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1989-15297-Resolution No. 89-042 Recorded 6/22/198989 -1t 29'7 -. rfir' CCI.!Na .JCL REVIEW BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON A Resolution Providing for * C 1 01 the Execution and Delivery of * an Installment Purchase and * Trust Agreement in a Principal* Amount of Not More Than One * Million Eight Hundred Thousand* Dollars, Authorizing the Sale * of Certificates of Participa- * tion, and Related Matters. RESOLUTION NO. 89 -042 BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON, as follows: Section 1. Findings. The Board finds: A. It is desirable for the County to acquire the project described in the attached Attachment "A" to this resolution (the "Project "), by executing and delivering an Installment Purchase and Trust Agreement in substantially the form attached as Attach- ment "B" to this resolution (the "Agreement "). B. In the Agreement, the County agrees to purchase the Project from the Trustee and to pay the purchase price in Installment Payments, which include principal and interest. The Agreement authorizes the Trustee to issue Certificates of Parti- cipation in the right to receive Installment Payments due from the County under the Agreement. The Certificates will be sold and proceeds from the sale will be used by the Trustee to acquire the Project. C. It is advantageous to the County to have the Certifi- cates of Participation sold to Seattle Northwest Securities Corporation, pursuant to a Certificate Purchase Agreement in substantially the form attached as Attachment "C" to this resolu- tion. D. The County has authority to enter into the Agreement and to perform the actions contemplated by the Agreement. Section 2. Authorization of Installment Purchase and Trust Agreement. The purchase price of the Project under the Agreement shall not be more than One Million Eight Hundred Thousand Dollars ($1,800,000.00). The Board hereby authorizes the Chair of the Board of County Commissioners to establish the purchase price, the amount, term and interest rate of the Installment Payments and all other terms of the Agreement, and to execute and deliver the Agreement on behalf of the County in substantially the form 1 - RESOLUTION NO. 89 -042 V:EYP CH'l ED .)Uf4 0095 1762 attached hereto as Attachment "B" to this resolution with such changes as may be approved by the executing officer. Section 3. Authorization of Certificate Purchase Agreement and Other Documents. The Board hereby authorizes the Chair to establish the price at which the Certificates will be sold and all other terms of the Certificate Purchase Agreement, and to execute and deliver the Certificate Purchase Agreement in sub- stantially the attached form, but with such changes as the executing officer may approve, and any other documents necessary to consummate the transactions contemplated by the Agreement. Section 4. Approval and Distribution of Official Statement. The Board hereby authorizes the Chair to approve, on behalf of the County, the final Official Statement for the Certificates, and to authorize the distribution of preliminary and final Official Statements to prospective purchasers of Certificates. Section 5. Other Action. The Chair is hereby authorized to take any other action necessary to acquire the Project and sell the Certificates as contemplated by the Agreement. DATED this oc %/ day of /\ !/L11.4 , 1989. `BOARD OF COUNTY COMMISSIONERS OF DESCHU ES COUNTY, ,OREGON ATTEiST : Recording Secretary 2 - RESOLUTION NO. 89 -042 TOM TROOP J CC mmissioner DICK MAUDLI%, Commissioner 1763 ATTACHMENT "A" The Proiect The County will use Certificate proceeds towards the following projects: purchase and remodeling of a motel for conversion to the County juvenile center; purchase of a warehouse to be used for County storage; purchase of a piece of land to be used for the site of the County library; and purchase of a second piece of land to be used for parking for tenants of the County's existing warehouse storage facility. 3 - RESOLUTION NO. 89 -042 ATTACHMENT "B" INSTALLMENT PURCHASE AND TRUST AGREEMENT by and between DESCHUTES COUNTY, OREGON, Purchaser and SECURITY PACIFIC BANK OREGON Trustee Dated as of June , 1989 0095 1764 1 Section 5.1. Section 5.2. Section 5.3. Section 5.4. Section 5.5. Section 5.6. Section 5.7. Section 5.8. Section 5.9. Section 5.10. Section 5.11. Section 5.12. Section 6.1. Section 6.2. Section 6.3. Section 6.4. Section 6.5. Section 6.6. Section 6.7. Section 7.1. Section 7.2. Section 8.1. Section 8.2. Section 8.3. Section 8.4. Section 8.5. Section 8.6. 0095 1766 Page ARTICLE V REPRESENTATIONS AND COVENANTS County to Perform 17 Notice of Non - Payment 17 No Obligation by the County to Owners 17 No Obligation with Respect to Performance by Trustee 17 Tax Covenant 17 Covenant to Authorize 18 Additional Obligations Secured by the Project 18 Taxes 18 County Representations 19 Insurance 19 Maintenance and Repair 20 Conditions Precedent Satisfied 21 ARTICLE VI THE TRUSTEE Acceptance of Appointment 22 Removal and Resignation 22 Compensation to the Trustee 22 Protection to the Trustee 23 No Liability to Owners for Payment 24 Investments 24 County Indemnification of the Trustee 24 ARTICLE VII DEFEASANCE Conditions for Defeasance 25 Conveyance Upon Defeasance 25 ARTICLE VIII AMENDMENT: ADMINISTRATIVE PROVISIONS Amendment 26 Recording and Filing 26 Trustee to Keep Records 26 Notices 26 Oregon Law 27 Severability 27 0095 1767 Page Section 8.7. Binding on Successors 27 Section 8.8. Headings 27 Section 8.9. Execution in Counterparts 27 EXHIBIT A EXHIBIT B EXHIBIT C ASSIGNMENT - iii - RDRsam695 /39 0095 1768. INSTALLMENT PURCHASE AND TRUST AGREEMENT THIS INSTALLMENT PURCHASE AND TRUST AGREEMENT is executed as of June _, 1989 (the "Agreement "), by and between DESCHUTES COUNTY, OREGON, as Purchaser (the "County ") and SECURITY PACIFIC BANK OREGON as trustee (the "Trustee "). The County and the Trustee agree as follows: Page 1 - Installment Purchase and Trust Agreement CO 5 17 ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION Section 1.1. Definitions. The following terms shall have the meanings given to them in this section, unless the context clearly requires a different interpretation. (a) Agreement. The term "Agreement" means this Installment Purchase and Trust Agreement. (b) Authorized Officer. The term "Authorized Officer" means the Chairman of the Board of Commissioners of the County, or anyone designated by the Board of Commissioners to serve as an Authorized Officer hereunder. (c) Certificate. The term "Certificate" means a certificate of participation prepared and delivered by the Trustee pursuant to Article III of this Agreement. (d) Closing. The term "Closing" shall mean the delivery of the Certificates in exchange for the deposits specified in Section 4.1(b) hereof, and the date on which such exchange occurs. (e) Government Obligations. The term "Government Obligations" means direct obligations of the United States Government or obligations unconditionally guaranteed by the United States Government. (f) Installment Payments. The term "Installment Payments" means the combined payments of principal and interest which the County is obligated to pay pursuant to Section 2.1(a) hereof, and which are described in Exhibit B. (g) Outstanding. The term "Outstanding" when used with reference to the Certificate and as of any particular date means any Certificate theretofore delivered except: (a) any Certificate cancelled by the Trustee at or before said date, (b) any Certificate in lieu of or in substitution for which another Certificate shall have been delivered pursuant to this Agreement, and (c) any Certificate for which all amounts due have either been mailed to the Owner or deposited into a special trust account for the Owner. (h) Owner. The term "Owner" or "Certificate Owner" or any similar term, when used with respect to a Certificate, means the registered Owner of any Outstanding Certificate as indicated in the Certificate Register maintained by the Trustee. Page 2 - Installment Purchase and Trust Agreement 0095 1770. (i) Payment Dates. The term "Payment Dates" refers do the dates on which Installment Payments are due, as indicated in the attached Exhibit B. (j) Permitted Investments. The term "Permitted Investments" means, to the extent not prohibited by applicable law: (i) Government Obligations; (ii) Certificates of deposit issued by a nationally or state - chartered bank or savings and loan association, to the extent that the principal amount does not exceed available FSLIC or FDIC insurance; and (iii) Repurchase agreements with a bank having a net worth of at least $50,000,000, which are collateralized by Government Obligations, if the collateral is held by the Trustee. (k) Principal Office. The term "Principal Office," when used with respect to the Trustee, means the principal office of the Trustee situated in Portland, Oregon, at which the Trustee conducts its corporate trust business. (1) Project. The term "Project" means the real and personal property described in the attached Exhibit A. (m) Purchase Price. The term Purchase Price means the sum of $1,800,000 which is the price to be paid by the County to purchase the Project, pursuant