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Ordinance 4235FG:54375381.2 CITY OF EDMONDS, WASHINGTON ORDINANCE NO. 4235 AN ORDINANCE of the City of Edmonds, Washington, relating to contracting indebtedness; providing for the issuance, sale, and delivery of one or more series of limited tax general obligation improvement and refunding bonds for the purpose of providing the funds necessary: (1) to finance improvements to Civic Park and other capital projects, (2) to refund certain outstanding water and sewer revenue bonds of the City, (3) to refund certain outstanding limited tax general obligation bonds of the City, and (4) to pay the costs of issuance and sale of the bonds; fixing or setting parameters with respect to certain terms and covenants of the bonds; appointing the City’s designated representative to approve the final terms of the sale of the bonds; authorizing the execution and delivery of an amendment to Interlocal Agreement for Development of the Edmonds Centre for the Arts; and providing for other related matters. Passed October 12, 2021 This document prepared by: Foster Garvey P.C. 1111 Third Avenue, Suite 3000 Seattle, Washington 98101 (206) 447-4400 -i- FG:54375381.2 TABLE OF CONTENTS* Page Section 1. Definitions............................................................................................................... 1 Section 2. Findings and Determinations .................................................................................. 6 Section 3. Purpose and Authorization of Bonds ...................................................................... 7 Section 4. Description of the Bonds; Appointment of Designated Representative ................. 8 Section 5. Registrar; Registration and Transfer of Bonds ....................................................... 8 Section 6. Form and Execution of Bonds ................................................................................ 9 Section 7. Payment of Bonds ................................................................................................. 10 Section 8. Funds and Accounts; Deposit of Proceeds............................................................ 10 Section 9. Redemption Provisions and Purchase of Bonds ................................................... 11 Section 10. Failure To Pay Bonds............................................................................................ 12 Section 11. Security for the Bonds .......................................................................................... 12 Section 12. Tax Covenants; Designation of Tax-Exempt Bonds as “Qualified Tax- Exempt Obligations.” ............................................................................................ 13 Section 13. Refunding or Defeasance of the Bonds ................................................................ 13 Section 14. Refunding Plans. ................................................................................................... 14 Section 15. Sale and Delivery of the Bonds ............................................................................ 17 Section 16. Official Statement; Continuing Disclosure ........................................................... 17 Section 17. Amendatory Ordinances ....................................................................................... 18 Section 18. Amendment of County PFD Interlocal Agreement .............................................. 18 Section 19. General Authorization and Ratification ................................................................ 18 Section 20. Severability ........................................................................................................... 19 Section 21. Effective Date of Ordinance ................................................................................. 19 Exhibit A Parameters for Final Terms Exhibit B Form of Undertaking to Provide Continuing Disclosure Exhibit C Form of Second Amendment to County PFD Interlocal Agreement * The cover page, table of contents and section headings of this ordinance are for convenience of reference only, and shall not be used to resolve any question of interpretation of this ordinance. FG:54375381.2 CITY OF EDMONDS, WASHINGTON ORDINANCE NO. 4235 AN ORDINANCE of the City of Edmonds, Washington, relating to contracting indebtedness; providing for the issuance, sale, and delivery of one or more series of limited tax general obligation improvement and refunding bonds for the purpose of providing the funds necessary: (1) to finance improvements to Civic Park and other capital projects, (2) to refund certain outstanding water and sewer revenue bonds of the City, (3) to refund certain outstanding limited tax general obligation bonds of the City, and (4) to pay the costs of issuance and sale of the bonds; fixing or setting parameters with respect to certain terms and covenants of the bonds; appointing the City’s designated representative to approve the final terms of the sale of the bonds; authorizing the execution and delivery of an amendment to Interlocal Agreement for Development of the Edmonds Centre for the Arts; and providing for other related matters. THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. Definitions. As used in this ordinance, the following capitalized terms shall have the following meanings: (a) “2011 Bond Ordinance” means Ordinance No. 3863, passed on December 6, 2011. (b) “2011 Bonds” means the City’s Water and Sewer Improvement and Refunding Revenue Bonds, 2011, issued pursuant to the 2011 Bond Ordinance. (c) “2011 Redemption Date” means, unless otherwise specified in the Bond Purchase Contract, December 1, 2021. (d) “2011 Refunded Bonds” means the 2011 Refunding Candidates selected by the Designated Representative to be refunded with the proceeds of the 2011 Refunding Bonds. (e) “2011 Refunding Bond” means each Bond issued to carry out the 2011 Refunding Plan. (f) “2011 Refunding Candidates” means the 2011 Bonds stated to mature in the years 2022 through 2027, inclusive, 2029, and 2031. (g) “2011 Refunding Plan” means: (1) the deposit with the registrar for the 2011 Bonds (or, if so determined by the Designated Representative, with the Refunding Trustee) of proceeds of the 2011 Refunding Bonds (together with other money of the City, if so determined by the Designated Representative); 2 FG:54375381.2 (2) the purchase by the Refunding Trustee of Acquired Obligations (if so determined by the Designated Representative) and the application of the principal of and interest on any such Acquired Obligations and any other such money of the City to the call, payment, and redemption of the 2011 Refunded Bonds on the 2011 Redemption Date at a price equal to the principal amount of the 2011 Refunded Bonds plus accrued interest; and (3) the payment of the costs of issuing the 2011 Refunding Bonds and the costs of carrying out the foregoing elements of the 2011 Refunding Plan. (h) “2012 Bond Ordinance” means Ordinance No. 3862, passed on December 6, 2011. (i) “2012 Bonds” means the City’s Limited Tax General Obligation Refunding Bonds, 2012, issued pursuant to the 2012 Bond Ordinance. (j) “2012 Redemption Date” means December 1, 2022. (k) “2012 Refunded Bonds” means the 2012 Refunding Candidates selected by the Designated Representative to be refunded with the proceeds of the 2012 Refunding Bonds. (l) “2012 Refunding Bond” means each Bond issued to carry out the 2012 Refunding Plan. (m) “2012 Refunding Candidates” means the portions of the 2012 Bonds stated to mature on December 1 in the following principal amounts in the following years: Year Principal Amount 2021 $400,000 2022 430,000 2023 455,000 2024 480,000 2025 510,000 2026 310,000 (n) “2012 Refunding Plan” means: (1) the deposit with the Refunding Trustee of proceeds of the 2012 Refunding Bonds (together with other legally available funds, if so determined by the Designated Representative); (2) the purchase by the Refunding Trustee of Acquired Obligations; (3) the application of the principal of and interest on such Acquired Obligations and other such money of the City to the payment of principal of and interest on the 2012 Refunded Bonds when due up to and including the 2012 Redemption Date and the call, payment, and redemption of the then-outstanding 3 FG:54375381.2 2012 Refunded Bonds on the 2012 Redemption Date at a price equal to the principal amount of such 2012 Refunded Bonds plus accrued interest; and (3) the payment of the costs of issuing the 2012 Refunding Bonds and the costs of carrying out the foregoing elements of the 2012 Refunding Plan. (o) “Acquired Obligations” means the United States Treasury Certificates of Indebtedness, Notes, and Bonds—State and Local Government Series and other direct, noncallable obligations of the United States of America purchased to carry out the 2011 Refunding Plan (if so determined by the Designated Representative) and the 2012 Refunding Plan. (p) “Authorized Denomination” means $5,000 or any integral multiple thereof within a maturity of a Series. (q) “Beneficial Owner” means, with respect to a Bond, the owner of any beneficial interest in the Bond, and includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares (1) voting power that includes the power to vote, or to direct the voting of, the Bond, and/or (2) investment power that includes the power to dispose, or to direct the disposition of, the Bond. (r) “Bond” means each bond issued pursuant to and for the purposes provided in this ordinance. (s) “Bond Counsel” means the firm of Foster Garvey P.C., its successor, or any other attorney or firm of attorneys selected by the City with a nationally recognized standing as bond counsel in the field of municipal finance. (t) “Bond Fund” means the Limited Tax General Obligation Bond Fund, 2021, of the City created for the payment of the principal of and interest on the Bonds. (u) “Bond Purchase Contract” means an offer to purchase a Series, setting forth certain terms and conditions of the issuance, sale, and delivery of the Series, which offer is authorized to be accepted by the Designated Representative on behalf of the City, if consistent with this ordinance. In the case of a competitive sale, the official notice of sale, the Purchaser’s bid, and the award by the City shall constitute the Bond Purchase Contract for purposes of this ordinance. (v) “Bond Register” means the books or records maintained by the Registrar for the purpose of identifying ownership of each Bond. (w) “City” means the City of Edmonds, Washington, a municipal corporation duly organized and existing under the laws of the State. (x) “City Council” means the legislative authority of the City, as duly and regularly constituted from time to time. (y) “Code” means the United States Internal Revenue Code of 1986, as amended, and applicable rules and regulations promulgated thereunder. 