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Home My WebLink AboutState of Washington Office of the State Treasurer Local Option Capital Asset Lending (LOCAL) - Interlocal Agreement State of Washington Office of the State Treasurer LOCAL OPTION CAPITAL ASSET LENDING (LOCAL) .p.bpO.elp��: Ha oo . I� ;C�1t Series 2016B Financing Contract for Mason County Lease Number 0144-3-1 S State of Washington Certificates of Participation Series 2016B: Mason County Table of Contents NOTICE OF INTENT Notice of Intent RESOLUTIONS Form of Authorizing Resolution Certificate of Authorizing Resolution Certificate Designating Authorized Agency Representatives Opinion of Local Agency Counsel Incumbency Certificate FINANCING Local Agency Financing Contract(Signature Page) Local Agency Financing Contract Personal Property Certificate(s) PAYMENT SCHEDULE Agency Payment Schedule MISCELLANEOUS Local Agency Tax Certificate Evidence of Insurance 1 • 1 Notice of Intent State of Washington LOCAL(Local Option Capital Asset Lending) / Local Government Information County:_Mason_ Legal Name:_Mason County_MCAG No.: 0144 Contact Person:_Frank Pinter Title:_Budget Manager Address:_411 N.5u'St Shelton WA_ Zip: _98584 Phone:_360-427-9670 Fax: E-mail:_fpinter@co.mason.wa.us_ Property (Real Estate or Equipment) Property description(include quantity,if applicable):_County wide VOIP Phone System_ Total cost:$ 400,000_Maximum amount to finance:$_350,000_ Finance term:_5 years_Useful life:_10 years_Desired financing date:_7/l/15_ Purpose of property (Please be specific and include dept.of use):_County wide replacement of 25 year old PBX phone system_ If real estate,the Real Estate Worksheet: ❑Is attached ❑ Will be provided by(date)_ — If equipment,will the property purchase price be paid with: ® program proceeds or ❑ general funds to be reimbursed from program proceeds? If general funds are to be used,include a copy of the local agency's reimbursement resolution with the financing documents. Security Pledge ❑Voted general obligation-of local government.. I Non-voted general obligation of local government Other Information Approximate population:_61,000 (not required for cities and counties). . If any of the,following apply,please provide a complete discussion on a separate page: ❑ Yes ®No Does the local government use registered warrants, interfund loans or other cash flow borrowing? ❑ Yes ®No Is the local government a party to significant litigation? ❑ Yes ®No Is this a reimbursement? If yes,date funds spent _ Has local government received a bond rating in the last two years? ❑Yes ®No Bond rating(s): _ (attach rating agency letter) By executing this Notice of Intent,the local agency acknowledges,agrees to and accepts its designation and appointment as the agent of the nominal lessor in connection with the acquisition of the project.By executing this Notice of Intent,the local agency further acknowledges and agrees that certificate counsel and any other special counsel to the state in connection with the authorization,issuance and delivery of the certificates and the related financing documents shall not be acting,and shall not be deemed to act,as counsel to the local agency,nor shall any attorney-client relationship exist or be deemed to exist between such counsel and any participating local agency in connection with such matters. Submitted by:Fr Pinter Title: Budget Manager_ Signatu Date:_12/14/15_ I `1 Resolution No. y— i Authorization for the acquisition of personal property and execution of a financing contract and related documentation relating to the acquisition of Equipment WHEREAS,Mason County(the"Local Agency")has executed a Notice of Intent to the Office of State Treasurer,'in the form attached hereto as Annex 1 (the"NOI"),in relation to the acquisition of and the financing of the acquisition of the Property;as defined below,under the provisions of RCW ch 39.94;and WHEREAS,it is deemed necessary and advisable by the Commission of the Local Agency that the Local Agency acquire the equipment and/or personal property identified on Annex 1 attached hereto("Property");and WHEREAS,it is deemed necessary and advisable by the Commission of the Local Agency that the Local Agency enter into a Local Agency Financing Contract with the Office of the State Treasurer,in the form attached • hereto as Annex 2(the"Local Agency Financing Contract"),in an amount not to exceed$350,000.00 plus related financing costs in order to acquire the Property and finance the acquisition-of the Property;, WHEREAS,the Local Agency will undertake to acquire and/or improve the Property on behalf of and as agent of the Washington Finance Officers Association(the"Corporation")pursuant to the terms of the-local Agency Financing Contract,and in accordance with all applicable purchasing statutes and regulations applicable to the Local Agency;and WHEREAS,the Local Agency desires to appoint the.individuals set forth in Annex 3 as the representatives of the Local Agency in connection with the acquisition of the,Property and execution of the Local Agency Financing Contract(each an"Authorized Agency Representative"); NOW,THEREFORE,BE IT RESOLVED,by the Commissioners of Mason County as follows: Section 1.The individuals holding the offices or positions set forth in Annex 3 are each hereby appointed as a representative of the Local Agency in connection with the acquisition of the Property and execution of the Local Agency Financing Contract and all other related documents. A minimum of two Authorized Agency Representatives shall be required to execute any one document in order for it to be considered duly executed on behalf of the Local Agency. Section 2.The form of the Local Agency Financing Lease attached hereto as Annex 2 is hereby approved and the Authorized Agency Representatives are hereby authorized and directed to execute and deliver the Local Agency Financing Contract,in an amount not to exceed$350,000 plus related financing costs,and in substantially the form attached hereto with such changes as may be approved by the Authorized Representatives,for the acquisition of the Property and financing of the acquisition of the Property. Section 3.The Local Agency hereby authorizes the acquisition of the property as agent of the Corporation in accordance with the terms and provisions of the Local Agency Financing Contract. Section 4.The Authorized Representatives are hereby authorized to execute and deliver to the Office of State Treasurer all other documents,agreements and certificates,and to take all other action,which they deem necessary or appropriate in connection with the financing of the property,including,but not limited to,any amendment to the NOI,any tax certificate and any agreements relating to initial and ongoing disclosure in connection with the offering of securities related to the financing. Section 5.This resolution shall become effective immediately upon its adoption. Resolution No. 38 Ik ADOPTED by the Mason County Commissioners at a regular meeting thereof held this 12th day of July,2016. BOARD OF COUNTY COMMISSIONERS MASON COUNTY,WASHINGTON ATTEST: fA 1� vVMU Terri Jeffr Ch Juh Almanzor,Clerk of the Boar APPROVED AS TO FORM: Tim Sheldon,Commissioner Tim Whitehea Chief DPA Randy Neatherlin,Commissioner Certificate Designating Authorized Agency Representatives I, Terry Jeffreys, Chair of Mason County Board of Commissioners (the "Local Agency"), hereby certify that, as of the date hereof, pursuant to Resolution No. ,the following individuals are each an "Authorized Agency Representative," as indicated by the title appended to each signature, that the following individuals are duly authorized to execute and deliver the Local Agency Financing.Agreement to which this Certificate is attached as Exhibit C, and all documentation in connection therewith, including but not limited to the Personal Property Certificate(s) attached thereto as Exhibit B, that the signatures set forth below are the true and genuine signatures of said Authorized Agency Representatives and that pursuant to such resolution/ordinance, two of the three following signature(s) [is/are] required on each of the aforementioned documents in order to consider such documents executed on behalf of the Local Agency: r Jeffreys, Chair rank Pinter, Budget Manager Dated this 12th day of July, 2016. Terri re s, Chair Mason County Board of Commissioners SUBSCRIBED AND SWORN TO before me this 12th day of July, 2016 1.LjJ ilt'yt PJ-MA/V2\- NOTARY PUBLIC in and for the State ;59%0N fr D Wan dig residing at: iA • u° 40TARV N' Printed Name: iyLi Ai wia (/1 z ( My Commission Expires: yjZ()i-- ' PUBLIC '�." ,OE WASN;.s� �yu�eusn�u`�� Certificate of Authorizing Resolution I,the undersigned,Clerk of the Board for the Board of Mason County Commissioners(the"Local Agency"),DO HEREBY CERTIFY: ��}} 1. That the attached Resolution No.UO (herein called the"Resolution")is a true and correct copy of a Resolution of the Local Agency adopted/passed at a regular meeting of the Board of Commissioners held on the 12th day of July,2016,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 bylaw,due and proper notice of such meeting was given;that a quorum of the Commission was present throughout the meeting and a legally sufficient number of members of the Commission voted in the proper manner for the adoption of the Resolution; 3. That all other requirements and proceedings incident to the proper adoption/passage of the Resolution have been duly fulfilled,carried out and otherwise observed; 4. That the Resolution remains in full force and effect and has not been amended,repealed or superseded;and - 5. That I am authorized to execute this certificate. IN WITNESS WHEREOF,I have hereunto set my hand as of this 12th day of July,2016. [SEAL] Julie Almanzor, Clerk of the Board OFFICE OF THE MASON COUNTY PROSECUTING ATTORNEY MICHAEL K.DORCY 521 N.FOURTH STREET PROSECUTING ATTORNEY P.O.BOX 639 SHELTON,WASHINGTON 98584 PHONE:(360)427-9670 ext.417 FAX:(360)427-7754 July 12, 2016 Ellen Evans, Deputy State Treasurer Lease Purchase Program Office of the State Treasurer P.O. Box 40200 Olympia, Washington 98504-0200 Re: State of Washington Certificates of Participation, Series 2016B Dear Ms. Evans: We represent Mason County with respect to the above-referenced financing (the "Certificates"). In connection with the execution and delivery by Mason County of the Local Agency Financing Contract, enclosed herewith is an executed copy of our opinion letter dated as of the date of initial delivery of the Certificates(the"Dated Date"). You are to hold the opinion letter in escrow until the Dated Date, at which time, unless you are otherwise instructed by me in writing, the opinion letter may be considered released and shall become effective. Please contact me with any question. - Sincerely, Timothy Whitehead Chief Deputy Prosecuting Attorney OFFICE OF THE MASON COUNTY PROSECUTING ATTORNEY MICHAEL K.DORCY 521 N.FOURTH STREET PROSECUTING ATTORNEY P.O.BOX 639 SHELTON,WASHINGTON 98584 PHONE:(360)427-9670 ext 417 FAX:(360)427-7754 August 30,2016 Mason County Equipment 411 N. 5t' Street Shelton, WA 98584 State of Washington Office of the State Treasurer P.O. Box 40200 Olympia, Washington 98504-0200 Washington Finance Officers Association 1200 Fifth Avenue, Suite 1300 Seattle, Washington 98101-115 Re: State of Washington Certificates of Participation, Series 2016B (the"Certificates") Ladies and Gentlemen: I have acted as counsel to Mason County] (the"Local Agency") in connection with the execution and delivery by the Local Agency of the Local Agency Financing Contract, dated as of the date of initial delivery of the Certificates (the"Local Agency Financing Contract") by and between the state of Washington (the"State") and the Local Agency. As such counsel, I am of the following opinions: 1. Resolution number 38-16, approving the execution and delivery of the Local Agency Financing Contract, was duly [passed/adopted] by the governing body of the Local Agency on July 12, 2016 at a meeting of such governing body duly called and held in conformity with the law. 2. The Local Agency Financing Contract has been duly authorized, executed and delivered and, assuming the due authorization, execution and delivery by the other parties thereto, constitute legal,valid and binding obligations of the Local Agency,enforceable in accordance with their terms, subject only to bankruptcy, insolvency, moratorium, arrangement, reorganization and similar laws affecting creditors' rights, applicable equitable principles and the,application of judicial discretion in appropriate cases. I understand that agency installment payments to be made by the Local Agency under the Local Agency Financing Contract"will constitute a portion of the source of payment and security for installment payments to be made by the State to the Corporation under a Master Financing Contract between the State and the Corporation and that certificated interests in such installment payments will be offered to purchasers thereof