to this Agreement. (n) Record Date. The term "Record Date" means the fifteenth day of the month preceding a Payment Date. (o) Required Reserve. The term "Required Debt Service Reserve" means an amount equal to the lesser of the maximum annual debt service on the Certificates determined as of the date of issuance of the Certificates, or ten percent of the original principal amount of all issues of Certificates which have Certificates outstanding. (p) Trustee. The term "Trustee" means Security Pacific Bank Oregon, Portland, Oregon, as Trustee under this Agreement, and its successors. Section 1.2. Rules of Construction. Words of the masculine and feminine genders shall be deemed and construed to include the neuter gender. Unless the context otherwise indicates, the singular number shall include the plural number and vice versa, and words importing persons shall include corporations and Page 3 - Installment Purchase and Trust Agreement 0095 1771 associations, including public bodies, as well as natural persons. The terms "hereby," hereto," "herein," "hereunder" and any similar terms, as used in this Agreement, refer to this Agreement. Page 4 - Installment Purchase and Trust Agreement 0095 1772 ARTICLE II INSTALLMENT PURCHASE Section 2.1. Agreement to Purchase Project and Pay Purchase Price in Installments. (a) Payment of Purchase Price. The Trustee agrees to sell the Project to the County and the County agrees to purchase the Project from Trustee, for a price of $1,800,000, payable in installments, with interest, as provided herein. The principal installments of the Purchase Price shall be paid in the amounts and on the dates shown in Exhibit B, Each unpaid principal installment shall bear interest at the rate indicated in Exhibit B, Interest shall be paid semi - annually on the dates shown in Exhibit B, These payments of principal and interest are referred to herein as the "Installment Payments." The County shall pay the Installment Payments on the dates shown in Exhibit B, without notice or demand, unless otherwise expressly provided herein, The obligation to make Installment Payments shall not be reduced because of damage, destruction, or deterioration of the Project. (b) Transfers to Trustee. To provide additional security for the Owners, the County agrees to transfer each fiscal year to the Trustee the sum of the following amounts (i) for deposit in the Installment Payment Account, the full amount of all Installment Payments due in that fiscal year; plus (ii) for deposit into the Reserve Account, the amount by which the Reserve Requirement exceeds the balance in the Reserve Account. Such transfers shall be made as soon as possible after the beginning of each fiscal year, but no later than August 15 of each year. Amounts on deposit in these accounts on the date of the transfer shall be credited against the transfers required by this paragraph. Not later than February 1 of each year, the Trustee shall notify the County of the amount which must be transferred to the Trustee pursuant to this Section. Notwithstanding such notification the County shall render sufficient immediately available funds to the Trustee by each Payment Date so that there will be an amount equal to the Installment Payment then due available in the Installment Payment Account on each Payment Date. (c) Prepayment. (i) Principal may be prepaid by the County, in whole or in part, in amounts of $5,000 or integral multiples Page 5 - Installment Purchase and Trust Agreement 0095 1773 thereof, upon thirty days prior written notice to the Trustee, on June 1, 1999, or on any payment date thereafter, at par plus accrued interest to the date of prepayment. (ii) Principal shall be prepaid, without prepayment penalty, on the date and to the extent that insurance proceeds are to be used to prepay principal pursuant to Section 5.10 hereof. (iii) All principal shall be prepaid, without prepayment penalty, if the Trustee declares the unpaid principal balance immediately due and payable pursuant to Section 2.4(b)(i) hereof. (iv) All principal prepayments shall be credited against the principal installments shown in Exhibit B in inverse chronological order of the dates on which they are due. Exhibit B will be adopted by the Board on June 26, 1989. Section 2.2. Security Interest. This Agreement shall constitute a security agreement in all fixtures and personal property which are part of the Project for the sums due hereunder. The Trustee may file Uniform Commercial Code Financing Statements reflecting that interest. Section 2.3. Title. The County has caused marketable title to the Project to be conveyed to the Trustee. Title to the Project shall remain in the Trustee until the purchase price has been paid in accordance with this Agreement. Upon the County's timely payment of all Installment Payments and the compliance with all other terms and conditions of this Agreement, the Trustee shall convey all its interest in the Project to the County by special warranty deed, free of all encumbrances created by the Trustee without the consent of the County. The Trustee does not, and shall not be required to make any representations regarding the condition of the Project and the County agrees to accept the Project in "as is" condition. Section 2.4. Default and Trustee's Remedies. (a) The occurrence of one or more of the following events shall constitute an Event of Default, whether occurring voluntarily or involuntarily, by operation of law or pursuant to any order of any court or governmental agency: (i) The County's failure to make any Installment Payment by the applicable Payment Date; (ii) The County's failure to make any payment required by Section 2.1(b) prior to August 15 of any year; Page 6 - Installment Purchase and Trust Agreement 0095 1774 (iii) The County's failure to comply in any material respect with any other covenant, condition, or agreement of the County hereunder for a period of thirty (30) days after notice thereof from the Trustee; (iv) Any representation or warranty made by the County hereunder shall be untrue in any material respect as of the date made; and /or (v) The County becomes insolvent or admits in writing an inability to pay its debts as they mature or applies for, consents to, or acquiesces in the appointment of a trustee or receiver for the County or a substantial part of its property; or in the absence of such application, consent, or acquiescence, a trustee or receiver is appointed for the County or a substantial part of its property and is not discharged within sixty (60) days; or any bankruptcy, reorganization, debt arrangement or moratorium, or any proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is instituted by or against the County and, if instituted against, the County, is consented to or acquiesced in by the County or is not dismissed within ninety (90) days. It shall not constitute an Event of Default under subsection (a)(ii) of this Section in any fiscal year if the conditions described in Section 2.10 are satisfied by September 1 of that year. (b) Upon the occurrence of any Event of Default specified herein, the Trustee may, and shall upon written request of the Owners of Certificates representing not less than twenty -five percent (25 %) of the principal amount of unpaid Installment Payments, exercise any or all of the following remedies: (i) Declare the unpaid principal balance, together with accrued interest immediately due and payable but such balance and interest may be paid only to the extent of moneys on deposit in any accounts held hereunder, moneys appropriated by the County for payments due hereunder and moneys realized from the exercise of remedies listed in subsections (b)(ii) and (b)(iii) of this section; (ii) Judicially foreclose the lien of this Agreement against the Project, in the same manner as mortgages are foreclosed; (iii) Exercise its rights as a secured party under the Uniform Commercial Code; and /or Page 7 - Installment Purchase and Trust Agreement 0095 1775 (iv) Pursue and exercise any other remedy available at law or in equity. (c) If an Event of Default occurs as a result of a failure to appropriate funds, the remedies available to the Trustee and the Owners shall be restricted to those described in subsections (b)(i), (b)(ii) and (b)(iii) of this section. (d) The Trustee may rescind any declaration made under subsection (b) of this Section and abandon any exercise of remedies if there has been no failure to pay Owners Installment Payments, and the Event of Default is cured by the County. Such rescission and abandonment shall not constitute a waiver of any other Event of Default. Section 2.5. Assignment and Leasing. (a) Except as specifically provided herein, the County shall not assign, transfer, pledge, hypothecate or otherwise dispose of this Agreement, the Project, or any part thereof or any interest therein without the prior written consent of the Owners of Certificates representing not less than two thirds of the unpaid principal balance. The County may lease the Project without consent of the Owners, but only if the Trustee receives a security interest in the lease. Prior to any assignment or leasing the County shall obtain the opinion of nationally recognized bond counsel that the