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HomeMy WebLinkAboutResolution 07-120-CCRESOLUTION NO. 07 -120 -CC A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF GRANT COUNTY, WASHINGTON, AUTHORIZING THE ISSUANCE AND SALE OF LIMITED TAX GENERAL OBLIGATION BONDS OF THE COUNTY IN THE AGGREGATE PRINCIPAL AMOUNT OF $9,945,000 TO FINANCE CERTAIN IMPROVEMENTS TO THE COUNTY FAIRGROUNDS; PROVIDING THE DATE, FORM, TERMS, MATURITIES, AND REDEMPTION PROVISIONS OF THE BONDS; PROVIDING FOR THE DISPOSITION OF THE BOND PROCEEDS; PROVIDING FOR THE ANNUAL LEVY OF TAXES TO PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS; AND AUTHORIZING THE SALE OF THE BONDS. ADOPTED ON SEPTEMBER 12, 2007 Prepared by: K&L PRESTON GATES ELLIS LLP Seattle, Washington RESOLUTION NO. 07 -120 -CC Neither this Table of Contents nor the preceding cover page is a part of this resolution, and is included solely for convenience of the reader. TABLE OF CONTENTS* Pati Section1. Definitions.............................................................................................................2 Section 2. Authorization of Projects..................................................................................... 5 Section 3. Authorization and Description of Bonds.............................................................. 6 Section 4. Registration, Exchange and Payments.................................................................. 7 Section 5. Redemption Prior to Maturity and Purchase of Bonds ....................................... 11 Section6. Form of Bonds.................................................................................................... 15 Section 7. Execution of Bonds.............................................................................................19 Section 8. Lost or Destroyed Bonds..................................................................................... 20 Section9. Bond Fund........................................................................................................... 20 Section 10. Pledge of Taxation and Credit............................................................................ 20 Section11. Defeasance..........................................................................................................21 Section 12. Project Fund; Application of Bond Proceeds...................................................... 22 Section 13. Tax Covenants; Special Designation.................................................................. 22 Section14. Sale of Bonds...................................................................................................... 24 Section15. Bond Insurance...................................................................................................25 Section 16. Undertaking to Provide Ongoing Disclosure...................................................... 30 Section 17. Severability ..........................................33 Neither this Table of Contents nor the preceding cover page is a part of this resolution, and is included solely for convenience of the reader. RESOLUTION NO. 07 -120 -CC A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF GRANT COUNTY, WASHINGTON, AUTHORIZING THE ISSUANCE AND SALE OF LIMITED TAX GENERAL OBLIGATION BONDS OF THE COUNTY IN THE AGGREGATE PRINCIPAL AMOUNT OF $9,945,000 TO FINANCE CERTAIN IMPROVEMENTS TO THE COUNTY FAIRGROUNDS; PROVIDING THE DATE, FORM, TERMS, MATURITIES, AND REDEMPTION PROVISIONS OF THE BONDS; PROVIDING FOR THE DISPOSITION OF THE BOND PROCEEDS; PROVIDING FOR THE ANNUAL LEVY OF TAXES TO PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS; AND AUTHORIZING THE SALE OF THE BONDS. WHEREAS, the Board of County Commissioners (the `Board'I of Grant County, Washington (the "County") has determined that it is in the best interest of the County that it make certain improvements to the fairgrounds of the County (the "Projects", as described in Section 2 of this resolution); and WHEREAS, it is in the best interest of the County to issue limited tax general obligation bonds in order to finance the Projects; and WHEREAS, the County is authorized by RCW 36.67 and ch. 39.46 to issue general obligation bonds payable from, inter alio, regular tax levies of the County; and WHEREAS, it is necessary that the designation, date, form, terms and maturities of such general obligation bonds be fixed; and WHEREAS, the bonds authorized herein shall be sold pursuant to negotiated sale as herein provided; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF GRANT COUNTY, WASHINGTON, as follows: Section 1. Definitions The following words and terms as used in this resolution shall have the following meanings for all purposes of this resolution, unless some other meaning is plainly intended. Beneficial Owner means any person that has or shares the power, directly or indirectly to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries). Board means the Board of County Commissioners of the County, the general legislative body of the County, as constituted from time to time. Bond Fund means the "Grant County Limited Tax General Obligation Bond Fund, 2007" established pursuant to Section 9 hereof. Bond Insurance Policy means the municipal bond insurance policy issued by the Insurer insuring the payment due of the principal of and interest on the Bonds as provided herein. Bond Register means the registration books maintained by the Bond Registrar for the purpose of identifying ownership of the Bonds. Bond Registrar means the fiscal agency of the State of Washington for the purposes of registering and authenticating the Bonds, maintaining the Bond Register, effecting the transfer of ownership of the Bonds and paying interest on and principal of the Bonds or any registrar hereafter appointed by the Treasurer. Bonds means the Limited Tax General Obligation Bonds, 2007 of the County issued pursuant to this resolution. Code means the federal Internal Revenue Code of 1986, as amended. Any reference to a provision of the Code shall include the applicable regulations of the Department of the Treasury promulgated with respect to such provision. -2- P12=7_anwmze77vssnMW County means Grant County, Washington, a political subdivision duly organized and existing by virtue of the Constitution and laws of the State of Washington. County Representative means the Treasurer. DTC means The Depository Trust Company of New York, a limited purpose trust company organized under the laws of the State of New York, a depository for the Bonds pursuant to Section 4 hereof. Government Obligations has the meaning given such term in Chapter 39.53 RCW, as the same may be amended or restated from time to time. Insurer means MBIA Insurance Corporation, or any successor thereto or assignee thereof, as issuer of a Bond Insurance Policy for the Bonds. Letter of Representations means the blanket issuer letter of representations from the County to DTC. MSRB means the Municipal Securities Rulemaking Board or any successor to its functions. NRMSIR means a nationally recognized municipal securities information repository. Private Person means any natural person engaged in a trade or business or any trust, estate, partnership, association, company or corporation. Private Person Use means the use of property in a trade or business by a Private Person if such use is other than as a member of the general public. Private Person Use includes ownership of the property by the Private Person as well as other arrangements that transfer to the Private Person the actual or beneficial use of the property (such as a lease, management or incentive payment contract or other special arrangement) in such a manner as to set the Private Person apart from the general public. Use of property as a member of the general public includes -3- r:%20287- cMM2M7 rnasa1irW7 attendance by the Private Person at municipal meetings or business rental of property to the Private Person on a day-to-day basis if the rental