by means of an official statement prepared by the State. I have neither reviewed nor participated in the preparation of such official statement and express no opinion regarding the adequacy or accuracy(under federal securities laws or otherwise) of any information presented therein. Timothy I e ead Chief Deputy Prosecuting Attorney Incumbency Certificate I,Karen Herr, County Auditor of the County of Mason, Washington, do hereby certify that the following is a true and correct listing of the Board of County Commissioners of Mason County and their terms of office: Terri Jeffreys January 1, 2015-2018 Tim Sheldon January 1, 2013-2016 Randy Neatherlin January 1, 2013-2016 Dated this y I Karen He , County Auditor 1 Transaction No. Annex 2 to Authorizing Resolution(Equipment) LOCAL AGENCY FINANCING CONTRACT,SERIES 20168 (Equipment) This Local Agency Financing Contract,Series 2016B(the"Agency Financing Contract")is entered into by and between the state of Washington(the "State 7;acting by and through the State Treasurer(the"State Treasurer"),-and Mason County,a County of the State(the"Local Agency"). RECITALS WHEREAS,certain State agencies(as defined in Appendix I hereto,"State Agencies")are authorized to acquire real and personal property used or needed by such State Agencies through Agency Financing Contracts entered into pursuant to Chapter 356,Laws of Washington,1989,codified as Chapter 39.94 of the Revised Code of Washington(the"RCW"),as supplemented and amended(the"Act");and WHEREAS,.Chapter 291,Laws of Washington,1998 supplemented and amended the Act to authorize the State to enter into Agency Financing Contracts on behalf ofcertain local agencies(as described therein,"Local Agencies"),including the Local Agency,to finance the acquisition of real and personal property by such Local Agencies;and WHEREAS,the State Treasurer has established a consolidated program providing for the execution-and"delivery of certificates of participation in such Agency Financing Contracts,or in Master Financing Contracts with respect thereto,in series from time to time in older to provide financing or refinancing for the costs of acquisition of real and personal property by State Agencies and Local Agencies;and WHEREAS simultaneously with the execution and delivery hereof the State is entering into a MasterFinancing Contract Series 20168,dated as of the Dated Date(the Master Financing Contract')with the Washington Finance Of iceis Association,a nonprofit corporation duly organized and existing under and by virtue of the laws of"the state of Washington(the"Corporation"),to provide financing for the costs of acquisition of certain items of personal property by certain State Agencies and Local Agencies,including the Local Agency,under the terms set forth therein;and WHEREAS,the State Treasurer and the Local Agency have determined that it is necessary and desirable to enter into this Agency Financing Contractto provide financing or refinancing for the costs of acquisition of certain items of personal property,described in Exhibit B hereto(the"Property"),by the Local Agency;and WHEREAS,the State Finance Committee has authorized the execution and delivery of this Agency Financing Contract pursuant to Resolution No.987 adopted on October 7,2003;and Wh EREEAS,all acts,conditions and things required by law to exist,to have happened and to have been performed precedent to and in connection-with the execution and delivery of this Agency Financing Contract do exist,have happened and have been performed in regular and due time,form and manner as required by law,and the Parties hereto are now duly authorized to execute,deliver and perform their respective obligations under this Agency Financing Contract; NOW THEREFORE;in consideration of the mutual covenants and agreements contained hereinand for other valuable consideration,the Parties hereto mutually agree as follows: Section 1.1 Defined Terms.Capitalized terms used but not otherwise defined in this Agency Financing Contract shall have the respective meaning`s given such terms.in Appendix I hereto. - Section 1.2 Notice of Intent:Personal Property Certificate: Certificate Designating Authorized Local Agency Representative The Local Agency has delivered a Notice of Intent to the State Treasurer in the form of Exhibit A attached hereto-and incorporated herein by this reference..In order to evidence its acceptance of the Property financed and acquired pursuant hereto,the Local Agency has executed and delivered herewith,or will execute and deliver;within 60 days from the Dated Date to the State Treasurer,a Personal Property Certificate in the form of Exhibit B attached hereto and incorporated herein by this reference:,The Local Agency has delivered a Certificate Designating Authorized Agency Representatives to the State Treasurer in the form of Exhibit C attached hereto and incorporated herein by this reference:Said Certificate is currently in force and has not been amended, withdrawn or superseded,and the signatures shown thereon are true and correct originals of the signatures of the persons who hold the titles shown opposite their names.The signature of any one of the individuals shown on said Certificate is sufficient to bind the Local Agency under this Agency Financing Contract with respect to any of the undertakings contemplated herein.The terms and provisions set*forth in Appendix II hereto are incorporated herein and made apart hereof by this reference. Section 1.3 Tstal ment Sale and Purchase of Property The State hereby agrees to sell,assign and convey,and does hereby sell,assign and convey to the Local Agency,and the Local Agency hereby agrees to purchase,acquire and assume,and does hereby purchase,acquire and assume,from the State,all of the State's right title and interest in and to the Property and all proceeds and profits thereof and therefrom,subject to the security interest created pursuant to Section 25 ofAppend'nr II hereof,and the Local Agency agrees to pay in consideration thereof the Purchase Price•therefor and interest thereon and the Additional Costs in accordance with Section 1.4 hereof and all other amounts required to be paid by the Local Agency hereunder all in accordance with the provisions of this Agency Financing Contract - Section 1.4 Agency Installment Payments.In consideration of the sale of theProperty and the covenants and agreements of the State in this Agency Financing Contract,the Local Agency hereby promises to pay to the State the following amounts at the following times:(a)On each Agency Installment Payment Date, the Agency Installment Payment set forth in Exhibit D hereto, consisting of a Principal Component and/or an Interest Component as set forth in such Exhibit;and(b)All Additional Costs incurred by the State in connection with the sale of the Property to the Local Agency, the execution and delivery of the Certificates,and the observance and performance of the Series 2016B Agreements,within thirty(30)days following receipt of an invoice from the State with respect thereto which includes(i)a brief description of each such Additional Cost(II)the party to whom payment is due,(iii)the amount thereof,and(iv)such additional information as the Local Agency may reasonably request Section 1.5 Term The term of this Local Agency Financing Contract shall commence on the Dated Date and shall terminate on the date on which all amounts due hereunder shall have been paid or the payment thereof duly provided for pursuant to Section 4.3 of Appendix II hereof. STATE OF WASHINGTON Mason County OFFICE OF THE STATE TREASURER as Local Agen By By edr\ lit ii DesignatedTreSsurer Representat a Authorized Aug I�epr en iv Teri[ 3e -� e s 7 krcndy .Nea-4 -erl,r, By Autho' d Agency Re five tvekw I ° Se,.,.raes Transaction No. Annex 2 to Authorizing Resolution(Equipment) - LOCAL AGENCY FINANCING CONTRACT,SERIES 2016B (Equipment) This Local Agency Financing Contract,Series 2016B(the"Agency Financing Contract")is entered into by and between the state of Washington(the "State"),acting by and through the State Treasurer(the"State Treasurer"),and Mason County,a County of the State(the"Local Agency"). RECITALS WHEREAS,certain State agencies(as defined in Appendix I hereto,"State Agencies")are authorized to acquire real and personal property used or needed by such State Agencies through Agency Financing Contracts entered into pursuant to Chapter 356,Laws of Washington,1989,codified as Chapter 39.94 of the Revised Code of Washington(the"RCW"),as supplemented and amended(the"Act");and WHEREAS,Chapter 291,Laws of Washington, 1998 supplemented and amended the Act to authorize the State to enter into Agency Financing Contracts on behalf of certain local agencies(as described therein,"Local Agencies"),including the Local Agency,to finance the acquisition of real and personal property by such Local Agencies;and WHEREAS,the State Treasurer has established a consolidated program providing for the execution and delivery of certificates of participation in such Agency Financing Contracts,or in Master Financing Contracts with respect thereto,in series from time to time in order to provide financing or refinancing for the costs of acquisition of real and personal property by State Agencies and Local Agencies;and WHEREAS,simultaneously with the execution and delivery hereof,the State is entering into a Master Financing Contract,Series 2016B,dated as of the Dated Date(the"Master Financing Contract")with the Washington Finance Officers Association,a nonprofit corporation duly organized and existing under and by virtue of the laws of the state of Washington(the"Corporation"),to provide financing for the costs of acquisition of certain items of personal property by certain State Agencies and Local Agencies,including the Local Agency,under the terms set forth therein;and WHEREAS,the State Treasurer and the Local Agency have determined that it is necessary and desirable to enter into this Agency Financing Contract to provide financing or refinancing for the costs of acquisition of certain items of personal property,described in Exhibit B hereto(the"Property"),by the Local Agency;and WHEREAS,the State Finance Committee has authorized the execution and delivery of this Agency Financing Contract pursuant to Resolution No.987 adopted on October 7,2003;and WHEREAS,all acts,conditions and things,required by law to exist,to have happened and to have been performed precedent to and in connection with the execution and delivery of this Agency Financing Contract do exist,have happened and have been performed in regular and due time,form and manner as required by law,and the Parties hereto are now duly authorized to execute,deliver and perform their respective obligations under this Agency Financing Contract; NOW THEREFORE,in consideration of the mutual covenants and agreements contained herein and for other valuable consideration,the Parties hereto mutually agree as follows: Section 1.1 Defined Terms.Capitalized terms used but not otherwise defined in this Agency Financing Contract shall have the respective meanings given such terms in Appendix I hereto. Section 1.2 Notice of Intent: Personal Property Certificate: Certificate Designating Authorized Local Agency Representative. The Local Agency has delivered a Notice of intent to the State Treasurer in the form of Exhibit A attached hereto and incorporated herein by this reference.In order to evidence its acceptance of the Property financed and acquired pursuant hereto,the Local Agency has executed and delivered herewith,or will execute and deliver within 60 days from the Dated Date to the State Treasurer,a Personal Property Certificate in the form of Exhibit B attached hereto and incorporated herein by this reference.The Local Agency has delivered a Certificate Designating Authorized Agency Representatives to the State Treasurer in the form of Exhibit C attached hereto and incorporated herein by this reference. Said Certificate is currently in force and has not been amended, withdrawn or superseded,and the signatures shown thereon are true and correct originals of the signatures of the persons who hold the titles shown opposite their names.The signature of any one of the individuals shown on said Certificate is sufficient to bind the Local Agency under this Agency Financing Contract with respect to any of the undertakings contemplated herein.The terms and provisions set forth in Appendix II hereto are incorporated herein and made a part hereof by this reference. Section 1.3 Installment Sale and Purchase of Property.The State hereby agrees to sell,assign and convey,and does hereby sell,assign and convey to the Local Agency,and the Local Agency hereby agrees to purchase,acquire and assume,and does hereby purchase,acquire and assume,from the State,all of the State's right,title and interest in and to the Property and all proceeds and profits thereof and therefrom,subject to the security interest created pursuant to Section 2.5 of Appendix II hereof,and the Local Agency agrees