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Tab 6 Certificate as to Arbitrage6 CERTIFICATE AS TO ARBITRAGE AND CERTAIN OTHER TAX MATTERS We, Sylvia Murphy, Mayor of the Board of County Commissioners (the "Board ") of Monroe County, Florida (the "County ") and Lindsey Ballard, Deputy Clerk of the Circuit Court of the County and Ex- Officio Deputy Clerk to the Board, each being a person duly charged, together with others, with the responsibility for issuing the $31,885,000 Monroe County, Florida Infrastructure Sales Surtax Improvement and Refunding Revenue Bond, Series 2014 (the "Series 2014 Bond ") dated as of October 21, 2014, and being issued this day, HEREBY CERTIFY that: 1. AUTHORIZATION AND DEFINITIONS. The Series 2014 Bond is being issued pursuant to the authority contained in Chapter 125, Florida Statutes, Chapter 212, Florida Statutes, the Monroe County Code, the Infrastructure Sales Surtax Ordinance (as defined in the hereinafter defined Resolution) and other applicable provisions of law, and under and pursuant to Resolution No. 077 -2003 adopted by the Board on February 19, 2003, as amended and supplemented, particularly as supplemented by a resolution adopted on October 17, 2014 (collectively, the "Resolution "). The capitalized terms defined in the Resolution shall retain the meanings set forth therein when used in this Certificate unless the context clearly indicates another meaning is intended. Other capitalized terms used in this Certificate shall have the meanings set forth herein or in the Internal Revenue Code of 1986, as amended, and the applicable Treasury Regulations promulgated thereunder and under the Internal Revenue Code of 1954, as amended (collectively, the "Code "), or in the Arbitrage Rebate Statement attached hereto as Exhibit A, in each case unless the context clearly indicates another meaning is intended. 2. PURPOSE. The Series 2014 Bond is being issued for the principal purpose of providing moneys for (a) the acquisition, construction and equipping of various capital improvements within the County, all as more particularly described in the Resolution and the plans and specifications on file or to be on file with the Issuer, as the same may be modified or amended from time to time (the "2014 Project "), (b) refund on a current basis the County's outstanding Infrastructure Sales Surtax Revenue Bonds, Series 2003 (the "Refunded Bonds ") and (c) paying certain costs and expenses in connection with the preparation, issuance and sale of the Series 2014 Bond. The original proceeds of the Refunded Bonds were used to finance various capital improvements within the County (referred to herein as the "Prior Project "). There remain no unspent proceeds of the Refunded Bonds. The refunding of the Refunded Bonds will result in debt service savings for the County. 3. ALLOCATION. For purposes of this Certificate, the portion of the proceeds of the Series 2014 Bond that will be used to refund the Refunded Bonds and the portion of the proceeds of the Series 2014 Bond that will be applied to finance the costs of the 2014 Project shall be considered proceeds of separate issues, respectively referred to herein as the "Refunding Issue" and the "New Money Issue." The proceeds of the Series 2014 Bond shall be allocated to the Refunding Issue and the New Money Issue in accordance with the U.S. Treasury Regulations, particularly Sections 1.148 -4 and 1.148 -9 or any successor provisions. The County hereby covenants and agrees to comply with all of the allocation rules contained in the Code. 4. FACTS, ESTIMATES AND CIRCUMSTANCES. On the basis of the facts, estimates and circumstances in existence on the date hereof, we reasonably expect the following with respect to the Series 2014 Bond and with respect to the proceeds of the Series 2014 Bond: (a) NET PROCEEDS. (i) Total The amount of proceeds received by the County from the sale of the Series 2014 Bond (the "Net Proceeds ") will be $31,885,000.00. (ii) Construction Fund An amount of the Net Proceeds of the Series 2014 Bond equal to $24,691,691.40 will be deposited to the account in the Construction Fund established for the 2014 Project (the "2014 Project Account ") and will be applied to finance costs of the acquisition, construction and equipping of the 2014 Project. (iii) Escrow Deposit for Refunded Bonds An amount of the Net Proceeds equal to $7,097,180.79 will be deposited on the date hereof in the escrow deposit trust fund (the "Escrow Fund ") held by The Bank of New York Mellon Trust Company, N.A., as escrow agent (the "Escrow Agent ") pursuant to the Escrow Deposit Agreement, dated as of October 21, 2014, between the Escrow Agent and the County (the "Escrow Agreement "). Such deposited moneys will be deposited in the Escrow Fund, and held uninvested in cash, which amount shall be sufficient to pay the principal of, premium, if any, and interest on the Refunded Bonds as provided in the Escrow Agreement. The Refunded Bonds will be redeemed on November 19, 2014. (iv) Costs of Issuance and Insurance An amount of the Net Proceeds equal to $96,127.81 will be held by the County and will be used within six months of the date hereof to provide for the payment of the costs and expenses of issuing the Series 2014 Bond. (b) NO OVERISSUANCE The Net Proceeds of the Series 2014 Bond ($31,885,000.00), less payment of the costs of issuance of $96,127.81, will be $31,788,872.19 (the "Original Proceeds). Taking into account other available funds, the 0) amount of Original Proceeds necessary to pay the costs of the 2014 Project and refund the Refunded Bonds equals or exceeds $31,788,872.19, plus investment earnings thereon. (c) AS TO THE 2014 PROJECT. (i) Construction Fund An amount of the Original Proceeds of the New Money Issue equal to $24,691,691.40 will be deposited in the 2014 Project Account of the Construction Fund and such amount and the investment earnings thereon will be used to pay the costs of the 2014 Project. (ii) Use of Construction Fund Moneys The County expects to spend all of the Original Proceeds of the New Money Issue deposited in the 2014 Project Account of the Construction Fund and any investment proceeds related thereto on or before October 20, 2017. (iii) Binding Obligations The County has spent or expects, within six months of the date hereof, to spend (or to enter into binding obligations with third parties obligating the County to spend) from the Original Proceeds of the New Money Issue and any investment proceeds thereon, an amount at least equal to 5% of the costs of the 2014 Project to be financed from such Original Proceeds (including any capitalized interest) in order to acquire, construct or equip a portion of the 2014 Project. (iv) Due Diligence Work on the acquisition, construction and equipping of the 2014 Project funded from the Original Proceeds of the New Money Issue will proceed with due diligence to the completion thereof. (v) Disposal of 2014 Project No portion of the 2014 Project is expected to be sold or disposed of prior to the last maturity date of the New Money Issue, except such portions as may be disposed of in the normal course of business. (vi) Reimbursement The County will not reimburse itself from proceeds of the Series 2014 Bond for any expenditures made by the County prior to the date the Series 2014 Bond were issued except for (A) any expenditures that were made within 60 days prior to the adoption of a resolution adopted on October 17, 2014, and (B) any "preliminary expenditures" authorized to be reimbursed pursuant to Treasury Regulations Section 1.150 -2 to the extent such "preliminary expenditures" do not exceed $6,377,000. (d) AS TO THE REFUNDING OF THE REFUNDED BONDS (i) Escrow Fund for the Refunded Bonds An amount of the Original Proceeds of the Refunding Issue equal to $7,097,180.79 will be deposited on the date hereof into the Escrow Fund. Such moneys shall be applied in the manner described in Section 4(a)(iii) of this Certificate. 9 (ii) Excess Proceeds All Original Proceeds of the Refunding Issue deposited in the Escrow Fund will be used to pay debt service on the Refunded Bonds. In addition, except as otherwise described in this Section 4, there are no other amounts which constitute Original Proceeds of the Refunded Bonds, Original Proceeds of the Refunding Issue or investment earnings on such Original Proceeds of the Refunding Issue. All proceeds of the Refunding Issue (including Original Proceeds and Investment Proceeds) will consist of proceeds that will be used to refund the Refunded Bonds, amounts used to pay administrative costs of repaying the Refunded Bonds and issuing the Series 2014 Bond (e) FUNDS AND ACCOUNTS. (i) Restricted Revenue Account All Infrastructure Sales Surtax Revenues shall be deposited as received by the County into the Restricted Revenue Account of the Revenue Fund. Moneys in the Restricted Revenue Account shall be deposited monthly into the various funds and accounts established by the Resolution. (ii) Debt Service Accounts Except for the Principal Account, the Interest Account and the Bond Amortization Account (collectively, the "Debt Service Accounts ") and the Reserve Account, the County has not created and established, and does not expect to create or establish any fund or account in connection with the Bonds that is reasonably expected to be used to pay debt service on the Bonds. The Debt Service Accounts will be used primarily