paid by such Private Person is the same as the rental paid by any Private Person who desires to rent the property. Use of property by nonprofit community groups or community recreational groups is not treated as Private Person Use if such use is incidental to the governmental uses of property, the property is made available for such use by all such community groups on an equal basis and such community groups are charged only a de minimis fee to cover custodial expenses. hereof. Projects mean those projects described and authorized by Section 2 of this resolution. Project Fund means the "2007 Bond Construction Fund" as described in Section 12 Registered Owner means the person named as the registered owner of the Bond in the Bond Register Rule means the SEC's Rule 15c2-12 under the Securities Exchange Act of 1934, as the same may be amended from time to time. SEC means the Securities and Exchange Commission. SID means a state information depository for the State of Washington (if one is created). Treasurer means the treasurer of the County pursuant to RCW Ch. 36.29, as amended from time to time. Underwriter means D.A. Davidson & Co., Spokane, Washington. Rules of Interpretation: In this resolution, unless the context otherwise requires: (a) The terms "hereby," "hereof," "hereto," "herein, "hereunder" and any similar terms, as used in this resolution, refer to this resolution as a whole and not to any particular -4- P:12M7_CMN9 M7_7P4W IMV article, section, subdivision or clause hereof, and the term "hereafter" shall mean after, and the term "heretofore" shall mean before, the date of this resolution; (b) Words of the masculine gender shall mean and include correlative words of the feminine and neuter genders and words importing the singular number shall mean and include the plural number and vice versa; (c) Words importing persons shall include firms, associations, partnerships (including limited partnerships), trusts, corporations and other legal entities, including public bodies, as well as natural persons; (d) Any headings preceding the text of the several articles and Sections of this resolution, and any table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this resolution, nor shall they affect its meaning, construction or effect; and (e) All references herein to "articles," "sections" and other subdivisions or clauses are to the corresponding articles, sections, subdivisions or clauses hereof. Section 2. Authorization of Projects. The Bonds are being issued to provide funds to pay a portion of the costs of certain improvements to the fairgrounds of the County including: 1. construct new horse barns; 2. add ADA compliant restrooms; 3. remodel, insulate and add HVAC systems to buildings; 4. add a kitchen facility; and 5. Utility service upgrades to serve the County's fair facilities. The cost of all necessary architectural, engineering, and other consulting services, inspection and testing, administrative and relocation expenses, on and off-site utilities, site -5- r.=97 CMWn �rnswn AM acquisition, related improvements and other costs incurred in connection with the making of the capital improvements shall be deemed a part of the costs of such improvements. Such improvements shall be complete with all necessary furniture, equipment and appurtenances. If available funds are sufficient from the proceeds of Bonds authorized for the above purposes, the County shall use such funds to pay the principal of or interest on the Bonds or to acquire, construct, equip or make other capital improvements the Board may deem reasonable and in the best interests of the County. The above -referenced improvements are hereinafter collectively referred to as the "Projects". The Projects have been or will be undertaken in compliance with all requirements of environmental and comprehensive plans of the County and will be consistent with the County's comprehensive plans of development. Section 3. Authorization and Description of Bonds. The County hereby authorizes the issuance and sale of the Bonds for the purposes of paying the costs of the Projects and paying the expenses incidental to the issuance of the Bonds. The Bonds shall be in the aggregate principal amount of $9,945,000 and shall be designated "Grant County, Washington Limited Tax General Obligation Bonds, 2007". The Bonds shall be dated as of their initial date of delivery, shall be fully registered as to both principal and interest, shall be in the denomination of $5,000 each or any integral multiple thereof, provided that no Bond shall represent more than one maturity, and shall be numbered separately in such manner and with any additional designation as the Bond Registrar deems necessary for purposes of identification, and shall bear interest from their date or from the most recent interest payment date to which interest has been paid or duly provided for, whichever is later, payable on December 1, 2007, and semiannually thereafter on each succeeding June 1 and -6- P.AM87 CMWMA7 7P4W11rZ007 December 1, to the maturity or earlier redemption of the Bonds, at the following rates, and shall mature on December 1 of the following years in the following principal amounts. Maturity Year (December 1) Principal Amount Interest Rate 2013 $ 495,000 4.00 % 2014 515,000 4.00 2015 535,000 4.00 2016 555,000 4.25 2017 580,000 4.25 2018 605,000 4.00 2019 630,000 4.00 2020 655,000 4.00 2021 680,000 4.00 2022 710,000 4.00 2023 735,000 4.00 2024 765,000 4.00 2025 795,000 4.00 2026 830,000 4.00 2027 860,000 4.00 Section 4.. Registration, Exchange and Payments. (a) Bond Registrar/Bond Register. The Board hereby requests that the Treasurer specify and adopt the system of registration and transfer for the Bonds approved by the Washington State Finance Committee from time to time through the appointment of state fiscal agencies. The County shall cause a bond register to be maintained by the Bond Registrar. So long as any Bonds remain outstanding, the Bond Registrar shall make all necessary provisions to permit the exchange or registration of transfer of Bonds at its principal corporate trust office. The Bond Registrar may be removed at any time at the option of the Treasurer upon prior notice to the Bond Registrar, DTC, the Insurer, if any, each entity entitled to receive notices pursuant to Section 16, any, and a successor Bond Registrar appointed by the Treasurer. No resignation or removal of the Bond Registrar shall be effective until a successor shall have been appointed and until the successor Bond Registrar shall have accepted the duties of the Bond Registrar -7- PA20297_CUW%Z0297_7P491170007 hereunder. The Bond Registrar is authorized, on behalf of the County, to authenticate and deliver Bonds transferred or exchanged in accordance with the provisions of such Bonds and this resolution and to carry out all of the Bond Registrar's powers and duties under this resolution. The Bond Registrar shall be responsible for its representations contained in the Certificate of Authentication on the Bonds. (b) Registered Ownership. The County and the Bond Registrar, each in its discretion, may deem and treat the Registered Owner of each Bond as the absolute owner thereof for all purposes (except as provided in Section 16 of this resolution), and neither the County nor the Bond Registrar shall be affected by any notice to the contrary. Payment of any such Bond shall be made only as described in Section 3 hereof, but such Bond may be transferred as herein provided. All such payments made as described in Section 3 shall be valid and shall satisfy and discharge the liability of the County upon such Bond to the extent of the amount or amounts so paid. (c) DTC Acceptance/Letter of Representations. To induce DTC to accept the Bonds as eligible for deposit at DTC, the County has executed and delivered to DTC a Letter of Representations. Neither the County nor the Bond Registrar will have any responsibility or obligation to DTC participants or the persons