assignment or leasing will not cause the interest component of Installment Payments to be taxable under federal income tax laws. (b) The Trustee may assign or sell its interest in this Agreement only in connection with the issuance of Certificates, or in connection with the appointment of a successor Trustee. Section 2.6. Possession. The County shall be entitled to possession of the Project upon execution of this Agreement. All risks of damage, destruction, or loss of the Project shall pass to the County upon execution hereof. Section 2.7. Modifications of the Project. (a) The County may add to or improve the Project if: (i) The additions or improvements do not reduce the value of the Project, and the County so certifies to the Trustee; and, (ii) The County provides the Trustee with prior written notice that there will be additions or improvements to the Project; and, Page 8 - Installment Purchase and Trust Agreement 0095 1776 (iii) The improvements or additions become part of the Project, are secured by the lien of this Agreement, and the County provides the Trustee with such documents as the Trustee determines are necessary to evidence the Trustee's interest in the additions and improvements. (b) The County may remove portions of the Project which are worn out, obsolete or unserviceable if the County notifies the Trustee in writing prior to the removal and, (i) The County replaces the removed property with property which performs the functions of the removed property and such replacement property satisfies the conditions of subsection (a)(iii) of this Section; or (ii) Any proceeds from the sale of the removed property are deposited with the Trustee and used to prepay principal on the earliest possible date; or (iii) The value of the removed property does not exceed $100,000 in any fiscal year and $250,000 in aggregate during the term of this Agreement. Section 2.8. Security for the Certificates. The Certificates represent undivided proportional ownership interests in the principal installments of the Purchase Price due from the County under this Agreement and the interest due on such principal installments, and are additionally secured by the accounts held hereunder and any sums the Trustee may realize in connection with the exercise of default remedies. The obligation of the County to make Installment Payments under this Agreement is subject to annual appropriation. The Certificates are not secured by the unlimited taxing power of the County, and are not a general obligation of the County or the Trustee, but are secured solely as provided in this section. To the extent that funds are appropriated to make Installment Payments hereunder, the faith and credit of the County are pledged to the payment of the Installment Payments. Section 2.9. Nonappropriation of Funds. The County, by entering into this Agreement, acknowledges its current intention to make all Installment Payments due hereunder on the dates such Installment Payments are due. In the event the County's governing body fails to appropriate sufficient funds to fully fund all of County's legal obligations to make Installment Payments hereunder for any future fiscal period, then the County will immediately notify the Trustee or its assignee of such occurrence and the County's right to possession of the Project, and all its interest in the Project shall terminate as of September 1 of the fiscal year in which the failure to appropriate occurs. In such case, the obligation of the County Page 9 - Installment Purchase and Trust Agreement 0095 1777 for the unpaid purchase price shall be limited as provided in Section 2.4(c). The County agrees (i) that County staff will, for each fiscal period in which Installment Payments are scheduled to be made, present to the County's Board of Commissioners a request that the Board of Commissioners budget for and approve the expenditure of an amount sufficient to allow County to make all Installment Payments due in that fiscal period; (ii) that, to the extent funds are legally available therefore, it will make all Installment Payments; and (iii) that it will not cancel this Agreement under the provisions of this Section 2.9 if sufficient funds are appropriated and budgeted to it, or by it, for the acquisition, retention or operation of the Project. Section 2.10. Use of Reserve. It shall not constitute an Event of Default under Section 2.4(a)(ii) if: (a) The County has previously filed with the Trustee a MAI appraisal satisfactory to the Trustee indicating that the unpaid principal due under this Agreement is 75% or less of the appraised value of the Project; and (b) The amounts transferred to the Trustee under Section 2.1(b), plus amounts available in the Reserve Account, at least equal the Installment Payments due in that fiscal year; and (c) The full amount of the transfer required by Section 2.1(b) was made in the prior fiscal year. Page 10 - Installment Purchase and Trust Agreement 0095 1778 ARTICLE III CERTIFICATES: TERMS AND PROVISIONS PREPAYMENT OF CERTIFICATES Section 3.1. Preparation of Certificates. (a) The Trustee shall prepare, authenticate and deliver to their purchasers Certificates in an aggregate principal amount equal to the Purchase Price. The Certificates shall evidence the ownership of, and the right to receive, a proportionate share of the principal installments specified in the certificates and the interest due thereon, which are to be paid by the County hereunder. Certificates shall be in denominations of $5,000, or any integral multiple, and shall indicate that the principal amount thereof is payable on the due date of the principal installments for which the Certificates are issued. Certificates may be exchanged for an equal principal amount of certificates having the same terms, but different authorized denominations, as provided in Section 3.5. (b) The Trustee shall not at any time while the Certificates are outstanding issue additional certificates evidencing ownership of the Installment Payments, except as provided in Section 3.5 hereof. Section 3.2. Form; Payment. The Certificates shall be in registered form substantially as set forth in Exhibit C. Installment Payments shall be paid to the Certificate Owners as provided in Section 3.5 hereof. Section 3.3. Date of Certificate. The Certificates shall be dated with the date of this Agreement. Section 3.4. Authentication. The Certificates shall be authenticated by the manual signature of an authorized officer of the Trustee. Section 3.5. Transfer of Certificates. (a) No Certificate shall be entitled to any right or benefit under this Agreement unless it shall have been authenticated by an authorized officer of the Trustee. The Trustee shall authenticate the Certificates to be delivered at closing, and shall additionally authenticate any Certificate properly surrendered for exchange, transfer or replacement pursuant to this Agreement. (b) The Trustee shall maintain a Certificate register, and shall enter the names and addresses of the Owners in the Page 11 - Installment Purchase and Trust Agreement 0095 1779 Register when Certificates are authenticated. The County and the Trustee may treat the persons listed as Owner in the Certificate register as the Owners of the Certificate for all purposes. (c) The Trustee shall, on behalf of the County, mail on each Payment Date the interest attributable to the principal which each Certificate represents to the name and address of each Certificate Owner entitled thereto, as they appear on the Certificate register on the Record Date, but solely from moneys available in the Installment Payment Account. If payment is so mailed, neither the County nor the Trustee shall have any further liability to any party for such payment. The Trustee shall pay the principal amounts to which the Owners are entitled, but solely from moneys available in the Installment Payment Account, upon presentation and surrender of the Certificates at the Principal Office of the Trustee. (d) If there is a prepayment described in Section 2.1(c)(iii), the Trustee may fix a special Record Date and notify owners thereof, not less than 15 days prior to the time when payments will be made based on the special Record Date. The Trustee shall notify affected owners of any prepayment under Section 2.1(c)(i) hereof, not less than 15 days prior to the date on which such prepayment is scheduled to be made. If less than all principal due on a single date is prepaid, the Trustee shall apply the prepayment to outstanding certificates in increments of $5,000 (to the extent possible) and by lot. (e) Certificates may be exchanged or transferred to other Owners if the Certificate Owner submits the following to the Trustee: (i) Written instructions for exchange or transfer satisfactory to the Trustee, signed by the Owner or his attorney in fact and guaranteed or witnessed in a manner satisfactory to the Trustee; and (ii) The Certificates to be exchanged or transferred. (f) The Trustee shall note the date of authentication on the Certificates. After Closing, the date of authentication shall be the date as of which the Owner's name is listed on the Certificate Register. (g) For purposes of this Section 3.5, Certificates shall be considered submitted to the