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050704e HARNETT COUNTY BOARD OF COMMISSIONERS Minutes of Emergency Meeting (General Obligation Refunding Bonds for Four Water & Sewer Districts) May 7, 2004 The Harnett County Board of Commissioners met in emergency session, Friday, May 7, 2004, in the County Manager's Office, County Administration Building, 102 East Front Street, Lillington, North Carolina. The "emergency meeting" was called because items to be considered were inadvertently omitted from the agenda of the last regular meeting, May 3, and there was a deadline for adoption of required resolutions that did not allow 48 hours notice required for a "special meeting". Notice was given by phone to all commissioners and to members of the media. Member present: Teddy J. Byrd, Chairman Beatrice B. Hill, Vice Chairman Walt Titchener Commissioners Dan B. Andrews and Tim McNeill were absent. Staff present: Neil Emory, County Manager Vanessa W. Young, Finance Officer Kay S. Blanchard, Clerk to the Board Chairman Byrd called the meting to order at 11 :30 a.m. and called on Mr. Emory. Mr. Emory presented the proposed resolutions listed below for consideration by the Board sitting in its capacity of each water and sewer district. A Resolution of the Board of Commissioners of the County of Harnett, North Carolina sitting as the governing body of the Southwest Water and Sewer District of the County of Harnett, North Carolina, Authorizing the Issuance of Not to Exceed $4,500,000 General Obligation Refunding Bonds, Series 2004. Commissioner Hill moved to adopt the resolution. Commissioner Titchener seconded the motion and it passed unanimously. (Attachment 1) A Resolution of the Board of Commissioners of the County of Harnett, North Carolina sitting as the governing body of the South Central Water and Sewer District of the County of Harnett, North Carolina, Authorizing the Issuance of Not to Exceed $3,400,000 General Obligation Refunding Bonds, Series 2004. Commissioner Hill moved to adopt the resolution. Commissioner Titchener seconded the motion and it passed unanimously. (Attachment 2) A Resolution of the Board of Commissioners of the County of Harnett, North Carolina sitting as the governing body of the West Central Water and Sewer District of the County of Harnett, North Carolina, Authorizing the Issuance of Not to Exceed $2,700,000 General Obligation Refunding Bonds, Series 2004. Commissioner Hill moved to adopt the resolution. Commissioner Titchener seconded the motion and it passed unanimously. (Attachment 3) A Resolution of the Board of Commissioners of the County of Harnett, North Carolina sitting as the governing body of the Northwest Water and Sewer District of the County of Harnett, North Carolina, Authorizing the Issuance of Not to Exceed $1,700,000 General Obligation Refunding Bonds, Series 2004. Commissioner Hill moved to adopt the resolution. Commissioner Titchener seconded the motion and it passed unanimously. (Attachment 4) There being no further business, Commissioner Titchener moved to adjourn. Commissioner Hill seconded the motion and it passed unanimously. The Harnett County Board of Commissioners emergency meeting, May 7, 2004 adjourned at 11 :45 a.m. 267 268 TlfmrP ~ J. J~J Kay S. anchard, Clerk to the Board Attachment 1. Extract of Minutes ofa special meeting of the Board ofCommissimlers of the COWlty of Harnett, North Carolina, sitting as the governing body of the Southwest Water and Sewer District of the County of Harnettj North Carolina, held in the County Manager's Office, 102 East Front Stree4 LiIlingt~ North Carolina. at 11 :30 a.m. on May 7 j 2004. A special called of the Board of Commissioners of the CoWlty of Harnett, North Carolina (the "County"). sitting as the governing body (the "Board') of the Southwest Water and Sewer District of the County (the "District .." was held in the County Managers Office, 102 East Front S~ Lillingto~ North Carolina, at 11 :30 a.m. on May 7, 2004 (the "Meeting'), after proper notice, and was called to order by Chairman Teddy J, Byrd and upon the roll being called, the following members of the Board answered present: Beatrice B. H1ll and Walt Titchener. The following members of the Board were absent: Dan B. Andrews and Tim McNeill. Also present: Neil Emory, Vanessa W. Young and Kay S. Blanchard. Commissioner Hill introduced the following resolution, a summal)' of which had been provided to each Commissionert a ropy of which was available with the Clerk to the Board and which was read by title: A RESOLUTION OF THE BoARD OF COMMISSIONERS OF THE COUNTY OF RARNEn, NORTH CAROLINA, SIlTING AS THE GOVERNING BODY OF THE SOUTHwEST WATER AND SEWER DISTRICT OF THE COUNTY OF HARNE1T, NORTH CAROLINA, AUTHORIZING THE IssUANCE OF NOT TO EXCEED S4,500~OOO GENERAL OBLIGATION REFUNDING BoN OS, SERIES 2004, WHEREAS, the Bond Order hereinafter..