to pay in consideration'thereof the Purchase Price therefor and interest thereon and the Additional Costs in accordance with Section 1.4 hereof,and all other amounts required to be paid by the Local Agency hereunder,all in accordance with the provisions of this Agency Financing Contract Section 1.4 Agency Installment Payments.In consideration of the sale of the Property and the covenants and agreements of the State in this Agency Financing Contract,the Local Agency hereby promises to pay to the State the following amounts at the following times: (a)On each Agency Installment Payment Date, the Agency Installment Payment set forth in Exhibit D hereto,-consisting of a Principal Component and/or an Interest Component as set forth in such Exhibit;and(b)All Additional Costs incurred by the State in connection with the sale of the Property to the Local Agency, the execution and delivery of the Certificates,and the observance and performance of the Series 2016B Agreements,within thirty(30)days following receipt of an invoice from the State with respect thereto which includes(i)a brief description of each such Additional Cost,(ii)the party to whom payment is due,(iii)the amount thereoff,and(iv)such additional information as the Local Agency may reasonably request. Section 1.5 Term.The term of this Local Agency Financing Contract shall commence on the Dated Date and shall terminate on the date on which all amounts due hereunder shall have been paid or the payment thereof duly provided for pursuant to Section 4.3 of Appendix II hereof STATE OF WASHINGTON Mason County OFFICE OF THE STATE TREASURER as Local Agen By_______________ By L lkui ijo Designated Treasurer Representat a Authorized Age epr en7"vK,4v1a%4 'r�rrt3e C e s -Nea4berl�r' By Authorized Agency Representative APPENDIX II LOCAL AGENCY FINANCING CONTRACT,SERIES 200 (Personal Property) (General Obligation/Nonvoted) ARTICLE I DEFINITIONS; CONSTRUCTION;MISCELLANEOUS PROVISIONS; SUPPLEMENTS Section 1.1. `Definitions,- Construction. Miscellaneous Provisions Supplements. Capitalized terms used but not otherwise defined in this.Agency Financing Contract shall have the respective meanings given such terms in Part 1 of Appendix I of this Agency Financing Contract, which is incorporated herein and made a part hereof by this reference. This Agency Financing Contract shall be.construed in accordance with the Rules of Constructions set forth in Part 2 of Appendix I of this Agency Financing Contract,which is incorporated herein and made a part hereof by this reference. The,miscellaneous provisions set forth in Part 3 of Appendix I are incorporated herein and made a part:hereof by this.reference. This Agency Financing Contract may be supplemented and amended from time to time in accordance with Part 4 of Appendix I of this Agency Financing.Contract, which is incorporated herein and made a part hereof by this reference. Section 1.2. Performance by Re resentatives. Any authority granted or duty imposed upon the State Treasurer or the, State hereunder may be undertaken.and performed by the Treasurer Representative,Any authority or duty imposed upon the Local Agency hereunder may be undertaken and performed by the Authorized Agency Representative.. ARTICLE II SALE AND-PURCHASE OF PROPERTY Section 2.1. Conditional Sales Contract:Master Financing Contract. (a) ;Conditional Sales Contract. This Agency Financing Contract shall constitute a "conditional sales contract"and a."-Agency Financing Contract"within'the meaning of the Act. (b) Master Financing -Contract. The Local Agency acknowledges -and agrees that this Agency Financing Contract is subject and -subordinate in all respects to the terms and provisions of the Master Financing Contract. Section 2.2. Appointment of Agents;Acquisition of Property. . (a) Appointment of Agents. The Local Agency hereby ratifies, approves :and confirms, and accepts and agrees to, its designation and appointment as agent of the Corporation in connection with the acquisition of the Property. (b) Acquisition ofProperty. The Local Agency hereby agrees that(i) it has caused or will cause the Property to be acquired, as agent for the Corporation,with all reasonable dispatch; DOCSPNW 1:34127.5 42248-21 MY2 1 (ii) it will make, execute, acknowledge and:,deliver any contracts, agreements, orders, receipts, documents; writings or instructions with or to any Person and do all other things that may be necessary or desirable to acquire the Property; and (iii) it will pay or cause to be paid the Costs of Acquisition of the Property from funds available to it pursuant to this Agency Financing Contract and the Master Financing Contract. The appointment of the Local Agency to act as agent of the Corporation in connection with the acquisition of the Property is made and conferred • irrevocably by the Corporation, and shall not be terminated by any act of the Local Agency, the State Treasurer or otherwise, • The Local Agency shall negotiate or call for bids for the purchase of the Property in accordance with the requirements and limitations, if any; imposed by State or local law with respect to the purchase of such Property'by such Local Agency. It is intended by the Parties hereto that neither the Corporation nor the State shall have any responsibility, liability or obligation with respect₹o the selection or procurement of any of the Property. (c) Revision and Substitution'of Property. ,The Local Agency, with the prior written consent of the State Treasurer, may revise'any item,of Property to be financed or refinanced and acquired'pursuant hereto, or the description thereof;provided,that(i)such item of Property as so • revised shall satisfy'the requirements: under this Agency Financing Contract and the Master Financing Contract with respect to'the substitution of Property previously acquired; (n)the Costs of Acquisition of such item of.Property shall not be materially reduced thereby and (iii) any such revision shall not relieve the,Local Agency of its obligation to acquire the Property"in accordance herewith and with the Master Financing,Contract. After acquisition of an item of Property,the Local Agency,with the prior written consent of the State Treasurer,may substitute for an mein of Property acquired pursuant to this Agency Financing'Contract other personal property by filing with the State Treasurer (i) a certificate of the Agency stating that such substitute Property (A) has a remaining useful life equal to or greater than the Property for which it is being substituted, (B)has;a fair market value equal to or greater than the fair market value'of the item of`Property for which'it is being substituted; (C) is free and clear of all liens and encumbrances except a'first priority security interest in favor of the Fiscal Agent, as assignee of the Corporation, under the Master Financing Contract; (D) is of equal usefulness and value as the Property for which it is being substituted;,(P)is essential to the Agency's ability to carry out its governmental functions and responsibilities;:and(F) is,expected ₹o be used by such Agency immediately and for the term of this Agency Financing Contract; and (ii) an Opinion of Counsel to.the effect;that such substitution•.will not cause interest evidenced and represented by the Certificates to he includable.in gross income for federal ;income "tax purposes under the Code. Section 2.3. Acquisition Fund. Pursuant .to:the Trust Agreement, the State Treasurer shall establish the Acquisition Fund and make disbursements therefrom in accordance with the provisions thereof and of the Master Financing Contract to pay.the Acquisition-Costs of the Property on behalf of the Corporation. A.portion of the proceeds of the sale of the Certificates shall be deposited in the Acquisition Fund. Moneys on:deposit in the Acquisition Fund shall be invested by the State Treasurer as provided_in the Trust Agreement. Disbursements from the Acquisition Fund. shall he made as-provided in the Trust Agreement. The amount allocable to each Agency shall be established by the State Treasurer and shall be an amount not to exceed to DOCSPNW I:34127.5 • - • 42248-21 MY2 2 • the Acquisition Costs of its respective Property.The Local Agency shall file requisitions with the State Treasurer for the Acquisition Costs of the Property or reimbursement therefor in such form as the State Treasurer,shall reasonably require. If moneys in the Acquisition Fund allocable to the LocalAgency shall not be sufficient to pay the Acquisition Costs of the Property in full, the Local Agency shall cause the Acquisition Costs of such Property in excess of the allocable amount in the Acquisition Fund to be paid from other moneys of such Local Agency.Neither the State Treasurer nor the Corporation makes any representation or warranty;,either express or implied, that the moneys which will be deposited into the Acquisition Fund allocable to the Local Agency will be sufficient to pay the Acquisition Costs of the Property. The State Treasurer and the Corporation shall have no obligation or liability for the payment of the Acquisition Costs of the Property other than from the proceeds of the Certificates and any other amounts that may'be provided by the Local Agency. If the Local Agency shall pay or cause the payment of any Acquisition Costs in excess of the-allocable amounts in the Acquisition Fund available for such purpose from other funds,the Local Agency shall not be entitled to any reimbursement from the State Treasurer or the Corporation for such payments, nor shall the Local Agency be entitled to any-diminution, reduction,"°abatement, postponement, counterclaim, defense or set-off of the Agency Installment Payments, Additional Costs or other amounts otherwise required to be paid hereunder. The Fiscal Agent, as assignee of the.Corporation, shall have no responsibility, liability-or obligation under the Master Financing-Contract or otherwise with respect to the acquisition of the Property or payment of the Acquisition Costs thereof. Section 2.4.:',. Title-.to the.Property. - All right, title and interest in and to the Property shall transfer to and be vested in the Local Agency from the State without any-further action by the Local Agency or the State immediately upon the acquisition thereof or reimbursement to'the Local Agency for the Acquisition Costs thereof;provided that the State Treasurer and the Local Agency shall take such action and execute such documents (including without limitation bills of sale and other title documents) as may be deemed necessary or desirable by the State Treasurer or the Local Agency to evidence and confirm such transfer of title pursuant to this Agency Financing Contract. . Title to any.and all additions,modifications, improvements, repairs or replacements to• •.the Property shall be -vested in the Local Agency, subject to the security interest of the Corporation until payment of all amounts due and owing with respect to such Property under'this • Agency Financing Contract. Any Property constituting a motor- 'vehicle subject to. registration with the State , Department of Licensing shall be registered with the Local Agency as the registered and legal owner thereof. , Section 2.5. Security Interests. (a) State Security Interest In order to secure the payment and performance by the State of its obligations under the Master Financing Contract, the State has pledged, granted, assigned and conveyed to the Corporation a lien on and security interest in all right,-title and DOCSPNWI:34127.5 42248-21 MY2 3 interest of the State,whether now owned or-hereafter acquired, in and to the Property and this Agency.Financing Contract,-including-without limitation the Agency Installment Payments and° all proceeds thereof The'Local Agency acknowledges and agrees to`•such pledge, grant,'• assignment and conveyance, and hereby acknowledges that its right, title and interest in and to the Property is subject to-such=first priority hen and security interest: Local Agency Security Interest ,In order to secure'the a went and performance �).: g Y tY PY by the Local Agency of its obligations.uiider this.Agency Financing Contract,the Local Agency hereby;pledges, grants,assigns and conveys to the Corporation a lien on and security interest in allright,i title and interest of the Local Agency;whether now owned or hereafter acquired,in and`-- to the Property. Accordingly, this Agency Financing.Contract constitutes a secunty.agreement. The Local,Agency';acknowledges and,agrees that l each provision of this ,Agency Financing Contract is also;a provision of the security agreement. The Local Agency further agrees that the Corporation may (i),:jcomntingle Property which comes into its,possession,,(a)re pledge such Property.Upon terms which impair the Local Agency's nght to redeem such Property, and (in) require.theLocal Agency to assemble the Property:and make it available to the Corporation in a manner which'is reasonably.convenient to both Parties. To the extent the Corporation is required,for any:reason to provide commercially reasonable notice to.the Local Agency,the State agrees that notice mailed by first class mail five days before'.the'event,of which notice is given is commercially reasonable notice:The standard by which the:Corporation's rights and duties with respect to:such security agreement shall be measured is gross negligence or willful misconduct ::: If required by:.the Corporation or the Fiscal Agent, as assignee of the Corporation,at any time during the term;of:_this,"Agency".Financing.:,Contract, the Local Agency will execute and. dehver;to the:Corporation or the Fiscal"Agent, as the case may,be, in,foam satisfactory to the Corporation or the Fiscal Agent, such security agreements, financing statements'.and/or;other-.