Okaloosa County BOCC — August 19, 2014 — Note Resolution

NGN Draft No.2 8/11/14 019-19 OKALOOSA COUNTY, FLORIDA SALES TAX BOND ANTICIPATION NOTE RESOLUTION ADOPTED AUGUST 19, 2014  TABLE OF CONTENTS PAGE ARTICLE I GENERAL SECTION 1.01. DEFINITIONS..............................................................................................1 SECTION 1.02. AUTHORITY FOR RESOLUTION ............................................................5 SECTION 1.03. RESOLUTION TO CONSTITUTE CONTRACT.......................................5 SECTION 1.04. FINDINGS....................................................................................................5 SECTION 1.05. AUTHORIZATION OF PROJECTS ...........................................................5 ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF SERIES 2014 NOTE SECTION 2.01. AUTHORIZATION AND DESCRIPTION OF SERIES 2014 NOTE; THE SERIES 2014 NOTE............................................................................6 SECTION 2.02. APPLICATION OF SERIES 2014 NOTE PROCEEDS..............................6 SECTION 2.03. EXECUTION OF SERIES 2014 NOTE ......................................................7 SECTION 2.04. SERIES 2014 NOTE MUTILATED, DESTROYED, STOLEN OR LOST ............................................................................................................7 SECTION 2.05. INTERCHANGEABILITY, NEGOTIABILITY AND TRANSFER ..........7 SECTION 2.06. ADJUSTMENTS TO INTEREST RATE ....................................................8 SECTION 2.07. NON-USAGE FEE .......................................................................................9 SECTION 2.08. FORM OF SERIES 2014 NOTE ..................................................................9 ARTICLE III REDEMPTION OF NOTE SECTION 3.01. NOTICE OF REDEMPTION.....................................................................15 SECTION 3.02. PAYMENT OF REDEEMED NOTE.........................................................15 SECTION 3.03. PERMITTED AND REQUIRED REDEMPTIONS OF THE SERIES 2014 NOTE.................................................................................................15 ARTICLE IV SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF SECTION 4.01. SERIES 2014 NOTE NOT TO BE INDEBTEDNESS OF COUNTY ......16 SECTION 4.02. SECURITY FOR SERIES 2014 NOTE .....................................................16 SECTION 4.03. NOTE CONSTRUCTION FUND ..............................................................16 SECTION 4.04. DEBT SERVICE FUND ............................................................................17 SECTION 4.05. APPLICATION OF SALES TAX REVENUES........................................17 SECTION 4.06. ARBITRAGE REBATE .............................................................................17 SECTION 4.07. INVESTMENTS.........................................................................................18 SECTION 4.08. SEPARATE ACCOUNTS..........................................................................18 SECTION 4.09. PAYMENT COVENANT ..........................................................................18 SECTION 4.10 SPECIAL COVENANT .............................................................................18 ARTICLE V COVENANTS OF THE COUNTY SECTION 5.01. BOOKS AND RECORDS..........................................................................20 SECTION 5.02. ISSUANCE OF ADDITIONAL INDEBTEDNESS ..................................20 SECTION 5.03 ANNUAL AUDIT ......................................................................................20 SECTION 5.04. NO IMPAIRMENT ....................................................................................20 SECTION 5.05. FEDERAL INCOME TAX COVENANTS ...............................................20 SECTION 5.06. COLLECTION OF SALES TAX REVENUES.........................................21 SECTION 5.07. OTHER MONEYS .....................................................................................21 SECTION 5.08. ADDITIONAL COVENANTS WITH RESPECT TO THE SERIES 2014 NOTE.................................................................................................21 ARTICLE VI DEFAULTS AND REMEDIES SECTION 6.01. EVENTS OF DEFAULT............................................................................22 SECTION 6.02. REMEDIES ................................................................................................22 SECTION 6.03. REMEDIES CUMULATIVE .....................................................................23 SECTION 6.04. WAIVER OF DEFAULT ...........................................................................23 ARTICLE VII SUPPLEMENTAL RESOLUTIONS SECTION 7.01. SUPPLEMENTAL RESOLUTIONS .........................................................24 ARTICLE VIII MISCELLANEOUS SECTION 8.01. DEFEASANCE ..........................................................................................25 SECTION 8.02. SALE OF SERIES 2014 NOTE .................................................................25 SECTION 8.03. NO ADVISORY OR FIDUCIARY RELATIONSHIP ..............................26 SECTION 8.04. VALIDATION AUTHORIZED.................................................................26 SECTION 8.05. APPOINTMENT OF PAYMENT AGENT AND REGISTRAR ..............26 SECTION 8.06. SEVERABILITY OF INVALID PROVISIONS .......................................26 SECTION 8.07. REPEAL OF INCONSISTENT RESOLUTIONS .....................................27 SECTION 8.08. EFFECTIVE DATE....................................................................................27 EXHIBIT A -- THE PROJECTS EXHIBIT B -- FORM OF DRAW CERTIFICATE  A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF OKALOOSA COUNTY, FLORIDA, AUTHORIZING THE ISSUANCE BY THE COUNTY OF A $_________ OKALOOSA COUNTY, FLORIDA SALES TAX BOND ANTICIPATION NOTE, SERIES 2014, IN ORDER TO FINANCE AND REFINANCE CERTAIN CAPITAL COSTS ASSOCIATED WITH COUNTY FACILITIES; PLEDGING THE PROCEEDS OF THE COUNTY'S SALES TAX REVENUE BONDS, SERIES 2014 AND THE MONEYS RECEIVED BY THE COUNTY FROM THE COUNTY'S HALF-CENT SALES TAX REVENUES AS SECURITY THEREFOR; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF SAID NOTE; AWARDING THE SALE OF SAID NOTE; AND PROVIDING FOR AN EFFECTIVE DATE FOR THIS RESOLUTION. BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF OKALOOSA COUNTY, FLORIDA, AS FOLLOWS: ARTICLE I GENERAL SECTION 1.01. DEFINITIONS. When used in this Resolution, the following terms shall have the meanings set forth below, unless the context clearly otherwise requires. All capitalized but undefined terms shall have the meanings set forth in the Bond Resolution. "After-Tax Yield" shall mean: (a) the amount received as interest on the Series 2014 Note less (i) any federal income taxes directly or indirectly payable on such interest; and (ii) any federal income tax liability directly or indirectly imposed on the Series 2014 Noteholder as a result of its purchase or ownership of or receipt of interest from such Series 2014 Note (including any tax liability resulting from disallowance or limitation on any deductions, credits or other tax benefits), all on an annualized basis, divided by: (b) the outstanding principal amount held by the Series 2014 Noteholder. Unless the Series 2014 Noteholder shall otherwise determine (as, for example, in the case of an alternative minimum tax), the income is subject to taxation at a rate applicable to the highest bracket of corporate income. If the Series 2014 Noteholder is a member of a consolidated corporate tax filing, determination of the effect on After-Tax Yield shall be made on a consolidated basis unless the Series 2014 Noteholder shall deem a different basis to more accurately reflect the impact of such change in tax treatment. "Bond Resolution" shall mean Resolution No. 09-190 of the Board, adopted December 17, 2009. 