to achieve a proper snatching of revenues and debt service within each bond year and will be depleted at least annually except for a reasonable carryover amount not to exceed the greater of (A) one year's earnings on amounts in the Debt Service Accounts, or (B) one - twelfth of annual debt service on the Bonds. Amounts deposited in the Debt Service Accounts will be used to pay debt service on the Bonds within a thirteen -month period beginning on the date of deposit therein, and any income earned from the investment of such amounts shall be used for the purposes provided in the Resolution. (iii) Reserve Account Amounts in the Reserve Account will be used only for the purpose of the payment of maturing principal of or Redemption Price, if applicable, and interest on the Bonds when the other moneys in the Debt Service Accounts are insufficient therefor. Amounts in the Reserve Account will be transferred to the Debt Service Accounts, if needed, to make up any deficiency. The Reserve Account is intended to provide for the payment of debt service on the Bonds in the event of a temporary interruption of revenues, and, as such, constitutes a reasonably required reserve fund. The Reserve Account Requirement with respect to the Series 2014 Subaccount of the Reserve Account and the Series 2014 Bond shall be $0.00. The Series 2014 Subaccount shall solely secure the M Series 2014 Bond and the Series 2014 Bond shall not be secured by any other portion of the Reserve Account or any other subaccount therein. (iv) Construction Fund Amounts in the 2014 Project Account of the Construction Fund shall be used to pay or reimburse costs of the 2014 Project. Amounts on deposit in the 2014 Project Account of the Construction Fund may be used for the payment of debt service on the Series 2014 Bond; however, the County does not expect that amounts in such Account will be used to pay debt service on the Series 2014 Bond and there is no assurance that any portion of the amounts deposited in such Account will be available to pay such debt service. (v) Unrestricted Revenue Account The balance of any monies remaining in the Restricted Revenue Account after funding the Debt Service Accounts and the Reserve Account in accordance with the Resolution may be transferred to the Unrestricted Revenue Account of the Revenue Fund or any other appropriate fund or account of the County and used for any lawful purpose including, without limitation, the early redemption of the Series 2014 Bond. In the event moneys on deposit in the Debt Service Accounts on the third day prior to an interest payment date are not sufficient to pay the principal of and interest on the Series 2014 Bond coming due on such interest payment date, the Issuer shall transfer moneys from the Unrestricted Revenue Account, if any, to the appropriate Debt Service Account to provide for such payment. (vi) Investment Earnings Any and all income received from the investment of moneys in the Construction Fund, the Interest Account, the Principal Account, the Bond Amortization Account, the Restricted Revenue Account and the Reserve Account (only to the extent such income and the other amounts in the Reserve Account does not exceed the Reserve Account Requirement) shall be retained in such respective fund or account. Any and all income received from the investment of moneys in the Reserve Account (only to the extent such income and other amounts in the Reserve Account exceeds the Reserve Account Requirement) shall be deposited to the Interest Account. (vii) No Other Funds Other than the funds and accounts described in this Certificate, no fund or account has been established pursuant to any instrument which secures or otherwise relates to the Bonds. 5. YIELD. (a) GENERAL For purposes of this Certificate, bond yield is, and shall be, calculated in the manner provided in Treasury Regulations Section 1.148 -4, and the provisions therein will be complied with in all respects. The term "bond yield" means, with respect to a bond or note, the discount rate that when used in computing the present value of all the unconditionally payable payments of principal and interest and all the M payments for a qualified guarantee paid and to be paid with respect to the bond or note produces an amount equal to the present value of the issue price of the bond as of the delivery date of such bond or note. In computing the purchase price of the Series 2014 Bond, which is equal to the issue price, the County did not take into consideration the costs of issuance. The purchase price of the Series 2014 Bond, therefore, is $31,885,00. For purposes hereof, yield is, and shall be, calculated on a 360 -day year basis with interest compounded semiannually. As of the date hereof, the yield on the Series 2014 Bond calculated in the above - described manner is 2.3601% (the "2014 Bond Yield "). Such yield calculation has been computed by Public Financial Management, Inc. ( "PFM "), the financial advisor to the County. It should be noted, however, that such yield may, under certain circumstances set forth in the Treasury Regulations, be subject to recalculation. The purchase price of all obligations other than certain tax - exempt investments ( "Taxable Obligations ") to which restrictions as to yield or rebate of excess earnings under this Certificate applies shall be calculated using (i) the price, taking into account discount, premium, and accrued interest, as applicable, actually paid or (ii) the fair market value if less than the price actually paid and if such Taxable Obligations were not purchased directly from the United States Treasury. The County will acquire all such Taxable Obligations directly from the United States Treasury or in arms length transactions without regard to any amounts paid to reduce the yield on such Taxable Obligations. The County will not pay or permit the payment of any amounts to reduce the yield on any Taxable Obligations. Any amounts subject to yield restrictions may be subject to yield reduction payments pursuant to Treasury Regulations Section 1.148 -5(c). (b) RESERVE ACCOUNT The Reserve Account Requirement for the Series 2014 Bond equals $0.00. Any amounts in the Series 2014 Subaccount of the Reserve Account in excess of the Reserve Account Requirement for the Series 2014 Bond will be invested at a yield not in excess of the 2014 Bond Yield. (c) DEBT SERVICE ACCOUNTS - DEBT SERVICE Amounts held in the Debt Service Accounts which are set aside for the payment of the principal of and interest on the Series 2014 Bond will be invested without regard to yield restrictions for a period not to exceed 13 months from the date of deposit of such amounts in such Accounts. Any amounts not expended within the period set forth above shall be invested at a yield not in excess of the 2014 Bond Yield. (d) CONSTRUCTION FUND The amounts on deposit in the 2014 Project Account of the Construction Fund, including any investment earnings thereon, shall be invested without regard to yield restrictions for a period of not to exceed 36 months from the date of deposit therein. Any such amounts not expended within such period shall be invested at a yield not in excess of the 2014 Bond Yield. C (e) RESTRICTED REVENUE ACCOUNT Amounts in the Restricted Revenue Account shall be invested without regard to yield restrictions. (f) UNRESTRICTED REVENUE ACCOUNT Amounts in the Unrestricted Revenue Account shall be invested without regard to yield restrictions. (g) INVESTMENT EARNINGS All investment earnings on amounts deposited in the Debt Service Accounts may be invested without regard to yield restrictions for a period not to exceed one year from the date of receipt of the amount earned. Any investment earnings not expended within the applicable periods set forth above shall be subject to yield restrictions. (h) OTHER FUNDS AND ACCOUNTS Any other funds and accounts not described in subsections (c) through and including (f) of this Section 5 may be invested without regard to yield restrictions. (i) YIELD REDUCTION PAYMENTS Any amounts subject to yield restrictions may be subject to yield reduction payments pursuant to Treasury Regulations Section 1.148 -5(c). 