- instruments covering the Property and:all:accessions thereto:': Section 2 6 Disclaimer of.Warranties. The Local .Agency;acknowledges,and agrees that the Property is of a nature,size, design and capacity selected by the Local Agency.;pursuant ==' to its own specifications, and not,by the_State or the-Corpoi ation, and"that neither the State nor the Corporation is a manufacturer,,supplier or al'vendor of such.Property"-THE STATE AND the Corporation MAKE.NO,_WARRANTY OR,REPRESENTATION, EITHER EXPRESS':OR IMPLIED, AND ASSUME NO RESPONSIBILITY,LIABILITY,OR OBLIGATION, AS TO THE VALUE, DESIGN, CONDITION, "MERCHANTABILITY OR 'FITNESS FOR. -A PARTICULAR PURPOSE OR FITNESS FOR USE OF THE PROPERTY, OR. AS TO THE TITLE THERETO,` OR:. FOR: THE, ENFORCEMENT OF _THE MANUFACTURERS', SUPPLIERS'•.OR.,VENDORS' REPRESENTATIONS; WARRANTIES OR GUARANTIES, OR ANY ;OTHER REPRESENTATION `OR WARRANTY WITH RESPECT TO THE PROPERTY. IN NO EVENT SHALL THE STATE OR the Corporation BE LIABLE OR RESPONSIBLE FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR`'CONSEQUENTIAL DAMAGES IN CONNECTION WITH OR ARISING OUT OF THIS AGENCY FINANCING CONTRACT OR THE.EXISTENCE, FURNISHING, FUNCTIONING OR R' USE .BY THE LOCAL AGENCY OF THE PROPERTY. DOCSPNWI:34127.5 :34127.5 42248-21 MY2 - 4 - The State hereby grants, assigns and conveys to the Local Agency during the term hereof, for so long as no Agency Event of Default, Event of Default or other event permitting termination of this Agency Financing Contract has occurred and is continuing hereunder, all representations, warranties and •guaranties, if any, express or implied, with respect to 'the Property from the manufacturers, suppliers and vendors thereof, subject,. however, to a reservation by the State and the Corporation of a right to independently enforce such.warranties and guaranties. _ No officer, employee or agent of any manufacturer, supplier or vendor is authorized to waive or alter.any term or condition of this Agency Financing Contract, and no manufacturer, supplier or vendor shall in any, way'affect the Local Agency's- duty to pay'and perform its obligations as set forth in this Agency Financing Contract. .• • ARTICLE III - AGENCY INSTALLMENT PAYMENTS;PAYMENTS BY STATE TREASURER;FULL FAITH AND CREDIT OBLIGATION Section 3.1. Agency Installment Payments. Each Agency Installment Payment shall consist of a Principal Component and/or an Interest Component as set forth in Exhibit D to this Agency Financing Contract.. Interest shall accrue and be calculated.as determined by the State Treasurer,which determination shall be binding and conclusive against the Local Agency absent manifest error.Each Agency Installment Payment payable hereunder shall be paid to or upon the order of the State Treasurer at such place as the State Treasurer shall direct in writing not less, than ten (10) Business Days prior to the Agency Installment Payment Date by electronic funds , transfer in lawful money of the United States of America. Payments of Additional Costs shall be made to or upon the order of the State Treasurer. Each Agency Installment Payment shall be applied first to the Interest Component due hereunder, and then to the Principal Component due hereunder. Section 3.2. Sources of Payment of Agency Installment Payments. (a) Local Agency Financing Contract. The Local Agency hereby acknowledges and . agrees that the State is acquiring the Property from the Corporation for and on behalf of the Local Agency. Concurrently with the•execution hereof, the State shall execute and deliver the Master.Financing Contract pursuant.to which the State shall agree to make Installment Payments for the acquisition of the Property,for and on behalf of the respective Agencies, at such times and. in such amounts as-provided therein, which will be sufficient in the aggregate to pay the Purchase Price of the Property to be acquired by the State.for and on behalf of the Local.Agency, . together with all other personal property to be acquired for and on behalf of the other Local Agencies and the State Agencies,and interest thereon. That portion of the Installment Payments that is allocable to the Purchase Price of the Local Agency Property and interest thereon shall be payable by-the State solely from Agency Installment Payments to be made by the respective Local Agencies, including the Local Agency, except as otherwise provided in the Master Financing Contract. The obligation of the Local Agency to.make its Agency Installment Payments shall be a direct and general obligation of the' Local Agency to which the full.faith and credit of such Local Agency-is hereby pledged. The DOCSPNW 1:34127.5 42248-21 MY2 5 State shall not be obligated to.pay.that portion of the Installment Payments that is allocable to the Purchase Price of the Local Agency Property and interest thereon other than from Agency Installment Payments paid by the respective Local Agencies, except as otherwise provided in the Master Financing Contract. : (b) . Intercept,of Local Agency Share. of State Revenues : In,the event that the Local Agency ,fails to make any payment .due under this Agency Financing Contract,:the State Treasurer shall withhold an amount sufficient.to make such payment from the Local Agency's share of State revenues or other amounts authorized or required by law to be distributed:by the State to the Local Agency,including but not limited to leasehold excise-taxes sales and use taxes, excise taxes,;property.taxes, and t-liquor control board receipts,provided,.that the use of any such revenues or amounts to make such payments is otherwise authorized`or permitted by State law. Such withholding shall continue until all such delinquent payments have been made. Amounts withheld by the State Treasurer shall be applied to make any such payment due under r this Agency Financing'Contract or `°behalf of the Local Agency, or to reimburse the State Treasurer for any such payment made pursuant to Subsection'32(c) hereof The Local Agency hereby authorizes,approves and consents to any such withholding. (c) ( Conditional Payment of Local Agency Installment Payments.: Upon the failure of the Local Agency to'make any Agency Installment Payment at such time and in such.amount as required pursuant to this Agency-Financing Contract, the State Treasurer--shall,to the extent of legally available appropriated funds and subject to any Executive Order`reduction, make such payment into the:Agency 1Installment Payment.Fund,,defied below, on behalf of such Locale Agency within ten (10).Business Days after,such Agency Installment Payment Date The Local Agency shall-reimburse the State for such payments made on its behalf mimediately thereafter and in any case not,later than ten(10) Business'Days after such Agency Installment Payment Date, together with interest thereonat-a rate equal to the State Reimbursement Rate Anything herein to'the contrary notwithstanding, failure of the Local Agency to reimburse the State forany such payment shall not.constitute an Agency Event of Default hereunder, but the State may institute such legal action and pursue such other remedies against the Local Agency as the State deems necessary or desirable, including, but not limited to, actions-for specific performance, injunction and/or the recovery of damages. (d) ' Payments by Local•Agency' Treasurer. `The tteasurer of the Local Agency i hereby authorized and,directed to establish and/or maintain a special fund in the "bonds payable" category of accounts of the Local Agency for the purposes of paying the Local Agency's Agency Installment Payments and Additional Costs. The treasurer of the Local Agency is hereby fiuther authorized and directed to remit each:payment of Agency Installment Payents to the State Treasurer or its assignee on each Agency'Installment Payment Date and any Additional Costs when due hereunder. Such payment shall be made from any'legally available funds of the Local Agency. Section 3.:3. Deposit and Investment of Agency Installment. Payments. The Local Agency hereby 'acknowledges and' agrees that the Agency Installment Payments shall be deposited in a special fund or funds maintained by the State Treasurer (the"Agency Installment Payment _Fund"). Payments of Agency Installment Payments from State Agencies shall be separately accounted for from °payments-from Local Agencies. The Agency Installment DOCSPNW 1:34127.5 42248-21 MY2 6 / - a Payments due on each Agency Installment Payment Date shall be at least sufficient, in the aggregate, to make the Installment Payment next coming due under the Master Financing Contract. Amounts in the Agency Installment Payment Fund, including investment earnings thereon, shall be used and applied,first, to make the Installment Payment next coming due, and thereafter, but prior to the next Agency Installment Payment Date, to-the extent that-amounts remain in such Fund after such Installment Payment is made,to pay Additional-Costs or for any other lawful purpose of the State Treasurer.-Amounts in the Agency Installment Payment Fund shall be invested in Qualified Investments, and shall be separately accounted for, but may be commingled with other moneys on deposit with the State t,Treasurer solely for 'investment purposes.The Local Agency shall have no right,title or interest in or to the'amounts on deposit from time to time in the Agency Installment Payment Fund. Section 3.4. No Set-Off. The obligation of the Local .Agency to make Agency Installment Payments from the'sources set forth herein and to perform its other obligations hereunder shall be absolute and unconditional.The Local Agency shall make Agency Installment Payments as and when the same shall become due without diminution,reduction,postponement, abatement,counterclaim, defense or set-off as a result of any dispute, claim or right of action by, against or among the State, the Corporation, the Fiscal Agent, any Agency, and/or any other Person, or for any other reason;provided, that nothing in this Section 3.4 shall be.construed to release or excuse the State from the observance or performance of its obligations hereunder. If the'State shall'fail to observe or perform any such obligation, the Local Agency may institute such legal action and pursue-such other remedies against the State as the Local Agency deems necessary or desirable, including, but not limited to, actions for specific performance, injunction and/or the recovery of damages. . ' Section 3.5. " Assinnments by the Corporation. The Local Agency acknowledges-and agrees "that, concurrently with the execution and delivery hereof,_ the Corporation will unconditionally grant, sell, assign, transfer.and convey to the Fiscal Agent without recourse (i) all of its frights to'receive the Installment Payments under and pursuant to the Master Financing - Contract, (ii) all of its remaining right, title and interest in,'to and under the Master Financing Contract and this Agency Financing Contract, and in and to the Property (including any security interest therein), including but not limited to its right to take all actions and exercise all remedies -under and pursuant to the Master Financing Contract, pursuant to•the Master Assignment in consideration for the payment by the Fiscal Agent to the State ,Treasurer, as agent of the Corporation, of the proceeds of the sale of the Certificates. The State and the Corpoxation•have acknowledged and agreed that such grant, sale, assignment, transfer and conveyance by the Corporation'is intended to be a true sale of the Corporation's right, title and interest, and that upon such grant, sale, assignment, transfer and conveyance, the Corporation shall cease to have any rights, dirties,or obligations under the Master Financing Contract or with respect to the Property, and the Fiscal Agent shall thereafter have,all,the rights, duties and obligations of the Corporation thereunder as if the Fiscal Agent had been the original party thereto, and, except where the context otherwise requires, every reference therein to the Corporation shall be deemed and construed to refer to the Fiscal-Agent. Anything• herein or therein to the contrary notwithstanding, such grant, sale, assignment, transfer and conveyance shall not confer any rights or impose any duties or obligations on the