1  "Bonds" shall mean those bonds issued pursuant to the Bond Resolution, including the Outstanding Bonds. "Business Day" shall mean, with respect to Interest Periods applicable to the LIBOR Rate, a day on which the Holder is open for business and on which dealings in U.S. dollar deposits are carried on in the London Inter-Bank Market. "Default Rate" shall mean the lesser of 18% per annum or the maximum rate allowed by law. "Determination of Taxability" shall mean the occurrence after the date of issuance of the Series 2014 Note of a final decree or judgment of any Federal court or a final action of the Internal Revenue Service determining that interest paid or payable on all or a portion of the Series 2014 Note is or was includable in the gross income of the Series 2014 Noteholder for Federal income tax purposes; provided, that no such decree, judgment, or action will be considered final for this purpose, however, unless the County has been given written notice and, if it is so desired and is legally allowed, has been afforded the opportunity to contest the same, either directly or in the name of the Series 2014 Noteholder, and until the conclusion of any appellate review, if sought. A Determination of Taxability does not include and is not triggered by a change in law by Congress that causes the interest to be includable under the Series 2014 Noteholder's gross income. Upon the occurrence of a Determination of Taxability the interest rate on the Series 2014 Note shall be adjusted to assure the Series 2014 Noteholder's receipt of the After-Tax Yield. "Event of Default" shall mean any Event of Default specified in Section 6.01 of this Resolution. "Interest Period" shall mean a period of one (1) calendar month, provided that (i) the initial Interest Period shall be less than one month, based on the initial funding date of August 21, 2014, and (ii) no Interest Period shall extend beyond the Maturity Date. "Interest Rate Determination Date" shall mean August 1, 2014 and the first Business Day of each calendar month thereafter. "Interest Rate" means the LIBOR Rate plus 1.30% x 68%. Notwithstanding the foregoing, (i) after a Determination of Taxability the Interest Rate shall be the Taxable Rate, and (ii) after and during the continuance of and Event of Default, the Interest Rate shall be the Default Rate. "LIBOR Rate" shall mean that rate per annum effective on any Interest Rate Determination Date which is equal to the quotient of: (i) the rate per annum equal to the offered rate for deposits in U.S. dollars for a one (1) month period, which rate appears on that page of Reuters reporting service, or such similar service as determined by the Holder, that displays ICE Benchmark Administration ("ICE") (or any successor thereto if ICE is no longer making a 2  London Interbank Offered Rate available) interest settlement rates for deposits in U.S. Dollars, as of 11:00 A.M. (London, England time) two (2) Business Days prior to the Interest Rate Determination Date; provided, that if no such offered rate appears on such page, the rate used for such Interest Period will be the per annum rate of interest determined by the Holder to be the rate at which U.S. dollar deposits for the Interest Period are offered to the Holder's affiliate bank in the London Inter-Bank Market as of 11:00 A.M. (London, England time), on the day which is two (2) Business Days prior to the Interest Rate Determination Date, divided by (ii) a percentage equal to 1.00 minus the maximum reserve percentages (including any emergency, supplemental, special or other marginal reserves) expressed as a decimal (rounded upward to the next 1/100th of 1%) in effect on any day to which the Holder's affiliate bank is subject with respect to any LIBOR loan pursuant to regulations issued by the Board of Governors of the Federal Reserve System with respect to eurocurrency funding (currently referred to as "eurocurrency liabilities" under Regulation D). This percentage will be adjusted automatically on and as of the effective date of any change in any reserve percentage. "Maturity Date" shall mean, with respect to the Series 2014 Note, the date specified in the Series 2014 Note, as set forth in Section 2.01 hereof and in the form set forth in Section 2.07 hereof. "Non-Ad Valorem Funds" shall mean all revenues of the County derived from any source whatsoever, other than ad valorem taxation on real or personal property, which are legally available to make the payments required herein, but only after provision has been made by the County for the payment of all essential or legally mandated services. "Non-Usage Fee" shall mean that fee, payable by the County to the Holder on the first day of each month, computed as of the last day of the prior month by multiplying 0.20% (20 basis points) times the difference between (a) $__________ and (b) the aggregate amount of all amounts drawn by the County pursuant to Section 2.02 hereof. "Note Construction Fund" shall mean the Okaloosa County, Florida Sales Tax Bond Anticipation Note Construction Fund established pursuant to Section 4.03 hereof. "Note Debt Service Fund" shall mean the Okaloosa County, Florida Subordinate Sales Tax Revenue Note Debt Service Fund established pursuant to Section 4.04 hereof. "Outstanding Bonds" shall mean the County's Sales Tax Revenue Bonds, Series 2009A and Taxable Sales Tax Revenue Bonds, Series 2009B (Direct Payment – Build America Bonds). "Paying Agent" shall mean, with respect to the Series 2014 Note, the Clerk. "Pledged Revenues" shall mean (1) the proceeds of the sale of the County's proposed Series 2014 Bonds, (2) the Sales Tax Revenues, and (3) until applied in accordance with the 3 provisions of this Resolution, all moneys, including investments thereof, in the funds and accounts established hereunder. "Project" or "Projects" shall mean the planning, design, development, acquisition, construction, equipping and maintenance of certain improvements and public facilities in the County, including the costs associated therewith financed or refinanced from the proceeds of the Series 2014 Note, as set forth in Exhibit A attached hereto or by a Supplemental Resolution. "Redemption Price" shall mean, with respect to the Note, the principal amount or portion thereof, plus accrued interest through the date of payment. "Resolution" shall mean this Resolution, as the same may from time to time be amended, modified or supplemented by Supplemental Resolution. "Sales Tax Revenues" shall mean amounts received by the County derived from the half-cent sales tax imposed pursuant to Chapter 218, Part VI, Florida Statutes, and distributed to the County. "Series 2014 Bonds" means the County's Sales Tax Revenue Bonds, Series 2014, to be issued pursuant to the Bond Resolution. "Series 2014 Note" shall mean the County's Sales Tax Bond Anticipation Note, Series 2014, issued pursuant to the Resolution. The Series 2014 Note shall constitute "Subordinate Indebtedness" under the Bond Resolution. "Series 2014 Noteholder" or "Holder" shall mean STI Institutional & Government, Inc., and its successors and assigns. "Supplemental Resolution" shall mean any resolution of the County amending or supplementing this Resolution enacted and becoming effective in accordance with the terms of Sections 7.01 hereof. "Tax Certificate" shall have the meaning ascribed thereto in Section 4.06 hereof. "Taxable Rate" shall mean such rate as shall produce the same After-Tax Yield to the Series 2014 Noteholder as existed prior to a Determination of Taxability. The terms "herein," "hereunder," "hereby," "hereto," "hereof," and any similar terms, shall refer to this Resolution; the term and "heretofore" shall mean before the date of adoption of this Resolution; and the term "hereafter" shall mean after the date of adoption of this Resolution. Words importing the masculine gender include every other gender. Words importing the singular number include the plural number, and vice versa. 4  SECTION 1.02. AUTHORITY FOR RESOLUTION. This Resolution is adopted pursuant to the provisions of the Act. SECTION 1.03. RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the purchase and acceptance of the Series 2014 Note by those who shall hold the same from time to time, the provisions of this Resolution shall be a part of the contract of the County with the Holder from time to time of the Series 2014 Note, and shall be deemed to be and shall constitute a contract between the County and the Holder from time to time of the Series 2014 Note. SECTION 1.04. FINDINGS. It is hereby ascertained, determined and declared that: (A) The County desires to finance certain capital costs associated with the Projects. (B) The Sales Tax Revenues are not pledged or encumbered in any manner, except with respect to the Outstanding Bonds. (C) The principal of, Redemption Price, if applicable, and interest on the Series 2014 Note shall be paid from the Pledged Revenues; provided that the lien thereon with respect to the Sales Tax Revenues shall be on a subordinate basis to the Outstanding Bonds. The County shall never be required to use any ad valorem taxes for the payment of the Series 2014 Note. The Series 2014 Note shall not constitute a direct obligation of the County or a pledge of its faith and credit, nor shall the Series 2014 Noteholder have any lien or encumbrance on any property in the County other than the Pledged Revenues. (D) Due to the present volatility of the market for tax-exempt obligations such as the Series 2014 Note and the complexity of the transactions relating to such Note, it is in the best interest of the County to sell the Series 2014 Note by a negotiated sale, allowing the County to enter the market at the most advantageous time and conditions, thereby permitting the County to obtain the best possible price and interest rate for the Series 2014 Note. The County acknowledges receipt of the information required by Section 218.385, Florida Statutes, in connection with the negotiated sale of the Series 2014 Note. A copy of the disclosure statement provided by the Series 2014 Noteholder containing the aforementioned information has been provided under separate cover to the County. SECTION 1.05. AUTHORIZATION OF PROJECTS. The County hereby authorizes the implementation of the Projects. 