<Jescribed has been adopted, and it is desirable to make provision for the issuance of the Bonds authorized by said Bond Order; and WHEREAS, the Board wishes to amend and restate in its entirety the resolution by the same nam= adopted on February 16, 2004 in the manner set forth herein~ NOW, THEREFORE. BE IT RESOL VED by the Board as follows: 1. For purposes of this Resolution, the following words will have the meanings ascribed to them below: "Authorized Denomination" means S 1,000 or any integral multiple thereof. "Board" means the Board of Commissioners of the County, sitting as the governing body of the District. "Bond Order" means the Bond Order authorizing the Bonds adopted by the Board on February 16,2004 and effective on its adoption. "Bonds" means the District's General Obligation Refunding Bonds, Series 2004 autborized under the Bond Order. CLT 751611'0'2 "Business Day" means a day on wrnch First-Citizens is not required or authorized by law to remain closed, "County H means the County of Harnett, North Carolina, and its successors or assigns. "Custody Agreement" means the Custody Agreement dated as of May I, 2004 between Ferris, Baker Watts, lncorporat~ as depositor, and First-Citizens. as custodian, relating to custody receipts evidencing related ownership interests in the Bonds, "District" means the Southwest Water and Sewer District of the County. "Federal Securities" means (a) direct obligations of the United States of Amenca for the t:Jmely payment of which the fuU faith and credit of the United States of America is pledged; (b) obligations issued by any agency controlled or supervised by and acting 8S an instrumentality of the United States of Ameri~ the timely payment of the principal of and interest on which is fully guaranteed as fulJ faith and credit obligations of the United States of America (including any securities described in (a) or (b) issued or held in the name of a trustee in book-entry form on the books of the Department of Treasury of the United States of America), which obligations, in either case, are held in the name of a trustee and are not subject to redemption or pW'chase prior to maturity at the option of anyone other than the holder; (c) any bonds or other obligations of the State of North Olrolina or of any agency. instrumentahty or local governmental lIDit of the State of North Carolina which are ( I) not callable prior to maturity or (2) as to which irrevocable instructions have been given to the trustee or escrow agent with respect to such bonds or other obhgations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified, and which are rated by Moody's, if the Bonds are rated by Moody's, and S&P, if the Bonds are rated by S&P, within the highest rating category and which are secured as to principal, redemptIon premium, if any, and interest by a fund consisting only of cash or bonds or other obligations of the character described in clause (a) or (b) hereof which fi.md may be apphed only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obI igations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate; or (d) direct evidences of ownership of proportionate interests in future interest and principal payments on specified obligations described in (a) held by a bank or tmst company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor on the W1derlying obligations described in (a), and which underlying obligations are not available to satisfy any claim of the custodian or any person claiming through the custodian or to whom the custodian may be obligated. "First-Citizens" means First-Citizens Bank & Trust Company, a duly organized and existmg North Carolina banlcing corporation having an offICe and place of business in RaleighJ North Carolina, "Fitch Ratings" means Fitch, Inc., a corporation organized and existing under the laws of the State of New Y or14 its successors and their assigns and, if such corporation for any reason no longer perfonns the functions of a securities rating agency, "Fitch Ratings" win be deemed to refer to any other nationally recognized rating agency other than MCK>dy' s or S&P designated by the District. "Moody's" means Moody's Investors Service, a corporation organized and existing Wlder the laws of the State of Delaware~ its successors and their assigns and, if such corporation for any reason no longer performs the fWlclions of a securities rating agency, "Moody's" will be deemed to refer to any other nationaHy recognized rating agency other than Fitch Ratings or S&P designated by the District. CLT 751671..2 269 270 "Refunded Bonds" means the Refunded 1991A Bonds, the RefWlded J991B Bonds, the Refunded 1992 Bonds and the Refunded 1997 A Bonds. "Refunded 199JA Bonds" means the $2~298~000 County of Harnett., North Carolina Southwest Water and Sewer District Bonds.. Series 1991A, maturing on and after June 1.. 