4 FG:54375381.2 (z) “County PFD” means the Snohomish County Public Facilities District. (aa) “County PFD Interlocal Agreement” means the Interlocal Agreement for Development of the Edmonds Centre for the Arts, dated November 4, 2002, by and among the City, the Edmonds PFD, the County PFD, and the County, and recorded under County recording number 200211060003, as amended by the First Amendment thereto, Addendum No. 1 thereto, Addendum No. 2 thereto, and Addendum No. 3 thereto, and as it may hereafter be amended in accordance with its terms. (bb) “DTC” means The Depository Trust Company, New York, New York, or its nominee. (cc) “Designated Representative” means the officer of the City appointed in Section 4 to serve as the City’s designated representative in accordance with RCW 39.46.040. (dd) “Edmonds PFD” means the Edmonds Public Facilities District. (ee) “Final Terms” means the terms and conditions for the sale of a Series, including the amount, date or dates, denominations, interest rate or rates, payment dates, final maturity, redemption rights, price, and other terms or covenants, including minimum savings for refunding bonds (if the refunding bonds are issued for savings purposes). (ff) “Finance Director” means the Finance Director of the City or any other City official who succeeds the duties now delegated to that office, or the designee of such officer. (gg) “Fiscal Agent” means the fiscal agent of the State, as the same may be designated by the State from time to time. (hh) “Government Obligations” means direct obligations of, or obligations the payment of principal of and interest on which are unconditionally guaranteed by, the United States of America. (ii) “Intergovernmental Payments” means the amounts received by the City from the Edmonds PFD and the County PFD under the County PFD Interlocal Agreement. (jj) “Issue Date” means, with respect to a Bond, the date of initial issuance and delivery of the Bond to the Purchaser in exchange for the purchase price of the Bond. (kk) “Letter of Representations” means the Blanket Issuer Letter of Representations between the City and DTC, dated August 6, 1996, as it may be amended from time to time, and any successor or substitute letter relating to the operational procedures of the Securities Depository. (ll) “MSRB” means the Municipal Securities Rulemaking Board. (mm) “Municipal Advisor” means Northwest Municipal Advisors of Bellevue, Washington, or any other municipal advisor then appointed and acting as municipal advisor to the City. 5 FG:54375381.2 (nn) “Official Statement” means an offering document, disclosure document, private placement memorandum, or substantially similar disclosure document provided to purchasers and potential purchasers in connection with the initial offering of a Series in conformance with Rule 15c2-12 or other applicable regulations of the SEC. (oo) “Owner” means, with respect to a Bond and without distinction, the Registered Owner and the Beneficial Owner. (pp) “Project” means improvements to Civic Park and other capital projects, as deemed necessary and advisable by the City. Incidental costs incurred in connection with carrying out and accomplishing the Project, consistent with RCW 39.46.070, including costs of issuance and sale of the Project Bonds, may be included as costs of the Project. (qq) “Project Bond” means each Bond issued to finance the Project. (rr) “Project Fund” means the fund or account designated or created by the Finance Director for the purpose of carrying out the Project. (ss) “Purchaser” means, with respect to a Series, the financial institution or institutions selected by the Designated Representative to serve as purchaser in a private placement, underwriter or placement agent in a negotiated sale, or awarded as the successful bidder in a competitive sale of the Series. (tt) “Rating Agency” means any nationally recognized rating agency then maintaining a rating on the Bonds at the request of the City. (uu) “Real Estate Excise Taxes” means the proceeds of the real estate excise taxes imposed by the City under RCW 82.41.010. (vv) “Record Date” means the Registrar’s close of business on the 15th day of the month preceding an interest payment date. With respect to redemption of a Bond prior to its maturity, “Record Date” means the Registrar’s close of business on the date on which the Registrar sends the notice of redemption in accordance with Section 9. (ww) “Refunding Trust Agreement” means a refunding trust or escrow agreement between the City and the Refunding Trustee, dated the Issue Date, providing for the carrying out of the 2011 Refunding Plan (if so determined by the Designated Representative) and the 2012 Refunding Plan. (xx) “Refunding Trustee” means U.S. Bank National Association, serving as refunding trustee to carry out the 2011 Refunding Plan (if so determined by the Designated Representative) and the 2012 Refunding Plan. (yy) “Registered Owner” means, with respect to a Bond, the person in whose name the Bond is registered on the Bond Register. For so long as the City utilizes the book-entry only system for the Bonds under the Letter of Representations, “Registered Owner” means the Securities Depository. 6 FG:54375381.2 (zz) “Registrar” means the Fiscal Agent, or any successor Registrar selected by the City. (aaa) “Rule 15c2-12” means Rule 15c2-12 promulgated by the SEC under the Securities Exchange Act of 1934, as amended. (bbb) “SEC” means the United States Securities and Exchange Commission. (ccc) “Securities Depository” means DTC, any successor thereto, any substitute securities depository selected by the City that is qualified under applicable laws and regulations to provide the services proposed to be provided by it, or the nominee of any of the foregoing. (ddd) “Series” means a series of the Bonds issued pursuant to this ordinance. (eee) “State” means the State of Washington. (fff) “System of Registration” means the system of registration for the City’s bonds and other obligations set forth in Ordinance No. 2451 of the City. (ggg) “Tax-Exempt” means, with respect to a Bond, that interest on the Bond is intended, as of the Issue Date, to be excluded from gross income for federal income tax purposes. (hhh) “Term Bond” means each Bond designated as a Term Bond and subject to mandatory redemption in the years and amounts set forth in the Bond Purchase Contract. (iii) “Undertaking” means the undertaking to provide continuing disclosure entered into pursuant to Section 16. Section 2. Findings and Determinations. The City takes note of the following facts and makes the following findings and determinations: (a) Authority for Project. The City is in need of certain improvements to Civic Park and other capital projects. The City Council therefore finds that it is in the best interests of the City to finance the Project. (b) Authority to Finance Project. Pursuant to applicable law, including chapters 35.37, 39.36, 39.44, 39.46, and 39.52 RCW, the City is authorized to issue general obligation bonds for the purpose of financing the Project. (c) Refunding of 2011 Refunded Bonds. The City Council finds that it is in the best interests of the City and its taxpayers to issue the 2011 Refunding Bonds to carry out the 2011 Refunding Plan if, in the determination of the Designated Representative, a savings will be effected by the difference between the principal and interest cost over the life of the 2011 Refunding Bonds and the principal and interest cost over the life of the 2011 Refunded Bonds but for such refunding, as set forth in Exhibit A. The City Council further finds that a 2011 Refunding Plan approved by the Designated Representative in accordance with this ordinance will discharge and satisfy the obligations, pledges, charges, trusts, covenants, and agreements of the City under the 2011 Bond Ordinance as to the 2011 Refunded Bonds, and the 2011 Refunded Bonds shall no longer be 7 FG:54375381.2 deemed to be outstanding immediately upon the deposit of the money specified in the 2011 Refunding Plan with the registrar for the 2011 Bonds (or, if so determined by the Designated Representative, with the Refunding Trustee). (d) Authority to Carry Out 2011 Refunding Plan. Pursuant to applicable law, including chapters 35.37, 39.36, 39.44, 39.46, 39.52, and 39.53 RCW, the City is authorized to issue general obligation bonds for the purpose of carrying out the 2011 Refunding Plan. (e) Refunding of 2012 Refunded Bonds. The Edmonds PFD, as obligor on the 2012 Refunded Bonds, has requested that the