5  ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF SERIES 2014 NOTE SECTION 2.01. AUTHORIZATION AND DESCRIPTION OF SERIES 2014 NOTE; THE SERIES 2014 NOTE. This Resolution creates indebtedness of the County to be designated as its "Okaloosa County, Florida, Sales Tax Bond Anticipation Note, Series 2014," issued in the aggregate principal amount of $_________. The Series 2014 Note is issued for the principal purposes of financing the cost of the Projects and paying certain costs of issuance incurred with respect to the Series 2014 Note. The Series 2014 Note shall be in the form of one registered Series 2014 Note in the principal amount of $_________, which shall be dated August 21, 2014 and mature on December 31, 2014, shall be issued in fully registered form and shall bear interest from August 21, 2014. The Series 2014 Note shall be issued in the denomination of $_________. Interest on the Series 2014 Note shall accrue on the amounts drawn by the County pursuant to Section 2.02 hereof from the times drawn to the maturity date thereof at the Interest Rate, computed based on an actual/360-day year, subject to further adjustment from time to time as set forth in Section 2.06 hereof, and shall be payable on first day of each month, commencing September 1, 2014, and on the Maturity Date. Principal on the Series 2014 Note shall be payable on the Maturity Date. If the Series 2014 Note shall be declared due and payable or any amount due on the Series 2014 Note shall remain unpaid following the Maturity Date, the Series 2014 Note shall bear interest at the Default Rate until all amounts then due under the Series 2014 Note are paid in full. The Series 2014 Note shall be payable as to interest and principal by check or draft of the Paying Agent, mailed to the owner of record thereof, as such owner shall appear on the registration books of the County on the 15th day of the month prior to such interest payment date. The final payment of principal of and interest on the Series 2014 Note shall be payable at the office of the Paying Agent, upon presentation and surrender of such Series 2014 Note on the maturity date thereof, or if such maturity date is a Saturday, Sunday or holiday, on the next succeeding business day, with interest accruing at the interest rate then due until payment is made. Notwithstanding the foregoing, as long as STI Institutional & Government, Inc. is the owner of the Series 2014 Note, principal and interest payments shall be made via an ACH Direct Debit from a SunTrust Bank account designated by the County. Principal of and interest on the Series 2014 Note shall be payable in any coin or currency of the United States of America which, on the date of payment, are legal tender for the payment of public and private debts. SECTION 2.02. APPLICATION OF SERIES 2014 NOTE PROCEEDS. The proceeds derived from the sale of the Series 2014 Note, shall be drawn down from time to time, upon a Draw Certificate submitted to the Holder in the form attached hereto as Exhibit B, and deposited into the Note Construction Fund to pay the Costs of the Projects, including costs of issuance of the Series 2014 Note. Amounts drawn down may not be redrawn, regardless of payments made on the Series 2014 Note. 6  SECTION 2.03. EXECUTION OF SERIES 2014 NOTE. The Series 2014 Note shall be executed in the name of the County with the manual or facsimile signature of the Chairman and the Clerk and the official seal of the County shall be imprinted thereon, attested and countersigned with the manual or facsimile signature of the Clerk. In case any one or more of the officers who shall have signed or sealed the Series 2014 Note or whose facsimile signature shall appear thereon shall cease to be such officer of the County before the Series 2014 Note so signed and sealed has been actually sold and delivered, such Series 2014 Note may nevertheless be sold and delivered as herein provided and may be issued as if the person who signed or sealed such Series 2014 Note had not ceased to hold such office. The Series 2014 Note may be signed and sealed on behalf of the County by such person who at the actual time of the execution of such Series 2014 Note shall hold the proper office of the County, although at the date of the Series 2014 Note such person may not have held such office or may not have been so authorized. The County may adopt and use for such purposes the facsimile signatures of any such persons who shall have held such offices at any time after the date of the adoption of this Resolution, notwithstanding that either or both shall have ceased to hold such office at the time the Series 2014 Note shall be actually sold and delivered. SECTION 2.04. SERIES 2014 NOTE MUTILATED, DESTROYED, STOLEN OR LOST. In case the Series 2014 Note shall become mutilated, or be destroyed, stolen or lost, the County may, in its discretion, issue and deliver a new Series 2014 Note, in exchange and substitution for such mutilated Note upon surrender and cancellation of such mutilated Note or in lieu of and substitution for the Note destroyed, stolen or lost, and upon the Holder furnishing the County proof of his ownership thereof and indemnity satisfactory to the County, and complying with such other reasonable regulations and conditions as the County may prescribe and paying such expenses as the County may incur. The Series 2014 Note so surrendered or otherwise substituted shall be canceled by the Registrar. If the Series 2014 Note shall have matured or been called for redemption or be about to mature or be called for redemption, instead of issuing a substitute Series 2014 Note, the County may pay the same or cause the Series 2014 Note to be paid, upon being indemnified as aforesaid, and if the Series 2014 Note be lost, stolen or destroyed, without surrender thereof. Any such duplicate Series 2014 Note issued pursuant to this Section 2.04 shall constitute an original, additional contractual obligation on the part of the County whether or not the lost, stolen or destroyed Series 2014 Note be at any time found by anyone. SECTION 2.05. INTERCHANGEABILITY, NEGOTIABILITY AND TRANSFER. The Series 2014 Note may not be transferred except in whole. Further, the transfer of the Series 2014 Note shall be restricted to Permitted Lenders. A "Permitted Lender" shall mean any bank, trust company, savings institution, finance or leasing company, or insurance company that is engaged as a regular part of its business in making loans and is authorized to do business in the State. 7  SECTION 2.06. ADJUSTMENTS TO INTEREST RATE. (a) The interest rate on the Series 2014 Note shall be subject to further adjustment as described in this Section. Any adjustments shall be payable only after the Series 2014 Noteholder or its assigns has provided the County written notice of such adjustments. (b) In the event of a Determination of Taxability, the interest rate on the Series 2014 Note shall be changed to the Taxable Rate effective retroactively to the date on which such Determination of Taxability was made. Immediately upon a Determination of Taxability, the County agrees to pay the Series 2014 Noteholder subject to such Determination of Taxability the Additional Amount (as defined herein). "Additional Amount" means (i) the difference between (A) interest on the Series 2014 Note for the period commencing on the date on which the interest on such Note (or portion thereof) loses its tax-exempt status and ending on the earlier of the date such Note ceased to be Outstanding or such adjustment is no longer applicable to such Note (the "Taxable Period") at a rate per annum equal to the Taxable Rate as adjusted from time to time on the same dates and in the same manner as the interest rate on such Note was or would be adjusted pursuant to the provisions of the Note, and (B) the aggregate amount of interest payable on such Note for the Taxable Period under the provisions of such Note, plus (ii) any penalties, interest and additions to tax (as referred to in Subchapter A of Chapter 68 of the Code) paid or payable by the Series 2014 Noteholder to the Internal Revenue Service by reason of such Determination of Taxability. (c) The above adjustments shall be cumulative, but in no event shall the interest rate on the Series 2014 Note exceed the maximum rate permitted by law. The above adjustments to the interest rate on the Series 2014 Note shall be effective on the effective date of the applicable change in the tax laws or regulations or the Determination of Taxability, as applicable. Interest on the Series 2014 Note and all other tax rates and interest rates are expressed as annual