2004. "Refunded J 991 B Bonds" means the $416~500 County of Harnett, North Carolina Southwest Water and Sewer District Bond~ Series 1991 B, maturing on and after June 1, 2004. "Refunded 1992 Bonds" means the $220,000 County of Harnett, North Carolina Southwest Water and Sewer District Bonds~ Series 1992, maturing on and after March l~ 2005. "Refunded 1997 A Bonds tt means the $841,000 County of Hamett, North Carolina Southwest Water and Sewer District Bonds, Series 1997 A, maturing on and after June I ~ 2004. "S&P.' means Standard & Poor's Ratings Services, a Division of The McGraw-Hill Companies, Inc., its successors and their assigns and. if such corporation for any reason no longer perfonns the functions of a securities rating agency, "S&P ,t will be ~d to refer to any other nationally recognized rating agency other than Fitch Ratings or Moody's designated by the District 2. its Bonds. The District shall issue not to exceed $4,500,000 in total aggregate principal amount of 3. The Bonds shall be dated as of the dated date set forth on the Bonds and pay interest semiannually on June 1 and December I, begjnning December 1. 2004. As long as First-Citizens is the registered OWtlCT of the Bonds, the District shall make its semiannual payments me Business Day before each June 1 and December I. The Bonds are being issued to provide funds to refund in advance of their maturities the Refunded Bonds pursuant to and in accordance with the Bond Order. 4. The Board has ascertained and hereby detennines that the average period of usefulness of the capital projects being financed by the proceeds of the Refimded Bonds was not less than 25 years computed from the date of the Refunded Bonds, and the weighted average maturity of the Bonds does not exceed the weighted average maturity of the Reftmded Bonds, S. The Bonds are payable in annual installments on June 1 in each year, as follows: CL T 751671 v2 YEAR AMmlliI YEAR AMOUNT 2005 $130,000 2017 $160,000 2006 145,000 2018 165,000- 2007 140~000 2019 170~000- 2008 140~OOO 2020 175,000 2009 145~OOO 2011 170,000 2010 145~OOO 2022 170,000 2011 150~000 2023 175~OOO 2012 150~OOO 2024 175,000 2013 150~000 2025 180~000 2014 140~000 2026 180~OOO 2015 140~000 2027 185 ~OOO 2016 150,000 2028 18S~000 The Finance Director of the County, acting on behalf of the District, may~ so long as net present value savings are at least 2% of the par amount of the Refunded Bonds, (a) increase or decrease the aggregate principal amoWlt and the principal of each maturity of the Bonds or (b) combine or otherwise alter the matmity dates set forth above for any of the Bonds. 6. The Bonds shall be numbered from UR_I" consecutively and upward. AU Bonds shall bear interest from thelT date at a rate or mtes which shall be hereafter determined on the sale thereof computed on the basIs of a 360-<1ay year of twelve 30-day months. 7. The Bonds shall be registered as to principal and interest, and the Finance Director of the County~ acting on behalf of the District, is directed to maintain the registration records with respect thereto. The Bonds shall bear the original or facsimile signatures of the Vice Chainnan of the Board and the Clerk to the Board. An original or facsimile of the seal of the District shaU be imprinted on each of the Bonds. 8. The Bonds will be issuable as fully registered bonds 1n any Authorized Denomination. The Bonds initially will be issued in substantially the fonn set forth in Exhibit A, with such appropriate variations~ omissioos and insertions as are pennitted or required by this resolution. 9. The Bonds maturing on or before June I, 2014 are not subject to redemption before maturity. The Bonds maturing on and after June l~ 2015 are subject to redemption prior to maturity, at the option of the District, from any moneys that may be made available for such purpose, either in whole or in part on any date not earlier than June l, 2014~ at the following redemption prices (expressed as a percentage of the principal amount of Bonds to be redeemed)~ together with interest accrued thereon to the date fixed for redemption: if redeemed during the period from June 1~ 2014 to May 31, 2015~ inclusive, 101%; and if redeemed on or after June I~ 2015, 1000;0, The Finance Director of the County, acting on behalf of the District~ may alter the redemption provisions of the Bonds by a written certificate delivered on or before the date the Bonds are issued setting forth the new redemption provisions of the Bonds, as long as the ftrst optional redemption date is not later than June I, 2016 and the premium does not exceed riO. If less than all of the Bonds of anyone maturity shall be called for redemption, the District shall select the maturity or maturities of the Bonds to be redeemed in such manner as the District in its discretion may detennine and the District shall determine which of the Bonds within a maturity are to be redeemed by lot; proyjde<L