6. FURTHER CERTIFICATIONS. The County will take no action which would cause the Series 2014 Bond to become a Private Activity Bond (as such term is defined in the Code). None of the Gross Proceeds of the Series 2014 Bond will be used directly or indirectly in any trade or business carried on by any person other than a governmental unit. No bonds or other obligations of the County (a) were sold in the 15 days preceding the date of sale of the Series 2014 Bond or (b) were sold or will be sold within the 15 days after the date - of sale of the Series 2014 Bond, pursuant to a common plan of financing with the plan for the issuance of the Series 2014 Bond and payable out of substantially the same source of revenues. The County does not expect that the proceeds of the Series 2014 Bond will be used in a manner that would cause it to be an arbitrage bond under Section 148 of the Code. The County does not expect that the proceeds of the Series 2014 Bond will be used in a manner that would cause the interest on the Series 2014 Bond to be includable in the gross income of the holder of the Series 2014 Bond under Section 103 of the Code. 7. REBATE. The County has established a Rebate Fund for the Series 2014 Bond and shall deposit moneys therein as required by the terms of the Arbitrage Rebate Statement attached hereto as Exhibit A. Moneys in the Rebate Fund shall be held in trust by the County and, subject to the provisions hereof, shall be held for the benefit of the United States Government as contemplated under the provisions hereof and shall not constitute part of the trust estate held for the benefit of the holders of the Series 2014 7 Bond or the County. The County acknowledges and agrees to comply with the terms of the Arbitrage Rebate Statement attached hereto as Exhibit A. 8. AMENDMENTS. The provisions hereof need not be observed and this Certificate may be amended or supplemented at any time by the County if, in each case, the County receives an opinion or opinions of Bond Counsel that the failure to comply with such provisions will not cause, and that the terms of such amendment or supplement will not cause, any of the Series 2014 Bond to become an arbitrage bond under Section 148 of the Code, or other applicable section of the Code, or otherwise cause interest on any of the Series 2014 Bond to become includable in gross income for federal income tax purposes under the Code. 9. SERIES 2014 BOND NOT FEDERALLY GUARANTEED. Payment of debt service on the Series 2014 Bond is not directly or indirectly guaranteed in whole or in part by the United States, within the meaning of Section 149(b) of the Code. None of the Original Proceeds will be invested directly or indirectly in federally insured deposits or accounts except for Original Proceeds invested during the applicable temporary periods described herein until such Original Proceeds are needed for the purpose for which the Series 2014 Bond is being issued. 10. SERIES 2014 BOND NOT HEDGE BOND. (a) It is reasonably expected that not less than 85% of the Original Proceeds of the New Money Issue will be used to carry out the governmental purposes of the New Money Issue within three years from the date of its issuance. Not more than 50% of such proceeds shall be invested in nonpurpose investments having a substantially guaranteed yield for four years or more (including but not limited to any investment contract or fixed yield investment having a maturity of four years or more). The reasonable expectations stated above are not based on and do not take into account any expectations or assumptions as to the occurrence of changes in market interest rates or of federal tax law or regulations or rulings thereunder. These reasonable expectations are not based on any prepayments of items other than items which are customarily prepaid. (b) It was reasonably expected at the time of issuance of the Refunded Bonds that not less than 85% of the proceeds of the Refunded Bonds would be used to carry out the governmental purposes of the Refunded Bonds within three years from the date of issuance of the Refunded Bonds. Not more than 50% of such proceeds were invested in nonpurpose investments having a substantially guaranteed yield for four years or more (including but not limited to any investment contract or fixed yield investment having maturity of four years or more). The reasonable expectations stated above were not based on and did not take into account any expectations or assumptions as to the occurrence of changes in market interest rates or of federal tax law or regulations or rulings thereunder. These reasonable expectations were not based on any prepayments of items other than items which are customarily prepaid. M 11. ADDITIONAL COVENANTS. The County further agrees to (a) impose such limitations on the investment or use of moneys or investments related to the Series 2014 Bond, (b) make such rebate payments to the United States Treasury, (c) maintain such records, (d) perform such calculations, (e) enter into such agreements, and (f) perform such other acts as may be necessary under the Code to preserve the exclusion from gross income for purposes of federal income taxation of interest on the Series 2014 Bond, which it may lawfully do. 12. INFORMATION. The County agrees to file all infonmation statements as may be required by the Code. 13. VALUATION AND MARKE PRICE RULES. In determining the amounts on deposit in any fund or account for purposes of this Certificate, the purchase price of the obligations, including accrued interest, shall be added together, and adding to or subtracting from such purchase prices any discount, computed ratably on an annual basis. With respect to any amounts required to be restricted as to yield, the "market price rules" set forth in Exhibit A attached hereto shall apply. 14. NO REPLACEMENT. No portion of the amounts received from issuance, conversion, sale or remarketing of the Series 2014 Bond will be used as a substitute for other funds which were otherwise to be used for the purposes for which the Series 2014 Bond is being issued, and which have been or will be used to acquire, directly or indirectly, obligations producing a yield in excess of the 2014 Bond Yield. The weighted average maturity of the New Money Issue (5.9087 years) is less than 120% of the remaining reasonably expected economic life of the Prior Project. 15. LIMITATIONS ON PRIVATE USE; REMEDIAL ACTION. Either (a) the County has not and will not permit the 2014 Project or the Prior Project to be used by any private non - governmental entity (a "Private User ") to the extent such use exceeds 10% of the 2014 Project or the Prior Project, or (b) the County has not and will not (i) secure, directly or indirectly, more than 10% of either principal or interest on the Series 2014 Bond by (A) any interest in property used or to be used by any Private User or (B) any payments in respect of property used or to be used by any Private User, or (ii) directly or indirectly, cause or permit more than 10% of either principal or interest on the Series 2014 Bond to be derived from payments (whether or not to the County) in respect of property, or borrowed money, used or to be used by any Private User. Use by the general public does not constitute use by Private Users. No portion of the proceeds of the Series 2014 Bond or any other obligation financed or refinanced, directly or indirectly, in whole or in part with the proceeds of such obligations has been or will be loaned, directly or indirectly, by the County or any other person to any person. 7 The County will not sell, lease (other than as permitted under the limitations described above), allow the private management of or otherwise dispose of, directly or indirectly, in whole or in part, whether for consideration or otherwise, the 2014 Project or the Prior Project unless prior to any sale, lease or other disposition, the County receives the approval of Bond Counsel. In the event that the County takes any action, or fails to take any action, the result of which would adversely affect the tax- exempt status of the Series 2014 Bond, the County will immediately take such remedial action as permitted by the Code (including, particularly Sections 141 and 150 thereof) and the regulations thereunder to preserve such tax - exempt status including, if necessary, the defeasance and/or redemption of all or a portion of the Series 2014 Bond from funds derived from a source other than tax - exempt obligations. See Revenue Procedure 97 -13 which provides rules regarding the use of management, service or incentive payment contracts between the County and a service provider regarding the 2014 Project and the Prior Project. 16. RELIANCE. The County has relied on certain representations made by PFM in its certificate attached hereto as Exhibit B. The County is not aware of any facts or circumstances that would cause it to question the accuracy of such representations. 17. NO ADVERSE ACTION. The County has neither received notice that this Certificate may not be relied upon with respect to its issues, nor has it been advised that any adverse action by the Commissioner of Internal Revenue Service is contemplated. To the best of our knowledge and belief there are no facts, estimates or circumstances other than those expressed herein that materially affect the expectations herein expressed, and, to the best of our knowledge and belief, the County's expectations are reasonable. We further represent that the County expects and intends to be able to comply with the provisions and procedures set forth herein, including Section 148 of the Code. 10 IN WITNESS WHEREOF, we have hereunto set our hands as of this 21st day of October, 2014. By: Deputy Clerk of the Circuit Court and Ex- Officio Deputy Clerk to the Board of County Commissioners 11 MONROE COUNTY, FLORIDA EXHIBIT A ARBITRAGE REBATE STATEMENT This Arbitrage Rebate Statement (the "Statement ") is intended to set forth certain duties and requirements necessary for compliance with Section 148(f) of the Code to the extent necessary to preserve the tax exempt treatment of interest on the Monroe County, Florida Infrastructure Sales Surtax Improvement and Refunding Revenue Bond, Series 2014 (the "Series 2014 Bond "). This Statement is based upon Section 148(f) of the Code and by analogy, to the Regulations. However, it is not intended to be exhaustive. Since the requirements of such Section 148(f) are subject to amplification and clarification, it may be necessary to supplement or modify this Statement from time to time to reflect any . additional or different requirements of such Section and the Regulations or