rates. However, proper partial adjustment shall be made if the tax law change is effective after the first day of the Series 2014 Note's tax year or if interest on the Series 2014 Note does not accrue for the entire tax year of the Series 2014 Noteholder. Adjustments which create a circular calculation because the interest rate on the Series 2014 Note is affected by the calculation shall be carried out sequentially, increasing the interest rate on the Note accordingly in each successive rate on the Note, until the change in the interest rate on the Series 2014 Note caused by the next successive calculation of the adjustment is de minimis. (d) To the extent an adjustment to the interest rate on the Series 2014 Note is not effected within three (3) months of the event giving rise to the adjustment, the additional interest due as a result of such adjustment shall be paid with interest thereon compounded monthly at the rate which is equal to the interest rate on the Series 2014 Note. All unpaid amounts determined to be owing as a result of such calculation shall be due and payable within ten (10) days after delivery of notice of the amount of such adjustment, and shall be paid to the Series 2014 Noteholder of record during the period to which the adjustment relates. This obligation shall survive the payment of the Series 2014 Note. 8  (e) If any amounts due and payable under this Section 2.06 are not paid within 10 days of the applicable due date, such delinquent amounts shall accrue interest at the Default Rate until fully paid. (f) If any adjustments made to the interest rate on the Series 2014 Note pursuant to the terms of this Section shall cause such interest rate to be in violation of the maximum interest rate provisions of Section 215.84, Florida Statutes, the Series 2014 Note shall be subject to mandatory redemption within 30 days thereof, upon notice from the Series 2014 Noteholder or its assigns to redeem the Series 2014 Note. SECTION 2.07. NON-USAGE FEE. The County shall pay to the Series 2014 Noteholder, solely from the Pledged Revenues, the amount of the Non-Usage Fee due on the first day of each month. SECTION 2.08. FORM OF SERIES 2014 NOTE. The text of the Series 2014 Note shall be in substantially the following form, with such omissions, insertions and variations as may be necessary and/or desirable and approved by the Chairman prior to the issuance thereof (which necessity and/or desirability and approval shall be presumed by such officer's execution of the Series 2014 Note and the County's delivery of the Series 2014 Note to the purchaser or purchasers thereof): 9 No. R-1 $_________ UNITED STATES OF AMERICA STATE OF FLORIDA OKALOOSA COUNTY, FLORIDA SALES TAX BOND ANTICIPATION NOTE SERIES 2014 Interest Rate Date of Issuance Principal Sum Maturity Date As described below August 21, 2014 $________ December 31, 2014 KNOW ALL MEN BY THESE PRESENTS that Okaloosa County, Florida (the "County"), for value received, hereby promises to pay, in the manner provided herein, to STI Institutional & Government, Inc., as registered owner, or registered assigns, the Principal Sum of ____________________________________ DOLLARS, solely from the Pledged Revenues (hereinafter defined) and to pay interest on the portion of such principal amount advanced hereunder from the date or dates proceeds of this Note are drawn down pursuant to the Resolution (as hereinafter defined), or from the most recent date to which interest has been paid at the Interest Rate per annum provided herein (subject to adjustment as hereinafter provided) on the first day of each month, commencing September 1, 2014, and on the Maturity Date set forth above, together with all other amounts required to be paid to the registered owner hereof under the terms of the Resolution hereinafter referred to until such principal amount shall have been paid. The principal sum hereof shall be payable on the Maturity Date. 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 Note shall bear interest at the Interest Rate, as defined in the Resolution, on the basis of a 360-day year for the actual number of days in the calculation period. The interest rate on this Note is subject to further adjustment upon a Determination of Taxability or an Event of Default (each as defined in the Resolution), all as set forth in the Resolution. All payments made by the County hereon shall apply first to accrued interest, and then to the principal amount due on the Note. Both principal of and interest on this Note are payable in lawful money of the United States of America by check or draft of the Paying Agent appointed by the County to the owner of record as such owner shall appear in the registration books of the County on the 15th day of the month prior to such payment date. The final payment of principal of and interest on this Note shall be payable, upon presentation, at the office of the Paying Agent appointed by the County. Notwithstanding the foregoing, as long as STI Institutional & Government, Inc. is the Registered Holder of this Note, all payments shall be made by ACH Direct Debit from a SunTrust Bank account designated by the County. If a payment date for this Note is not a business day, such 10 payment date shall be the next succeeding business day, with interest accruing at the interest rate then due hereon until payment is made. This Note is issued under the authority of and in full compliance with the Constitution and laws of the State of Florida, particularly Chapter 125, Florida Statutes, Chapter 218, Part VI, Florida Statutes, and other applicable provisions of law, a Resolution duly adopted by the Board of County Commissioners of the County on August 19, 2014 (the "Resolution"), as such resolution may be amended and supplemented from time to time, and is subject to all terms and conditions of the Resolution. Any term used in this Note not otherwise defined shall have the meaning ascribed to such term in the Resolution. This Note is being issued to finance or refinance the costs of acquiring and constructing the Projects described in the Resolution. This Note is secured by and shall be payable from the Pledged Revenues as described in the Resolution. Notwithstanding any provision of this Note to the contrary, in no event shall the interest contracted for, charged or received in connection with this Note (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 Note is accelerated or prepaid in accordance with the provisions hereof, 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 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 canceled automatically as of the date of such acceleration, or, if theretofore paid, shall be credited on the principal amount of the Note unpaid, but such crediting shall not cure or waive any default under the Resolution. The County may prepay this Note as a whole, at any time, by paying to the registered owner hereof all of the Principal Sum of the Note, together with the unpaid interest accrued on the amount of principal so prepaid to the date of such prepayment. Each prepayment of the Note shall be made on such date and in such principal amount as shall be specified by the County in a written notice delivered to the registered owner hereof not less than five (5) days prior thereto. Notice having been given as aforesaid, the Principal Sum of the Note 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 (i) in case the entire unpaid balance of the principal of the Note is to be paid, upon presentation and surrender of such Note at the office of the Paying Agent, and (ii) in case only part of the unpaid balance of principal of the Note is to be paid, upon presentation of such Note at the office of the Paying Agent for notation thereon of the amount of principal and interest on such Note then paid (except as described above if STI Institutional & Government, Inc. is the owner of this Note, no such presentment shall be required). If on the prepayment date moneys for the payment of the principal amount to be prepaid on such Note, together with interest to the prepayment date on such principal amount, shall have been paid to the Paying Agent as above 11 provided and if notice of prepayment shall have been given to the Paying Agent as above provided, then from and after the prepayment date interest on such principal amount of such Note shall cease to accrue. If said moneys shall not have been so paid on the prepayment date, such principal amount of such Note shall continue to bear interest until payment thereof at the rate or rates provided for in the Resolution. This Note, when delivered by the County pursuant to the terms of the Resolution, shall not be or constitute an indebtedness of the County or of the State of Florida, within the meaning of any constitutional, statutory or charter limitations of indebtedness, but shall be payable solely from the Pledged Revenues, as provided in the Resolution. The registered owner hereof shall never have the right to compel the exercise of the ad valorem taxing power of the County or the State, or taxation in any form of any property therein to pay this Note or the interest thereon. Upon the occurrence of an Event of Default relating to this Note, the Principal Sum of this Note may become or be declared due and payable before the Maturity Date in the manner, with the effect and subject to the conditions set forth in the Resolution. The registered owner shall also have such other remedies as described in the Resolution. If this Note shall be declared to be immediately due and payable or any amounts due on the Note shall remain unpaid on the tenth (10th) day following the Maturity Date, the Note shall bear interest at the Default Rate (as defined in the Resolution) until all amounts then due under the Note are paid in full. The County hereby waives demand, protest and notice of dishonor. 