City carry out the 2012 Refunding Plan to modify debt service requirements. The City Council finds that it is in the best interests of the City and its taxpayers and of the Edmonds PFD and its taxpayers to issue the 2012 Refunding Bonds to carry out the 2012 Refunding Plan to modify debt service requirements. The City Council further finds that a 2012 Refunding Plan approved by the Designated Representative in accordance with this ordinance will discharge and satisfy the obligations, pledges, charges, trusts, covenants, and agreements of the City under the 2012 Bond Ordinance as to the 2012 Refunded Bonds, and the 2012 Refunded Bonds shall no longer be deemed to be outstanding immediately upon the deposit of the money specified in the 2012 Refunding Plan with the Refunding Trustee. (f) Authority to Carry Out 2012 Refunding Plan. Pursuant to applicable law, including chapters 35.37, 39.36, 39.44, 39.46, 39.52, and 39.53 RCW, the City is authorized to issue general obligation bonds for the purpose of carrying out the 2012 Refunding Plan. (g) Debt Capacity. Based on the following facts, the principal amount of Bonds authorized to be issued pursuant to this ordinance is within the amount permitted to be issued by the City for general municipal purposes without a vote: (1) The assessed valuation of the taxable property within the City as ascertained by the last preceding assessment for City purposes for collection in the calendar year 2021 is $11,648,792,913. (2) As of December 31, 2020, the City had limited tax general obligation indebtedness outstanding (consisting of bonds, loans, and a nonexchange financial guarantee) in the principal amount of $9,741,038, which was incurred within the limit of up to 1½% of the value of the taxable property within the City permitted for general municipal purposes without a vote ($174,731,893). (3) As of December 31, 2020, the City had no unlimited tax general obligation indebtedness outstanding. Section 3. Purpose and Authorization of Bonds. The City is authorized to borrow money on the credit of the City and issue negotiable limited tax general obligation improvement and refunding bonds evidencing indebtedness in one or more Series in aggregate principal amount not to exceed the amount set forth in Appendix A to provide funds necessary to finance the Project, carry out the 2011 Refunding Plan, and carry out the 2012 Refunding Plan. The proceeds of the Project Bonds shall be deposited as set forth in Section 8(b) and shall be used to carry out the Project, or a portion of the Project, in such order of time as the City determines is advisable and practicable. The proceeds of the 2011 Refunding Bonds shall be deposited as set forth in Section 14 8 FG:54375381.2 and shall be used to carry out the 2011 Refunding Plan. The proceeds of the 2012 Refunding Bonds shall be deposited as set forth in Sections 14 and shall be used to carry out the 2012 Refunding Plan. Section 4. Description of the Bonds; Appointment of Designated Representative. The Finance Director, or the Assistant Finance Director in the absence of the Finance Director, is appointed as Designated Representative and is authorized and directed to conduct the sale of the Bonds in the manner and upon the terms deemed most advantageous to the City, and to approve the Final Terms of each Series, with such additional terms and covenants as the Designated Representative deems advisable, within the parameters set forth in Exhibit A, which is attached to this ordinance and incorporated by this reference. Section 5. Registrar; Registration and Transfer of Bonds. (a) Registration of Bonds. Each Bond shall be issued only in registered form as to both principal and interest and the ownership of each Bond shall be recorded on the Bond Register. (b) Registrar; Duties. The Fiscal Agent is appointed as initial Registrar. The Registrar shall keep, or cause to be kept, sufficient books for the registration and transfer of the Bonds, which shall be open to inspection by the City at all times. The Registrar is authorized, on behalf of the City, to authenticate and deliver Bonds transferred or exchanged in accordance with the provisions of the Bonds and this ordinance, to serve as the City’s paying agent for the Bonds, and to carry out all of the Registrar’s powers and duties under this ordinance and the System of Registration. The Registrar shall be responsible for its representations contained in the Registrar’s Certificate of Authentication on each Bond. The Registrar may become an Owner with the same rights it would have if it were not the Registrar and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as members of, or in any other capacity with respect to, any committee formed to protect the rights of Owners. (c) Bond Register; Transfer and Exchange. The Bond Register shall contain the name and mailing address of each Registered Owner and the principal amount and number of each Bond held by each Registered Owner. A Bond surrendered to the Registrar may be exchanged for a Bond or Bonds in any Authorized Denomination of an equal aggregate principal amount and of the same Series, maturity, and interest rate. A Bond may be transferred only if endorsed in the manner provided thereon and surrendered to the Registrar. Any exchange or transfer shall be without cost to the Owner or transferee. The Registrar shall not be obligated to exchange any Bond or transfer registered ownership during the period between the applicable Record Date and the redemption date. (d) Securities Depository; Book-Entry Only Form. If a Bond is to be issued in book- entry form, DTC shall be appointed as initial Securities Depository and the Bond initially shall be registered in the name of Cede & Co., as the nominee of DTC. Each Bond registered in the name of the Securities Depository shall be held fully immobilized in book-entry only form by the Securities Depository in accordance with the provisions of the Letter of Representations. Registered ownership of any Bond registered in the name of the Securities Depository may not be transferred except: (i) to any successor Securities Depository; (ii) to any substitute Securities Depository appointed by the City; or (iii) to any person if the Bond is no longer to be held in book- 9 FG:54375381.2 entry only form. Upon the resignation of the Securities Depository, or upon a termination of the services of the Securities Depository by the City, the City may appoint a substitute Securities Depository. If (i) the Securities Depository resigns and the City does not appoint a substitute Securities Depository, or (ii) the City terminates the services of the Securities Depository, the Bonds no longer shall be held in book-entry only form and the registered ownership of each Bond may be transferred to any person as provided in this ordinance. Neither the City nor the Registrar shall have any obligation to participants of any Securities Depository or the persons for whom they act as nominees regarding accuracy of any records maintained by the Securities Depository or its participants. Neither the City nor the Registrar shall be responsible for any notice that is permitted or required to be given to a Registered Owner of a Bond registered in the name of the Securities Depository except such notice as is required to be given by the Registrar to the Securities Depository. Section 6. Form and Execution of Bonds. (a) Form of Bonds; Signatures and Seal. Each Bond shall be prepared in a form consistent with the provisions of this ordinance and State law. Each Bond shall be signed by the Mayor and the City Clerk, either or both of whose signatures may be manual or in facsimile, and the seal of the City or a facsimile reproduction thereof shall be impressed or printed thereon. If any officer whose manual or facsimile signature appears on a Bond ceases to be an officer of the City authorized to sign bonds before the Bond bearing manual or facsimile signature of such officer is authenticated by the Registrar, or issued or delivered by the City, the Bond nevertheless may be authenticated, issued, and delivered and, when authenticated, issued, and delivered, shall be as binding on the City as though that person had continued to be an officer of the City authorized to sign bonds. Any Bond also may be signed on behalf of the City by any person who, on the actual date of signing of the Bond, is an officer of the City authorized to sign bonds, although such officer did not hold the required office on its Issue Date. (b) Required Statement on 2012 Refunding Bonds. Each 2012 Refunding Bond shall include on such Refunding 2012 Bond and in any Official Statement for the sale of any such 2012 Refunding Bond substantially the following statement, as required by Section C.4 of the County PFD Interlocal Agreement: The 2012 Refunding Bonds are obligations of the City, payable from payments transferred to the City by the Edmonds PFD, from certain real estate excise tax receipts, and from other money of the City legally available therefor. The 2012 Refunding Bonds are not obligations of the Edmonds PFD, the County or the County PFD. The Edmonds PFD, the County, and the County PFD are political subdivisions of the state of Washington separate from the City. All liabilities incurred by the City incurred in connection with the Edmonds PFD shall be satisfied exclusively from the assets, credit, and property of the City and no creditor or other person shall have any right of action against or recourse to the Edmonds PFD (except to the extent of required payments under the County PFD Interlocal Agreement), the County PFD, the County, 10 FG:54375381.2 or any of their respective assets, credit or services on account of