for whom they act as nominees (or any successor depository) with respect to the Bonds in respect of the accuracy of any records maintained by DTC (or any successor depository) or any DTC participant, the payment by DTC (or any successor depository) or any DTC participant of any amount in respect of the principal of or interest on Bonds, any notice which is permitted or required to be given to Registered Owners under this resolution (except such notices as shall be required to be given by the County to the Bond Registrar or to 8 PaxozV CMa za77KW11Mo? DTC (or any successor depository), or any consent given or other action taken by DTC (or any successor depository) as the Registered Owner. For so long as any Bonds are held in fully -immobilized form hereunder, DTC or its successor depository shall be deemed to be the Registered Owner for all purposes hereunder (except as provided in Section 16 of this resolution), and all references herein to the Registered Owners shall mean DTC (or any successor depository) or its nominee and shall not mean the owners of any beneficial interest in such Bonds. If any Bond shall be duly presented for payment and funds have not been duly provided by the County on such applicable date, then interest shall continue to accrue thereafter on the unpaid principal thereof at the rate stated on such Bond until such Bond is paid. (d) Use of Depository. (1) The Bonds shall be registered initially in the name of "Cede & Co.", as nominee of DTC, with one Bond maturing on each of the maturity dates for the Bonds in a denomination corresponding to the total principal therein designated to mature on such date. Registered ownership of such immobilized Bonds, or any portions thereof, may not thereafter be transferred except (A) to any successor of DTC or its nominee, provided that any such successor shall be qualified under any applicable laws to provide the service proposed to be provided by it; (B) to any substitute depository appointed by the County Representative pursuant to subsection (2) below or such substitute depository's successor; or (C) to any person as provided in subsection (4) below. (2) Upon the resignation of DTC or its successor (or any substitute depository or its successor) from its functions as depository or a determination by the Board to discontinue the system of book entry transfers through DTC or its successor (or any substitute depository or -9- P.20287_CMW=87_7P49VH2087 its successor), the County Representative may hereafter appoint a substitute depository. Any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it. (3) In the case of any transfer pursuant to clause (A) or (B) of subsection (1) above, the Bond Registrar shall, upon receipt of all outstanding Bonds, together with a written request on behalf of the County Representative, issue a single new Bond for each maturity then outstanding, registered in the name of such successor or such substitute depository, or their nominees, as the case may be, all as specified in such written request of the County Representative. (4) In the event that (A) DTC or its successor (or substitute depository or its successor) resigns from its functions as depository, and no substitute depository can be obtained, or (B) the County Representative determines that it is in the best interest of the beneficial owners of the Bonds that such owners be able to obtain such bonds in the form of Bond certificates, the ownership of such Bonds may then be transferred to any person or entity as herein provided, and shall no longer be held in fully -immobilized form. The County Representative shall deliver a written request to the Bond Registrar, together with a supply of definitive Bonds, to issue Bonds as herein provided in any authorized denomination. Upon receipt by the Bond Registrar of all then outstanding Bonds together with a written request on behalf of the County Representative to the Bond Registrar, new Bonds shall be issued in the appropriate denominations and registered in the names of such persons as are requested in such written request. (e) Registration of Transfer of Ownership or Exchange, Change in Denominations. The transfer of any Bond may be registered and Bonds may be exchanged, but no transfer of any such Bond shall be valid unless such Bond is surrendered to the Bond Registrar with the -10- P:120291_C M WQ0Y87 J Pa 9117 /i W 7 assignment form appearing on such Bond duly executed by the Registered Owner or such Registered Owner's duly authorized agent in a manner satisfactory to the Bond Registrar. Upon such surrender, the Bond Registrar shall cancel the surrendered Bond and shall authenticate and deliver, without charge to the Registered Owner or transferee therefor, a new Bond (or Bonds at the option of the new Registered Owner) of the same date, maturity and interest rate and for the same aggregate principal amount in any authorized denomination, naming as Registered Owner the person or persons listed as the assignee on the assignment form appearing on the surrendered Bond, in exchange for such surrendered and cancelled Bond. Any Bond may be surrendered to the Bond Registrar and exchanged, without charge, for an equal aggregate principal amount of Bonds of the same date, maturity and interest rate, in any authorized denomination. The Bond Registrar shall not be obligated to register the transfer or to exchange any Bond during the 15 days preceding the date any such Bond is to be redeemed. (f) Bond Registrar's Ownership of Bonds. The Bond Registrar may become the Registered Owner of any Bond with the same rights it would have if it were not the Bond Registrar, and to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as member of, or in any other capacity with respect to, any committee formed to protect the right of the Registered Owners of Bonds. (g) Registration Covenant. The County covenants that, until all Bonds have been surrendered and cancelled, it will maintain a system for recording the ownership of each Bond that complies with the provisions of Section 149 of the Code. Section 5. Redemption Prior to Maturity and Purchase of Bonds. (a) Optional Redemption. The Bonds maturing on and prior to December 1, 2016 are not subject to redemption prior to maturity. The Bonds maturing on or after December 1, 2017 11 P1202"_CMW1202B77P/9n IrW7 are subject to redemption at the option of the County in whole or in part at any time on or after June 1, 2017 (maturities to be selected by the County) at a price of par plus accrued interest, if any, to the date of redemption. (b) Purchase of Bonds. The County reserves the right to purchase any of the Bonds offered to it at any time at a price deemed reasonable by the Treasurer. (c) Selection of Bonds for Redemption. For as long as the Bonds are held in book -entry only form, the selection of particular Bonds within a maturity to be redeemed shall be made in accordance with the operational arrangements then in effect at DTC. If the Bonds are no longer held in uncertificated form, the selection of such Bonds to be redeemed shall be made as provided in this subsection (c). If the County redeems at any one time fewer than all of the Bonds having the same maturity date, the particular Bonds or portions of Bonds of such maturity to be redeemed shall be selected by lot (or in such manner determined by the Bond Registrar) in increments of $5,000. In the case of a Bond of a denomination greater than $5,000, the County and the Bond Registrar shall treat each Bond as representing such number of separate Bonds each of the denomination of $5,000 as is obtained by dividing the actual principal amount of such Bond by $5,000. In the event that only a portion of the principal sum of a Bond is redeemed, upon surrender of the such Bond at the principal office of the Bond Registrar there shall be issued to the Registered Owner, without charge therefor, for the then unredeemed balance of the principal sum thereof, at the option of the Registered