12  IN WITNESS WHEREOF, the Board of County Commissioners of Okaloosa County, Florida has issued this Note and has caused the same to be executed by the manual or facsimile signature of its Chairman, its official seal or a facsimile thereof to be affixed or reproduced hereon, and countersigned and attested to by the manual or facsimile signature of its Clerk, all as of the 21st day of August, 2014. OKALOOSA COUNTY, FLORIDA (SEAL) Chairman ATTESTED AND COUNTERSIGNED: Clerk 13  ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto Insert Social Security or Other Identifying Number of Assignee (Name and Address of Assignee) the within Note and does hereby irrevocably constitute and appoint , as attorneys to register the transfer of the said Note on the books kept for registration thereof with full power of substitution in the premises. Dated: Signature guaranteed: NOTICE: Signature(s) must be guaranteed by NOTICE: The signature to this assignment a member firm of the New York Stock must correspond with the name of the Exchange or a commercial Series 2014 Registered Holder as it appears upon the face Noteholder or trust company. of the within Note in every particular, without alteration of enlargement or any change whatever and the Social Security or other identifying number of such assignee must be supplied. 14  ARTICLE III REDEMPTION OF NOTE SECTION 3.01. NOTICE OF REDEMPTION. Except as otherwise provided herein, notice of any redemption, which shall specify the principal amount of the Series 2014 Note to be redeemed and the date and place for redemption, shall be mailed first class, postage prepaid, at least five (5) days prior to the redemption date to the Holder of the Series 2014 Note at the address appearing on the registration books kept by the Registrar. SECTION 3.02. PAYMENT OF REDEEMED NOTE. Notice having been given as aforesaid, the principal sum of the Series 2014 Note 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 (i) in case the entire unpaid balance of the principal of the Series 2014 Note is to be paid, upon presentation and surrender of such Series 2014 Note at the office of the Paying Agent, and (ii) in case only part of the unpaid balance of principal of the Series 2014 Note is to be paid, upon presentation of such Series 2014 Note at the office of the Paying Agent for notation thereon of the amount of principal and interest on such Series 2014 Note then paid. (Notwithstanding the foregoing, as long as STI Institutional & Government, Inc. is the owner of the Series 2014 Note, any such payment shall be made via an ACH Direct Debit from a SunTrust Bank account designated by the County). If on the prepayment date moneys for the payment of the principal amount to be prepaid on such Series 2014 Note, together with interest to the prepayment date on such principal amount, shall have been paid to the registered owners thereof as above provided and if notice of prepayment shall have been given to the registered owners thereof as above provided, then from and after the prepayment date interest on such principal amount of such Series 2014 Note shall cease to accrue. If said moneys shall not have been so paid on the prepayment date, such principal amount of such Series 2014 Note shall continue to bear interest until payment thereof at the rate or rates provided for in the Resolution. SECTION 3.03. PERMITTED AND REQUIRED REDEMPTIONS OF THE SERIES 2014 NOTE. (A) The Series 2014 Note shall be subject to optional redemption on any date, in whole but not in part, at a price equal to 100% of the principal amount thereof to be redeemed, plus accrued interest to the redemption date. (B) The Series 2014 Note shall be subject to mandatory redemption in whole, at a price equal to the Redemption Price, upon the occurrence of the circumstances described in Section 2.06(d) hereof. 15  ARTICLE IV SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF SECTION 4.01. SERIES 2014 NOTE NOT TO BE INDEBTEDNESS OF COUNTY. The Series 2014 Note shall not be or constitute a general obligation or indebtedness of the County, the State of Florida or any political subdivision or agency thereof, within the meaning of any constitutional, statutory or charter limitations of indebtedness, but shall be payable solely as herein provided. The Holders from time to time of the Series 2014 Note shall never have the right to compel the exercise of any ad valorem taxing power of the County, or taxation in any form on any property therein to pay the Series 2014 Note or interest thereon. The Series 2014 Note is a special and limited obligations payable as to principal and interest from the Pledged Revenues. SECTION 4.02. SECURITY FOR SERIES 2014 NOTE. The Series 2014 Note shall be secured by the Pledged Revenues. The County does hereby irrevocably pledge and grant a lien upon the Pledged Revenues to secure the payment of the principal of and interest on the Series 2014 Note in accordance with the provisions hereof. The pledge of and lien on such Pledged Revenues shall attach with respect to the Series 2014 Note at the time it is made. The pledge of and lien on the Sales Tax Revenues, which forms a part of the Pledged Revenues, is junior and subordinate to the lien thereon of the Outstanding Bonds. SECTION 4.03. NOTE CONSTRUCTION FUND. The County covenants and agrees to establish a special fund to be known as the "Okaloosa County, Florida Sales Tax Bond Anticipation Note Construction Fund," which shall be used only for payment of the Cost of the Projects. Moneys in the Note Construction Fund, until applied in payment of any item of the cost of a Project in the manner hereinafter provided, shall be held in trust by the County, and shall be subject to a lien and charge in favor of the Holder of the Series 2014 Note. The proceeds of insurance maintained against physical loss of or damage to any Project, or the contractors' performance bonds with respect thereto pertaining to the period of construction thereof, shall be deposited into the Note Construction Fund. The County covenants that the acquisition, construction and installation of each Project, will be completed without delay and in accordance with sound engineering practices. The County shall make disbursements or payments from the Note Construction Fund to pay the costs of the Projects. The County shall keep records of such disbursements and payments and shall retain all such records for the time periods required by State law. Notwithstanding any of the other provisions of this Section 4.03, to the extent that other moneys are not available therefor, amounts in the Note Construction Fund shall be applied to the payment of principal and interest on the Series 2014 Note, when due. The date of completion of acquisition and construction of each Project shall be determined by the County Administrator, who shall certify such fact in writing to the Board. 