Fiscal Agent other than as expressly set forth•in the Trust Agreement and the Master Assignment. D0CSPNW134I273 42248-21 MY2 7 ARTICLE IV OPTIONAL AND MANDATORY PREPAYMENT OF AGENCY INSTALLMENT PAYMENTS Section 4.1. Optional Prepayment. - .. -(a) The Local Agency may, at its option, prepay all or.any portion of its.Agency Installment Payments then_unpaid, in. whole or in part on any date, by causing to be deposited :. with the State`Treasurer money and/or Government Obligations in,an amount sufficient for-the State Treasurer to,.prepay, or defense the portion of its.Installment Payments corresponding thereto in accordancewith Subsection 4.1(a) or 4.1(b) of the Master Financing Contract, and to pay any Additional Costs in connection therewith. b The Local Agency shall •provide the State Treasurer;with not less than 60 days' prior.written notice,of its-intention to prepay;any,of.its Agency Installment Payments, which notice shall specify the date of the date'of.such prepayment, and the amount and the Agency Installment',Payment Dates of the Agency Installment Payments to be prepaid . The-State;,. Treasurer shall notify the Local Agency within fifteen(15).Business Days after:receipt of such notice from the Local Agency as to the amount required'to be paid in connection with such prepayment or defeasance of the corresponding.Installment:Payments, including any Additional Costsin connection therewith The determination by the State Treasurer of the amount to be paid by the Local Agency shall be binding and conclusive against such Local Agency, absent, manifest error. Section 4.2. Revision of Agency Installment Payments upon Optional Prepayment. The Principal Components and.Interest Components of the.Agency Installment Payments due on each,Agency`Installment Payment Date on and after the,'date of any.prepayment pursuant to, •. Section 4.1_hereof, as set forth in Exhibit D hereto, shall be reduced by the State Treasurer to reflect'such prepayment, in such amounts and.on such Agency Installment Payment Dates as the Local Agency shall.elect.in its written notice.to the State Treasurer, pursuant to Section 4.1.(b). hereof. Section 4.3. Discharge" of Agency Financing Contract All right, title and interest of.. the State herein and all obligations:of the Local Agency hereunder shall cease,terminate,become void and be completely discharged and satisfied (except for the right of the State Treasurer and the Fiscal Agent,as assignee of the Corporation, and the obligation of the Local Agency to have the moneys' and Government.Obligations so set aside applied to make the remaining'Agency Installment Payments)when either: (a) all Agency Installment Payments and'all Additional Costs and.other amounts due hereunder have been paid in accordance herewith;or' (b} (i)the Local Agency shall have delivered a'written notice to the State Treasurer of its intention to prepay all of the Agency Installment Payments remaining unpaid; (ii) the Local Agency- shall have caused to -be deposited` with the State Treasurer (A) moneys and/or Government Obligations in accordance with Section'4.1 hereof;=and'(B) an Opinion'•of Counsel to the effect that such actions are permitted hereunder, under the Master Financing Contract and DOCSPN W 1:34127.5 42248-21 MY2 8 under the Trust Agreement and will not cause interest evidenced and represented by the Certificates to be includable in gross,income for federal income tax purposes under the Code; and (iii) for so long as.any Agency Installment.Payments remain unpaid, provision shall have been made satisfactory to the Corporation and the Fiscal Agent for payment of all Additional Costs. .. ARTICLE V REPRESENTATIONS,WARRANTIES,COVENANTS AND AGREEMENTS . Section 5.1. Representations and Warranties of the Local Agency. The Local Agency represents and warrants as follows: ,(a) The Local,Agency is a "Local Agency" within the meaning of the Act, duly organized and validly existing under the Constitution and laws of the state of Washington. (b) The Local Agency is authorized under the laws of the state of Washington and its Charter or other constituent document,if any, to enter into and perform its obligations under this Agency Financing Contract. •. (c) Neither the execution and delivery by the Local Agency,of this Agency Financing Contract, nor the observance and performance of the"terms and conditions hereof,.nor the consummation of the transactions contemplated hereby, conflicts with or constitutes a breach of or default under`any agreement or instrument to which the Local Agency-is a party or by which the Local Agency or its property is bound, or results in-the creation or imposition of any lien, charge or encumbrance whatsoever upon the Property,- except as expressly provided in this Agency Financing Contract and the Master Financing Contract. (d) The Local Agency has duly authorized, executed and;delivered this :Agency Financing.Contract. (e) , This Agency:Financing Contract is a valid and binding obligation of the Local Agency, enforceable against it in accordance with its terms,except as such enforceability may be affected by bankruptcy,.insolvency, reorganization, moratorium and other laws relating to or affecting creditors rights generally, to the application of equitable principles,'and to the exercise of judicial discretion in appropriate cases. (f) The Property to be financed and acquired,pursuant to this Agency Financing Contract is essential to the'Local•Agency's ability to'carry'out its governmental functions and responsibilities,.and the Local Agency expects to make immediate and continuing use of such Property during the term of this Agency Financing Contract. (g) The useful life of the Property is equal to or.exceeds the term hereof. (h) The obligations of the Local Agency under this Agency Financing 'Contract, together with all other -outstanding indebtedness of the Local Agency, do not exceed any statutory or constitutional debt limit applicable to the Local Agency. DOCSPNW1:34127.5 42248-21 MY2 9 (i) The Local Agency makes no representation;;or warranty regarding the perfection of any security interest in the Property,the Master Financing Contract,or this Agency Financing Contract for the benefit of the Corporation or the Fiscal Agent,as assignee of the Corporation. Section 5.2. �`"Covenants and Agreements of the Local Agency. The Local Agency covenants and agrees as follows: (a) Preservation of Existence The Local Agency will do or cause;to be done all things necessary to preserve its existence as a Local Agency within the meaning of the Act. (b). Budget. The Local Agency shall take�such action as maybe necessary to include. all the Agency Installment Payments and Additional Costs due hereunder in its-annual budget' and to make the necessary:annual appropriations for all such Agency Installment Payments Additional Costs Tax-Exemption The Local Agency shall not make any use of the proceeds of this Agency Fuiancing Contract or Certificates,or,of any other amounts,regardless of the source, or of any property, and shall not take or refrain from,taking any•action, that would cause the Master Financing Contract or the Certificates'to, be "arbitrage"bonds" within the meaning of Section 148 of the Code The Local Agency shall not'use or permit the use of the Property or any part thereof by any,Person other than a"governmental unit"• as that term is defined in Section 141 of the Code, in such-manner.or to;such extent as`-would result in the 1 loss of the exclusion from gross income for federal income tax purposes of the Interest Component of the Installment Payments-,under Section 103 of-the Code. The Local'.Agency shall not,make-any use of the proceeds'of this Agency..Financing Contract or the Certificates or of any other amounts,and shall" not takeor refrain from taking`any action,'that would cause the Master Financing.Contract orkhe Certificates to.be "federally.guaranteed" within_the meaning of.Section'149(b) of the Code, or "private activity bonds"within the meaningof Section_141 ofthe"Code, or"hedge bonds"within the meaning of Section 149,of the.Code.`.To that end,' for so long as any Agency Installment Payments remain unpaid, the.Local Agency, with respect to such proceeds and other amounts, will comply with all requirements'under-such°Sections and:.all applicable regulations of the United States Department of the Treasury promulgated thereunder`The Local Agency will at all times do-and perform all, acts and things permitted by=law which are necessary or desirable in order to`assure that the Interest Components of the Installment Payments will not be included in. gross income of the Owners of the Certificates for federal income tax purposes under the Code, and will take no action that would result in such interest being•so included. The Local Agency shall comply with the applicable"provisions of the'Tax Certificate and Agreement,' (d) Duties Imposed by Law. . To the 'extent. permitted by law, the covenants, agreements and other obligations.on the part of the'Local_ Agency-contained herein. shall be deemed and construed to be ministerial and non-discretionary duties imposed by law,and it shall be the duty of the Local'Agency and each and every public official to take'such actions and to do such things as are required by law in the performance of the official duties of such officials to enable the Local Agency to observe and-perform the covenants,_agreements, terms, conditions and other obligations contained herein to be observed and performed by the Local Agency. D0CSPNW 1:34127.5 - 42248 21 MY2 10 (e) Liens; Sale or-Disposal. The Local Agency shall not create, incur, assume .or suffer to exist any mortgage,pledge,lien,charge, encumbrance or claim on or with respect to the Property, except the rights of the Corporation as provided herein and in the,Master Financing Contract. The Local Agency shall promptly, at its own expense;take such action as may be necessary to duly discharge any such mortgage,pledge,lien,charge, encumbrance or claim if the same shall arise at any time. The Local Agency shall not grant, sell, transfer, assign, pledge, convey or otherwise dispose of any of the Property or any interest therein during the term of this Agency Financing Contract, and any such attempted grant; sale, transfer, assignment, pledge, • conveyance or disposal shall be void. (f) Performance. The Local Agency shall punctually pay the Agency Installment Payments and any Additional Costs in strict conformity with the terms and provisions hereof, and will faithfully observe and perform all the covenants, agreements, terms, conditions 'and - other obligations contained herein required to be observed and performed by the Local Agency. The Local Agency will not suffer or permit any default to occur hereunder, or do or permit anything to be done,or omit or refrain from doing anything, in any case where any such act done or permitted,=or any such omission or refraining from doing anything,would or might be grounds for acceleration or termination of this Agency Financing `Contract. The Local Agency will not" terminate this Agency"Financing Contract for any cause, including but not-limited to any'acts or circumstances that may constitute failure of consideration, destruction of or -damage to the Property, commercial frustration of purpose, any change in the tax or other laws;of the United States of America-or of the State or any political subdivision of the State, or any failure by the State or the Corporation to-observe or perform any covenant,agreement,term;condition or other obligation.contained herein or in the Master'Financing Contract required to be observed and performed by it, whether express or implied, or the bankruptcy, insolvency,` liquidation or reorganization;of the Corporation. The Local Agency assumes the entire.