Owner, a Bond or Bonds of like maturity and interest rate in any of the denominations herein authorized. (d) Notice of Redemption. (1) Official Notice. For so long as the Bonds are held in uncertificated form, notice of redemption shall be given in accordance with the operational arrangements of DTC as -12- P, OMLCMb 87 7P4WIIQW - then in effect, and neither the County nor the Bond Registrar will provide any notice of redemption to any Beneficial Owners. Thereafter (if the Bonds are no long held in uncertificated form), notice of redemption shall be given in the manner hereinafter provided. Unless waived by any owner of Bonds to be redeemed, official notice of any such redemption (which redemption shall be conditioned by the Bond Registrar on the receipt of sufficient funds for redemption) shall be given by the Bond Registrar on behalf of the County by mailing a copy of an official redemption notice by first class mail at least 30 days and not more than 60 days prior to the date fixed for redemption to the Registered Owner of the Bond or Bonds to be redeemed at the address shown on the Register or at such other address as is furnished in writing by such Registered Owner to the Bond Registrar. All official notices of redemption shall be dated and shall state: (A) the redemption date, (B) the redemption price, (C) if fewer than all outstanding Bonds are to be redeemed, the identification by maturity (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed, (D) that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, and (E) the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the principal office of the Bond Registrar. -13- P.-=287_CWW=87_7P4W112W On or prior to any redemption date, the County shall deposit with the Bond Registrar an amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds which are to be redeemed on that date. (2) Effect of Notice; Bonds Due. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the County shall default in the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Bond Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Registered Owner a new Bond or Bonds of the same maturity in the amount of the unpaid principal. All Bonds which have been redeemed shall be canceled and destroyed by the Bond Registrar and shall not be reissued. (3) Additional Notice. In addition to the foregoing notice, further notice shall be given by the County as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed. Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (A) the CUSIP numbers of all Bonds being redeemed; (B) the date of issue of the Bonds as originally issued; (C) the rate of interest home by each Bond being redeemed; (D) the maturity date of each Bond being redeemed; and (E) any other descriptive information needed to identify accurately the Bonds being redeemed. Each further notice of redemption may be sent at least -14- PMS CW1%2 e7-7P4WIrwr 35 days before the redemption date to the Insurer, each person entitled to receive notice pursuant to Section 16 of this resolution, and to the successful bidder for the Bonds or to its business successor, if any, and to such persons (including securities repositories who customarily at the time receive notices of redemption in accordance with rules promulgated by the SEC) and with such additional information as the County shall deem appropriate, but such mailings shall not be a condition precedent to the redemption of such Bonds. (4) Amendment of Notice Provisions. The foregoing notice provisions of this Section 5, including but not limited to the information to be included in redemption notices and the persons designated to receive notices, may be amended by additions, deletions and changes in order to maintain compliance with duly promulgated regulations and recommendations regarding notices of redemption of municipal securities. Section 6. Form of Bonds. The Bonds shall be in substantially the following form: STATEMENT OF INSURANCE MBIA Insurance Corporation (the "Insurer") has issued a policy containing the following provisions, such policy being on file at the principal office of the Bank of New York in New York, New York. The Insurer, in consideration of the payment of the premium and subject to the terms of the policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter defined, of the following described obligations, the full and complete payment required to be made by or on behalf of Grant County, Washington (the "Issuer") to the Fiscal Agency of the State of Washington, or its successor (the "Paying Agent"), of an amount equal to (i) the principal of (either at the stated maturity or by any advancement of maturity pursuant to a mandatory sinking fund payment) and interest on, the Obligations (as that term is defined below) as such payments shall become due but shall not be so paid (except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed hereby shall be made in such amounts and at such times as such payments of principal would have been due had there not been any such acceleration, unless the Insurer elects in its sole discretion, to pay in whole or in part any principal due by reason of such acceleration); and (ii) the reimbursement of any such payment which is subsequently recovered from any owner pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner within the meaning of any applicable bankruptcy law. The amounts referred to in clauses (i) and (ii) of the preceding sentence shall be referred to herein collectively as the "Insured Amounts." "Obligations" shall mean: $9,945,000 Grant County, Washington Limited Tax General Obligation Bonds, 2007 Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by the Insurer from the Paying Agent or any owner of an Obligation the payment of an Insured Amount for which is then due, that such required payment has not been made, the Insurer on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with U.S. Bank Trust National Association, in New York, New York, or its successor, sufficient for the payment of any such Insured Amounts which are then due. Upon presentment and surrender of such Obligations or presentment of such other proof of ownership of the Obligations, together with any appropriate instruments of assignment to evidence the assignment of the Insured Amounts due on the Obligations as are paid by the Insurer, and appropriate instruments to effect the appointment of the Insurer as agent for such owners of the Obligations in any legal proceeding related to payment of Insured Amounts on the Obligations, such instruments being in a form satisfactory to U.S. Bank Trust National Association, U.S. Bank Trust National Association shall disburse to such owners or the Paying Agent payment of the Insured Amounts due on such Obligations, less any amount held by the Paying Agent for the payment of such Insured Amounts and legally available therefor. This policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Obligation. As used herein, the term "owner" shall mean the registered owner of any Obligation as indicated in the books maintained by the Paying Agent, the Issuer, or any designee of the Issuer for such purpose. The term owner shall not include the Issuer or any party whose agreement with the Issuer constitutes the underlying security for the Obligations. Any service of process on the Insurer may be made to the Insurer at its offices located at 113 King Street, Armonk, New York 10504 and such service of process shall be valid and binding. This policy is non -cancelable for any reason. The premium on this policy is not refundable for any reason including the payment prior to maturity of the Obligations. MBIA Insurance Corporation -16- PIM26U OMW1202877P49n72007 UNITED STATES OF AMERICA STATE OF WASHINGTON GRANT COUNTY, WASHINGTON LIMITED TAX GENERAL OBLIGATION BOND, 2007 INTEREST RATE: % MATURITY DATE: CUSIP NO.: Registered Owner: CEDE & CO. Principal Amount: Grant County, Washington (the "County"), hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns, on