Trustee on the date the Trustee actually receives the materials described in subsection (e) of this Section. Page 12 - Installment Purchase and Trust Agreement 0095 1780 (I) A mutilated, lost or destroyed Certificate may be replaced by the Trustee at the request and expense of its Owner, if the Owner: (i) furnishes indemnity satisfactory to the Trustee which will protect the Trustee and the County against loss or liability resulting from any demand or payment on a Certificate which the Owner seeks to have replaced; and (ii) submits an affidavit satisfactory to the Trustee describing the Certificate and the circumstances under which it was mutilated, lost or destroyed. Page 13 - Installment Purchase and Trust Agreement 0095 1'781 ARTICLE IV ESTABLISHMENT AND ADMINISTRATION OF TRUST ACCOUNTS Section 4.1. Establishment and Funding of Accounts. (a) There are hereby established with the Trustee the following trust accounts: (i) The "Deschutes County 1989 Project Installment Payment Account," hereafter referred to as the "Installment Payment Account;" (ii) The "Deschutes County 1989 Project Proceeds Account," hereafter referred to as the "Proceeds Account;" and, (iii) The "Deschutes County 1989 Project Debt Service Reserve Account" hereafter referred to as the "Reserve Account;" (b) Upon Closing, the proceeds of the sale of the Certificates and other funds shall be deposited as follows: (i) The amount of accrued interest, if any, shall be deposited with the Trustee in the Installment Payment Account. (ii) An amount equal to the Required Reserve shall be deposited with the Trustee in the Reserve Account. (iii) The cost of acquiring the Project shall be paid into the Proceeds Account. (iv) The balance of the proceeds shall be deposited with the County. Section 4.2. Administration of Installment Payment Account. (a) The Installment Payment Account shall be maintained by the Trustee until the Installment Payments are paid in full pursuant to the terms hereof. Accrued interest received from the sale of the Certificate, Installment Payments, and any other amounts which the Trustee receives and are available for use as Installment Payments shall be immediately deposited by the Trustee in the Installment Payment Account. (b) The Trustee shall withdraw from the Installment Payment Account, on each Payment Date, an amount equal to the Installment Payment due on such Payment Date, and shall pay, on Page 14 - Installment Purchase and Trust Agreement 0095 1782 behalf of the County, such withdrawn amount to the Owners as provided herein. (c) Monies in the Installment Payment Account shall be used solely for Installment Payments, except as provided in Section 4.5. (d) If on any Payment Date the amount of all Installment Payments then due and payable exceeds the amount on hand in the Installment Payment Account and the Reserve Account, the Trustee shall apply the moneys on hand therein first to the payment of any interest due or past due on the Certificates, pro rata if necessary, and second to the payment of the unpaid principal which is then due or past due, pro rata if necessary. Section 4.3. Administration of Proceeds Account. Monies in the Proceeds Account shall be used to pay any costs of acquiring the Project, costs incurred by the County in connection with execution of this Agreement and issuance of the Certificates, and (if moneys in the Installment Payment Account and Reserve Account are insufficient) Installment Payments. The Trustee shall disburse moneys in the Proceeds Account at the direction of the County to pay such costs. Any moneys remaining after June 1, 1992, shall be transferred to the Installment Payment Account. Section 4.4. Administration of Reserve Account. (a) Monies in the Reserve Account shall be held in trust for the payment when due of the Installment Payments to be paid pursuant to the Agreement, and shall be used and applied only as hereinafter provided. If on any Payment Date the moneys on hand in the Installment Payment Account are not sufficient to pay any Installment Payment then due and unpaid, the Trustee shall use the moneys on hand in the Reserve Account to make such payment on behalf of the County by transferring the amount necessary for this purpose to the Installment Payment Account. (b) If the combined balance in the Installment Payment Account and the Reserve Account at any time equals or exceeds the sum of all unpaid Installment Payments, the balance in the Reserve Account shall be transferred to the Installment Payment Account. Section 4.5. Deposit and Investment of Monies in Trust Accounts. (a) All moneys held by the Trustee in any of the accounts established pursuant to this Agreement shall be deposited or invested in Permitted Investments, which deposits or investments may be made with the commercial banking or investment department of the Trustee, pursuant to written instructions of Page 15 - Installment Purchase and Trust Agreement 0095 1783 the Authorized Officer. If the Authorized Officer does not provide the Trustee with written instructions for such investment, the Trustee shall invest such moneys in Permitted Investments so as to obtain the highest yield which the Trustee deems practicable, having due regard for the safety of such moneys and for the dates upon which such moneys will be required for uses and purposes specified in this Agreement. (b) Except as provided in Section 4.5 hereof: (i) Investment earnings on moneys in the Proceeds Account shall be retained in the Proceeds Account. (ii) Investment earnings on moneys in the Installment Payment Account shall be retained in the Installment Payment Account. (iii) Investment earnings on moneys in the Reserve Account shall be retained in the Reserve Account until the Reserve Account has a balance equal to the highest amount of Installment Payments in any remaining fiscal year. Thereafter, earnings shall be transferred to the Installment Payment Account. (c) The Trustee shall act only as agent in making or disposing of any investment. The Trustee shall not be liable for any loss resulting from the making or disposition of any investment pursuant to the provisions of subsection (a) of this section and any such losses shall be charged to the account with respect to which such investment was made. (d) The Trustee may sell any investments held hereunder prior to maturity, if such a sale is required to permit Installment Payments to be paid timely to Owners. (e) If any moneys remain in the accounts established hereunder after all sums due hereunder have been paid, such moneys shall be returned to the County. Page 16 - Installment Purchase and Trust Agreement 0095 1784 • ARTICLE V REPRESENTATIONS AND COVENANTS Section 5.1. County to Perform. The County covenants and agrees with the Owners of the Certificates to perform all obligations and duties imposed on it under this Agreement. Section 5.2. Notice of Non - Payment. In the event of delinquency in the payment of any amounts due from the County hereunder, the Trustee shall, on the date upon which such delinquency occurs, immediately give written notice of the delinquency and the amount thereof to the County. Section 5.3. No Obligation by the County to Owners. Except for the payment of Installment Payments when due in accordance with this Agreement and the performance of the other covenants and agreements of the County contained herein, the County shall have no obligation or liability to any of the other parties or to the Owners of the Certificates with respect to this Agreement or the term, execution, delivery or transfer of the Certificates, or the distribution of Installment Payments to the Owners by the Trustee. Section 5.4. No Obligation with Respect to Performance by Trustee. The County shall have no obligation or liability to any of the other parties or to the Owners of the Certificates with respect to the performance by the Trustee of any duty imposed upon it under this Agreement. Section 5.5. Tax Covenant. The County covenants with the Trustee and the Owners of the Certificates not to take any action which, or omit to take any action which, would cause the interest component of the Installment Payments to be included in gross income under federal income tax laws (except for certain corporate taxes). The County also covenants to comply with the applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code "), unless the County obtains an opinion of nationally recognized bond counsel that such compliance is not required. The County makes the following specific covenants with respect to the Code: (a) The County will not take any action or omit any action if it would cause the Series 1989 Certificates to become "arbitrage Certificates" under Section 148 of the Code. (b) The County shall operate the facilities financed with the Certificates so that the Series 1989 Certificates are not "private activity Certificates" within the meaning of Section 141 of the Code. Page 17 - Installment Purchase and Trust Agreement 0095 1785 (c) The County shall comply with appropriate reporting requirements. (d) The County shall pay, when due, all rebates on the gross proceeds of the Series 1989 Certificates which are required under Section 148 of the Code. (e) The County designates the Certificates