-risk'of loss, from any and every cause whatsoever,to the Property. (g) Further*Assurances. The Local Agency will preserve and protect the rights of the State Treasurer.hereunder, and will warrant and defend such rights against all claims and demands of all Persons. The Local Agency will promptly execute,make and deliver any and all further assurances, instruments and agreements, and do or cause to be done such other and further things, as may be necessary or proper to carry out the intention or to facilitate the performance hereof and for the better assuring and confirming to the State,Treasurer the rights and benefits provided to it hereunder-. . (h) Pledge of Funds and Credit of Local Agency. The obligations of the Local Agency under this Agency Financing Contract constitute a debt and a general obligation of the Local Agency,and a contracting of an indebtedness by the Local Agency,to which the full faith and credit of the Local Agency are hereby pledged. If.and to the extent authorized by law, the Local Agency hereby covenants and agrees that it will levy taxes in such amounts and at such times as shall be necessary, within and as a part of the tax levy, if any, permitted to the Local Agency without a vote of its electors, to provide funds, together with other legally available moneys, sufficient to make the Agency Installment Payments and the other payments required under this Agency Financing Contract. DOCSPNW 1:34127.5 42248-21 MY2 11 (i) Use of Property. During the term of this Agency Financing Contract, the Local Agency will use the Property for the purposes of performing one or:more of its essential. i governmental functions or responsibilities.The Local Agency will not permit the Property:to'be used or.operated otherthan by,authorized employees, agents-'and contractors:o f the Local Agency: (j) .,.. ,Notice of Nonpayment The Local Agency shall give written notice to the Statef Treasurer, the Corporation and the Fiscal Agent, as assignee of the,Corporation prior; to any Agency Installment Payment Date if the Local Agency knows prior to.such date,that it will be unable to make the Agency Installment Payment due on such date; or any portion thereof. k Financial Statements The Local Agency shall':prepare annual financial. :, ( ) g y p p. statements and obtain;audits thereof as required by law. Upon the,Written Request of the:State. Treasurer, the Local Agency sha1Lprovide:the State Treasurer with a cop y:of-its most recent audited and unaudited financial statements. .(l) Use, Repairs. For so long as the.Local Agency is in.possession of the Property, the Local Agency shall be solely responsible for the maintenance;and repairs both ordinary and extraordinary,"thereof:.The Local Agency will(i) keep and maintain the Property,in good repair, working;order and condition,and protect the same.from deterioration other than normal wear and tear; (u)cause the Property to be used within its normal_capacity,in the manner contemplated by the manufacturer's specification, and in compliance_with the requirements of applicable;laws, . ordinances and regulations, the requirements. of.any warranties ;applicable thereto, and the requirements of any: insurance or 'self-insurance program:required under Subsection 5.2(q) hereof, (iii) cause the,Property to be used and operated by or under the direction,of conipetent_ persons only, and obtain_alt registrations,'permits and licenses, if any, required by law for the operation of the Property; and (iv)will.pay;all costs, claims, damages, fees and charges arising out of its possession,use or maintenance of the Property.The Local Agency, at its expense, will furnish all parts,mechanisms and,devices,required to operate and maintain the Property. (m) Alterations The Local Agency;will.not make any alterations, additions or improvements to the Property without the prior written consent:of the State Treasurer unless such alterations, additions:or improvements (i) maintain or increase the value of the Property;`or (ii) may be readily removed;without damage, to the Property. All such alterations, additions or improvements shally be•deemed to be a part of the Property and shall be subject to the terms and ..` provisions of this Agency Financing Contract. (n) Location, Ins ection. The. Property will be,located.within,the State. The State . pp : Y Treasurer, the Corporation and the Fiscal Agent, as,assignee of the Corporation,will be entitled to inspect the Property during regular business hours upon,at least one (1) Business Day's prior notice. The Local'Agency:hereby acknowledges, and consents and agrees,to,the right of the State Treasurer,the Corporation and the Fiscal Agent to so inspect the Property.: . (o) Impositions and Charges. If during the term of this Agency Financing.Contract, any Imposition is imposed or incurred in connection with the sale and purchase of the Property by the Corporation to the State, or by the State to the Local Agency, or the ownership, operation, possession or use of the Property by the Corporation, the.State or the Local Agency, or the DOCSPNWI:34127.5 42248-21 MY2 12 payment of the Agency Installment Payments by the Local Agency, or the payment of the Installment Payments payable therefrom by the State,or any fines,penalties or interest imposed on or with respect to any of the foregoing, the Local.Agency shall pay all such Impositions and charges when due. The Local Agency at its own expense may contest any such Impositions and charges until it obtains a final administrative or judicial determination with respect thereto, unless the Property is encumbered by any levy,lien or any other type of encumbrance because of the Local Agency's failure to pay such Impositions or charges. If the State Treasurer or the •Corporation pays any such Impositions or'charges for which.the Local Agency is responsible or liable, hereunder, the Local Agency shall reimburse the State Treasurer or the Corporation therefor as Additional Costs hereunder. If the State Treasurer or the Corporation pay any such.. impositions or charges for which the Local Agency is responsible or liable hereunder,the Local Agency shall reimburse the State-Treasurer or the Corporation therefor as Additional Costs hereunder. The Local Agency shall hold harmless the State Treasurer and the Corporation from and against all-,such Impositions and charges during the term of this Agency Financing Contract. (p) Risk of Loss;.Damage; Destruction; Condemnation. The Local Agency assumes all risk of loss of or damage to the Property from any cause whatsoever,and the obligation of the - Local Agency to pay the Agency Installment Payments or to perform any other obligation under this Agency Financing Contract shall in no way-be released, discharged or otherwise affected for any reason,including without limitation(i) any defect in the condition, quality or fitness for use of, or title to, any portion of the Property, or (ii) any damage to, or abandonment, destruction, requisition,condemnation:or taking'of any portion of the Property.In the event of damage to any item of the Property,the Local Agency will immediately place the same in good repair,working order and condition as required by Subsection 5.2(1)hereof. If the Local Agency determines that any item of Property is lost, stolen, destroyed or damaged beyond repair,the Local Agency will either (x)replace the same withequipment of equivalent value and usefulness in good repair in accordance .with .Subsection 2.1(c) hereof, or (y) prepay all. of its .obligations for Agency Installment Payments and terminate its obligations hereunder in accordance with Subsection 4.3(b)hereof. (q) Insurance.. (i) • The Local Agency.shall maintain, or cause to be maintained, in full force and effect, comprehensive general liability insurance with respect to the Property in such amounts as may be reasonably determined by the Local Agency from time to tune but in any event not less than,$1,000,000 per occurrence, or-such greater amount as the State Treasurer.may reasonably require from time- to time. Such insurance may be carried under a blanket policy with umbrella coverage..Such-insurance shall cover any and all liability of the.Local Agency and its officials, officers, employees and volunteers. Such insurance,shall include (A) coverage for any accident resulting in personal injury to or death of any person and consequential damages arising therefrom; and (B) comprehensive property damage insurance. (ii) The Local Agency shall maintain or cause to be maintained in full force and effect fire and extended coverage insurance covering the Property in such amounts and covering such risks as the Local Agency may reasonably determine from time to time but in any event not less than the aggregate amount of Agency Installment Payments due DOCSPNW 1:34127.5 42249-21 MY2 13 hereunder which remain unpaid. Such insurance may be carried under:a policy or policies covering other:property of the Local Agency: In the alternative, the Local.Agency may assume financial responsibility for-any physical damage to-andlor loss of-the Property; provided, however, that if the Local Agency elects this option,the Local'Agency hereby covenants and agrees that it will promptly repair or replace the Property promptly upon any.loss or:damage thereto. (in) \ The insurance required under paragraphs O and (u) above: (A) shall b' provided by a financially responsible insurance company authorized todo business in the State, (B) shall name:the State, the Corporation andthe Fiscal Agent, as assignee of the Corporation; as additional insureds thereunder; (C) shall provide that the same may not be canceled or given.notice,of non-renewal, nor shall the,terms of conditions thereof.be altered; amended or modified, without at least 45 days' prior_written notice ebeing given. by the insurer to the State Treasurer,the Corporation and the Fiscal Agent as assignee of.,- the Corporation, and (D)may be provided in whole or in part through a funded program of selfinsurance reviewed at least annually by anuisui ance actuary: (iv) ;A certificate of insurance with.respect to the required coverages shall be provided by the Local Agency to the State Treasurer on or prior to the date of delivery of the Personal.Property Certificate to the.State Treasurer. (v) The Local Agency will pay or cause to-be paid when due the premiums for all insurance policies required by this Section 5.2(q). ARTICLE VI': EVENTS OF DEFAULT;REMEDIES Section 6 1 Agency Event of Default. Each of the following shall constitute an "Agency Event of Default"hereunder: (a) Failure by the Local Agency to pay or cause to be paid any Agency Installment Payment required to be paid hereunder within'ten (10) Business Days of the respective Agency Installment Payment Date; (b) Failure by the Local Agency to observe or perform any covenant,agreement,term or condition on its part to be observed or performed hereunder, other than as. set forth in paragraph(a) above,fora period of thirty (30) days after written notice from the State Treasurer or the Fiscal Agent` to the Local Agency specifying such failure- and.requesting that it be remedied;provided, however,'that such period shall be extended for not more than sixty (60) days if.such failure'cannot be corrected' within such period, and the corrective action is commenced by the-Local Agency within such period and diligently pursued until the failure is corrected';` (c) If any statement, representation, or warranty made by the Local Agency in this Agency Financing Contract or;in any writing delivered by the Local Agency pursuant hereto or in connection herewith is`false,misleading, or erroneous in any material respect,and D0CSPNWI:34I27.5 , 42248 21 MY2 14 1 (d) Inability of the Local Agency to generally pay its debts as such debts become due, or admission by the Local Agency in writing of its inability to pay its debts generally or the making by the Local Agency of a general assignment for the benefit of creditors, or the institution of anyproceeding by or against the Local Agency'seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation, winding-up, reorganization, reimbursement,-'adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or'for appointment of a receiver, trustee, or other similar officer of it or any substantial part of its property,or the taking of any action by the Local Agency to autliorize'any of the actions'set forth above in this Section 6.1(d): Notwithstanding the foregoing provisions of this 'Section 6.1, ..if by reason of force majeure the Local Agency is unable in whole or in part to carry out the covenants, agreements, terms and conditions on its part contained in this.Agency Financing Contract, the Local Agency shall not be deemed in default during the continuance of such inability. The term -`force majeure"means the following: acts of God;'strikes; lockouts or other industrial disturbances or disputes;acts of public enemies; orders or restraints of any kind of the government of the United States of America or. any of its departments, agencies or officials, or of its civil or military authorities; orders or restraints of the-State'or of any of its departments, agencies or officials or civil. or military authorities of the Stated wars, rebellions, insurrections; riots; civil disorders; blockade or embargo;landslides;earthquakes;fires; storms; droughts;floods; explosions; or any other cause orevent not within the control of the Local Agency. The State Treasurer, with-the prior written consent of the Fiscal Agent, may;, at its election, waive any default or Agency Event of Default and its consequences hereunder and annul any notice thereof by written notice to the Local Agency to such effect, and thereupon the respective rights_of the Parties hereunder shall be as they would have been if such default or. Agency Event of Default had not occurred. Section 6.2. Rights of State Treasurer Following'Agency Default Event. Upon the occurrence and continuance of an Agency Default Event, the State, at its option, may exercise ►� any one or more ofthe following remedies: (a) By written notice to the Local Agency, require that the Local Agency promptly return possession and use of the-Property to the State at any