16 Promptly after the date of the completion of each Project, and after paying or making provisions for the payment of all unpaid items of the cost of such Project, the County shall use any balance of moneys remaining in the Note Construction Fund for prepayment of the Series 2014 Note. SECTION 4.04. DEBT SERVICE FUND. The County covenants and agrees to establish a special fund with respect to the Series 2014 Note and Projects to be known as the "Note Sales Tax Debt Service Fund". Moneys in the aforementioned fund, until applied in accordance with the provisions hereof, shall be held in trust for and be subject to a lien and charge in favor of the Holder. SECTION 4.05. APPLICATION OF SALES TAX REVENUES. All Sales Tax Revenues shall be deposited, as received, into the Revenue Fund established under the Bond Resolution. In accordance with Section 4.05(A)(4) of the Bond Resolution, the County will apply Sales Tax Revenues available after required payments under the Bond Resolution for deposit to the Note Debt Service Fund to pay amounts due and owing on the Series 2014 Note on the succeeding Interest Date. SECTION 4.06. ARBITRAGE REBATE. The County covenants and agrees to cause to be transferred to a separate account held outside the lien of this Resolution such amounts as shall be required to make timely rebate payments to the United States government as described below. Amounts transferred pursuant to the preceding sentence shall be held in trust by the County and used solely to make required rebates to the United States, and the Holder from time to time of the Series 2014 Note shall have no right to have the same applied for debt service on the Series 2014 Note. The County agrees to undertake all actions required of it in its Certificates as to Arbitrage and Certain Other Tax Matters, dated the date of issuance of the Series 2014 Note (the "Tax Certificate"), as well as any successor Tax Certificate thereto, including, but not limited to: (A) making a determination in accordance with the Code of the amount required to be transferred as described above; (B) depositing the amount determined in clause (A) above in the separate account as described above; (C) paying on the dates and in the manner required by the Code to the United States Treasury from the rebate account and any other legally available moneys of the County such amounts as shall be required by the Code to be rebated to the United States Treasury; and (D) keeping such records of the determinations made pursuant to this Section 4.06 as shall be required by the Code, as well as evidence of the fair market value of any investments purchased with "gross proceeds" of the Series 2014 Note (as defined in the Code). The provisions of the above-described Tax Certificate may be amended from time to time as shall be necessary, in the opinion of Bond Counsel, to comply with the provisions of the Code. 17  SECTION 4.07. INVESTMENTS. The Note Construction Fund and the Note Debt Service Fund shall be continuously secured in the manner by which the deposit of public funds are authorized to be secured by the laws of the State. Moneys on deposit in the Note Construction Fund and the Note Debt Service Fund may be invested and reinvested in Authorized Investments maturing not later than the date on which the moneys therein will be needed. Any and all income received by the County from the investment of moneys in the Note Construction Fund and the Note Debt Service Fund shall be retained in such respective Fund. All investments shall be valued at amortized cost. Nothing contained in this Resolution shall prevent any Authorized Investments acquired as investments of or security for funds held under this Resolution from being issued or held in book-entry form on the books of the Department of the Treasury of the United States. SECTION 4.08. SEPARATE ACCOUNTS. The moneys required to be accounted for in each of the foregoing funds and accounts established herein may be deposited in a single bank account, and funds allocated to the various funds and accounts established herein may be invested in a common investment pool; provided that adequate accounting records are maintained to reflect and control the restricted allocation of the moneys on deposit therein and such investments for the various purposes of such funds and accounts as herein provided. The designation and establishment of the various funds and accounts in and by this Resolution shall not be construed to require the establishment of any completely independent, self-balancing funds as such term is commonly defined and used in governmental accounting, but rather is intended solely to constitute an earmarking of certain revenues for certain purposes and to establish certain priorities for application of such revenues as herein provided. SECTION 4.09. PAYMENT COVENANT. The County covenants that it shall duly and punctually pay from the Pledged Revenues the principal of and interest on the Series 2014 Note at the dates and place and in the manner provided herein and in the Series 2014 Note according to the true intent and meaning thereof and all other amounts due under this Resolution. The County covenants to make timely sale and delivery of the Series 2014 Bonds in order to have funds available to pay the Series 2014 Note and the interest thereon as the same become due, and to apply the proceeds of the Series 2014 Bonds for such purpose. SECTION 4.10 SPECIAL COVENANT. In the event the Series 2014 Note is not paid in full on or before the Maturity Date, the County covenants and agrees to appropriate in its annual budget, by amendment, if necessary, from Non-Ad Valorem Funds lawfully available in each Fiscal Year, amounts sufficient to pay the principal and interest then due on the Series 2014 Note. Such covenant and agreement on the part of the County to budget and appropriate such amounts of Non-Ad Valorem Funds shall be cumulative to the extent not paid, and shall continue until such Non-Ad Valorem Funds or other legally available funds in amounts sufficient to make all such required payments shall have been budgeted, appropriated and actually paid. Notwithstanding the foregoing covenant, the County does not covenant to maintain any services or programs, now provided or maintained by the County, which generate Non-Ad Valorem Funds. 18  Such covenant to budget and appropriate does not create any lien upon or pledge of such Non-Ad Valorem Funds, nor does it preclude the County from pledging in the future its Non-Ad Valorem Funds, nor does it require the County to levy and collect any particular Non-Ad Valorem Funds, nor does it give the Holders from time to time of the Series 2014 Note a prior claim on the Non-Ad Valorem Funds as opposed to claims of general creditors of the County. Such covenant to appropriate Non-Ad Valorem Funds is subject in all respects to the payment of obligations secured by a pledge of such Non-Ad Valorem Funds heretofore or hereinafter entered into (including the payment of debt service on bonds and other debt instruments). However, the covenant to budget and appropriate in its general annual budget for the purposes and in the manner stated herein shall have the effect of making available for the payment of amounts due on the Series 2014 Note in the manner described herein Non-Ad Valorem Funds and placing on the County a positive duty to appropriate and budget, by amendment, if necessary, amounts sufficient to meet its obligations hereunder; subject, however, in all respects to the restrictions of Section 129.07, Florida Statutes, which provides that the governing body of each county make appropriations for each fiscal year which, in any one year, shall not exceed the amount to be received from taxation or other revenue sources; and subject, further, to the payment of services and programs which are for essential public purposes affecting the health, welfare and safety of the inhabitants of the County or which are legally mandated by applicable law. 19  ARTICLE V COVENANTS OF THE COUNTY SECTION 5.01. BOOKS AND RECORDS. The County will keep books and records of the receipt of the Sales Tax Revenues and the funds and accounts established hereunder in accordance with generally accepted accounting principles, and the Holder of the Series 2014 Note shall have the right at all reasonable times to inspect the records, accounts and data of the County relating thereto. SECTION 5.02. ISSUANCE OF ADDITIONAL INDEBTEDNESS. The County will not issue any debt or obligation secured by a pledge of Sales Tax Revenues, other than the Outstanding Bonds, senior to or having any priority over the Series 2014 Note. No additional indebtedness, payable on a parity with the Series 2014 Note then Outstanding pursuant to this Resolution, shall be issued. SECTION 5.03 ANNUAL AUDIT. The County shall, immediately after the close of each Fiscal Year, cause the financial statements of the County to be properly audited by a recognized independent certified public accountant or recognized independent firm of certified public accountants, and shall require such accountants to complete their report on the annual financial statements in accordance with applicable law. The annual financial statement shall be prepared in conformity with generally accepted accounting principles. A copy of the audited financial statements for each Fiscal Year shall be furnished to the Series 2014 Noteholder promptly upon completion, but in no event later than 270 days after the end of the Fiscal Year. SECTION 5.04. NO IMPAIRMENT. The pledging of the Pledged Revenues in the manner provided herein shall not be subject to repeal, modification or impairment by any subsequent ordinance, resolution or other proceedings of the Board or the County. SECTION 5.05. FEDERAL INCOME TAX COVENANTS. The County covenants with the Holders from time to time of the Series 2014 Note that it shall not use the proceeds of such Series 2014 Note in any manner which would cause the interest on such Series 2014 Note to be included in gross income for purposes of federal