the Maturity Date identified above, the Principal Amount indicated above and to pay interest thereon from September 26, 2007, or the most recent date to which interest has been paid or duly provided for until payment of this bond at the Interest Rate set forth above, payable on December 1, 2007, and semiannually thereafter on the first days of each succeeding June and December. Both principal of and interest on this bond are payable in lawful money of the United States of America. For so long as the bonds of this issue are held in fully immobilized form, payments of principal and interest thereon shall be made as provided in accordance with the operational arrangements of The Depository Trust Company ("DTC") referred to in the Blanket Issuer Letter of Representations (the "Letter of Representations") from the County to DTC. Initially, the County's Treasurer has specified and adopted the registration system for the bonds of this issue specified by the Washington State Finance Committee, and the fiscal agency of the State will act as registrar, paying agent and authenticating agent (the "Bond Registrar"). The bonds of this issue are issued under and in accordance with the provisions of the Constitution and applicable statutes of the State of Washington and Resolution No. 07 -120 -CC duly adopted by the Board on September 12, 2007 (the "Bond Resolution"). Capitalized terms used in this bond have the meanings given such terms in the Bond Resolution. This bond is one of an authorized issue of bonds of like date, tenor, rate of interest and date of maturity, except as to number and amount in the aggregate principal amount of $9,945,000 and is issued pursuant to the Bond Resolution for providing funds to pay part of the cost of the Projects and pay costs of issuance. The bonds of this issue are subject to optional redemption as stated in the Bond Resolution. The County hereby irrevocably covenants and agrees with the owner of this bond that it will include in its annual budget and levy taxes annually, within and as a part of the tax levy permitted to counties without a vote of the electorate, upon all the property subject to taxation in amounts sufficient, together with other revenues and money legally available therefor, to pay the principal of and interest on this bond as the same shall become due. The full faith, credit and -17- P:20287 cMW12029/_7P49/1120W7 resources of the County are hereby irrevocably pledged for the annual levy and collection of such taxes and the prompt payment of such principal and interest. The County has designated the bonds of this issue as "qualified tax-exempt obligations" for investment by financial institutions under Section 265(b) of the Code. The pledge of tax levies for payment of principal of and interest on the bonds may be discharged prior to maturity of the bonds by making provision for the payment thereof on the terms and conditions set forth in the Bond Resolution. This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Resolution until the Certificate of Authentication hereon shall have been manually signed by or on behalf of the Bond Registrar. It is hereby certified that all acts, conditions and things required by the Constitution and statutes of the State of Washington to exist, to have happened, been done and performed precedent to and in the issuance of this bond have happened, been done and performed and that the issuance of this bond and the bonds of this issue does not violate any constitutional, statutory or other limitation upon the amount of bonded indebtedness that the County may incur. IN WITNESS WHEREOF, Grant County has caused this bond to be executed by the manual or facsimile signatures of the Chair and Clerk of the Board of County Commissioners, and the seal of the County to be impressed, imprinted or otherwise reproduced hereon, as of this 26th day of September, 2007. GRANT COUNTY, WASHINGTON (SEAL) /s/ facsimile or manual signature Chair of the Board of County Commissioners ATTEST: /s/ facsimile or manual signature Clerk of the Board of County Commissioners The Bond Registrar's Certificate of Authentication on the Bonds shall be in substantially the following form: l$- v20297 CMW%20287_7P4Y11/2W7 CERTIFICATE OF AUTHENTICATION This bond is one of the bonds described in the within -mentioned Bond Resolution and is one of the Limited Tax General Obligation Bonds, 2007 of Grant County, Washington, dated September 26, 2007. WASHINGTON STATE FISCAL AGENCY, as Bond Registrar By Section 7. Execution of Bonds. The Bonds shall be executed on behalf of the County with the manual or facsimile signatures of the.Chair of the Board and the Clerk of the Board, and the corporate seal of the County shall be impressed, imprinted or otherwise reproduced thereon. In case either or both of the officers who shall have executed the Bonds shall cease to be an officer or officers of the County before the Bonds so signed shall have been authenticated or delivered by the Bond Registrar, or issued by the County, such Bonds may nevertheless be authenticated, delivered and issued, and upon such authentication, delivery and issuance, shall be as binding upon the County as though those who signed the same had continued to be such officers of the County. Any Bond also may be signed and attested on behalf of the County by such persons as at the actual date of execution of such Bond shall be the proper officers of the County although at the original date of such Bond any such person shall not have been such officer of the County. Only such Bonds as shall bear thereon a Certificate of Authentication in the form hereinbefore recited, manually executed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this resolution. Such Certificate of Authentication shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this resolution. -19- P120287_CMVM0287_7P49H 12087 Section 8. Lost or Destroyed Bonds. If any Bonds are lost, stolen or destroyed, the Bond Registrar may authenticate and deliver a new Bond or Bonds of like amount, maturity and tenor to the Registered Owner upon the owner paying the expenses and charges of the Bond Registrar and the County in connection with preparation and authentication of the replacement Bond or Bonds and upon his or her filing with the Bond Registrar and the County evidence satisfactory to both that such Bond or Bonds were actually lost, stolen or destroyed and of his or her ownership, and upon furnishing the County and the Bond Registrar with indemnity satisfactory to both. Section 9. Bond Fund. A fund of the County to be known as the "Grant County Limited Tax General Obligation Bond Fund, 2007' is hereby authorized and directed to be created in the office of the County Treasurer. The taxes hereafter levied for the purpose of paying principal of and interest on the Bonds and other funds to be used to pay the Bonds shall be deposited in the Bond Fund no later than the date such funds are required for the payment of principal of and interest on the Bonds. The Bond Fund shall be drawn upon for the sole purpose of paying the principal of and interest on the Bonds. Money in the Bond Fund not needed to pay the interest or principal next coming due may temporarily be deposited in such institutions or invested in such obligations as may be lawful for the investment of County money. Section 10. Pledge of Taxation and Credit. The County hereby irrevocably covenants and agrees for as long as any of the Bonds are outstanding and unpaid that each year it will include in its budget and levy an ad valorem tax upon all the property within the County subject to taxation in an amount that will be sufficient, together with all other revenues and money of the County legally available for such purposes, to pay the principal of and interest on the Bonds as _20_ va2o2e? aaw12o2e7_?a<v++r2W7 the same shall become due. All of such taxes so collected and any other money to be used for such purposes shall be paid into