location.specified in the United States(at the cost and expense of the Local Agency)in good repair,working order and condition, ordinary wear and tear excepted; (b) By written notice to the Local Agency and the Fiscal Agent, declare an amount equal to all Agency Installment Payments to become due and payable hereunder, including but not limited to the Interest Components thereof accrued and unpaid, to be immediately due and payable,without further demand; (c) Take whatever action at law or in equity may appear necessary or desirable to collect the Agency Installment Payments then due and thereafter becoming due, or to enforce the observance or performance of any covenant, agreement or obligation,of the Local Agency under this Agency Financing Contract; and DOCSPNWI:34127.5 42248-21 MY2 • 15 (d) exercise any other rights or remedies it may have hereunder or under applicable law. Section 63 No Remedy_.'Exclusive -Non-Waiver No remedy conferred•,upon,or reserved to the,State hereunder or under:applicable law'is mtendedUto or shall be exclusive, and every such remedy shall be cumulative and shall be in addition to,every other remedy given under this Agency Financing.Contract or now or hereafter existing at law or in equity No delay or omission to exercise any right or remedy accruing•upon;'a default or:an Agency Event of. 4 Default hereunder shall impair any such right or remedy or shall be construed tob'e a waiver of such default or Agency Event of Default, but any-such right or remedy may be exercised from time to time and as often as may be deemed necessary or expedient. In order to exercise any; remedy reserved to the State hereunder,.it;:shall,not be.necessary to give any notice, other than such notice as may be required hereunder.A waiver by:the State of any default or Agency_Event of Default hereunder,shall not constitute a waiverrof.any, subsequent default or Agency Event of Default hereunder, and,shallrnot:affect or impair the rights or remedies.of the State in connection _-' with any'such subsequent default or Agency Event of Default: ARTICLE VII .MISCELLANEOUS PROVISIONS.; Section 71 No Local Agency Assignment The Local Agency may not grant, sell, assign,transfer,convey,pledge;hypothecate or grant any security interest in any-of.its right,title or interest in,to or under this Agency Financing"Contract.Any attempted grant,sale, assignment, conveyance,pledge,hypothecation or security interest shalt be void Section?2 Indemnification of State and the,Corporation. To the.extent permitted by law, the Local Agencyhereby releases the,State and the.Corporation from, agrees,that the State. and the Corporation shall not be liable for, and agrees to indemnify;and hold the;State and the -. Corporation and their respective directors, officers, officials, employees, and agents harmless from, any:,lzabzlity for any loss or damage to property or any uijury tor death of any person that may`be occasioned by.,any cause whatsoever arising out of the oMoribp6fation�bf thep rtyo e or the acquisition; financing or refinancing thereof T Agency.,agrees .;to..-.:, indemnify and hold the State and the,Corporation and their r directors, 'officers, officials,employees,.and agents harmless from any losses,costs, charges, expenses (including reasonable attorneys'„fees),judgments.and habilitie`s incurred by it or them, as the case may be,in connection with any,action,=suit or proceeding.,instituted or threatened iii•:connection with the,, _. transactions contemplated by this Agency Financing Contract or the.exercise :of rights or the performance of duties of the State or the Corporation under this Agency Financing'Contract,the Master.Financing Contract or the otlier'Series 200 • Agreements to which each,of them is a Party, except tothe extent caused by the gross negligence or willful misconduct of such indemnified•,party The indemnification provided in this Section-7 2° shall survive'the final payment of the Agency Installment Payments and the termination'of-this;;Agency Financing ; - Contract for any reason. Section 7.3 . ;.Third Party' Beneficiaries. The Corporation and the,`Fiscal_Agent;"as assignee of the Corporation, shalt be third party beneficiaries.of this Agency Financing Contract: DOCSPNWI:34127.5 42248-21 MY2. 16 Section 7.4. Notices to Agency. The notice address for the Local Agency shall be as set forth in the Notice of Intent. DOCSPNWI:34127.5 42248-21 MY2 17 TABLE OF CONTENTS Page '• ARTICLE I DEFINITIONS; CONSTRUCTION;MISCELLANEOUS PROVISIONS; SUPPLEMENTS..................................... ......:....................... 1 Section I.I. Definitions,Construction, Miscellaneous Provisions, Supplements.............. ................ ......... ......................................... 1 Section 1.2. Performance by Representatives,......:........................................:......... 1 ARTICLE II SALE AND PURCHASE OF PROPERTY•....:...............................................1 Section 2.1: Conditional Sales Contract;Master Financing Contract...........:......... 1 Section 2.2. Appointment of Agents Acquisition of Property....:..........:...:... ' 1 Section 2.3. Acquisition Fund............:........:.:.....;.....................................................2 Section 2.4. Title to the Property............................................:..................................3 Section 2.5. Security Interests........:.....................:::...........:...........................:.........3 Section 2.6. Disclaimer of Warranties.................`.............:........................................4 • ARTICLE III AGENCY INSTALLMENT PAYMENTS;PAYMENTS BY STATE TREASURER;FULL FAITH AND CREDIT OBLIGATION...::..................5 Section 3.1. Agency:Installment Payments.................... Section 3.2. Sources of Payment of Agency Installment Payments.........................5 Section 3.3.. Deposit and Investment of Agency Installment Payments 6 Section3.4. No Set-Off..:.:......:..........................:.............................................:.......7 Section 3.5. Assignments by the Corporation..................... ..............7 ARTICLE IV OPTIONAL AND MANDATORY PREPAYMENT OF AGENCY INSTALLMENT_PAYMENTS..............:......:...:........:....................................8 Section 4.1. Optional Prepayment......................... Section 4.2. Revision of Agency Installment Payments upon Optional Prepayment..... ... ................................... ..............................8 Section 4.3. Discharge of Agency Financing Contract............................................ ARTICLE V ' REPRESENTATIONS,WARRANTIES, COVENANTS AND AGREEMENTS................:...............'.............:..................................................9 Section 5.1. Representations and Warranties of the Local Agency.........................9 9 Section 5.2. Covenants and Agreements of the Local Agency.............................. 10 ARTICLE VI EVENTS OF DEFAULT;REMEDIES.......................................................... 14 Section 6.1. Agency Event of Default.................:...............:................................. 14 Section 6.2. Rights of State Treasurer Following Agency Default Event............. 15 Section 6.3. No Remedy Exclusive;Non-Waiver.................................................. 16 ARTICLE VII MISCELLANEOUS PROVISIONS.............................................................. 16 DOCSPNWI:34127,5 -1- 42248-21 MY2 TABLE OF CONTENTS (continued) Page Section 7.1. No Local Agency Assignment........................................................'...16 Section 7.2. Indemnification of State and the Corporation....................................16 Section 7.3. Third Party Beneficiaries...............................................:...................16 Section 7.4. Notices to Agency..............................................................................17 - - t DOCSPNWI:34127.5 -11- 42248-21 MY2 - Personal Property Certificate Name of Local Agency: Mason County - Address: 411 N.5a'Street Shelton,WA.98584 All capitalized terms not defined herein shall have the meanings assigned to such terms in the Local Agency Financing Contract that this Exhibit B is attached to.The undersigned,Frank Pinter does hereby certify,that[he/she] is an Authorized Agency Representative of Mason County(the"Local Agency")pursuant to the terms of the Local Agency Financing Contract. The undersigned,confirms that the Property described below will be placed in use at the location listed below.The undersigned confirms that the Property described below has been delivered to and received by the Local Agency.All installation or other work necessary prior to the use thereof has been completed:The Property has been examined and/or tested and is in good operating order and condition and is in all respects satisfactory to the Local Agency and complies with all terms of the Master Financing Contract and the Local Agency Financing Contract. Notwithstanding the foregoing,the undersigned does not waive or limit,by execution of this certificate, any claim against the vendor or any other seller, installer, contractor or other provider of property or services related to the purchase, shipment, delivery,installation or maintenance of the Property. - The Local Agency further confirms that the Property will be used to fulfill an essential governmental function which the Local Agency has the authority to provide in the State. PROPERTY INFORMATION Office Communication System,see • Description: Name of Vendors: Cerium Networks attached invoice Address: 1636 West 1s'Avenue Spokane,WA.99201 CDW Government LLC Numerous Serial Numbers See Serial No.: 75 Remittance Drive,Suite 1515 Attached Tag No.: Numerous Tag Numbers Chicago,IL 60675-1515 Location of Property Acquired: Mason County=all county buildings INSTRUCTIONS TO STATE TREASURER FOR PAYMENT: Disburse to: ❑Vendor El City x County Treasurer ❑Other Entity Name: Mason County Disbursement Amount: $235,000 Method of Payment: ❑ACH ❑Wire x Check ACH/Wire Instructions: N/A Attached hereto are: 1. A vendor's invoice for the Property approved by the Local Agency. 2. A Certificate of Insurance,demonstrating liability insurance coverage and stating that insurance will be renewed annually automatically,unless said office notifies the State Treasurer of any discontinuation of coverage. In connection with the Local Agency's acquisition of the Property as agent of the Washington Finance Officers Association,you are hereby requested to make a disbursement as indicated above. Au ed A ey RRe resentative Date: //✓//.� Countersigned and Approved for Payment: Designate tote Treasurer Representative Date: 1�1 17 � 1 State of Washington Treasury Management System Date: 08/26/2016 Agency Payment Schedule ReportID: DMCOPPmtSched Time: 1:57 pm Dated Date: August 30, 2016 Series: LP_2016B (WASCOP 16B) As of 08/30/2016 Agency: Mason County County: Mason County Lease Number: 0144 -3 - 1 Fiscal Agent Account Number: MAS0144-3-1 Property: County wide VOID Phone System Principal: 211,967.09 S Term (Years): 5.00 Interest Rate: 1.27627 % Number of Months Until 1st Payment: 4 Payment Scheduled Date Paid, Principal Number' Due Payment Principal Interest Paid Principal Interest Balance* 1 12/01/2016 3,562.22 ' 0.00 3,562.22 2 06/01/2017 38,572.55 33,273.37 5,299.18 3 12/01/2017 4,467.34 0.00 4,467.34 - 4 06/01/2018 45,926.40 41,459.06 4,467.34 5 12/01/2018 3,430.87' X0.00 3,430.87 ' 6 06/01/2019 46,062.88 43,532.01 3,430.87 7 12/01/2019 2,342.57 0.00 2,342.57 8 06/01/2020 48,051.18 45,708.61 2-342.57 . 9 12/01/2020 1,199.85 0.00 1,199.85 10 06/01/2021. 49,193.89 47,994.04 .1,199.85 Total 0144-3-1 243,709.75 211,967.09 31,742.66 ' *The Prepayment Price would include any unamortized costs of issuance,escrow fees,and the cost to fund the relevant escrow. Agencies intending to prepay should contact the Office of the State Treasurer to receive prepayment amount. The interest rate shown is calculated from the dated date,based on a 3 60 day year. U.S.Bank-will post on its Washington State fiscal agent website,on or about mid-May and mid-November,a statement for the debt service amount due on the first of the following month. The site address is https:\\usbtrustgateway.usbank.com/portal/login.do. The form to request a password is also available there.'If you provide an email address,U.S.Bank will notify you when each statement is posted. Please contact Carolyn Morrison at__ carolyn.morrison@usbank.com or 206-344-4678 if you have questions about the website or access to it.'If your agency is not a State of Washington. Treasury Management System Date: 08/26/2016 Sources and Uses ReportID: DMCOPSourcesUses Time: 1:54 pm Dated Date: August 30,2016 Series: LP_2016B (WASCOP 16B) As of 08/30/2016 Agency: Mason County County: Mason County Lease Number: 0144-3 - 1 _ Property: County wide VOIP Phone System Sources: ' Par Amount: 211,967.09 Original Issue Premium (Discount): 25,419.97 Total Sources: 237,387.06 Uses: Project: 235,000.00 .Capitalized Interest: Underwriter Cost: 1,114.08 Cost of Issuance: } 1,272.98 Additional-Proceeds**: 0.,00 Total Uses: 237,387.06 **Additional proceeds result fr6m rounding and will be held by OST and applied toward the interest component on the next debt service payment due on this COP lease. Attachment A STATE OF WASHINGTON Mason County SERIES 2016B Delivery Date: Aug.30,2016 • COP Arbitrage Yield: 1.55 COP.Proceeds: .