to specify that action required hereunder is no longer required or that some further or different action is required to maintain or assure the exemption from federal income tax of interest with respect to the Series 2014 Bond. For purposes hereof, any covenant relating to a fund, account or subaccount established under the Resolution shall be deemed to apply only to that portion of such fund, account or subaccount allocable to the Series 2014 Bond. SECTION 1. TAX COVENANTS. Pursuant to the Resolution, the County has made certain covenants designed to assure that the interest with respect to the Series 2014 Bond is and shall remain excludable from gross income for purposes of federal income taxation. The County shall not, directly or indirectly, use or permit the use of any proceeds of the Series 2014 Bond or any other funds or take or omit to take any action that would cause the Series 2014 Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code or that would cause interest on the Series 2014 Bond to be included in gross income for federal income tax purposes under the provisions of the Code. The County shall comply with all other requirements as shall be determined by Bond Counsel to be necessary or appropriate to assure that interest on the Series 2014 Bond will be excludable from gross income for purposes of federal income taxation. To that end, the County shall comply with all requirements of Section 148 of the Code to the extent applicable to the Series 2014 Bond. SECTION 2. DEFINITIONS. Capitalized terms used herein, not otherwise defined herein, shall have the same meanings set forth in the Resolution and in the County's Certificate as to Arbitrage and Certain Other Tax Matters relating to the Series 2014 Bond. "Bond Counsel" means Nabors, Giblin & Nickerson, P.A., Tampa, Florida or such other firm of nationally recognized bond counsel as may be selected by the County. Appendix A -1 "Bond Year" means any one -year period (or shorter period from the Issue Date) ending on the close of business on the day preceding the anniversary of the Issue Date. "Code" means the Internal Revenue Code of 1986, as amended. "Computation Date" means each date selected by the County as a computation date pursuant to Section 1.148 -3(e) of the Regulations and the Final Computation Date. "Fair Market Value" means, when applied to a Nonpurpose Investment, the Fair Market Value of such Investment as determined in accordance with Section 4 hereof. "Final Computation Date" means the date the Series 2014 Bond is discharged. "Gross Proceeds" means, with respect to the Series 2014 Bond: (1) Amounts constituting Sale Proceeds of the Series 2014 Bond. (2) Amounts constituting Investment Proceeds of the Series 2014 Bond. (3) Amounts constituting Transferred Proceeds of the Series 2014 Bond. (4) Other amounts constituting Replacement Proceeds of the Series 2014 Bond, including Pledged Moneys. "Investment Proceeds" means any amounts actually or constructively received from investing proceeds of the Series 2014 Bond. "Investment Property" shall have the meaning as ascribed to such term in Section 148(b)(2) of the Code, which includes any security, obligation or other property held principally as a passive vehicle for the production of income, within the meaning of Section 1.148 -1(e) of the Regulations. "Issue Date" means October 21, 2014. "Net Proceeds" means Sale Proceeds, less the portion of such Proceeds invested in a reasonably required reserve or replacement fund under the Code. " Nonpurpose Investment" means any Investment Property in which Gross Proceeds are invested which is not an investment that is acquired to carry out the governmental purpose of the Series 2014 Bond, e.g., obligations acquired with Gross Proceeds that are invested temporarily until needed for the governmental purpose of the Series 2014 Bond, that are used to discharge a prior issue, or that are invested in a reasonably required reserve or replacement fund, as referenced in Section 1.148 -1(b) of the Regulations. Appendix A -2 "Nonpurpose Payments" shall include the payments with respect to Nonpurpose Investments specified in Section 1.148 -3 (d)(1)(i) -(v) of the Regulations. "Nonpurpose Receipts" shall include the receipts with respect to Nonpurpose Investments specified in Section 1.148- 3(d)(2)(i) -(iii) of the Regulations. "Pledged Moneys" means moneys that are reasonably expected to be used directly or indirectly to pay debt service on the Series 2014 Bond or as to which there is a reasonable assurance that such moneys or the earnings thereon will be available directly or indirectly to pay debt service on the Series 2014 Bond if the County encounters financial difficulties. "Pre- Issuance Accrued Interest" means amounts representing interest that has accrued on an obligation for a period of not greater than one year before its issue date but only if those amounts are paid within one year after the Issue Date. "Proceeds" means any Sale Proceeds, Investment Proceeds and Transferred Proceeds of the Series 2014 Bond. "Qualified Administrative Costs" means reasonable, direct administrative costs, other than carrying costs, such as separately stated brokerage and selling commissions that are comparable to those charged nongovernmental entities in transactions not involving tax - exempt bond proceeds, but not legal and accounting fees, recordkeeping, custody or similar costs. In addition, with respect to a guaranteed investment contract or investments purchased for a yield restricted defeasance escrow, such costs will be considered reasonable if (1) the amount of the fee the County treats as a Qualified Administrative Cost does not exceed the lesser of (a) $38,000 (for calendar year 2014), or (b) the greater of (x) .2% of the "computational base," or (y) $4,000; and (2) the County does not treat as Qualified Administrative Costs more than $108,000 (for calendar year 2014) in brokers' commissions or similar fees with respect to all guaranteed investment contracts and investments for yield restricted defeasance escrows purchased with Gross Proceeds of the issue. For purposes of this definition only, "computational base" shall mean, with respect to guaranteed investment contracts, the amount of Gross Proceeds the County reasonably expects, as of the date the contract is acquired, to be deposited in the guaranteed investment contract over the term of the contract and for investments other than guaranteed investment contracts, "computational base" shall mean the amount of Gross Proceeds initially invested in such investments. The above described safe harbor dollar amounts shall be increased each calendar year for cost -of- living adjustments pursuant to Section 1.148 -5(e) of the Regulations. "Rebatable Arbitrage" means, as of any Computation Date, the excess of the future value of all Nonpurpose Receipts over the future value of all Nonpurpose Payments. Appendix A -3 "Rebate Fund" means the Rebate Fund established pursuant to the Resolution and described in Section 3 hereof. "Regulations" means Treasury Regulations Sections 1.148 -0 through 1.148 -11, 1.149(b) -1 and (d) -1, and 1.150 -0 through 1.150 -2, as amended, and any regulations amendatory, supplementary or additional thereto. "Replacement Proceeds" means amounts that have a sufficiently direct nexus to the Series 2014 Bond or to the governmental purpose of the Series 2014 Bond to conclude that the amounts would have been used for that governmental purpose if the Proceeds of the Series 2014 Bond were not used or to be used for that governmental purpose. For this purpose, governmental purposes include the expected use of amounts for the payment of debt service on a particular date. The mere availability or preliminary earmarking of amounts for a governmental purpose, however, does not in itself establish a sufficient nexus to cause those amounts to be Replacement Proceeds. Replacement Proceeds include, but are not limited to, amounts held in a sinking fund or a pledged fund. For these purposes, an amount is pledged to pay principal of or interest on the Series 2014 Bond if there is reasonable assurance that the amount will be available for such purposes in the event that the County encounters financial difficulties. "Sale Proceeds" means any amounts actually or constructively received by the County from the sale of the Series 2014 Bond, including amounts used to pay underwriters' discount or compensation and interest other than Pre - Issuance Accrued Interest. Sale Proceeds shall also include, but are not limited to, amounts derived from the sale of a right that is associated with a Series 2014 Bond and that is described in Section 1.148- 4(b)(4) of the Regulations. "Tax- Exempt Investment" means (i) an obligation the interest on which is excluded from gross income pursuant to Section 103 of the Code, (ii) United States Treasury-State and Local Government Series, Demand Deposit Securities, and (iii) stock in a tax- exempt mutual fund as described in Section 1.150 -1(b) of the Regulations. Tax- Exempt Investment shall not include a specified private activity bond as defined in Section 57(a)(5)(C) of the Code. For purposes of this Statement, a tax - exempt mutual fund includes any regulated investment company within the meaning of Section 851(a) of the Code meeting the requirements of Section 852(a) of the Code for the applicable taxable year; having only one class of stock