any debts, obligations, liabilities, or omissions of the City. The County PFD is a municipal corporation organized under RCW 36.100.010 and Amended Ordinance No. 01-041 of Snohomish County. Amended Ordinance No. 01-041 expressly provides: “All liabilities incurred by the [County PFD] shall be satisfied exclusively from the assets, credit, and property of the [County PFD] and no creditor or other person shall have any right of action against or recourse to the County, its assets, credit, or services on account of any debts, obligations, liabilities, or omissions of the [County PFD].” (c) Authentication. Only a Bond bearing a Certificate of Authentication in substantially the following form, manually signed by the Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance: “Certificate of Authentication. This Bond is one of the fully registered City of Edmonds, Washington, Limited Tax General Obligation [Improvement and] [Refunding] Bonds, [Series and other designation], described in the Bond Ordinance.” The authorized signing of a Certificate of Authentication shall be conclusive evidence that the Bond so authenticated has been duly executed, authenticated, and delivered and is entitled to the benefits of this ordinance. Section 7. Payment of Bonds. Principal of and interest on each Bond shall be payable in lawful money of the United States of America. Principal of and interest on each Bond registered in the name of the Securities Depository are payable in the manner set forth in the Letter of Representations. Interest on each Bond not registered in the name of the Securities Depository is payable by electronic transfer on the interest payment date, or by check or draft of the Registrar mailed on the interest payment date, to the Registered Owner at the address appearing on the Bond Register on the Record Date. The City is not required to make electronic transfers except pursuant to a request by a Registered Owner in writing received on or prior to the Record Date and at the sole expense of the Registered Owner. Principal of each Bond not registered in the name of the Securities Depository is payable upon presentation and surrender of the Bond by the Registered Owner to the Registrar. The Bonds are not subject to acceleration under any circumstances. Section 8. Funds and Accounts; Deposit of Proceeds. (a) Bond Fund. The Bond Fund is created as a special fund of the City for the purpose of paying principal of and interest on the Bonds. All amounts allocated to the payment of the principal of and interest on the Bonds shall be deposited in the Bond Fund as necessary for the timely payment of amounts due with respect to the Bonds. The principal of and interest on the Bonds shall be paid out of the Bond Fund. Until needed for that purpose, the City may invest money in the Bond Fund temporarily in any legal investment, and the investment earnings shall be retained in the Bond Fund and used for the purposes of the Bond Fund. (b) Project Fund. The Project Fund is authorized to be created as a fund of the City for the purpose of paying the costs of the Project. Proceeds received from the sale of the Project Bonds shall be deposited into the Project Fund and used to pay the costs of the Project, including costs of issuance and of the Project Bonds. If so provided in the Refunding Trust Agreement, 11 FG:54375381.2 proceeds of the Project Bonds to be used to pay costs of issuance and sale of the Project Bonds may be deposited with the Refunding Trustee for that purpose. Until needed to pay such costs, the City may invest those proceeds temporarily in any legal investment, and the investment earnings shall be retained in the Project Fund and used for the purposes of the Project Fund, except that earnings subject to a federal tax or rebate requirement (if applicable) may be withdrawn from the Project Fund and used for those tax or rebate purposes. Section 9. Redemption Provisions and Purchase of Bonds. (a) Optional Redemption. The Bonds shall be subject to redemption at the option of the City on terms acceptable to the Designated Representative, as set forth in the Bond Purchase Contract, consistent with the parameters set forth in Exhibit A. (b) Mandatory Redemption. Each Bond that is designated as a Term Bond in the Bond Purchase Contract, consistent with the parameters set forth in Exhibit A and except as set forth below, shall be called for redemption at a price equal to the stated principal amount to be redeemed, plus accrued interest, on the dates and in the amounts as set forth in the Bond Purchase Contract. If a Term Bond is redeemed under the optional redemption provisions, defeased, or purchased by the City and surrendered for cancellation, the principal amount of the Term Bond so redeemed, defeased, or purchased (irrespective of its actual redemption or purchase price) shall be credited against one or more scheduled mandatory redemption installments for that Term Bond. The City shall determine the manner in which the credit is to be allocated and shall notify the Registrar in writing of its allocation prior to the earliest mandatory redemption date for that Term Bond for which notice of redemption has not already been given. (c) Selection of Bonds for Redemption; Partial Redemption. If fewer than all of the outstanding Bonds are to be redeemed at the option of the City, the City shall select the Series and maturities to be redeemed. If fewer than all of the outstanding Bonds of a maturity of a Series are to be redeemed, the Securities Depository shall select Bonds registered in the name of the Securities Depository to be redeemed in accordance with the Letter of Representations, and the Registrar shall select all other Bonds to be redeemed as specified by the Designated Representative in such manner as the City directs and as the Registrar shall determine. All or a portion of the principal amount of any Bond that is to be redeemed may be redeemed in any Authorized Denomination. If less than all of the outstanding principal amount of any Bond is redeemed, upon surrender of that Bond to the Registrar, there shall be issued to the Registered Owner, without charge, a new Bond (or Bonds, at the option of the Registered Owner) of the same Series, maturity, and interest rate in any Authorized Denomination in the aggregate principal amount to remain outstanding. (d) Notice of Redemption. Notice of redemption of each Bond registered in the name of the Securities Depository shall be given in accordance with the Letter of Representations. Notice of redemption of each other Bond, unless waived by the Registered Owner, shall be given by the Registrar not less than 20 nor more than 60 days prior to the date fixed for redemption by first- class mail, postage prepaid, to the Registered Owner at the address appearing on the Bond Register on the Record Date. The requirements of the preceding sentence shall be satisfied when notice has been mailed as so provided, whether or not it is actually received by an Owner. In addition, the redemption notice shall be mailed or sent electronically within the same period to the MSRB (if 12 FG:54375381.2 required under the Undertaking), to each Rating Agency, and to such other persons and with such additional information as the Finance Director shall determine, but these additional mailings shall not be a condition precedent to the redemption of any Bond. (e) Rescission of Optional Redemption Notice. In the case of an optional redemption, the notice of redemption may state that the City retains the right to rescind the redemption notice and the redemption by giving a notice of rescission to the affected Registered Owners at any time on or prior to the scheduled optional redemption date. Any notice of optional redemption that is so rescinded shall be of no effect, and each Bond for which a notice of optional redemption has been rescinded shall remain outstanding. (f) Effect of Redemption. Interest on each Bond duly called for redemption shall cease to accrue on the date fixed for redemption, unless either the notice of optional redemption is rescinded as set forth in subsection (e) of this Section, or money sufficient to effect such redemption is not on deposit in the Bond Fund or in a trust account established to refund or defease the Bond. (g) Purchase of Bonds. The City reserves the right to purchase any or all of the Bonds offered to the City or in the open market at any time at any price acceptable to the City plus accrued interest to the date of purchase. Section 10. Failure To Pay Bonds. If the principal of any Bond is not paid when the Bond is properly presented at its maturity or date fixed for redemption, the City shall be obligated to pay interest on that Bond at the same rate provided in the Bond from and after its maturity or date fixed for redemption until that Bond, both principal and interest, is paid in full or until sufficient money for its payment in full is on deposit in the Bond Fund, or in a trust account established to refund or defease the Bond, and the Bond has been called for payment by giving notice of that call to the Registered Owner. Section 11. Security for the Bonds. (a) Pledge of Taxes. The Bonds constitute a general indebtedness of the City and are payable from tax revenues of the City and such other money as is lawfully available and pledged by the City for the payment of principal of and interest on the Bonds. For so long as any of the Bonds are outstanding, the City irrevocably pledges that it shall, in the manner provided by law within the constitutional and statutory limitations provided by law without the assent of the voters, include in its annual property tax levy amounts sufficient, together with other money that is lawfully available, to pay the principal of and interest on the Bonds as the same become due. The full faith, credit, and resources of the City are pledged irrevocably for the prompt payment of the principal of and interest on the Bonds, and such pledge shall be enforceable in mandamus against the City. (b) Payment of the 2011 Refunding Bonds. Without limiting the provisions of subsection (a) of this Section, the City intends that principal of and interest on the 2011 Refunding Bonds be paid from Net Revenue of the Water and Sewer Utility, as such terms are defined in and in accordance with, the ordinances of the City authorizing the issuance of its outstanding water and sewer revenue bonds, including Ordinance No. 4197, passed on October 13, 2020. 