$235,000 • EXPENDITURE REQUIREMENTS Internal Revenue Service rules require the State of Washington(State) to monitor the spending • and investment of Certificate of Participation(COP)proceeds. In general,restrictions imposed • by the federal government prohibit the State from retaining arbitrage profits. Arbitrage is the difference between what the proceeds actually earned (investment income) and what the proceeds could have earned had they been invested at the same rate as the,COP yield • (i.e.,borrowing rate)- Arbitrage profits are earned when lower-yielding COP proceeds are invested in higher-yielding securities (e.g., if LGIP rate exceeds the COP yield). Any excess earnings (arbitrage profit)must be rebated to the federal government unless they qualify•for the • spending exception. The State can avoid arbitrage rebate requirements if the proceeds (and investment earnings) are • spent in an expeditious manner. The IRS regulations specify the following semi-annual spenddown schedule: • 15% within six months of the Delivery Date, • 60%within one year, • 100% within 18 months, Failing to meet any one of the targeted expenditure dates results in failure of the entire rebate exception. For example, if the State Agency met the 15% and 60% expenditure requirements, but did not meet the 100% expenditure requirement, the entire rebate exception is failed, and the COP issue is subject to rebate. Proceeds are not considered spent until your Agency is reimbursed or the Office of the State Treasurer (OST)pays the vendor. If proceeds are not spent in the manner specified above, the borrowing Agency will incur the additional costs associated with OST procuring arbitrage calculation services and the rebate liability owed to the federal government, if any. OST will help your Agency monitor the spending and investment of COP proceeds. If you have any questions,please contact Shelly Sweeney, at (360) 902-9005. Local Agency Tax Certificate (Equipment) This Local Agency Tax Certificate is executed and delivered by the Mason County the"Local Agency")in connection with the Local Agency Financing Contract between the Local Agency and the State of Washington(the"State"), dated as of the Dated Date(the"Local Agency Financing Contract"), under which the Local Agency is obligated to make Agency Installment Payments, including principal components thereof in the aggregate amount of$350,000,plus issuance costs allocable to the Local Agency(the"Obligations"). Capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Local Agency Financing Contract.The Local Agency certifies, covenants, warrants and represents as follows: ARTICLE I.IN GENERAL 1.1 The Local Agency.The Local Agency is a political subdivision duly organized and existing under and by virtue of the laws of the State of Washington.The Local Agency has the general authority to exercise the power of eminent domain in furtherance of its governmental purposes. 1.2 Purpose of Local Agency Tax Certificate.In the future,the State intends to cause the execution and delivery of certificates of participation(the"Certificates")evidencing undivided and proportionate interests in Installment Payments of the,State payable under a Master Financing Contract.A portion of the principal components of such Installment Payments are payable from the Obligations.The Local Agency is delivering this Local Agency Tax Certificate to the State with the understanding that the State will rely in part upon this Local Agency Tax Certificate in obtaining an opinion from bond counsel that the interest component of the Certificates is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986. 1.3 Purpose of Financing.The Obligations are being issued to finance the costs of the acquisition, construction,improvement and/or renovation of equipment(the"Project'), as described in more detail in the Local Agency Financing Contract. 1.4 Definitions.Unless the context otherwise requires,the following capitalized terms have the following meanings: "Code"means the Internal Revenue Code of 1986(including amendments thereto). "Current Revenues."See Section 2.7 hereof. "Dated Date"means 8/3 0/2016. "Governmental Unit"means any state, or political subdivision•of a state,but excludes the United States and its agencies or instrumentalities. "Investment Property"means any security or obligation, any annuity contract, or any other investment-type property,but does not include any Tax-Exempt Bond unless such obligation is a"specified private activity bond"within the meaning of Section 57(a)(5)(C) of the Code. "Nongovernmental Person"means any person or entity other than a Governmental Unit. "Preliminary Expenditures"means architectural, engineering, surveying, soil testing, and similar costs paid with respect to the Project in an aggregate amount not exceeding 20%of the Obligations.However,Preliminary Expenditures do not include land acquisition, site preparation or similar costs incident to the commencement of construction. "Tax-Exempt Bond"means any obligation the interest on which is excluded from gross income for federal income tax purposes pursuant to Section 103 of the Code or Section 103 of the Internal Revenue Code of 1954,as amended(the"1954 Code"), and Title XIII of the Tax Reform Act of 1986, as amended,as well as stock in a regulated investment company to the extent at least 95 percent of income to the stockholder is treated as interest that is excludable from gross income under Section 103 of the Code. ARTICLE II.TAX LIMITATIONS 2.1 Expenditure of Proceeds.For purposes of this Local Agency Tax Certificate, proceeds of the Obligation will be treated as spent when they are used to pay for or reimburse disbursements by the Local Agency that paid for(i)capital expenditures,(ii)any interest component of the Agency Installment Payments through the later of three years after the date hereof or one year after the Project is placed in service,or(iii)initial operating expenses directly associated with the Project(in aggregate amount not exceeding 5% of the Obligations).The State has authorized the issuance of the Certificates to finance, among other things,the costs of the Project.Absent written agreement by the State, all expenditures of proceeds of the Obligation will be made in respect of(a)Preliminary Expenditures, (b) capital expenditures reimbursed in respect of payments made by the Local Agency on or after the date which is sixty days prior to the date on which said authorization was adopted,or(c)other payments made by the Local Agency on or after the date hereof.In connection with all expenditures described in(b),the reimbursement allocation will be made no later than the later of 18 months after the date hereof or the date on which the Project is placed in service,but in no event later than three years after the date of expenditure. 2.2 Governmental Bond Status. [Different text will be substituted for this section when the loan is made for airport or port facilities that are the subject of private use.] The Local Agency will not loan any of the proceeds of the Obligations to one or more Nongovernmental Persons.The Local Agency will not allow more than 10% of proceeds of the Obligations or more than 10%of the Project to be used directly or indirectly by any Nongovernmental Person, other than as a member of the general public.A Nongovernmental Person will be treated as"using"proceeds of the Obligations to the extent the Nongovernmental Person: (i) Borrows proceeds of the Obligations, or (ii) Uses the Project(e.g as owner, lessee,service provider, operator or manager). 2.3 Change in Use.The)Local Agency reasonably expects to use all proceeds of the Obligations and all of the Project as set forth in Section 2.2 of this Local Agency Tax Certificate for the -entire stated term to maturity of the Obligations.Absent written agreement by the State,the Local Agency in fact will use all proceeds of the Obligations and all of the Project as set forth in Section 2.2 of this Tax Certificate. 2.4 Federal Guarantee. The Local Agency will not directly or indirectly use or permit the use of any proceeds of the Obligations or take or omit to take any action that would cause the Certificates to be obligations that are"federally guaranteed"within the meaning of Section 149(b) of the Code.In furtherance of this covenant,the Local Agency will not allow the payment of principal or interest with respect to the Obligations to be guaranteed(directly or indirectly)in whole or in part by the United States or any agency or instrumentality thereof.The Local Agency will not use 5%or more of the proceeds of the Obligations to make or finance loans the payment of principal or interest with respect to which is guaranteed in whole or in part by the United States or any agency or instrumentality thereof. 2.5 No Refunding.Proceeds of the Obligations will not be used directly or indirectly to make principal, interest or premium payments with respect to any obligation other than the Obligations. 2.6 No Hedge Bonds:The Local Agency reasonably expects that more than 85% of proceeds of the Obligations will be expended for the purposes of the Obligations within three years. 2.7 Debt Service Funds.Payments of debt service on the Obligations generally are expected to be derived from current revenues of the Local Agency in each year, and Current revenues are expected to equal or exceed debt service on the Obligations during each payment period.Revenues actually used in less than six months from the date first received to pay debt service on Obligations are referred to herein as"Current Revenues."The account, or portion thereof,used by the Local Agency to pay debt service on the Obligations will be used primarily to achieve a proper matching of revenues and debt service within each year.To the extent of Current Revenues, such account in the aggregate will be depleted at least once a year except for a carryover amount not to exceed the greater of the earnings on such account for the immediately preceding year or 1/12 of the debt service in respect of the Obligations for the immediately preceding year. Current Revenues contributed to such account will be spent within thirteen months after the date of such contribution, and any amounts received from the investment or reinvestment of monies held in such funds will be expended within one year after the date of accumulation thereof in any such fund. Current Revenues in such account shall be invested without regard to yield:Revenues other than Current Revenues will not be invested in Investment Property with a yield exceeding the yield on the Obligations. 2.8 No Other Replacement Proceeds.The Local Agency will not use any proceeds of the Obligations directly or indirectly to replace funds of the Local Agency which are or will be used directly or indirectly to acquire Investment Property reasonably expected to produce a yield that is materially higher than the yield on the Obligations.The weighted average maturity of the Obligations does not exceed 120%of the expected weighted average economic useful life of the Project. 2.9 No Expected Sale.It is not expected that the Project or any part.thereof will be sold or otherwise disposed of before the maturity date of the Obligations. ARTICLE III. OTHER MATTERS 3.1 ' Expectations. The undersigned is an authorized representative of the Local Agency acting for and on behalf of the Local Agency in executing this Local Agency Tax Certificate.To the best of the knowledge and belief of the undersigned,there are no other facts, estimates or circumstances that would materially change the expectations as set forth herein,and said expectations are reasonable. 3.2 Amendments. Notwithstanding any other provision of this Local Agency Tax • Certificate,the Local Agency may amend this Local Agency Tax Certificate and thereby alter any actions allowed or required by this Local Agency Tax Certificate if such amendment is signed by an authorized officer and is supported by formal written agreement by the State. 3.3 Survival of Defeasance.Notwithstanding any provision in this Local Agency Tax Certificate to the contrary,the obligation to comply with all requirements contained in this Local Agency Tax Certificate shall survive defeasance or prepayment of the Obligations. 3;4 Effective Date. This Local Agency Tax Certificate is dated and effective as of the Dated Date. By: • Terry-Jeffreys, a" Mason County Co ssion 3.4 Effective Date. This Local Agency Tax Certificate is dated and effective as of the Dated Date. By: Terry Jeffreys, Chair Mason County Commission Frank Pinter,Interim Support Services Director Mason County