as "qualified tax exempt obligations" pursuant to Section 265(b)(3) of the Code and shall not designate nor sell tax exempt obligations in the aggregate amount of more than $10,000,000 in the 1989 calendar year. The covenants contained in this section and any covenants in the closing documents for the Certificates shall constitute contracts with the owners of the Certificates, and shall be enforceable by them. Section 5.6. Covenant to Authorize. The County will comply with all applicable laws relating to levying and collecting taxes and other revenues, and budgeting and appropriating moneys for the Installment Payments due under this Agreement. To the extent that money is appropriated, all amounts becoming payable hereunder will be duly authorized and paid when due out of funds legally available for such purpose. Section 5.7. Additional Obligations Secured by the Project. The County shall not issue obligations secured by the Project which have a lien on the Project superior to or on a parity with this Agreement. The County may issue obligations secured by the Project which have a lien on the Project which is subordinate to this Agreement only if: (a) the obligations are issued to finance modifications to the Project; and, (b) prior to issuing the obligations the County files with the Trustee an MAI appraisal, reasonably satisfactory to the Trustee, appraising the value of the Project as it is proposed to be modified, and (c) the unpaid principal of this Agreement is 75% or less of the MAI appraised value of the modified project. Section 5.8. Taxes. (a) In addition to the payments to be made pursuant to Section 2.1 hereof, the County agrees to pay any and all taxes and other charges imposed on the Project, and to indemnify and hold the Trustee harmless from and against, such taxes and charges. The County may contest any such taxes prior to payment Page 18 - Installment Purchase and Trust Agreement 0095 1786 ., provided such contest does not involve any risk of sale, forfeiture or loss of the Project or any interest therein. (b) It it understood and agreed that the use of the Project by Purchaser qualifies for tax - exempt status. Purchaser agrees to file with the County Assessor a request for exemption from taxation along with a copy of this Agreement. (c) It is further agreed that the Installment Payments established herein have been established to reflect an exemption on this land from taxation pursuant to ORS 307.112(1)(a) and 307.112(1)(b), and that the real or personal purchased by a public body, where the use qualifies for an exemption, is exempt if the Agreement states that payments have been established to reflect the tax savings. Section 5.9. County Representations. The County represents as follows: (a) The County is a political subdivision of the State of Oregon, and is authorized by ORS 271.390 to enter into this Agreement. This Agreement has been duly authorized, executed, and delivered by the County and is a valid and binding limited obligation of the County enforceable in accordance with its terms. All requirements for the County's execution, delivery and performance of this Agreement, including applicable public bidding requirements and laws relating to the sale and purchase of interests in property, have been or will be, complied with in a timely manner. (b) There are no pending or threatened lawsuits or administrative or other proceedings contesting the legal authority for, authorization or performance of, or expenditure of funds pursuant to, this Agreement to which the County is a party. (c) The County has budgeted and has available for the current fiscal period sufficient funds to comply with any obligations it may have hereunder which are due in that period. Section 5.10. Insurance. The County shall maintain standard fire and casualty insurance on the Project in an amount at least equal to the unpaid principal of this Agreement. Policies evidencing this insurance shall be filed with the Trustee, and the Trustee shall be named as loss payee. Any proceeds of such insurance shall be paid to the Trustee. If the County has breached any of its promises herein contained (regardless of whether such breach constitutes an event of default) the breach has not been cured by the time insurance proceeds are paid to the Trustee, the insurance proceeds shall be used to prepay Agreement principal 30 days after the Trustee receives the insurance proceeds. If Page 19 - Installment Purchase and Trust Agreement 0095 1787 the County has not breached its promises hereunder, or any breach has been cured, and: (a) If the amount of insurance proceeds paid to the Trustee is less than $50,000, the Trustee shall transfer the proceeds of insurance to the County and the County shall use the proceeds, to the extent required, to repair the Project; or (b) If the amount of insurance proceeds paid to the Trustee equals or exceeds $50,000, the County may elect to use the proceeds to prepay Agreement principal or to repair or replace the Project. The County shall have 120 days after the Trustee receives the insurance proceeds in which to file a written election with the Trustee to use the proceeds to prepay Agreement principal, or to rebuild the Project. (i) If the County elects to use the proceeds to prepay Agreement principal, the insurance proceeds shall be applied to the prepayment 30 days after the County files its election to prepay, or 150 days after the Trustee receives the proceeds if the County fails to file an election within 120 days. (ii) If the County elects to use the insurance proceeds to repair or rebuild the Project, the insurance proceeds shall be deposited in the Proceeds Account, and disbursed by the Trustee to the order of the County as the costs of the repair or rebuilding are payable. No such proceeds shall be disbursed until the County files with the Trustee an MAI appraisal evidencing that unpaid Agreement principal is 75% or less of the appraised market value of the structure as it is proposed to be repaired or rebuilt. If the County fails to commence within one year, or complete within three years, the repair or rebuilding of the Project, all available insurance proceeds shall be applied by the Trustee to prepay Agreement principal. (c) If an Event of Default occurs after the Trustee receives insurance proceeds and is not cured, any proceeds of insurance held by the Trustee shall be applied to the payment of amounts due under this Agreement. Such amounts shall be applied first to pay principal, Any excess after all principal is paid may be used to pay interest, and any amount remaining thereafter shall be paid to the County. Section 5.11. Maintenance and Repair. At its own cost and expense, the County shall service, repair and maintain the Project in good condition, repair, appearance and working order. Page 20 - Installment Purchase and Trust Agreement 0095 1788. Section 5.12. Conditions Precedent Satisfied. The County represents and recites that all acts, conditions and things required by law to exist, happen and be performed precedent to and in connection with the execution and entering into of this Agreement have happened and have been performed in regular and due time, form and manner as required by law, and that it is now duly empowered to execute and enter into this Agreement. Page 21 - Installment Purchase and Trust Agreement 0095 1789 ARTICLE VI THE TRUSTEE Section 6.1. Acceptance of Appointment. In consideration of the compensation herein provided for, the Trustee agrees to serve as Trustee under this Agreement. Section 6.2. Removal and Resignation. (a) The County or the holders of a majority in aggregate principal amount of the Certificate Outstanding may by written request, remove the Trustee and may appoint a successor Trustee, but any such successor shall be a bank or trust company doing business in Oregon, having a combined capital (exclusive of borrowed capital) and surplus of at least Twenty -Five Million Dollars ($25,000,000), be subject to supervision or examination by federal or state authority, and publish a report of condition at least annually, pursuant to law or to the requirements of any supervision or examining authority above referred to, evidencing its combined capital and surplus as set forth in its most recent report of condition so published. (b) The Trustee may at any time resign by giving written notice to the County and by giving to the Owners notice by mail not less than 60 days prior to the proposed resignation date. Upon receiving such notice of resignation, the County shall promptly appoint a successor Trustee by an instrument in writing; provided, however, that in t does not appoint a successor Trustee within ninety (90) days following receipt of such notice of resignation, the resigning Trustee may petition any court having jurisdiction to appoint a successor Trustee. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. (c) The Trustee shall provide notice to the Owners of any change in the Trustee not later than the Payment Date following the change in Trustee. Section 6.3. Compensation to the Trustee. The County shall pay the Trustee its previously agreed fees, and shall reimburse the Trustee for all its reasonable advances and expenditures (including its reasonable attorneys fees). The Trustee shall not be entitled to any lien on the accounts created hereunder for the payment of its fees and expenses. Page 22 - Installment Purchase and Trust Agreement 0095 1790 Section 6.4. Protection to the Trustee. (a) The Trustee shall be protected and shall incur no liability in acting or proceeding in good faith upon any document which it shall in good faith believe to be genuine, and the Trustee shall be under no duty to make any investigation or inquiry about any statement contained or matters referred to in any such document, but may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statements. The Trustee shall not be bound to recognize any person as an Owner of any Certificate or to take any action at his or her request unless such Certificate shall be deposited with the Trustee or satisfactory evidence of the ownership of such Certificate shall be furnished to the Trustee. The Trustee may consult with counsel, who may be counsel to the County, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith in accordance therewith. (b) Whenever in the administration of its duties under this Agreement, the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter shall be deemed to be conclusively proved and established by the Certificate of an Authorized Officer and such Certificate shall be full warranty to the Trustee for any action taken or suffered under the provisions of this Agreement upon the faith thereof, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. (c) The Trustee may buy, sell, own, hold, and deal the Certificates, and may join in any action which any Owner may be entitled to take with like effect as if the Trustee were not a party to this Agreement. The Trustee, either as principal or agent, may also engage in or be interested in any financial or other transaction with the County and may act as depository, trustee, or agent for any committee or body of Owners or other obligations of the County as freely as if it were not Trustee hereunder. (d) The recitals, statements and representations in this Agreement and in the Certificates shall be taken and construed as made by the County, and not by the Trustee, and the Trustee does not assume, and shall not have, any responsibility or obligation for the correctness of any thereof. (e) The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents, or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its duties Page 23 - Installment Purchase and Trust Agreement 0095 1791 hereunder, and the Trustee shall not be answerable for the default or misconduct of any such attorney, agent or receiver selected by it with reasonable care. The Trustee shall not be answerable for the exercise of any discretion or power under this Agreement or for anything whatever in connection with the funds and accounts established hereunder, except only for its willful misconduct or want of reasonable care. (f) Prior to taking any action in connection with an Event of Default, the Trustee may require that the Owners post a bond, or otherwise agree, in a manner satisfactory to the Trustee, to indemnify the Trustee for all of its expenses (including all its reasonable attorney's fees, whether litigation is filed or not, or on appeal, if any) and any liability it may suffer as a result of such actions. (g) The Trustee shall not be liable for any action taken or omitted to be taken by it in good faith unless such action shall constitute negligence or willful default. Section 6.5. No Liability to Owners for Payment. Except as provided in this Agreement, the Trustee shall not have any obligation or liability to the Owners with respect to the payment of the Installment Payments by the County when due, or with respect to the performance by the County of any other covenant made by it herein. Section 6.6. Investments. The Trustee shall not be responsible for the sufficiency of the value of or to be to the Project. The Trustee shall not be responsible or liable for any boss suffered in connection with any investment of funds made by it under the terms of and in accordance with this Agreement. Section 6.7. County Indemnification of the Trustee. Subject to the Constitution and laws of the State of Oregon and to the fullest extent permitted by law, the County shall and hereby agrees to indemnify and save the Trustee harmless from and against all claims, losses and damages arising out of (i) the use, maintenance, condition or management of, or from any work or thing done on the Project by the County, (ii) any breach or default on the part of the County in the performance of any of its obligations under this Agreement, or (iii) any act of negligence of the County or of any of its agents, contractors, servants, employees, or licensees with respect to the Project. Indemnification for any tort mentioned in this Section 6.7 shall be limited to the extent and in the amounts provided for by Oregon law. No indemnification will be made under this Section or elsewhere in this Agreement for willful misconduct, want of reasonable care, or breach of duty under this Agreement by the Trustee, its officers, agents, employees, successors, or assigns. Page 24 - Installment Purchase and Trust Agreement 0095 1792 ARTICLE VII DEFEASANCE Section 7.1. Conditions for Defeasance. If: (a) The County deposits cash or Government Obligations irrevocably in escrow for the payment of Installment Payments, together with irrevocable instructions for the application of the escrow to pay Installment Payments; (b) The County obtains an opinion from a certified public accountant experienced in giving such opinions that cash and the principal and interest to be r- ceived from the Government Obligations are calculated to be sufficient, without further reinvestment, to pay when due all Installment Payment principal, interest and premium (if any), then due; and (c) The County obtains an opinion from nationally recognized bond counsel that the proposed defeasance will not cause the interest component of the Installment Payments to be taxable under federal income tax laws; then any money held in accounts hereunder may be transferred to the escrow or the County, the Installment Payments shall be made on behalf of the County solely from the moneys available in escrow, and the County shall have no further obligation to make Installment Payments to the Trustee hereunder. The Trustee shall promptly notify all Certificate Owners of any defeasance hereunder. Section 7.2. Conveyance Upon Defeasance. Upon defeasance pursuant to Section 7.1 hereof, the Trustee shall, if the County so requests, convey title to the Project to a party designated by the County, subject to the County's interest hereunder. Page 25 - Installment Purchase and Trust Agreement 0095 1793 ARTICLE VIII AMENDMENT: ADMINISTRATIVE PROVISIONS Section 8.1. Amendment. This agreement may be amended in writing by agreement between parties: (a) without consent of the Owners, but only to make changes which, in the reasonable judgment of the County and Trustee, are not prejudicial to the interests of the Owners; or (b) with the consent of the Owners of Certificates representing two - thirds of the unpaid principal amount of Installment Payments, to make any other change. Section 8.2. Recording and Filing. This Agreement shall be recorded in the real property records of the County, and shall constitute a lien on the Project for the amounts due hereunder. The Trustee shall be responsible for the recording and filing of financing statements (or continuation statements in connection therewith) if any, or of any supplemental instruments or documents of further assurance as may be required by law to perfect the security interests created by this Agreement, which must be filed after delivery of this Agreement. Section 8.3. Trustee to Keep Records. The Trustee shall keep a copy of this Agreement and books and records of all moneys received and disbursed under this Agreement, which shall be available for inspection by the County, and the Owners at any time during regular business hours. Section 8.4. Notices. All written notices to be given under this Agreement shall be given by mail to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other parties in writing from time to time. If to the County: If to the Trustee: Chair Board of County Commissioners c/o Deschutes County Deschutes County Courthouse Bend, Oregon 97701 Security Pacific Bank Oregon Corporate Trust Department 1001 S.W. Fifth Fourth Floor Portland, Oregon 97204 Page 26 - Installment Purchase and Trust Agreement 0095 1794 Section 8.5. Oregon Law. This Agreement shall be construed and governed in accordance with the laws of the State of Oregon. Section 8.6. Severability. Any provision of this Agreement found to be prohibited by law shall be ineffective only to the extent of such prohibition, and shall not invalidate the remainder of this Agreement. Section 8.7. Binding on Successors. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. Section 8.8. Headings. Headings preceding the text of the several Articles and Sections hereof, and the table of contents, are solely for convenience or reference and shall not constitute a part of this Agreement or affect its meaning, construction or effect. Section 8.9. Execution in Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. IN WITNESS WHEREOF, the parties have executed and attested this Agreement by their officers thereunto duly authorized as of the date and year first written above. DESCHUTES COUNTY By: Lois Bristow Prante, Chair, Board of County Commissioners By: Tom Throop, County Commissioner SECURITY PACIFIC BANK OREGON as Trustee By: Joan Autio, Vice President Page 27 - Installment Purchase and Trust Agreement STATE OF OREGON ) ss. County of Deschutes 0095 1795 The foregoing instrument was acknowledged before me this day of June, 1989, by LOIS BRISTOW PRANTE. Notary Public for Oregon My Commission Expires: STATE OF OREGON ) ss. County of Deschutes The foregoing instrument was acknowledged before me this day of June, 1989, by TOM THROOP. Notary Public for Oregon My Commission Expires: STATE OF OREGON ) ss. County of Multnomah The foregoing instrument was acknowledged before me this day of June, 1989, by JOAN AUTIO. Notary Public for Oregon My Commission Expires: Page 28 - Form of Certificate of Participation RDRsam695 /27 EXHIBIT A 0095 1796 RDRsam695 /28 0095 1797 EXHIBIT B DESCHUTES COUNTY INSTALLMENT PURCHASE AND TRUST AGREEMENT Issuer: Deschutes County, Oregon Issue: Installment Purchase and Trust Agreement Dated Date: Closing Date: Payment Dates Total Installment Principal Rate Interest Payment RDRsam695 /29 No. R- CERTIFICATE OF PARTICIPATION SERIES 1989 0095 1798 Evidencing an Undivided, Proportionate Interest of the Owner Hereof in Certain Installment Payments to be Made Under an Installment Purchase and Trust Agreement between DESCHUTES COUNTY, OREGON and SECURITY PACIFIC BANK OREGON, AS TRUSTEE DATE OF ORIGINAL ISSUE INTEREST RATE % PER ANNUM PAYMENT DATE CUSIP June 1, 1989 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS This is to certify that the registered owner named above (the "Owner "), or registered assigns, of this Certificate is the owner of an undivided, proportionate interest in the Installment Payments due under that certain Installment Purchase and Trust Agreement dated as of June 1, 1989 (the "Agreement "), between Deschutes County, Oregon, a political subdivision of the State of Oregon (the "County "), and Security Pacific Bank Gregon, as Trustee for the Owner, and is entitled to receive the principal amount stated above from the principal component of the Installment Payment due from the County on the Payment Date shown above (the "Principal "), together with a proportionate share of the interest components of the Installment Payments which are allocable to the Principal. The Agreement requires the County to pay interest on the Principal on June 1 and December 1 of each year at the annual interest rate indicated above, commencing December 1, 1989. All amounts payable hereunder are payable in lawful money of the United States of America, which at the time of payment is legal tender for the payment of public and private debts. The Principal is payable on surrender of this Certificate at the principal office of the Trustee at which it conducts business in Portland, Oregon (the "Principal Office "). Interest payable under this Certificate is payable by check or draft mailed on the payment date (or the next business day if the Page 1 - Form of Certificate of Participation 0095 1799 payment date is not a business day) by the Trustee to the registered Owner of this Certificate as shown as of the fifteenth day of the preceding month in the Certificate Register maintained by the Trustee. The Certificates represent an undivided, proportionate interest in the Installment Payments due from the County under the Agreement. The obligation of the County to make Installment Payments is subject to annual appropriation, as provided in the Agreement. The Agreement is additionally secured by a lien on certain property, as provided in the Agreement. ADDITIONAL PROVISIONS OF THIS CERTIFICATE APPEAR ON THE REVERSE SIDE HEREOF; SUCH PROVISIONS HAVE THE SAME EFFECT AS IF THEY WERE PRINTED HEREIN. THIS CERTIFICATE SHALL NOT BE VALID UNLESS PROPERLY AUTHENTICATED BY THE TRUSTEE IN THE SPACE INDICATED BELOW. Date of Authentication: CERTIFICATE OF AUTHENTICATION This is one of the Certificates of Participation in the Installment Payments due under the Agreement described herein, and is properly registered and authenticated pursuant to the Agreement. SECURITY PACIFIC BANK OREGON, as Trustee By: Authorized Officer The County reserves the right to prepay all or any portion of the Installment Payments on or after June 1, 1999. The Certificates are, to the extent the County makes prepayments, subject to redemption by the Trustee, in inverse order of maturity and by lot within a maturity on June 1, 1999, and on any Payment Date thereafter, at par plus accrued interest to the date fixed for redemption. Certificates maturing on June 1, 2005 shall be Term Certificates and subject to mandatory sinking fund installments and mandatory redemption by lot in the principal amounts and on June 1 in the years as follows: Page 2 - Form of Certificate of Participation Sinking Fund Installment Payment Date June 1, 2000 June 1, 2001 June 1, 2002 June 1, 2003 June 1, 2004 June 1, 2005 Total 0095 1800 Amount $ 85,000 $ 90,000 $100,000 $105,000 $110,000 $120,000 $610,000 Certificates maturing on June 1, 2009 shall be Term Certificates and subject to mandatory sinking fund installments and mandatory redemption by lot in the principal amounts and on June 1 in the years as follows: Sinking Fund Installment Payment Date June 1, 2006 June 1, 2007 June 1, 2008 June 1, 2009* Total * maturity Amount $130,000 $140,000 $150,000 $160,000 $580,000 Notice of any call for redemption, unless waived by the Owners of the Certificates to be redeemed, shall be mailed not less than thirty days and not more than sixty days prior to such call to the registered Owners of the Certificates, and otherwise given as required by the terms of the Agreement and as required by law; however, any failure to give notice shall not invalidate the redemption of the Certificates. All Certificates called for redemption shall cease to bear interest from the date designated in the notice. This Certificate has been authenticated by the Trustee pursuant to the terms of the Agreement. Copies of the Agreement are on file at the office of the County Treasurer and at the Principal Office. Reference to the Agreement and any and all amendments thereto is made for a description of the covenants of the County securing the Installment Payments, the nature, extent and manner of enforcement of such covenants, the rights and remedies of the Owners of the Certificates with respect thereto and the other terms and conditions upon which the Certificates are delivered thereunder. To the extent and in the manner permitted by the terms of the Agreement, the provisions of the Agreement may be amended by the parties thereto with the written consent of the Owners of at least two - thirds in principal amount of the Certificates then outstanding. Page 3 - Form of Certificate of Participation 0095 1801 This Certificate may be exchanged, transferred or replaced only as provided in the Agreement. The Ownership of this Certificate must be registered upon the books of the Trustee as provided in the Agreement. The Trustee may treat the registered Owner hereof as the absolute Owner hereof for all purposes, and the Trustee shall not be affected by any notice to the contrary. The Certificates are issuable in the form of fully registered Certificates without coupons in denominations of $5,000 or any integral multiple thereof. The amounts due under the Agreement may be prepaid under the conditions and upon the terms described in the Agreement. THE TRUSTEE HAS NO OBLIGATION OR LIABILITY TO THE CERTIFICATE OWNERS FOR THE PAYMENT OF INTEREST OR PRINCIPAL PORTIONS PERTAINING TO THE CERTIFICATES; THE TRUSTEE'S ONLY OBLIGATIONS ARE TO ADMINISTER, FOR THE BENEFIT OF THE COUNTY AND THE CERTIFICATE OWNERS, THE VARIOUS FUNDS AND ACCOUNTS ESTABLISHED IN THE AGREEMENT. ASSIGNMENT FOR VALUE RECEIVED the undersigned sells, assigns and transfers unto Please insert social security or other identifying number of assignee. This Certificate and does hereby irrevocably constitute and appoint as attorney, to transfer this Certificate on the books kept for registration thereof with the full power of substitution in the premises. Date: Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of this Certificate in every particular without alteration or enlargement or any change whatsoever. Signature Guaranteed (Bank, Trust Company or Brokerage Firm) Page 4 - Form of Certificate of Participation PE, . 