authorized and outstanding; investing all of its assets in tax exempt obligations to the extent practicable; and having at least 98% of (1) its gross income derived from interest on, or gain from the sale of or other disposition of, tax exempt obligations or (2) the weighted average value of its assets represented by investments in tax exempt obligations. "Transferred Proceeds" shall have the meaning provided therefor in Section 1.148 -9 of the Regulations. Appendix A -4 "Universal Cap" means the value of all the outstanding Series 2014 Bond. "Value" (of a Series 2014 Bond) means with respect to a Series 2014 Bond issued with not more than two percent original issue discount or original issue premium, the outstanding principal amount, plus accrued unpaid interest; for any other Series 2014 Bond, its present value. "Value" (of an Investment) shall have the following meaning in the following circumstances: (1) General Rules Subject to the special rules in the following paragraph, an issuer may determine the value of an investment on a date using one of the following valuation methods consistently applied for all purposes relating to arbitrage and rebate with respect to that investment on that date: (a) an investment with not more than two percent original issue discount or original issue premium may be valued at its outstanding stated principal amount, plus accrued unpaid interest on such date; (b) a fixed rate investment may be valued at its present value on such date; and (c) an investment may be valued at its Fair Market Value on such date. (2) Special Rules Yield restricted investments are to be valued at present value provided that (except for purposes of allocating Transferred Proceeds to an issue, for purposes of the Universal Cap and for investments in a commingled fund other than a bona fide debt service fund unless it is a certain commingled fund): (a) an investment must be valued at its Fair Market Value when it is first allocated to an issue, when it is disposed of and when it is deemed acquired or deemed disposed of, and provided further that; (b) in the case of Transferred Proceeds, the Value of a Nonpurpose Investment that is allocated to Transferred Proceeds of a refunding issue on a transfer date may not exceed the Value of that investment on the transfer date used for purposes of applying the arbitrage restrictions to the refunded issue. "Yield on the Series 2014 Bond," "2014 Bond Yield" or "Bond Yield" means, for all Computation Dates, the Yield expected as of the date hereof on the Series 2014 Bond over the term of such Bonds computed by: (i) using as the purchase price of the Series 2014 Bond, the amount at which such Series 2014 Bond was sold to the public within the meaning of Sections 1273 and 1274 of the Code; and Appendix A -5 (ii) assuming that the Series 2014 Bond will be paid at its scheduled maturity dates or in accordance with any mandatory redemption requirements. "Yield" means, generally, the discount rate which, when used in computing the present value of all the unconditionally payable payments of principal and interest on an obligation and all the payments for qualified guarantees paid and to be paid with respect to such obligation, produces an amount equal to the present value of the issue price of such obligation. Present value is computed as of the date of issue of the obligation. There are, however, many additional specific rules contained in the Regulations which apply to the calculation and recalculation of yield for particular obligations and such rules should be consulted prior to calculating the yield for the Series 2014 Bond on any Computation Date. Yield shall be calculated on a 360 -day year basis with interest compounded semi - annually. For this purpose the purchase price of a Nonpurpose Investment or a Tax - Exempt Investment is its Fair Market Value, as detennined pursuant to Section 4 of this Statement, as of the date that it becomes allocated to Gross Proceeds of the Series 2014 Bond. SECTION 3. REBATE REQUIREMENTS. (a) The County shall pay to the United States Government at the times and in the amounts determined hereunder, the Rebatable Arbitrage. For purposes of determining the Rebatable Arbitrage, the County shall cause the calculations to be made by competent tax counsel or other financial or accounting advisors or persons to ensure correct application of the rules contained in the Code and the Regulations relating to arbitrage rebate. (b) Pursuant to the Resolution, there has been established an account separate from any other fund or account established and maintained under the Resolution designated the "Rebate Fund." The County or its designated agent shall administer the Rebate Fund and continuously invest all amounts held in the Rebate Fund in Authorized Investments (as defined in the Resolution) or Tax - Exempt Investments. (c) Within 30 days after any Computation Date, the County shall calculate or cause to be calculated the Rebatable Arbitrage or any penalty due pursuant to Section 3(f) hereof. Immediately following such calculations, but in no event later than 60 days following the Computation Date (90 days in the case of any penalty payment due pursuant to Section 3(f) hereof), the County shall remit an amount which when added to the future value of previous rebate payments shall not be less than 90% (100% with respect to the Computation Date on the final repayment or retirement of the Series 2014 Bond) of the Rebatable Arbitrage or 100% of any penalty due pursuant to Section 3(f) hereof as of the applicable Computation Date. Each payment shall be accompanied by Internal Revenue Service Form 8038 -T. Appendix A -6 (d) The obligation to pay Rebatable Arbitrage to the United States, as described herein, shall be treated as satisfied with respect to the Series 2014 Bond if (i) Gross Proceeds are expended for the governmental purpose of the Series 2014 Bond by no later than the date which is six months after the Issue Date and if it is not anticipated that any other Gross Proceeds will arise during the remainder of the term of the Series 2014 Bond and (ii) the requirement to pay Rebatable Arbitrage, if any, to the United States with respect to the portion of the Reserve Account allocable to the Series 2014 Bond is met. For purposes described above, Gross Proceeds do not include (i) amounts deposited in a bona fide debt service fund, so long as the funds therein constitute bona fide debt service funds, or a reasonably required reserve or replacement fund (meeting the requirements of Section 1.148 -2(f) of the Regulations), (ii) amounts that, as of the Issue Date, are not reasonably expected to be Gross Proceeds but that become Gross Proceeds after the date which is six months after the Issue Date, (iii) amounts representing Sale or Investment Proceeds derived from any Purpose Investment (as defined in Section 1.148 -1 of the Regulations) and earnings on those payments, and (iv) amounts representing any repayments of grants (as defined in Section 1.148- 6(d)(4) of the Regulations). If Gross Proceeds are in fact expended by such date, then, except as to the Reserve Account, Rebatable Arbitrage with respect to such Gross Proceeds need not be calculated and no payment thereof to the United States Department of Treasury need be made. Use of Gross Proceeds to redeem the Series 2014 Bond shall not be treated as an expenditure of such Gross Proceeds. Notwithstanding the foregoing, if Gross Proceeds which were reasonably expected to be Gross Proceeds on the Issue Date actually become available after the date which is six months after the Issue Date, then the requirements described herein relating to the calculation of Rebatable Arbitrage and the payment thereof to the United States must be satisfied, except that no such calculation or payment need be made with respect to the initial six month period. Any other amounts not described in this Section 3(d) which constitute proceeds of the Series 2014 Bond, other than a bona fide debt service fund, will be subject to rebate. THE FOLLOWING PARAGRAPH (e) SHALL ONLY APPLY WITH RESPECT TO THE NEW MONEY ISSUE. (e) As an alternative to Section 3(d) above, the obligation of the County to pay Rebatable Arbitrage to the United States, as described herein, shall be treated as satisfied with respect to the New Money Issue if (i) the rebate requirement is met for all proceeds of the Series 2014 Bond other than Gross Proceeds (as defined in Section 3(d) hereof) and (ii) the Gross Proceeds are expended for the governmental purposes of the issue within the periods set forth below: (i) at least 15% of such Gross Proceeds of the New Money Issue are spent within the six -month period beginning on the Issue Date; Appendix A -7 (ii) at least 60% of such Gross Proceeds of the New Money Issue are spent within the 1 -year period beginning on the Issue Date; and (iii) at least 100% of such Gross Proceeds of the New Money Issue are spent within the 18 -month period beginning on the Issue Date. As set forth in Section 1.148- 7(d)(2) of the Regulations, for purposes of the expenditure requirements set forth in this Section 3 (e), 100% of the Gross Proceeds of the New Money Issue shall be treated as expended for the governmental purposes of the issue within the 18 -month period beginning on the Issue Date if such requirement is met within the 30 -month period beginning on the Issue Date and such requirement