13 FG:54375381.2 (c) Additional Pledge to the 2012 Refunding Bonds. As required by the County PFD Interlocal Agreement, the City expressly pledges to the payment of the principal of and interest on the 2012 Refunding Bonds the following resources, in the following order: (1) the Intergovernmental Payments received by the City under the County PFD Interlocal Agreement as a result of the sales tax collected by the Edmonds PFD; (2) the Real Estate Excise Taxes; and (3) the Intergovernmental Payments received by the City under the County PFD Interlocal Agreement as a result of the sales tax collected by the County PFD. Section 12. Tax Covenants; Designation of Tax-Exempt Bonds as “Qualified Tax- Exempt Obligations.” (a) Preservation of Tax Exemption for Interest on Tax-Exempt Bonds. The City will take all actions necessary to prevent interest on the Tax-Exempt Bonds from being included in gross income for federal income tax purposes, and it will neither take any action nor make or permit any use of proceeds of the Bonds or other funds of the City treated as proceeds of the Bonds that will cause interest on the Tax-Exempt Bonds to be included in gross income for federal income tax purposes. The City will, to the extent the arbitrage rebate requirements of section 148 of the Code are applicable to the Tax-Exempt Bonds, take all actions necessary to comply (or to be treated as having complied) with those requirements in connection with the Tax-Exempt Bonds. (b) Post-Issuance Compliance. The Finance Director is authorized and directed to review and update the City’s written procedures to facilitate compliance by the City with the covenants in this Section and the applicable requirements of the Code that must be satisfied after the Issue Date to prevent interest on the Tax-Exempt Bonds from being included in gross income for federal tax purposes. (c) Designation of Tax-Exempt Bonds as “Qualified Tax-Exempt Obligations.” A Series of Tax-Exempt Bonds may be designated as “qualified tax-exempt obligations” for the purposes of section 265(b)(3) of the Code, if the following conditions are met: (1) the Series does not constitute “private activity bonds” within the meaning of section 141 of the Code; (2) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds and other obligations not required to be included in such calculation) that the City and any entity subordinate to the City (including any entity that the City controls, that derives its authority to issue tax-exempt obligations from the City, or that issues tax-exempt obligations on behalf of the City) will issue during the calendar year in which the Series is issued will not exceed $10,000,000 (or such other amount that may on the Issue Date be in effect under the Code); and (3) the amount of tax-exempt obligations, including the Series, designated by the City as “qualified tax-exempt obligations” for the purposes of section 265(b)(3) of the Code during the calendar year in which the Series is issued does not exceed $10,000,000 (or such other amount that may on the Issue Date be in effect under the Code). Section 13. Refunding or Defeasance of the Bonds. The City may issue refunding bonds pursuant to State law or use money available from any other lawful source to carry out a 14 FG:54375381.2 refunding or defeasance plan, which may include (a) paying when due the principal of and interest on any or all of the Bonds (the “defeased Bonds”); (b) redeeming the defeased Bonds prior to their maturity; and (c) paying the costs of the refunding or defeasance. If the City sets aside in a special trust fund or escrow account irrevocably pledged to that redemption or defeasance (the “trust account”), money and/or Government Obligations maturing at a time or times and bearing interest in amounts sufficient to redeem, refund, or defease the defeased Bonds in accordance with their terms, then all right and interest of the Owners of the defeased Bonds in the covenants of this ordinance and in the funds and accounts obligated to the payment of the defeased Bonds shall cease and become void. Thereafter, the Registered Owners of defeased Bonds shall have the right to receive payment of the principal of and interest on the defeased Bonds solely from the trust account and the defeased Bonds shall be deemed no longer outstanding. In that event, the City may apply money remaining in any fund or account (other than the trust account) established for the payment or redemption of the defeased Bonds to any lawful purpose. Unless otherwise specified by the City in a refunding or defeasance plan, notice of refunding or defeasance shall be given, and selection of Bonds for any partial refunding or defeasance shall be conducted, in the manner prescribed in this ordinance for the redemption of Bonds. Section 14. Refunding Plans. (a) Appointment of Refunding Trustee. U.S. Bank National Association is appointed as Refunding Trustee. (b) Use of 2011 Refunding Bond Proceeds. The proceeds of the sale of the 2011 Refunding Bonds shall be deposited immediately upon the receipt thereof with the registrar for the 2011 Bonds (or, if so determined by the Designated Representative, with the Refunding Trustee) and used to discharge the obligations of the City relating to the 2011 Refunded Bonds under the 2011 Bond Ordinance by providing for the payment of the amounts required to be paid by the 2011 Refunding Plan. As determined by the Designated Representative, such obligations shall be discharged fully by either (i) the payment when due by the registrar for the 2011 Refunded Bonds of the amount required to be paid by the 2011 Refunding Plan or (ii) to the extent practicable, the Refunding Trustee’s simultaneous purchase of Acquired Obligations, bearing such interest and maturing as to principal and interest in such amount and at such time so as to provide, together with a beginning cash balance, if necessary, for the payment of the amount required to be paid by the 2011 Refunding Plan. Any such Acquired Obligations shall be listed and more particularly described in an exhibit to be attached to the Refunding Trust Agreement, but are subject to substitution as set forth in subsection (d) of this Section. Any 2011 Refunding Bond proceeds or other such money deposited with the Refunding Trustee not needed to carry out the 2011 Refunding Plan shall be returned to the City as soon as practicable after the Issue Date and deposited in the Bond Fund to pay interest on the Bonds on the first interest payment date. (c) Use of 2012 Refunding Bond Proceeds. The proceeds of the sale of the 2012 Refunding Bonds shall be deposited immediately upon the receipt thereof with the Refunding Trustee and used to discharge the obligations of the City relating to the 2012 Refunded Bonds under the 2012 Bond Ordinance by providing for the payment of the amounts required to be paid by the 2012 Refunding Plan. To the extent practicable, such obligations shall be discharged fully 15 FG:54375381.2 by the Refunding Trustee’s simultaneous purchase of Acquired Obligations, bearing such interest and maturing as to principal and interest in such amounts and at such times so as to provide, together with a beginning cash balance, if necessary, for the payment of the amounts required to be paid by the 2012 Refunding Plan. Such Acquired Obligations shall be listed and more particularly described in an exhibit to be attached to the Refunding Trust Agreement, but are subject to substitution as set forth in subsection (d) of this Section. Any 2012 Refunding Bond proceeds or other such money deposited with the Refunding Trustee not needed to carry out the 2012 Refunding Plan shall be returned to the City as soon as practicable after the Issue Date and deposited in the Bond Fund to pay interest on the Bonds on the first interest payment date. (d) Substitution of Acquired Obligations. Prior to the purchase of any Acquired Obligations by the Refunding Trustee, the City reserves the right to substitute other direct, noncallable obligations of the United States of America (“Substitute Obligations”) for any of the Acquired Obligations and to use any savings created thereby for any lawful City purpose if, (i) in the opinion of Bond Counsel, the interest on the Tax-Exempt Bonds, the 2011 Refunded Bonds, and the 2012 Refunded Bonds will remain excluded from gross income for federal income tax purposes under sections 103, 148, and 149(d) of the Code, and (ii) such substitution will not impair the timely payment of the amounts required to be paid by the Refunding Plan, as verified by a nationally recognized independent certified public accounting firm. After the purchase of the Acquired Obligations by the Refunding Trustee, the City reserves the right to substitute therefor cash or Substitute Obligations subject to the conditions that such cash or Substitute Obligations will be sufficient to carry out the 2011 Refunding Plan and the 2012 Refunding Plan, that