income taxation to the extent not otherwise included therein on the date of issuance of the Series 2014 Note. The County covenants with the Holder of the Series 2014 Note that neither the County nor any Person under its control or direction will make any use of the proceeds of such Series 2014 Note (or amounts deemed to be proceeds under the Code) in any manner which would cause such Series 2014 Note to be an "arbitrage bond" within the meaning of Section 148 of the Code, and neither the County nor any other Person shall do any act or fail to do any act which would cause the interest on such Series 2014 Note to be included in gross income for purposes of federal income taxation. The County hereby covenants with the Holder of the Series 2014 Note that it will comply with all provisions of the Code necessary to maintain the exclusion of interest on the Series 2014 Note from gross income for purposes of federal income taxation, including, in particular, the 20 payment of any amount required to be rebated to the United States Treasury pursuant to the Code. SECTION 5.06. COLLECTION OF SALES TAX REVENUES. The County covenants to do all things necessary on its part to maintain its eligibility to participate in the distribution of the Sales Tax Revenues required by the Act. The County will proceed diligently to perform legally and effectively all steps required on its part in the levy and collection of Sales Tax Revenues and shall exercise all legally available remedies to enforce such collection now or hereafter available under State law. The County covenants to comply with all laws relating to (i) the Sales Tax Revenues and the collection thereof, and (ii) the construction of the respective Projects. The County shall comply with the provisions of the Bond Resolution relating to the levy, collection and application of the Sales Tax Revenues. SECTION 5.07. OTHER MONEYS. The County may, in its sole discretion, utilize other legally available moneys, in addition to the Pledged Revenues, to pay the principal of and interest on the Series 2014 Note. SECTION 5.08. ADDITIONAL COVENANTS WITH RESPECT TO THE SERIES 2014 NOTE. (A) The County hereby knowingly, voluntarily and intentionally waives any and all right it may have to a trial by jury in respect of any litigation (including, but not limited to, any claims, cross-claims or third-party claims) arising out of, under, or in connection with this agreement or the transactions contemplated herein. The County hereby certifies that no representative or agent of the Series 2014 Noteholder, nor the Series 2014 Noteholder's counsel has represented, expressly or otherwise that the Series 2014 Noteholder would not, in the event of such litigation, seek to enforce this waiver of right to jury trial provision. (B) The County will provide, within thirty (30) days of adoption, to the Series 2014 Noteholder a copy of the County’s annual budget and with any other information such Holder may reasonably request from time to time. (C) Promptly after the County becomes aware of the same, the County will notify the Series 2014 Noteholder of (a) any change in any material fact or circumstance represented or warranted by the County in this Resolution or in connection with the issuance of the Series 2014 Note, and (b) any default or event which, with notice or lapse of time or both, could become a default under the Resolution, specifying in each case the nature thereof and what action the County has taken, is taking and/or proposed to take with respect thereto. 21  ARTICLE VI DEFAULTS AND REMEDIES SECTION 6.01. EVENTS OF DEFAULT. The following events shall each constitute an "Event of Default": (A) Default shall be made in the payment of the principal of, redemption premium, if any, or interest on the Series 2014 Note, when due. (B) The County shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Series 2014 Note or in this Resolution (other than defaults referenced in Section 6.01(A) and 6.01(C) hereof) on the part of the County to be performed, and such default shall continue for a period of thirty (30) days after written notice of such default shall have been received from the Holder of the Series 2014 Note. (C) An Act of Bankruptcy shall have occurred with respect to the County. (D) Any representation or warranty by the County to the Holders contained herein or in any certificate delivered at closing or in connection with the County's performance hereunder shall not be true and correct. Notice of any default by the County hereunder shall be given promptly to the Holders of the Series 2014 Note. SECTION 6.02. REMEDIES. Whenever any Event of Default referred to in Section 6.01 hereof shall have happened and be continuing, the Holder of the Series 2014 Note may take one or any combination of the following remedial steps: (A) Have reasonable access to and inspect, examine and make copies of the books and records and any and all accounts and data of the County during regular business hours; or (B) Take whatever action at law or in equity may appear necessary or desirable to collect the amounts then due and thereafter to become due, including declaring the entire unpaid principal amount of the Series 2014 Note to be immediately due and payable, and upon such declaration the same shall become immediately due and payable, or to enforce performance and observance of any obligation, agreement or covenant of the County under this Resolution or to enforce the lien granted hereunder on the Pledged Revenues. Any amounts due on the Series 2014 Note which shall remain unpaid on the day following the scheduled payment dates shall bear interest at the Default Rate until all amounts then due under such Note are paid in full. Nothing herein shall be deemed or construed to require the Holder to permit any cure or otherwise waive its rights hereunder to strict compliance by the County with its obligations hereunder, time being of the essence as to all such obligations. The Holder 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 Resolution after an Event of Default. 22  SECTION 6.03. REMEDIES CUMULATIVE. No remedy herein conferred upon or reserved to the Holder is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. If any remedial action is discontinued or abandoned, the Holder shall be restored to its former position. SECTION 6.04. WAIVER OF DEFAULT. No delay or omission of the Holder to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default, or an acquiescence therein; and every power and remedy given by this Article VI to the Holder may be exercised from time to time, and as often as may be deemed expedient. 23  ARTICLE VII SUPPLEMENTAL RESOLUTIONS SECTION 7.01. SUPPLEMENTAL RESOLUTIONS. The Holder of the Series 2014 Note shall have the right, from time to time, anything contained in this Resolution other than in this Section 7.01 to the contrary notwithstanding, to consent to and approve the adoption of such Supplemental Resolution or Resolutions hereto as shall be deemed necessary or desirable by the County for the purpose of supplementing, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Resolution. If at any time the County shall determine that it is necessary or desirable to adopt any Supplemental Resolution pursuant to this Section 7.01, the Clerk shall give notice of the proposed adoption of such Supplemental Resolution and the form of consent to such adoption to be mailed, postage prepaid, to the Holder at its address as it appears on the registration books. Such notice shall briefly set forth the nature of the proposed Supplemental Resolution and shall state that copies thereof are on file at the offices of the Clerk for inspection by the Holder. The County shall not, however, be subject to any liability to the Holder by reason of its failure to cause the notice required by this Section 7.01 to be mailed and any such failure shall not affect the validity of such Supplemental Resolution when consented to and approved as provided in this Section 7.01. Whenever the County shall deliver to the Clerk an instrument or instruments in writing purporting to be executed by the Holder, which instrument or instruments shall refer to the proposed Supplemental Resolution described in such notice and shall specifically consent to and approve the adoption thereof in substantially the form of the copy thereof referred to in such notice, thereupon, but not otherwise, the County may adopt such Supplemental Resolution in substantially such form. If the Holder at the time of the adoption of such Supplemental Resolution shall have consented to and approved the adoption thereof as herein provided, no future Holder of the Series 2014 Note shall have any right to object to the adoption of such Supplemental Resolution, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the County from adopting the same or from taking any action pursuant to the provisions thereof. Upon the adoption of any Supplemental Resolution pursuant to the provisions of this Section 7.01, this Resolution shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Resolution of the County and the Holder of the Series 2014 Note shall thereafter be determined, exercised and enforced in all respects under the provisions of this Resolution as so modified and amended. 24  ARTICLE VIII MISCELLANEOUS SECTION 8.01. DEFEASANCE. If the County shall pay or cause to be paid or there shall otherwise be paid to the Holder of the Series 2014 Note the principal or Redemption Price, if applicable, and interest due or to become due thereon, at the times and in the manner stipulated therein and in this Resolution, then the pledge of the Pledged Revenues, and all covenants, agreements and other obligations of the County to the Holder, shall thereupon cease, terminate and become void and be discharged and satisfied. The Series 2014 Note or interest installments appertaining thereto, whether at or prior to the maturity or redemption date of the Series 2014 Note, shall be deemed to have been paid within the meaning of this Section 8.01 if (A) in case such Series 2014 Note is to be redeemed prior to the maturity thereof, there shall have been taken all action necessary to call such Series 2014 Note for redemption and notice of such redemption shall have been duly given or provision shall have been made for the giving of such notice, (B) there shall have been deposited in irrevocable trust with a banking institution or trust company by or on behalf of the County either moneys in an amount which shall be sufficient, or Defeasance Obligations, which in either case shall be verified by an independent certified public accountant to be in such amount that the principal of and the interest on which when due will provide moneys which, together with the moneys, if any, deposited with such banking institution or trust company at the same time shall be sufficient, to pay the principal of or Redemption Price, if applicable, and interest due and to become due on said Series 2014 Note on and prior to the redemption date or maturity date thereof, as the case may be, and (C) the County shall receive an opinion of Bond Counsel to the effect that the Series 2014 Note is defeased in accordance with this Section 8.01 and, therefore, no longer Outstanding under this Resolution. Except as hereafter provided, neither the Defeasance Obligations nor any moneys so deposited with such banking institution or trust company nor any moneys received by such banking institution or trust company on account of principal of or Redemption Price, if applicable, or interest on said Defeasance Obligations shall be withdrawn or used for any purpose other than, and all such moneys shall be held in trust for and be applied to, the payment, when due, of the principal of or Redemption Price, if applicable, of the Series 2014 Note for the payment or redemption of which they were deposited and the interest accruing thereon to the date of maturity or redemption; provided, however, the County may substitute new Defeasance Obligations and moneys for the deposited Defeasance Obligations and moneys if the new Defeasance Obligations and moneys are verified by an independent certified public accountant as being sufficient to pay the principal of or Redemption Price, if applicable, and interest on the Series 2014 Note. Nothing herein shall be deemed to require the County to call the Series 2014 Note for redemption prior to maturity pursuant to any applicable optional redemption provisions, or to impair the discretion of the County in determining whether to exercise any such option for early redemption. SECTION 8.02. SALE OF SERIES 2014 NOTE. The negotiated sale of the Series 2014 Note to STI Institutional & Government, Inc., as the initial Series 2014 Noteholder, 25 is hereby authorized at a price equal to 100% of the principal amount of the Series 2014 Note. In addition, the County will pay the costs of the initial Series 2014 Noteholder's counsel in connection with the closing of the Series 2014 Note, in the amount of $5,000. SECTION 8.03. NO ADVISORY OR FIDUCIARY RELATIONSHIP. In connection with all aspects of each transaction contemplated hereunder (including in connection with any amendment, waiver or other modification hereof or of any other document in connection with the issuance of the Series 2014 Note (the "Loan Documents"), the County acknowledges and agrees, that: (a) (i) the County has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, (ii) the County is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the Series 2014 Note, (iii) the initial Series 2014 Noteholder (the "Initial Holder") is not acting as a municipal advisor or financial advisor to the County and (v) the Initial Holder has no fiduciary duty pursuant to Section 15B of the Securities Exchange Act to the County with respect to the transactions contemplated hereby and the discussions, undertakings and procedures leading thereto (irrespective of whether the Initial Holder has provided other services or is currently providing other services to the County on other matters); (b) (i) the Initial Holder is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary, for the County , or any other Person and (ii) the Initial Holder has no obligation to the County, with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (c) the Initial Holder may be engaged in a broad range of transactions that involve interests that differ from those of the County, and the Initial Holder has no obligation to disclose any of such interests to the County. To the fullest extent permitted by law, the County hereby waives and releases any claims that it may have against the Initial Holder with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transactions contemplated hereby. The County has engaged its own municipal advisor in this transaction that has legal fiduciary duties to the County. The loan is being entered into pursuant to and in reliance upon the bank exemption and/or the institutional buyer exemption provided under the municipal advisor rules of the Securities and Exchange Commission, Rule 15Ba1-1 et seq, to the extent that such rules apply to the transactions contemplated hereunder. SECTION 8.04. VALIDATION AUTHORIZED. To the extent deemed necessary or desirable by Bond Counsel, Bond Counsel is authorized to institute appropriate proceedings for validation of the Series 2014 Note pursuant to Chapter 75, Florida Statutes. SECTION 8.05. APPOINTMENT OF PAYMENT AGENT AND REGISTRAR. The County hereby appoints the Clerk as Registrar and Payment Agent with request to the Series 2014 Note. SECTION 8.06. SEVERABILITY OF INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions of this Resolution shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from 26 the remaining covenants, agreements and provisions of this Resolution and shall in no way affect the validity of any of the other covenants, agreements or provisions hereof or of the Note issued hereunder. SECTION 8.07. REPEAL OF INCONSISTENT RESOLUTIONS. All ordinances, resolutions or parts thereof in conflict herewith are hereby superseded and repealed to the extent of such conflict. SECTION 8.08. EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption. 27  PASSED AND ADOPTED by the Board of County Commissioners of Okaloosa County, Florida this 19th day of August, 2014. OKALOOSA COUNTY, FLORIDA (SEAL) Chairman Attest as to Chairman’s signature: ____________________________ Clerk 28  EXHIBIT A THE PROJECTS The acquisition and construction of improvements to certain County properties, including the southside annex, and such other public facilities as approved by the Board. A-1  EXHIBIT B FORM OF DRAW CERTIFICATE $___________ Okaloosa County, Florida Sales Tax Bond Anticipation Note, Series 2014 Dated: ____________, 2014 Draw No. ___ This Draw Certificate is made pursuant to Section 2.02 of Resolution No. ____ of the County, adopted August 19, 2014 (the "Resolution"), to pay a portion of the Cost of the Projects. The Draw is for the principal amount of $_________, to be deposited into the Note Construction Fund as provided by the Resolution. The principal amount of the Series 2014 Note related to such Draw shall bear interest from the date hereof. The County hereby certifies that: (a) it is not on the date hereof, and will not hereafter be, in default of any of the representations, warranties and covenants of the County contained in the Resolution and is not otherwise in default under the Series 2014 Note; (b) all conditions of the Resolution to the disbursement of the funds hereby requested have been fulfilled, and no Event of Default or any other event which, with the passage of time or notice would constitute an Event of Default, has occurred or exists as of the date hereof under the Resolution. OKALOOSA COUNTY, FLORIDA By: Approved By: STI INSTITUTIONAL & GOVERNMENT, INC. By: B-1