would have been met within such 18 -month period but for a reasonable retainage (not exceeding 5% of the Net Proceeds of the New Money Issue). If Gross Proceeds are in fact expended by such dates, then Rebatable Arbitrage need not be calculated and no payment thereof to the United States Department of Treasury need be made. Any failure to satisfy the final spending requirement shall be disregarded if the County exercises due diligence to complete the 2014 Project financed by the New Money Issue and the amount of the failure does not exceed the lesser of (i) 3% of the issue price of the New Money Issue or (ii) $250,000. Use of Gross Proceeds to redeem the New Money Issue shall not be treated as an expenditure of such Gross Proceeds. For purposes of this Section 3(e), "Gross Proceeds" shall be modified as described in Section 3(d) above. THE FOLLOWING PARAGRAPH (f) SHALL ONLY APPLY WITH RESPECT TO THE NEW MONEY ISSUE. (f) As an alternative to Sections 3(d) and (e) above, the obligation to pay Rebatable Arbitrage to the United States, as described herein, shall be treated as satisfied with respect to the New Money Issue if the Available Construction Proceeds (as defined in Section 148(f)(4)(C)(vi) of the Code and described below) are expended for the governmental purposes of the issue within the periods set forth below: (i) at least 10% of such Available Construction Proceeds are spent within the six -month period beginning on the Issue Date; (ii) at least 45% of such Available Construction Proceeds are spent within the 1 -year period beginning on the Issue Date; (iii) at least 75% of such Available Construction Proceeds are spent within the eighteen -month period beginning on the Issue Date; and (iv) at least 100% of such Available Construction Proceeds are spent within the 2 -year period beginning on the Issue Date. Appendix A -8 For purposes of this Section 3(f), the term Available Construction Proceeds means the Net Proceeds of the New Money Issue, increased by earnings on the Net Proceeds and earnings on all of the foregoing earnings, and reduced by the amount of the Net Proceeds deposited to the Reserve Account and amounts used to pay issuance costs. Any amounts which constitute proceeds of the Series 2014 Bond other than Available Construction Proceeds and amounts on deposit in a bona fide debt service fund will be subject to rebate. As set forth in Section 148(f)(4)(C)(iii) of the Code, for purposes of the expenditure requirements set forth in this Section 3(f), 100% of Available Construction Proceeds of the Series 2014 Bond shall be treated as expended for the governmental purposes of the issue within the 2 -year period beginning on the Issue Date if such requirement is met within the 3 -year period beginning on the Issue Date and such requirement would have been met within such 2 -year period but for a reasonable retainage (not exceeding 5% of the Net Proceeds of the New Money Issue). Use of Available Construction Proceeds to redeem the Series 2014 Bond shall not be treated as an expenditure of such proceeds. Any failure to satisfy the final spending requirement shall be disregarded if the County exercises due diligence to complete the 2014 Project financed by the New Money Issue and the amount of the failure does not exceed the lesser of (i) 3% of the issue price of the New Money Issue or (ii) $250,000. For purposes of Section 148(f)(4)(C)(vii) of the Code, in the event the County fails to meet the expenditure requirements referred to above, the County may elect to pay, in lieu of the Rebatable Arbitrage otherwise required to be paid with respect to such Gross Proceeds, a penalty with respect to the close of each 6 -month period after the Issue Date equal to 1.5% of the amount of the Available Construction Proceeds of the New Money Issue which, as of the close of such period, are not spent as required by the expenditure provisions set forth above. The penalty referred to above shall cease to apply only after the New Money Issue (including any refunding bonds issued with respect thereto) is no longer outstanding. The County makes no election in regard to the above - described penalty. In order to qualify for the exemption from the obligation to pay Rebatable Arbitrage to the United States pursuant to this Section 3(f), at least 75% of the Available Construction Proceeds must be used for construction expenditures (as defined in Section 1.148 -7(g) of the Regulations) with respect to property which is owned by a governmental unit or an organization described in Section 541(c)(3) of the Code. The term "construction" includes reconstruction and rehabilitation of existing property and rules similar to the rules of Section 142(b)(1)(B) of the Code shall apply. If only a portion of an issue is to be used for construction expenditures, such portion and the other portion of such issue may, at the election of the issuer, be treated as separate issues for Appendix A -9 purposes of this Section 3(f) (although the remaining portion may not be entitled to the benefits of Section 3(d) hereof). The County elects to treat the New Money Issue and the Refunding Issue of the Series 2014 Bonds as separate issues. (g) The County shall keep proper books of records and accounts containing complete and correct entries of all transactions relating to the receipt, investment, disbursement, allocation and application of the moneys related to the Series 2014 Bond, including moneys derived from, pledged to, or to be used to make payments on the Series 2014 Bond. Such records shall, at a minimum, be adequate to enable the County or its consultants to make the calculations for payment of Rebatable Arbitrage as required by this Statement. The records required to be maintained under this Section 3(g) shall be retained by the County until six years after the retirement of the last obligation of the Series 2014 Bond or for such other period as the United States Treasury may by regulations otherwise provide. Such records shall at least specify the account or fund to which each investment (or portion thereof) is to be allocated and shall set forth, in the case of each investment security, (i) its purchase price (including the amount of accrued interest to be stated separately), (ii) identifying information, including par amount, coupon rate, and payment dates, (iii) the amount received at maturity or its sale price, as the case may be, including accrued interest, (iv) the amounts and dates of any payments made with respect thereto, (v) the dates of acquisition and disposition or maturity, (vi) the amount of original issue discount or premium (if any), (vii) the frequency of periodic payments (and actual dates and amounts of receipts), (viii) the period of compounding, (ix) the transaction costs (e.g., commissions) incurred in acquiring, carrying or disposing of the Nonpurpose Investments, and (x) market price data sufficient to establish that the purchase price (disposition price) was not greater than (less than) the arm's- length price (see Section 4 below) on the date of acquisition (disposition) or, if earlier, on the date of a binding contract to acquire (dispose of) such Nonpurpose Investment. SECTION 4. MARKET PRICE RULES. Except as provided below, the County agrees to comply with the requirements relating to the "Fair Market Value" of acquired Nonpurpose Investments, as defined in Section 1.148 -5(d) of the Regulations ( "Fair Market Value "). All investments required to be made pursuant to this Statement shall be made to the extent permitted by law. In this regard, the County agrees, among other things, that it will not acquire or cause to be acquired a Nonpurpose Investment (or any other investment acquired with Gross Proceeds or on deposit in the Rebate Fund), for a price in excess of its Fair Market Value or sell any such investment at a price (determined without any reduction for transaction costs) less than its Fair Market Value, except as provided below. For this purpose, the following rules shall apply: (a) Established securities markets Except as otherwise provided below, any market especially established to provide a security or obligation to an issuer of municipal obligations shall not be treated as an established market and shall be rebuttably presumed to be acquired or disposed of for a price that is not its Fair Market Value. Appendix A -10 (b) Arm's-length price Any transaction in which a Nonpurpose Investment is directly purchased with Gross Proceeds, or in which a Nonpurpose Investment allocable to Gross Proceeds is disposed of, shall be undertaken in an arm's - length manner, and no amount shall be paid to reduce the yield on the Nonpurpose Investment. (c) Safe harbor for establish Fair Market 'value for uaranted investment contracts and No npurpose Investments t�urchased for a yield ar defeasa escrow In the case of a guaranteed investment contract or Nonpurpose Investments purchased for a yield restricted defeasance escrow, the purchase price shall not be considered to be an arm's- length price unless all the following conditions are met: (i) The County makes a bona fide Request for Bids( "Bona Fide Request for Bids ") for the purchase of the investment that satisfies all of the following requirements: (1) The bid specifications are in writing and are timely forwarded to potential providers; (2) The bid specifications include all terms of the bid that may directly or indirectly