0095 1802 (Authorized Officer) The following abbreviations, when used in the inscription on the face of this Certificate, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM - tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common OREGON CUSTODIANS use the following (as custodian for) CUST UL OREG MIN (name of minor) OR UNIF TRANS MIN ACT - under the Oregon Uniform Transfer to Minors Act Additional abbreviations may also be used through not in the list above. Page 5 - Form of Certificate of Participation RDRsam695 /34 ATTACHMENT "C" June _,1989 Honorable Board of Commissioners Deschutes County 1164 N.W. Bond St Bend, Oregon 97701 Re: Deschutes County $1,800,000 Certificates of Participation, Series 1989 Honorable Board of Commissioners: 0095 1803 Seattle - Northwest Securities Corporation ( "Purchaser ") offers to purchase from Deschutes County ( "Seller ") all the above - described certificates (the "Certificates "), on the terms and based upon the covenants, representations and warranties set forth below. Appendix A, which is incorporated into this agreement by reference, contains a brief description of the Certificates, including principal amount, maturity, interest rate, purchase price, and the proposed date and place of delivery and payment (the "Closing "). Other provisions of this agreement are as follows: 1. Prior to the Closing, Seller will approve a Preliminary Official Statement, and will adopt a resolution authorizing the execution of the Installment Purchase and Trust Agreement ( "Agreement ") in substantially the form attached to this agreement. The Purchaser is authorized by Seller to use these documents and the information contained in them in connection with the public offering of the Certificates and the Final Official Statement in connection with the sale and delivery of the Certificates. 2. Seller, to the best of its knowledge, represents and covenants to the Purchaser that: (a) It has and will have at the Closing the power and authority to enter into and perform this agreement, to adopt the Agreement and to deliver and sell the Certificates to the Purchaser; (b) This agreement and the Certificates do not and will not conflict with, constitute or create a breach or default under any existing law, regulation, order or agreement to which Seller is subject; Honorable Board of Commissioners Deschutes County June , 1989 Page Two 0095 1804 (c) No governmental approval or authorization other than the Agreement which has not been obtained, or will not be obtained prior to closing, is required in connection with the sale of the Certificates to the Purchaser; (d) The Prclitninary Official Statement with corrections, if any, noted by the Seller and its counsel, as of its date and (except as to matters corrected in the Final Official Statement) as of the Closing, shall be accurate and complete in all material respects as of its date to the knowledge and belief of the officers and employees of the Seller, after due review. 3. The Purchaser shall have the right to cancel the agreement contained herein to purchase the Certificates by notifying the Seller of its election to do so if, after the execution of this Contract of Purchase and prior to the Closing: (a) A decision by a court of the United States or the United States Tax Court shall be rendered or a ruling, or a regulation (final, temporary, or proposed), by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or other governmental agency shall be issued and in the case of any such regulation, published in the Federal Register, or legislation shall have been introduced in, enacted by or favorably reported to either the House of Representatives or the Senate of the United States, with respect to Federal taxation upon interest received on obligations of the type and character of any of the Certificates which, in reasonable judgment of the Purchaser, materially adversely affects the marketability of the Certificates or their sale by the Purchaser, at the contemplated public offering prices; or (b) The United States shall have become engaged in hostilities which have resulted in declaration of war or national emergency, or other national or international calamity or other event shall have occurred or accelerated to such an extent as, in the reasonable opinion of the Purchaser, to have a materially adverse affect on the marketability of the Certificates; or (c) There shall have occurred a general suspension of trading on the New York Stock Exchange; or (d) A general banking moratorium shall have been declared by United States, New York State or Oregon State authorities; or (e) Legislation shall hereafter be enacted, or actively considered for enactment, with an effective date prior to the date of the delivery of the Certificates, or a decision by a court of the United States shall hereafter be rendered, or a ruling or regulation by the Securities and Exchange Commission or other governmental agency having jurisdiction of the subject matter shall hereafter be made, the effect of which is that Honorable Board of Commissioners Deschutes County June _, 1989 Page Three 0095 1805 (1) the Certificates are not exempt from the registration, qualification or other requirements of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and then in effect, or (2) The Agreement is not exempt from the registration, qualification or other requirements of the Trust Indenture Act of 1939, as amended and as then in effect, or (f) A stop order, ruling or regulation by the Securities and Exchange Commission shall hereafter be issued or made, the effect of which is that the issuance, offering or sale of the Certificates, as contemplated herein or in the Final Official Statement, is in violation of any provision of the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect and which, in its reasonable judgment, adversely affects the marketability of the Certificates or the market price thereof. 4. The Purchaser's obligations hereunder are also subject to the following conditions: (a) At or prior to the Closing Seller will deliver, make available to the Purchaser, or have adopted: (i) The Certificates, in definitive form and duly executed or a temporary certificate as provided; (ii) A certificate from an authorized officer of Seller, in form and substance acceptable to the Seiler and the Purchaser, stating that execution of the Certificates shall constitute execution of the Final Official Statement by Seller, that the Final Official Statement attached thereto, to the knowledge and belief of such officers, after due review, does not contain any untrue statement of a material fact or omit any statement or information which is necessary to make the statements therein, in the light of the circumstances under which made, not misleading, and that the representations of the Seller contained in this agreement were true and correct when made and are true and correct as of the Closing; (iii) The approving opinion of Special Counsel dated the Closing date; Honorable Board of Commissioners Deschutes County June _,1989 Page Four 0095 1806 (iv) The following documents executed by authorized officers of the Seller (a) A certificate, dated the day of the Closing to the effect that no litigation or other proceedings are pending or threatened in any way affecting the issuance, sale or delivery of, or security for, any of the Certificates. (b) A certificate setting forth the facts, estimates and circumstances in existence on the date of Closing which establish that it is not expected that the proceeds of the Certificates will be used in a manner that could cause the Certificates to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code and any applicable regulations thereunder. (c) Such additional certificates, instruments or opinions or other evidence as the Purchaser may deem reasonably necessary or desirable to evidence the due authorization, execution, authentication and delivery of the Certificates, the truth and accuracy as of the time of the Closing of the representations and warranties, and the conformity of the Certificates, Lease Purchase Agreement and Escrow Agreement with the terms thereof as summarized in the Official Statement., and to cover such other matters as it reasonably requests. (d) A certified copy of the Agreement. 5. The Seller will pay the cost of preparing, printing and executing the Certificates and the fees and disbursements of Special Counsel, ratings, registration, escrow agent and paying agent fees, the cost of printing and distributing the Preliminary and Final Official Statements, its travel and other Seller expenses. The Purchaser will pay the fees and disbursements of Purchaser's counsel, if any, the preparation and filing of blue sky and legal investment surveys where necessary, its travel and other Purchaser's expenses. 6. This agreement is intended to benefit only the parties hereto, and Seller's representations and warranties shall survive any investigation made by or for the Purchaser, delivery and payment for the Certificates, and the termination of this Purchase Contract. Should the Seller fail to satisfy any of the foregoing conditions or covenants, or if the Purchaser's obligations are terminated for any reasons permitted under this agreement, then neither the Purchaser nor the Seller shall have any further obligations under this Purchase Contract, except that any expenses incurred shall be borne in accordance with Section 5. Honorable Board of Commissioners Deschutes County June _, 1989 Page Five 0095 1807 7. This offer expires on the date, and at the time, set forth on Appendix A. Respectfully submitted, SEATTLE - NORTHWEST SECURITIES CORPORATION By: Michael A. Lewis, Vice President Accepted June __, 1989 DESCHUTES COUNTY APPENDIX A DESCRIPTION OF THE CERTIFICATES [TO FOLLOW] 0095 1808 *:v, TOTAL PAGE. 13 *+: