Okaloosa County BOCC — August 19, 2014 — Note Resolution — reading text

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