affect the yield or the cost of the investment; (3) The bid specifications include a statement notifying potential providers that submission of a bid is a representation that the potential provider did not consult with any other potential provider about its bid, that the bid was determined without regard to any other formal or informal agreement that the potential provider has with the County or any other person (whether or not in connection with the bond issue), and that the bid is not being submitted solely as a courtesy to the County or any other person for purposes of satisfying these requirements; (4) The terms of the bid specifications are such that there is a legitimate business purpose for each term other than to increase the purchase price or reduce the yield of the investment (e.g., for Request for Bids of Nonpurpose Investments for a yield restricted defeasance escrow, the hold firm period must be no longer than the County reasonably requires); (5) For purchases of guaranteed investment contracts only, the terms of the Request for Bids take into account the County's reasonably expected deposit and draw down schedule for the amounts to be invested; (6) All potential providers have an equal opportunity to bid (e.g., no potential provider is given the opportunity to review other bids before providing a bid); and Appendix A -11 (7) At least three providers are solicited for bids that have an established industry reputation as a competitive provider of the type of investments being purchased. (ii) The bids received by the County must meet all of the following requirements: (1) The County receives at least three bids from providers that the County solicited under a Bona Fide Request for Bids and that do not have a material financial interest in the issue. A lead underwriter in a negotiated underwriting transaction is deemed to have a material financial interest in the issue until 15 days after the issue date of the issue. In addition, any entity acting as a financial advisor with respect to the purchase of the investment at the time the bid specifications are forwarded to potential providers has a material financial interest in the issue. A provider that is a related party to a provider that has a material financial interest in the issue is deemed to have a material financial interest in the issue. (2) At least one of the three bids described in paragraph (c) (ii)(1) above is from a provider that has an established industry reputation as a competitive provider of the type of investments being purchased; and (3) If the County uses an agent to conduct the bidding process, the agent did not bid to provide the investment. (iii) The winning bid must meet the following requirements: (1) Guaranteed investment contracts. If the investment is a guaranteed investment contract, the winning bid is the highest yielding bona fide bid (determined net of any broker's fees). (2) Other Nonpurpose Investments. If the investment is not a guaranteed investment contract, the following requirements are met: (A) The winning bid is the lowest cost bona fide bid (including any broker's fees). The lowest bid is either the lowest cost bid for the portfolio or, if the County compares the bids on an investment -by- investment basis, the aggregate cost of a portfolio comprised of the lowest cost bid for each investment. Any payment received by the County from a provider at the time a guaranteed investment contract is purchased (e.g., an escrow float contract) for a yield restricted defeasance escrow under a bidding procedure Appendix A -12 meeting these requirements is taken into account in determining the lowest cost bid. (B) The lowest cost bona fide bid (including any broker's fees) is not greater than the cost of the most efficient portfolio comprised exclusively of State and Local Government Series Securities from the United States Department of the Treasury, Bureau of Public Debt. The cost of the most efficient portfolio of State and Local Government Series Securities is to be determined at the time that bids are required to be submitted pursuant to the terms of the bid specifications. If such State and Local Government Series Securities are not available for purchase on the day that bids are required to be submitted because sales of those securities have been suspended, the cost comparison described in this paragraph is not required. (iv) The provider of the investments or the obligor on the guaranteed investment contract certifies the administrative costs that it pays (or expects to pay) to third parties in connection with supplying the investment. (d) The County shall retain certificates and records documenting compliance with the above requirements until three years after the Series 2014 Bond is redeemed including, but not limited to, the following: (i) For purchases of guaranteed investment contracts, a copy of the contract, and for purchases of Nonpurpose Investments other than guaranteed investment contracts, the purchase agreement or confirmation; (ii) The receipt or other record of the amount actually paid by the County for the investments, including a record of any administrative costs paid by the County and the certification required in paragraph (c)(iv) above; (iii) For each bid that is submitted, the name of the person and entity submitting the bid, the time and date of the bid, and the bid results; (iv) The Request for Bids form and, if the terns of the purchase agreement or the guaranteed investment contract deviated from the Request for Bids fonn or a submitted bid is modified, a brief statement explaining the deviation and stating the purpose for the deviation; and (v) For purchase of Nonpurpose Investments other than guaranteed investment contracts, the cost of the most efficient portfolio of State and Local Government Series Securities, determined at the time that the bids were required to be submitted. Appendix A -13 SECTION 5. MODIFICATION UPON RECEIPT OF BOND COUNSEL OPINION. Notwithstanding any provision of this Statement, if the County shall receive an opinion of Bond Counsel that any specified action required under this Statement is no longer required or that some further or different action is required to maintain or assure the exclusion from federal gross income of interest with respect to the Series 2014 Bond, the County may conclusively rely on such opinion in complying with the requirements of this Statement and the covenants herein shall be deemed to be modified to that extent. This Statement shall be amended or modified by the parties hereto in any manner which is necessary to comply with such regulations as may be promulgated by the United States Treasury Department from time to time. SECTION 6. ACCOUNTING FOR GROSS PROCEEDS. In order to perform the calculations required by the Code and the Regulations, it is necessary to track the investment and expenditure of all Gross Proceeds. To that end, the County must adopt reasonable and consistently applied methods of accounting for all Gross Proceeds. Appendix I hereto sets forth a description of the required allocation and accounting rules with which the County agrees to comply. SECTION 7. ADMINISTRATIVE COSTS OF INVESTMENTS. Except as otherwise provided in this Section 7, an allocation of Gross Proceeds to a payment or receipt on a Nonpurpose Investment is not adjusted to take into account any costs or expenses paid, directly or indirectly, to purchase, carry, sell or retire the Nonpurpose Investment (administrative costs). Thus, administrative costs generally do not increase the payments for, or reduce the receipts from, Nonpurpose Investments. In determining payments and receipts on Nonpurpose Investments, Qualified Administrative Costs are taken into account by increasing payments for, or reducing the receipts from, the Nonpurpose Investments. Qualified Administrative Costs are reasonable, direct administrative costs, other than carrying costs, such as separately stated brokerage or selling commissions, but not legal and accounting fees, recordkeeping, custody and similar costs. General overhead costs and similar indirect costs of the County such as employee salaries and office expenses and costs associated with computing Rebatable Arbitrage are not Qualified Administrative Costs. Allocation and accounting rules are provided in Appendix I attached hereto. Appendix A -14 APPENDIX I ALLOCATION AND ACCOUNTING RULES (a) General Rule Any issuer may use any reasonable, consistently applied accounting method to account for Gross Proceeds, investments and expenditures of an issue. An accounting method is "consistently applied" if it is applied uniformly within a Fiscal Period (as hereinafter defined) and between Fiscal Periods to account for Gross Proceeds of an issue and any amounts that are in a commingled fund. (b) Allocation of Gross Proceeds to an Issue Amounts are allocable to only one issue at a time as Gross Proceeds. Amounts cease to be allocated to an issue as Proceeds only when those amounts (i) are allocated to an expenditure for a governmental purpose; (ii) are allocated to Transferred Proceeds of another issue of obligations; or (iii) cease to be allocated to that issue at retirement of the issue or under the Universal Cap. (c) Allocation of Gross Proceeds to Investments Upon the purchase or sale of a Nonpurpose Investment, Gross Proceeds of an issue are not allocated to a payment for that Nonpurpose Investment