such substitution will not cause the Tax-Exempt Bonds, the 2011 Bonds, or the 2012 Bonds to be arbitrage bonds within the meaning of section 148 of the Code and regulations thereunder in effect on the date of such substitution and applicable to obligations issued on the issue dates of the Bonds, the 2011 Bonds, and the 2012 Bonds, as applicable, and that the City obtain, at its expense: (i) a verification by a nationally recognized independent firm acceptable to the Refunding Trustee confirming that the payments of principal of and interest on the Substitute Obligations, if paid when due, and any other money held by the Refunding Trustee will be sufficient to carry out the 2011 Refunding Plan and the 2012 Refunding Plan; and (ii) an opinion of Bond Counsel that the disposition and substitution or purchase of such Substitute Obligations, under the statutes, rules, and regulations then in force and applicable to the Tax-Exempt Bonds, will not cause the interest on the Tax-Exempt Bonds, the 2011 Refunded Bonds, or the 2012 Refunded Bonds to be included in gross income for federal income tax purposes and that such disposition and substitution or purchase is in compliance with the statutes and regulations applicable to the Tax-Exempt Bonds. Any surplus money resulting from the sale, transfer, other disposition, or redemption of the Acquired Obligations and the substitutions therefor shall be released from the trust estate and transferred to the City to be used for any lawful City purpose. (e) Administration of Refunding Plan. The Refunding Trustee is authorized and directed to purchase the Acquired Obligations (or Substitute Obligations), if so directed by the Designated Representative, and to make the payments required to be made by the 2011 Refunding Plan (if so determined by the Designated Representative) and the 2012 Refunding Plan from the Acquired Obligations (or Substitute Obligations) and money deposited with the Refunding Trustee pursuant to this ordinance. All Acquired Obligations (or Substitute Obligations) and the money deposited with the Refunding Trustee and any income therefrom shall be held irrevocably, 16 FG:54375381.2 invested, and applied in accordance with the provisions of the 2011 Bond Ordinance (if so determined by the Designated Representative) and the 2012 Bond Ordinance, this ordinance, chapter 39.53 RCW and other applicable statutes of the State, and the Refunding Trust Agreement. (f) Authorization for Refunding Trust Agreement. The Finance Director is authorized and directed to execute and deliver to the Refunding Trustee a Refunding Trust Agreement setting forth the duties, obligations, and responsibilities of the Refunding Trustee in connection with carrying out the 2011 Refunding Plan (if so determined by the Designated Representative) and the 2012 Refunding Plan. (g) Authorization for Replacement 2012 Bonds. The City may issue replacement 2012 Bonds in principal amounts reflecting the principal amount of the 2012 Refunded Bonds and the 2012 Bonds to remain outstanding. The replacement bonds shall be printed, executed, and authenticated as provided in the 2012 Bond Ordinance. (h) Calls for Redemption of Refunded Bonds. The City calls the 2011 Refunded Bonds for redemption on the 2011 Redemption Date. Such call for redemption shall be irrevocable after the delivery of the 2011 Refunding Bonds to the Purchaser. The City calls the 2012 Refunded Bonds stated to mature after the 2012 Redemption Date for redemption on the 2012 Redemption Date. Such call for redemption shall be irrevocable after the delivery of the 2012 Refunding Bonds to the Purchaser. The proper City officials are authorized and directed to give or cause to be given such notices as required, at the times and in the manner required by the 2011 Bond Ordinance to effect the redemption prior to their maturity of the 2011 Refunded Bonds and by the 2012 Bond Ordinance to effect the redemption prior to their maturity of the 2012 Refunded Bonds. (i) Findings with Respect to 2011 Refunding Plan. Prior to approving the sale of the 2011 Refunding Bonds, the Designated Representative shall make the following determinations in writing if in the judgment of the Designated Representative the following conditions are satisfied: (1) the savings that will be effected (as measured by the difference between the principal and interest cost over the life of the 2011 Refunding Bonds and the principal and interest cost over the life of the 2011 Refunded Bonds, but for such refunding) shall be equal to at least the percentage savings set forth in Exhibit A, and in making such determination, the Designated Representative shall give consideration to the fixed maturities of the 2011 Refunding Bonds and the 2011 Refunded Bonds, the costs of issuance of the 2011 Refunding Bonds, and the known earned income from the investment of the proceeds of the 2011 Refunding Bonds, if any, pending redemption of the 2011 Refunded Bonds; and (2) the 2011 Refunding Plan will provide sufficient funds to discharge and satisfy the obligations of the City under the 2011 Bond Ordinance, and in making such determination, the Designated Representative may rely upon a verification by a nationally recognized independent certified public accounting firm or a certification of the Municipal Advisor. (j) Finding with Respect to 2012 Refunding Plan. Prior to approving the sale of the 2012 Refunding Bonds, the Designated Representative shall determine in writing that the 2012 Refunding Plan will provide sufficient funds to discharge and satisfy the obligations of the City under the 2012 Bond Ordinance, and in making such determination, the Designated Representative may rely upon a verification by a nationally recognized independent certified public accounting firm. 17 FG:54375381.2 Section 15. Sale and Delivery of the Bonds. (a) Manner of Sale of Bonds; Delivery of Bonds. The Designated Representative is authorized to sell each Series by private placement, negotiated sale, or competitive sale in accordance with a notice of sale consistent with this ordinance, based on the assessment of the Designated Representative of market conditions, in consultation with appropriate City officials and staff, Bond Counsel, the Municipal Advisor, and other advisors. In determining the method of sale of a Series and accepting the Final Terms, the Designated Representative shall take into account the factors that, in the judgment of the Designated Representative, may be expected to result in the lowest true interest cost to the City. (b) Procedure for Private Placement or Negotiated Sale. If the Designated Representative determines that a Series is to be sold by private placement or negotiated sale, the Designated Representative shall select one or more Purchasers with which to negotiate such sale. The Bond Purchase Contract for each Series shall set forth the Final Terms. The Designated Representative is authorized to execute the Bond Purchase Contract on behalf of the City, so long as the terms provided therein are consistent with the terms of this ordinance. (c) Procedure for Competitive Sale. If the Designated Representative determines that a Series is to be sold by competitive sale, the Designated Representative shall cause the preparation of an official notice of bond sale setting forth parameters for the Final Terms and any other bid parameters that the Designated Representative deems appropriate consistent with this ordinance. Bids for the purchase of each Series shall be received at the time or place and by the means as the Designated Representative directs. On the date and time established for the receipt of bids, the Designated Representative (or the designee of the Designated Representative) shall open bids and shall cause the bids to be mathematically verified. The Designated Representative is authorized to award, on behalf of the City, the winning bid and accept the winning bidder’s offer to purchase the Series, with such adjustments to the aggregate principal amount and principal amount per maturity as the Designated Representative deems appropriate, consistent with the terms of this ordinance, and the official notice of sale, the Purchaser’s bid, and the award by the City shall constitute the Bond Purchase Contract for purposes of this ordinance. The Designated Representative may reject any or all bids submitted and may waive any formality or irregularity in any bid or in the bidding process if the Designated Representative deems it to be in the City’s best interest to do so. If all bids are rejected, the Series may be sold pursuant to negotiated sale or in any manner provided by law as the Designated Representative determines is in the best interest of the City, consistent with this ordinance. (d) Preparation, Execution, and Delivery of the Bonds. The Bonds will be prepared at City expense and will be delivered to the Purchaser in accordance with the Bond Purchase Contract, together with the approving legal opinion of Bond Counsel regarding the Bonds. Section 16. Official Statement; Continuing Disclosure. (a) Preliminary Official Statement Deemed Final. The Designated Representative shall review and, if acceptable to the Designated Representative, approve the preliminary Official Statement prepared in connection with the sale of each Series to the public or through a Purchaser as a placement agent. For the sole purpose of the Purchaser’s compliance with paragraph (b)(1) of 18 FG:54375381.2 Rule 15c2-12, the Designated Representative is authorized to deem that preliminary Official Statement final as of its date, except for the omission of information permitted to be omitted by Rule 15c2-12. The City approves the distribution to potential