged or that will be paid or discharged immediately after the issuance of such Additional Bonds proposed to be issued), plus (B) Maximum Annual Debt Service with respect to such Additional Bonds proposed to be issued. Under the Second Supplemental Indenture, consent by Radian Asset Assurance Inc., the Insurer for the Series 2007 Bonds, is required for issuance of Additional Bonds as described above unless the County complies with the provisions of the paragraphs set forth above but substituting 150% in place of 125% in clause (i) and clause (ii) therein. The County may issue Bond Anticipation Notes, secured on a parity as to the pledge of Net Revenues with Bonds issued pursuant to the Indenture, provided that the requirements set forth above are met. For such purpose, Bond Anticipation Notes shall be deemed to have level debt service (assuming an interest rate equal to The Bond Buyer 25 Bond Revenue Bond Index) over the anticipated term of the Bonds to be issued to retire such Bond Anticipation Notes. 14 Refunding Bonds. With respect to Additional Bonds proposed to be issued as Refunding Bonds, such Bonds may be issued provided that either the requirements set forth above are satisfied or the County shall have provided to the Trustee a certificate with an accompanying schedule indicating that, after issuance of the Refunding Bonds (i) there is no increase in Maximum Annual Debt Service and (ii) either (A) there is a decrease in the sum of all Annual Debt Service payable on all Bonds then Outstanding or (B) in each Fiscal Year, the Annual Debt Service with respect to the Refunding Bonds will be equal to or less than the Annual Debt Service with respect to the Bonds to be refunded. Completion Bonds. With respect to Additional Bonds proposed to be issued as Completion Bonds in order to finish any project or portion thereof, the Additional Bonds test described above need not be met; provided, however, the aggregate Principal Amount of such Completion Bonds shall be limited to ten percent (10%) of the amount specified in the Supplemental Indenture in which the initial Series of Bonds issued to finance such project was authorized as the total principal amount of Bonds and Subordinated Indebtedness originally projected to be required to complete the funding of such project (as defined in such Supplemental Indenture). The Construction Manager shall provide a certificate stating the total estimated cost to complete the project and that the proceeds of the Completion Bonds will not be used for costs related to material changes in the scope of such project. The Financial Advisor, in reliance on the Construction Manager's certificate, shall provide a certificate stating