the Bond Fund. The County hereby irrevocably pledges that the annual tax provided for herein to be levied for the payment of such principal and interest shall be within and as a part of the tax levy permitted to counties without a vote of the people, and that a sufficient portion of each annual levy to be levied and collected by the County prior to the full payment of the principal of and interest on the Bonds will be and is hereby irrevocably set aside, pledged and appropriated for the payment of the principal of and interest on the Bonds. The full faith, credit and resources of the County are hereby irrevocably pledged for the annual levy and collection of said taxes and for the prompt payment of the principal of and interest on the Bonds as the same shall become due. Section 11. Defeasance. In the event that money and/or Government Obligations, maturing at such time or times and bearing interest to be earned thereon in amounts (together with such money, if necessary) sufficient to redeem and retire part or all of the Bonds in accordance with their terms, are set aside in a special account of the County to effect such redemption and retirement, and such money and the principal of and interest on such Government Obligations are irrevocably set aside and pledged for such purpose, then no further payments need be made into the Bond Fund for the payment of the principal of and interest on the Bonds so provided for, and the registered owners of such Bonds shall cease to be entitled to any lien, benefit or security of this resolution except the right to receive the money so set aside and pledged, and such Bonds shall be deemed not to be outstanding hereunder. Within 30 days of any defeasance of Bonds, the Bond Registrar shall provide notice of defeasance of Bonds to -21- Pt202B7_CAhV1 M-7Pd9/IIrM 7 Registered Owners, the Insurer and to each entity entitled to receive notice pursuant to Section 16 of this resolution. Section 12. Project Fund Application of Bond Proceeds. There is hereby authorized to be created a separate fund of the County to be known as the "2007 Bond Construction Fund" (the "Project Fund"), which fund is to be drawn upon for the purpose of paying the costs of the Projects as directed by the Board from time to time and paying costs of issuance of the Bonds. At the time of delivery of the Bonds, the proceeds of the Bonds shall be deposited into the Project Fund and used to pay the costs of the Projects as described in Section 2 and all costs incidental thereto and to the issuance of the Bonds. Money in the Project Fund shall be invested as provided by the Treasurer or his designee in legal investments for County funds. Section 13. Tax Covenants; Special Designation. (a) No Arbitrage or Private Activity Bonds. The County hereby covenants that it will not make any use of the proceeds from the sale of the Bonds or any other funds of the County that may be deemed to be proceeds of such Bonds pursuant to Section 148 of the Code that will cause the Bonds to be "arbitrage bonds" within the meaning of said Section. The County will comply with the applicable requirements of Section 148 of the Code (or any successor provision thereof applicable to the Bonds) throughout the term of the Bonds. The County further covenants that it will not take any action or permit any action to be taken that would cause the Bonds to constitute "private activity bonds" under Section 141 of the Code. (b) Private Person Use Limitation for Bonds. The County covenants that for as long as the Bonds are outstanding, it will not permit: -22- a:%2�cMwzo 77PAWIMAN (1) More than 10% of the Net Proceeds of the Bonds to be allocated to any Private Person Use; and (2) More than 10% of the principal or interest payments on the Bonds in a Bond Year to be directly or indirectly: (A) secured by any interest in property used or to be used for any Private Person Use or secured by payments in respect of property used or to be used for any Private Person Use, or (B) derived from payments (whether or not made to the County) in respect of property, or borrowed money, used or to be used for any Private Person Use. The County fiuther covenants that, if: (3) More than five percent of the Net Proceeds of the Bonds are allocable to any Private Person Use; and (4) More than five percent of the principal or interest payments on the Bonds in a bond year are (under the terms of this resolution or any underlying arrangement) directly or indirectly: (A) secured by any interest in property used or to be used for any Private Person Use or secured by payments in respect of property used or to be used for any Private Person Use, or (B) derived from payments (whether or not made to the County) in respect of property, or borrowed money, used or to be used for any Private Person Use, then, (1) any Private Person Use of the Project described in subsection (3) hereof or Private Person Use payments described in subsection (4) hereof that is in excess of the five percent limitations described in such subsections (3) or (4) will be for a Private Person Use that is related to the state or local governmental use of the projects financed and refinanced with Bond proceeds, and (2) any Private Person Use will not exceed the amount of Net Proceeds of the Bonds used for the state or local governmental use portion of the projects to which the Private Person Use of such portion of such projects relate. The County further covenants that it will comply with any limitations on the -23- P.2 87_ LMM20291_7P4WII2W use of the projects by other than state and local governmental users that are necessary, in the opinion of its bond counsel, to preserve the tax exemption of the interest on the Bonds. The covenants of this section are specified solely to assure the continued exemption from regular income taxation of the interest on the Bonds. (c) Designation under Section 265(b) of the Code. The County hereby designates the Bonds as "qualified tax-exempt obligations" under Section 265(b)(3) of the Code for banks, thrift institutions and other financial institutions. The County does not anticipate issuing more than $10,000,000 in qualified tax-exempt obligations during 2007. Section 14. Sale of Bonds. The Bonds shall be sold by negotiated sale to the Underwriter, under the terms and conditions thereof as provided in its purchase offer and in this resolution. The County Representative or his designee is hereby authorized and directed to execute said purchase offer on behalf of the County. The County Representative or his designee are hereby authorized to review and approve on behalf of the County the preliminary and final Official Statements relative to the Bonds with such additions and changes as may be deemed necessary or advisable to them. The preliminary Official Statement for the Bonds, dated August 31, 2007, is hereby deemed final for the purposes of Securities and Exchange Commission Rule 15c2-12. The County Representative and other County officials, agents and representative are hereby authorized and directed to do everything necessary for the prompt issuance, execution and delivery of the Bonds to the Underwriter and for the proper application and use of the proceeds of sale of the Bonds. -24- rVM7 cMw2ozar_VMWI N Section 15. Bond Insurance. (a) Acceptance of Bond Insurance. In accordance with the offer of the Underwriter to purchase the Bonds, the Board hereby approves the commitment of the Insurer to provide a bond insurance policy guaranteeing the payment when due of principal of and interest on the Bonds (the `Bond Insurance Policy"). The Board further authorizes and directs all proper officers, agents, attorneys and employees of the County to cooperate with the Insurer in preparing such additional agreements, certificates, and other documentation on behalf of the County as shall be necessary or advisable in providing for the Bond Insurance Policy. (b) Payments Under the Bond Insurance Policy. In the event that, on the payment