purchasers of the Bonds of a preliminary Official Statement that has been approved by the Designated Representative and if applicable, deemed final, in accordance with this subsection. (b) Approval of Final Official Statement. The City approves the preparation of a final Official Statement for each Series to be sold to the public or through a Purchaser as placement agent, in the form of the preliminary Official Statement that has been approved and, if applicable, deemed final in accordance with subsection (a) of this Section, with such modifications and amendments as the Designated Representative deems necessary or desirable, and further authorizes the Designated Representative to execute and deliver such final Official Statement to the Purchaser if required under Rule 15c2-12 or the Bond Purchase Contract. The City authorizes and approves the distribution to purchasers and potential purchasers of the Bonds of that final Official Statement. (c) Undertaking to Provide Continuing Disclosure. If necessary to meet the requirements of paragraph (b)(5) of Rule 15c2-12, as applicable to the Purchaser acting as a participating underwriter for a Series, the Designated Representative is authorized to execute a written undertaking to provide continuing disclosure for the benefit of holders of the Series in substantially the form attached as Exhibit B to this ordinance, which is incorporated herein by this reference. Section 17. Amendatory Ordinances. The City may supplement or amend this ordinance for any one or more of the following purposes without the consent of any Owners: (a) To add covenants and agreements that do not materially adversely affect the interests of Registered Owners, or to surrender any right or power reserved to or conferred upon the City; or (b) To cure any ambiguities, or to cure, correct, or supplement any defective provision contained in this ordinance in a manner that does not materially adversely affect the interest of the Registered Owners. Section 18. Amendment of County PFD Interlocal Agreement. The Mayor is authorized and directed, on the City’s behalf, to execute and deliver an amendment to the County PFD Interlocal Agreement in substantially the form attached hereto as Exhibit C. Section 19. General Authorization and Ratification. The Designated Representative and other appropriate officers of the City are each individually authorized to take such actions and to execute such documents as in their judgment may be necessary or desirable to carry out the transactions contemplated in connection with this ordinance, and to do everything necessary for the prompt delivery of each Series to the Purchaser and for the proper application, use, and investment of the proceeds of the Bonds. All actions taken prior to the effective date of this ordinance in furtherance of the purposes described in this ordinance and not inconsistent with the terms of this ordinance are ratified and confirmed in all respects. A-1 FG:54375381.2 EXHIBIT A DESCRIPTION OF THE BONDS (a) Principal Amount. The Bonds may be issued in one or more Series. The Project Bonds shall not exceed the aggregate principal amount of $6,500,000. The 2011 Refunding Bonds shall not exceed the aggregate principal amount required to carry out the 2011 Refunding Plan. The 2012 Refunding Bonds shall not exceed the aggregate principal amount required to carry out the 2012 Refunding Plan. (b) Date or Dates. Each Bond shall be dated the Issue Date, which date may not be later than one year after the effective date of this ordinance. (c) Denominations, Name. The Bonds shall be issued in Authorized Denominations and shall be numbered separately in the manner and shall bear any name and additional designation as deemed necessary or appropriate by the Designated Representative. (d) Interest Rate. Each Bond shall bear interest at a fixed rate per annum (computed on the basis of a 360-day year consisting of twelve 30-day months) from the Issue Date or from the most recent date for which interest has been paid or duly provided for, whichever is later. One or more rates of interest may be fixed for the Bonds. No rate of interest for any Project Bond may exceed 5.25%, and the true interest cost to the City for the Project Bonds may not exceed 3.50%. (e) Payment Dates. Interest shall be payable semiannually on dates acceptable to the Designated Representative, commencing no later than one year after the Issue Date. Principal payments shall commence on a date acceptable to the Designated Representative and shall be payable annually thereafter at maturity or in mandatory redemption installments, on dates acceptable to the Designated Representative. A-2 FG:54375381.2 (f) Final Maturity. The Project Bonds shall mature no later than the date that is 21 years after the Issue Date. The 2011 Refunding Bonds shall mature no later than six months after the final stated maturity of the 2011 Refunded Bonds. The 2012 Refunding Bonds shall mature no later than December 1, 2041. (g) Redemption Rights. The Designated Representative may approve in the Bond Purchase Contract provisions for the optional and mandatory redemption of Bonds, subject to the following: (1) Optional Redemption. Any Bond may be designated as being (A) subject to redemption at the option of the City prior to its maturity date on the dates and at the prices set forth in the Bond Purchase Contract; or (B) not subject to redemption prior to its maturity date. If a Tax-Exempt Bond is subject to optional redemption prior to its maturity, it must be subject to such redemption on one or more dates occurring not more than 10½ years after the Issue Date. (2) Mandatory Redemption. Any Bond may be designated as a Term Bond, subject to mandatory redemption prior to its maturity on the dates and in the amounts set forth in the Bond Purchase Contract. (h) Price. The purchase price for each Series may not be less than 95% or more than 140% of the stated principal amount of the Series. (i) Other Terms and Conditions. (1) No Series may be issued if it would cause the indebtedness of the City to exceed the City’s legal debt capacity on the Issue Date. (2) The Designated Representative may determine whether it is in the City’s best interest to provide for bond insurance or other credit enhancement, and may accept such additional terms, conditions, and covenants as the Designated Representative may determine are in the best interests of the City, consistent with this ordinance. (3) The Designated Representative may determine which, if any, of the Bonds are to be Tax-Exempt Bonds. A-3 FG:54375381.2 (3) The Designated Representative may specify that the 2011 Redemption Date is other than December 1, 2021. (4) The 2011 Refunding Bonds shall produce a minimum net present value savings to the City and its taxpayers of at least 3.00% (as a percentage of the 2011 Refunded Bonds). Net present value savings means the aggregate difference between (i) annual debt service on the 2011 Refunded Bonds, less (ii) annual debt service on the 2011 Refunding Bonds (including expenses related to costs of issuance of the 2011 Refunding Bonds), discounted to the Issue Date using the yield on the 2011 Refunding Bonds as the discount rate, plus (iii) excess cash, if any, distributed to the City on the Issue Date allocable to the 2011 Refunding Bonds, and less (iv) the amount of additional money of the City contributed to the 2011 Refunding Plan, if any, on the Issue Date. B-1 FG:54375381.2 EXHIBIT B Form of UNDERTAKING TO PROVIDE CONTINUING DISCLOSURE City of Edmonds, Washington Limited Tax General Obligation [Improvement and] [Refunding] Bonds, [Series] The City of Edmonds, Washington (the “City”), makes the following written Undertaking for the benefit of holders of the above-referenced bonds (the “Bonds”), for the sole purpose of assisting the Purchaser in meeting the requirements of paragraph (b)(5) of Rule 15c2-12, as applicable to a participating underwriter for the Bonds. Capitalized terms used but not defined below shall have the meanings given in Ordinance No. 4235 of the City (the “Bond Ordinance”). (a) Undertaking to Provide Annual Financial Information and Notice of Listed Events. The City undertakes to provide or cause to be provided, either directly or through a designated agent, to the MSRB, in an electronic format as prescribed by the MSRB, accompanied by identifying information as prescribed by the MSRB: (i) Annual financial information and operating data of the type included in the final official statement for the Bonds, as described in paragraph (b)(i) (“annual financial information”); (ii) Timely notice (not in excess of 10 business days after the occurrence of the event) of the occurrence of any of the following events with respect to the Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notice of Proposed Issue (IRS Form 5701 – TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (7) modifications to rights of holders of the Bonds, if material; (8) bond calls (other than scheduled mandatory redemptions of Term Bonds), if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the City, as such “Bankruptcy Events” are defined in Rule 15c2-12 (13) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional trustee or the change of name of a trustee, if material; (15) incurrence of a financial obligation of the City or obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City or obligated B-2 FG:54375381.2 person, any of which affect security holders, if material; and (16) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the financial obligation of the City or obligated person, any of which reflect financial difficulties. The term “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term “financial obligation” shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with Rule 15c2-12. (iii) Timely notice of a failure by the City to provide the required annual financial information described in paragraph (b)(i) on or before the date specified in paragraph (b)(ii). (b) Type of Annual Financial Information Undertaken to be Provided. The annual financial information that the City undertakes to provide in paragraph (a): (i) Shall consist of (1) annual financial statements prepared (except as noted in the financial statements) in accordance with applicable generally accepted accounting principles applicable to local governmental units of the State such as the City, as such principles may be changed from time to time; (2) general obligation debt that has been authorized and the amount outstanding; (3) assessed valuation for that fiscal year; (4) assessed valuation for the fiscal year regular ad valorem property tax levy rate amount rate limitation and percentage of tax collected during the fiscal year; and (5) amount of general fund revenues from other major tax sources; (ii) Shall be provided not later than the last day of the ninth month after the end of each fiscal year of the City (currently, a fiscal year ending December 31), as such fiscal year may be changed as required or permitted by State law, commencing with the City’s fiscal year ending December 31, 20__; and (iii) May be provided in a single or multiple documents, and may be incorporated by specific reference to documents available to the public on the Internet website of the MSRB or filed with the SEC. If not submitted as part of the annual financial information described in paragraph (b)(i), the City will provide or cause to be provided to the MSRB audited financial statements, when and if available. (c) Amendment of Undertaking. This Undertaking is subject to amendment after the primary offering of the Bonds without the consent of any holder of any Bond, or of any broker, dealer, municipal securities dealer, participating underwriter, Rating Agency, or the MSRB, under the circumstances and in the manner permitted by Rule 15c2-12. The City will give notice to the MSRB of the substance (or provide a copy) of any amendment to the Undertaking and a brief statement of the reasons for the amendment. If the amendment changes the type of annual financial information to be provided, the annual financial information containing the amended financial B-3 FG:54375381.2 information will include a narrative explanation of the effect of that change on the type of information to be provided. (d) Beneficiaries. This Undertaking shall inure to the benefit of the City and the holder of each Bond, and shall not inure to the benefit of or create any rights in any other person. (e) Termination of Undertaking. The City’s obligations under this Undertaking shall terminate upon the retirement or legal defeasance of all of the Bonds. In addition, the City’s obligations under this Undertaking shall terminate if the provisions of Rule 15c2-12 that require the City to comply with this Undertaking become legally inapplicable in respect of the Bonds for any reason, as confirmed by an opinion of Bond Counsel delivered to the City, and the City provides timely notice of such termination to the MSRB. (f) Remedy for Failure to Comply with Undertaking. As soon as practicable after the City learns of any failure to comply with this Undertaking, the City will proceed with due diligence to cause such noncompliance to be corrected. No failure by the City or other obligated person to comply with this Undertaking shall constitute a default in respect of the Bonds. The sole remedy of any holder of a Bond shall be to take action to compel the City or other obligated person to comply with this Undertaking, including seeking an order of specific performance from an appropriate court. (g) Designation of Official Responsible to Administer Undertaking. The Finance Director or the designee of the Finance Director is the person authorized to take such further actions as may be necessary, appropriate, or convenient to carry out this Undertaking in accordance with Rule 15c2-12, including the following actions: (i) Preparing and filing the annual financial information undertaken to be provided; (ii) Determining whether any event specified in paragraph (a) has occurred, assessing its materiality, where necessary, with respect to the Bonds, and preparing and disseminating any required notice of its occurrence; (iii) Determining whether any person other than the City is an “obligated person” within the meaning of Rule 15c2-12 with respect to the Bonds, and obtaining from such person an undertaking to provide any annual financial information and notice of listed events for that person required under Rule 15c2-12; (iv) Selecting, engaging and compensating designated agents and consultants, including municipal advisors and legal counsel, to assist and advise the City in carrying out this Undertaking; and (v) Effecting any necessary amendment of this Undertaking. C-1 FG:54375381.2 EXHIBIT C Form of SECOND AMENDMENT TO INTERLOCAL AGREEMENT FOR DEVELOPMENT OF THE EDMONDS CENTRE FOR THE ARTS FG:54375383.2 SECOND AMENDMENT TO INTERLOCAL AGREEMENT FOR DEVELOPMENT OF THE EDMONDS CENTRE FOR THE ARTS This Second Amendment to Interlocal Agreement for Development of the Edmonds Centre for the Arts (this “Second Amendment”) is made and entered into as of __________, 2021, among the City of Edmonds, a city duly organized and existing under and by virtue of the laws of the State of Washington (the “City”); the Snohomish County Public Facilities District, a municipal corporation duly organized and existing under the laws of the State of Washington (the “County PFD”); Snohomish County, a political subdivision of and duly organized and existing under the laws of the State of Washington and the Charter of Snohomish County (the “County”); and the Edmonds Public Facilities District, a municipal corporation duly organized and existing under and by virtue of the laws of the State of Washington, established by the City of Edmonds (the “City PFD”). RECITALS A. The City, County PFD, County, and City PFD (collectively the “Parties”) entered into an Interlocal Agreement dated November 4, 2002, recorded with the Auditor of the County of Snohomish, State of Washington under recording number 200211060003 (the “Original Interlocal Agreement”), to provide for the development of a Regional Center as defined in RCW 35.57.020 known as the “Edmonds Centre for the Arts” (the “Regional Center”); and B. In 2005, the Parties entered into the First Amendment to Interlocal Agreement for Development of the Edmonds Centre For The Arts to extend the required operational date to March 31, 2007; and C. Subsequently, the Parties entered into Addendum No. 1, Addendum No. 2, and Addendum No. 3 to the Original Interlocal Agreement, as amended by the First Amendment thereto; and D. Pursuant to Chapter 164, Laws of 2017, the Legislature extended the time period for the Sales and Use Taxes imposed under RCW 82.14.390 from a maximum 25- year term to a maximum 40-year term; and E. The City issued limited tax general obligation bonds (the “2002 Bonds”) to finance a portion of developing the Regional Center, payable in part from payments to be made by the City PFD under the Original Interlocal Agreement, and the City subsequently issued limited tax general obligation refunding bonds (the “2012 Bonds”) to refund the then-outstanding 2002 Bonds; and F. The City PFD has requested that the City defease and refund the outstanding 2012 Bonds to modify the debt service requirements of the outstanding 2012 FG:54375383.2 2 Bonds, and the City Council of the City has found that it is in the best interests of the City and its taxpayers to issue limited tax general obligation refunding bonds (the “Refunding Bonds”) to be used, together with other available funds, to defease and refund the outstanding 2012 Bonds; and G. The Parties desire to amend the Original Interlocal Agreement, as heretofore amended (the “Interlocal Agreement”), by this Second Amendment to conform the intergovernmental payments to be made to the City by the City PFD to the debt service payable on the Refunding Bonds and any limited tax general obligation refunding bonds issued by the City in the future to refund the Refunding Bonds; NOW, THEREFORE, the Parties hereby agree as follows: AGREEMENT 1. Amendment of Section A of the Interlocal Agreement. Section A of the Interlocal Agreement is hereby amended to include the following definitions: Bond or bond means each limited tax general obligation bond or limited tax general obligation refunding bond issued by the City to finance the development of the Edmonds Centre for the Arts. Finance or finance means to finance or refinance. 2. Replacement of Exhibit B-3. Exhibit B-3 of the Interlocal Agreement is hereby deleted and replaced in its entirety by the following: The amount of the intergovernmental payments to be made to the City by the City PFD shall equal the debt service payable on the bonds outstanding from time to time, as set forth in a schedule provided by the City to the City PFD and acknowledged and agreed to in writing by the City PFD. 3. Second Amendment Supersedes Inconsistent Provisions; Ratification. This Second Amendment supersedes and controls any inconsistent provisions in the Interlocal Agreement. Except as otherwise amended as provided herein, the remaining terms of the Interlocal Agreement are hereby ratified and confirmed. This Second Amendment shall become effective upon execution by each Party and filing with the Snohomish County Auditor. Dated: __________, 2021.