in an amount greater than, or to a receipt from that Nonpurpose Investment in an amount less than, the Fair Market Value of the Nonpurpose Investment as of the purchase or sale date. The Fair Market Value of a Nonpurpose Investment is adjusted to take into account Qualified Administrative Costs allocable to the investment. Thus, Qualified Administrative Costs increase the payments for, or decrease the receipts from, a Nonpurpose Investment. (d) Allocation of Gross Proceeds to Expenditures Reasonable accounting methods for allocating funds from different sources to expenditures for the same governmental purpose include a "specific tracing" method, a "gross- proceeds- spent - first" method, a "first -in -first -out" method or a ratable allocation method, so long as the method used is consistently applied. An allocation of Gross Proceeds of an issue to an expenditure must involve a current outlay of cash for a governmental purpose of the issue. A current outlay of cash means an outlay reasonably expected to occur not later than five banking days after the date as of which the allocation of Gross Proceeds to the expenditure is made. (e) Commingled Funds Any fund or account that contains both Gross Proceeds of an issue and amounts in excess of $25,000 that are not Gross Proceeds of that issue if the amounts in the fund or account are invested and accounted for collectively, without regard to the source of the funds deposited therein, constitutes a "commingled fund." All payments and receipts (including deemed payments and receipts) on investments held by a commingled fund must be allocated (but not necessarily distributed) among each different source of funds invested in the commingled fund in accordance with a consistently applied, reasonable ratable allocation method. Reasonable ratable allocation methods include, without limitation, methods that allocate payments Appendix A - Schedule I - I and receipts in proportion to either (i) the average daily balances of the amounts in the commingled fund from each different source of funds during any consistent time period within its fiscal year, but at least quarterly (the "Fiscal Period "); or (ii) the average of the beginning and ending balances of the amounts in the commingled fund from each different source of funds for a Fiscal Period that does not exceed one month. Funds invested in the commingled fund may be allocated directly to expenditures for governmental purposes pursuant to a reasonable consistently applied accounting method. If a ratable allocation method is used to allocate expenditures from the commingled fund, the same ratable allocation method must be used to allocate payments and receipts on investments in the commingled fund. Generally a commingled fund must treat all its investments as if sold at Fair Market Value either on the last day of the fiscal year or on the last day of each Fiscal Period. The net gains or losses from these deemed sales of investments must be allocated to each different source of funds invested in the commingled fund during the period since the last allocation. This mark -to- market requirement does not apply if (i) the remaining weighted average maturity of all investments held by a commingled fund during a particular fiscal year does not exceed 18 months, and the investments held by the commingled fund during that fiscal year consist exclusively of obligations; or (ii) the commingled fund operated exclusively as a reserve fund, sinking fund or replacement fund for two or more issues of the same issuer. Subject to the Universal Cap limitation, and the principle that amounts are allocable to only one issue at a time as Gross Proceeds, investments held by a commingled fund must be allocated ratably among the issues served by the commingled fund in proportion to either (i) the relative values of the bonds of those issues; (ii) the relative amounts of the remaining maximum annual debt service requirements on the outstanding principal amounts of those issues; or (iii) the relative original stated principal amounts of the outstanding issues. (f) Universal Cap Amounts that would otherwise be Gross Proceeds allocable to an issue are allocated (and remain allocated) to the issue only to the extent that the Value of the Nonpurpose Investments allocable to those Gross Proceeds does not exceed the Value of all outstanding bonds of the issue. Nonpurpose Investments allocated to Gross Proceeds in a bona fide debt service fund for an issue are not taken into account in determining the Value of the Nonpurpose Investments, and those Nonpurpose Investments remain allocated to the issue. To the extent that the Value of the Nonpurpose Investments allocable to the Gross Proceeds of an issue exceed the Value of all outstanding bonds of that issue, an issuer should seek the advice of Bond Counsel for the procedures necessary to comply with the Universal Cap. (g) Expenditure for Working Capital Purposes Subject to certain exceptions, the Proceeds of an issue may only be allocated to "working capital expenditures" as of any date to the extent that those expenditures exceed "available amounts" as of that date (i.e., "proceeds- spent- last "). Appendix A - Schedule I - 2 For purposes of this section, "working capital expenditures" include all expenditures other than "capital expenditures." "Capital expenditures" are costs of a type properly chargeable (or chargeable upon proper election) to a capital account under general federal income tax principles. Such costs include, for example, costs incurred to acquire, construct or improve land, buildings and equipment having a reasonably expected useful life in excess of one year. Thus, working capital expenditures include, among other things, expenditures for current operating expenses and debt service. For purposes of this section, "available amount" means any amount that is available to an issuer for working capital expenditure purposes of the type financed by the issue. Available amount excludes Proceeds of the issue but includes cash, investments and other amounts held in accounts or otherwise by an issuer for working capital expenditures of the type being financed by the issue without legislative or judicial action and without a legislative, judicial or contractual requirement that those amounts be reimbursed. Notwithstanding the preceding sentence, a "reasonable working capital reserve" is treated as unavailable. A working capital reserve is reasonable if it does not exceed five percent of the actual working capital expenditures of an issuer in the fiscal year before the year in which the determination of available amounts is made. For purpose of the preceding sentence only, in determining the working capital expenditures of an issuer for a prior fiscal year, any expenditures (whether capital or working capital expenditures) that are paid out of current revenues may be treated as working capital expenditures. The proceeds- spent -last requirement does not apply to expenditures to pay (i) any Qualified Administrative Costs; (ii) fees for qualified guarantees of the issue or payments for a qualified hedge for the issue; (iii) interest on the issue for a period commencing on the Issue Date and ending on the date that is the later of three years from the Issue Date or one year after the date on which the financed 2014 Project is placed in service; (iv) the United States for yield reduction payments (including rebate payments) or penalties for the failure to meet the spend down requirements associated with certain spending exceptions to the rebate requirement; (v) costs, other than those described in (i) through (iv) above, that do not exceed five percent of the Sale Proceeds of an issue and that are directly related to capital expenditures financed by the issue (e.g., initial operating expenses for a new capital Project); (vi) principal or interest on an issue paid from unexpected excess sale or Investment Proceeds; (vii) principal or interest on an issue paid from investment earnings on a reserve or replacement fund that are deposited in a bona fide debt service fund; and (viii) principal, interest or redemption premium on a prior issue and, for a crossover refunding issue, interest on that issue. Notwithstanding the preceding paragraph, the exceptions described above do not apply if the allocation merely substitutes Gross Proceeds for other amounts that would have been used to make those expenditures in a manner that gives rise to Replacement Proceeds. Appendix A - Schedule I - 3 EXHIBIT B FINANCIAL ADVISOR'S CERTIFICATE The undersigned, acting on behalf of Public Financial Management, Inc., Financial Advisor with respect to the $31,885,000 Monroe County, Florida Infrastructure Sales Surtax Improvement and Refunding Revenue Bond, Series 2014 (the "Series 2014 Bond "), hereby certifies to Monroe County, Florida (the "County ") that the 2014 Bond Yield as described in the County's Certificate as to Arbitrage and Certain Other Tax Matters (the "Arbitrage Certificate ") to which this Certificate is attached is accurate as of the date hereof. We understand that the representations set forth above are being relied on by the County in the County's Arbitrage Certificate. Capitalized terms not otherwise defined in this Certificate shall have the meanings set forth in the Arbitrage Certificate. Dated: October 21, 2014 PUBLIC FINANCIAL MANAGEMENT, INC. By: r Managing Director