date of the Bonds, the County or the Bond Registrar determines that there will not be sufficient money available in the Bond Fund to pay all principal of and interest on the Bonds due on such payment date, the County or the Bond Registrar shall immediately notify the Insurer or its designee on the same day by telephone or telegraph, confirmed in writing by registered or certified mail, of the amount of the deficiency. If the deficiency is made up in whole or in part, the Bond Registrar shall so notify the Insurer or its designee. hi addition, if the Bond Registrar has notice that any bondholder has been required to disgorge payments of principal or interest on the Bonds to a trustee in bankruptcy or creditors or others pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such bondholder within the meaning of any applicable bankruptcy laws, then the Bond Registrar shall notify the Insurer or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail. The Bond Registrar is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for bondholders as follows: -25- r120287 cMW12 M-TP49M1 W (1) If and to the extent there is a deficiency in amounts required to pay interest on the Bonds, the Bond Registrar shall (A) execute and deliver to U.S. Bank Trust National Association, or its successors under the Bond Insurance Policy (the "Insurance Paying Agent"), in form satisfactory to the Insurance Paying Agent, an instrument appointing the Insurer as agent for such bondholders in any legal proceeding related to the payment of such interest and an assignment to the Insurer of the claims for interest to which such deficiency relates and which are paid by the Insurer, (B)receive as designee of the respective bondholders (and not as Bond Registrar) in accordance with the tenor of the Bond Insurance Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned, and (C) disburse the same to such respective bondholders; and (2) If and to the extent of a deficiency in amounts required to pay principal of any Bonds, the Bond Registrar shall (A) execute and deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent an instrument appointing the Insurer as agent for such bondholder in any legal proceeding relating to the payment of such principal and an assignment to the Insurer of any of the Bonds surrendered to the Insurance Paying Agent of so much of the principal amount thereof as has not previously been paid or for which moneys are not held by the Bond Registrar and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying Agent is received), (B) receive as designee of the respective bondholders (and not as Bond Registrar) in accordance with the tenor of the Bond Insurance Policy payment therefor from the Insurance Paying Agent, and (C) disburse the same to such bondholders. Payments with respect to claims for interest on and principal of Bonds disbursed by the Bond Registrar from proceeds of the Bond Insurance Policy shall not be considered to discharge -26- r. o 07 cMMMW 7wm1r2W the obligation of the County with respect to such Bonds, and the Insurer shall become the owner of such unpaid interest and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of this subsection or otherwise. Irrespective of whether any such assignment is executed and delivered, the County and the Bond Registrar hereby agree for the benefit of the Insurer that: (i) They recognize that to the extent the Insurer makes payments directly or indirectly (as by paying through the Bond Registrar), on account of principal of or interest on the Bonds, the Insurer will be subrogated to the rights of such bondholders to receive the amount of such principal and interest for the County, with interest thereon as provided and solely from the sources stated in this resolution and the Bonds; and (ii) They will accordingly pay to the Insurer the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) of the first paragraph of the Bond Insurance Policy, which principal and interest shall be deemed past due and not to have been paid), with interest thereon as provided in this resolution and the Bonds, but only from the sources and in the manner provided herein for the payment of principal of and interest on the Bond to bondholders, and will otherwise treat the Insurer as the owner of such rights to the amount of such principal and interest. (c) Rightsoflnsurer. (1) In connection with the issuance of additional general obligation bonds, the County shall deliver to the Insurer a copy of the disclosure document, if any, circulated with respect to such additional bonds. -27- P. -M267 Ce 2U 7w911+rzom (2) Copies of any amendments made to the documents executed in connection with the issuance of the Bonds which are consented to by the Insurer shall be sent to Standard & Poor's Ratings Services, a Division of The McGraw-Hill Companies, Inc. (3) The Insurer shall receive notice of the resignation or renewal of the Bond Registrar and the appointment of a successor, other than the designated state fiscal agent. (4) The Insurer shall receive copies of all notices required to be delivered to bondholders and, on an annual basis (or as soon as available from the office of the State Auditor) copies of the County's audited financial statements, and annual budget. (5) Any notice that is required to be given to a holder of Bonds or to the Bond Registrar pursuant to this resolution shall also be provided to the Insurer. All notices required to be given to the Insurer under this resolution shall be in writing and shall be sent by registered or certified mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504 Attention: Surveillance. (6) The County agrees to reimburse the Insurer immediately and unconditionally upon demand, to the extent permitted by law, for all reasonable expenses, including reasonable attorneys' fees and expenses, incurred by the Insurer in connection with (A) enforcement by the Insurer of the County's obligations, or the preservation or defense of any rights of the Insurer, under this resolution and any other document executed in connection with the issuance of the Bonds, and (B) any consent, amendment, waiver or other action with respect to this resolution or any related document, whether or not granted or approved, together with interest on all such expenses from and including the date incurred to the date of payment at Citibank's Prime Rate plus 3% or the maximum interest rate permitted by law, whichever is less. -28- P=87_cMWLIO ]_1P49H12UW In addition, the Insurer reserves the right to charge a reasonable fee in connection with its review of any such consent, amendment or waiver, whether or not granted or approved. (7) The County agrees not to use the Insurer's name in any published document including, without limitation, a press release or presentation, announcement or forum without the Insurer's prior consent; provided that the County may use the Insurer's name in any general or particular factual statement to the effect that the Insurer insures certain outstanding County bonds. In the event that the County is advised by counsel that it has a legal obligation to disclose the Insurer's name in any press release, public announcement or other published document, the County shall provide the Insurer with at least three (3) business days' prior written notice of its intent to use the Insurer's name together with a copy of the proposed use of the Insurer's name and of any description of a transaction with the Insurer and shall obtain the Insurer's prior consent as to the form and substance of the proposed use of the Insurer's name and any such description. The foregoing shall not apply to any request for public records duly received by the County pursuant to RCW Ch. 42.17, and the County shall not be obligated to notify the Insurer of its intent to comply with any public disclosure request. (8) The County shall not enter into any agreement nor shall it consent to or participate in any arrangement pursuant to which Bonds are tendered or purchased for any purpose other than the redemption and cancellation or legal defeasance of such Bonds without the prior consent of the Insurer. The provisions of this section shall be in effect only so long as the Bond Insurance Policy is in full force and effect. -29- PA20207 CMWM287 7P4W1120W Section 16. Undertaking to Provide Ongoing Disclosure. (a) Contract/Undertaking. This section constitutes the County's written undertaking for the benefit of the owners of the Bonds as required by Section (b)(5) of the Rule. (b) Financial Statements/Operating Data. The County agrees to provide or cause to be provided to each NRMSIR and to the SID, if any, in each case as designated by the SEC in accordance with the Rule, the following annual financial information and operating data for the prior fiscal year (commencing in 2008 for the fiscal year ended December 31, 2007): (1) Annual financial statements, which statements may or may not be audited, showing ending fund balances for the County's general fund prepared in accordance with the Budget Accounting and Reporting System prescribed by the Budget Accounting and Reporting System prescribed by the Washington State Auditor pursuant to RCW 43.09.200 (or any successor statute) and generally of the type included in the official statement for the Bonds under the heading "Historical and Budgeted Current Expense Fund Operating Results'; (2) The assessed valuation of taxable property in the County; (3) Ad valorem taxes due and percentage of taxes collected; (4) Property tax levy rate per $1,000 of assessed valuation; and (5) Outstanding general obligation debt of the County. Items 2-5 shall be required only to the extent that such information is not included in the annual financial statements. The information and data described above shall be provided on or before nine months after the end of the County's fiscal year. The County's current fiscal year ends December 31. The County may adjust such fiscal year by providing written notice of the change of fiscal year to each then existing NRMSIR and the SID, if any. In lieu of providing such annual financial -30- P120297_CMW%20M ?P49MI&W7 information and operating data, the County may cross-reference to other documents provided to the NRMSIR, the SID or to the SEC and, if such document is a final official statement within the meaning of the Rule, available from the MSRB. If not provided as part of the annual financial information discussed above, the County shall provide the County's audited annual financial statement prepared in accordance with the Budget Accounting and Reporting System prescribed by the Washington State Auditor pursuant to RCW 43.09.200 (or any successor statute) when and if available to each then existing NRMSfR and the SID, if any. (c) Material Events. The County agrees to provide or cause to be provided, in a timely manner, to the SID, if any, and to each NRMSIR or to the MSRB notice of the occurrence of any of the following events with respect to the Bonds, if material: • Principal and interest payment delinquencies; • Non-payment related defaults; • Unscheduled draws on debt service reserves reflecting financial difficulties; • Unscheduled draws on credit enhancements reflecting financial difficulties; • Substitution of credit or liquidity providers, or their failure to perform; • Adverse tax opinions or events affecting the tax-exempt status of the Bonds; • Modifications to the rights of Bond owners; • Bond calls (optional, contingent or unscheduled Bond calls other than scheduled sinking fund redemptions for which notice is given pursuant to Exchange Act Release 34-23856); -31- POM CMVVM er 7a49hu"7 • Defeasances; • Release, substitution or sale of property securing repayment of the Bonds; and • Rating changes. Solely for purposes of disclosure, and not intending to modify this undertaking, the County advises that no debt service reserve secures payment of the Bonds. (d) Termination/Modification. The County's obligations to provide annual financial information and notices of material events shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. Any provision of this section shall be null and void if the County (1) obtains an opinion of nationally recognized bond counsel to the effect that the portion of the Rule that requires that provision is invalid, has been repealed retroactively or otherwise does not apply to the Bonds and (2) notifies each NRMSIR and the SID, if any, of such opinion and the cancellation of this section. The County may amend this section with an opinion of nationally recognized bond counsel in accordance with the Rule. In the event of any amendment of this section, the County shall describe such amendment in the next annual report, and shall include, a narrative explanation of the reason for the amendment and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the County. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a material event under Subsection (c), and (ii) the annual report for the year in which the change is made shall present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. -32- P 20Mi CMVf%20287 7MMV2007 (e) Bond Owner's Remedies Under This Section. The right of any bondowner or beneficial owner of Bonds to enforce the provisions of this section shall be limited to a right to obtain specific enforcement of the County's obligations under this section, and any failure by the County to comply with the provisions of this undertaking shall not be an event of default with respect to the Bonds. For purposes of this section, "beneficial owner" means any person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds, including persons holding Bonds through nominees or depositories. (f) Disclosure USA. The County may elect to submit the information required by this Section 16 to be filed with the NRMSIRs and the SID, if any, directly to DisclosureUSA.org unless or until the SEC withdraws its approval of this submission process. (g) No Default. The County has not defaulted on any of its prior undertakings for ongoing disclosure. Section 17. Severabilitv. If any one or more of the covenants and agreements provided in this resolution to be performed on the part of the County shall be declared by any court of competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or agreements, shall be null and void and shall be deemed separable from the remaining covenants and agreements of this resolution and shall in no way affect the validity of the other provisions of this resolution or of the Bonds. -33- r mze?-CMW20WLrww„rmm ADOPTED by the Board of County Commissioners of Grant County, Washington, at a regular meeting thereof held this 12`h day of September, 2007. EST: e c of the Board BOARD OF COUNTY COMMISSIONERS: LeRoy . Allison, it Richard B. Stevens, Vice -Chair V n Cindy C. Cart , ember -34- P 202U CMWL0M 7v49m12w7 CERTIFICATE I, the undersigned, Clerk of the Board of County Commissioners of Grant County, Washington (herein called the "Board") and keeper of the records of the County, DO HEREBY CERTIFY: 1. That the attached resolution is a true and correct copy of Resolution No. 07 -120 -CC of the County (herein called the "Resolution"), as finally passed at a regular meeting of the Board held on the 12th day of September, 2007, and duly recorded in my office. 2. That said meeting was duly convened and held in all respects in accordance with law, and to the extent required by law, due and proper notice of such meeting was given; that quorum of the Board was present throughout the meeting and a legally sufficient number of members of the Board voted in the proper manner for the adoption of said Resolution; that all other requirements and proceedings incident to the proper adoption of said Resalution have been duly fulfilled, carried out and otherwise observed, and that I am authorized to execute this certificate. `VTOYM IN WITNESS WHEREOF, I have hereunto set my hand this 12th day of September, V.12026I_LMW12=7_7PI 9MMA 7