however, that the portion of any Bond to be redeemed shall be in an 4 Cl T 75 J671v2 271 272 Authorized Denomination and that. in selecting Bonds for redemption. each Bond shall be considered as representing that number of Bonds which is obtained by dividing the principal amount of such Bond by the minimum Authorized Denomination. Notice of redemption shall be given by the District. not less than 30 days nor more than 60 days before the redemption date. by first class mail. postage prepaid (a) to the Local Government Commission. (b) to the then~registered owners of the Bonds or portions thereof to be redeemed at the last address shown on the registration books kept by the registrar, (c) to each of the then..existing securities depositories and (d) to at least two of the then--existing national information servi~. The notice shall (a) state the redemption da~ and the redemption price, (b) identify the Bonds or portions thereof to be redeemed by reference to their numbers and (c) state that on the redemption date there shall become due and payable on each Bond or portions thereof so to be redeemed~ the principal thereof, redemption premium, if any, and interest accrued to the redemption date and that from and after such date interest thereon shall cease to accrue. 10. The Bonds and the provisions for the registration of the Bonds and for the approval of the Bonds by the Secretary of the Local Government Commission shall be in substantially the form attached hereto as Exhibit A. 11. The District c~venants to take such action as may be required in the opinion of nationally recognjzed bond counsel to cause the Bonds and all actions of the District with respect to the proceeds thereof to comply with Internal Revenue Code of 1986. as amended (the "Code ,'). In particular. the District covenants as follows: (a) At least one of the following two conditions wjll be satisfied for the Bonds: (I) less than ] 0010 of the proceeds of the Bonds, reduced by costs of issuance. will be used directly or indirectly in the business of a person other than a state or local governmental unit or (2) less than 100/0 of the principal or interest on the Bonds will be (under the tenns of such issue or any underlying an'1Ulgetnent) directly or indire<:tly (A) secured by an interest in property used or to be used in a private business or any interest in payments made with respect to such property or (B) to be derived from payments made with respect to property, or borrow~d money. used or to be used in a private business; (b) Less than 5% of the proceeds of the &nds, reduced by costs of ISsuance. will be used by nongovernmental persons for a use unrelated to the purposes for which the Bonds are being issued; (c) It will not loan directly or indirectly more than 50,4 of the proceeds of the Bonds to nongovernmental persons~ (d) It will not enter into any management contract with respect to the facilities refinanced with the proceeds of the Bonds unless it obtains an opinion of nationally recognized bond counsel that such management contract wiJI not impair the exclusion from a recipient's gross income for federal income tax purposes of the interest on the Bonds; CLT751671v2 '~~/ (e) The District acknowledges that the continued exclusion of interest on the Bonds. from a recipient's gross income for federal income tax purposes depends, in part, on compliance with the arbitrage limitations imposed by Section 148 of the Code. The District covenants to comply with all the requirements of Section 148 of the Code, including the rebate requirements, and it shall not permit at any time any of the proceeds of the Bonds or other funds of the District to be use~ directly or indirectly, to acquire any asset or obligation, the acquisition of which would cause t:be Bonds to be "arbitrage bonds" for purposes of Section 148 of the Code; (0 The Bonds shall not be 'federally guaranteed" as defmed in Section 149(b) of the Code; and (g) The District covenants to file or cause to be filed Form S03S-G in acoordance with S~tion I 49(e) of the Code. 12, From the proceeds of the Bonds, an amount sufficient to redeem the Refunded Bonds shall be used by the Local Government Commission, on behalf of the District, to redeem the Refunded Bonds on the day after the Bonds are issued, or such other day as the Local Government Commission may determine is in the best interests of the District, and the balance (the HBalam:e "), including accrued interest on the Bonds from the dated date set forth on the Bonds until the date the Bonds are issued will be transferred to the District. The Finance Director of the County, acting on behalf of the District, shall deposit the Balance in separate accounts and apply the amount of accrued interest to the payment of mterest on the Bonds on Jlttle I, 2004 and the remainder to pay the costs of issuing the Bonds. Any money remaining in that accoWlt, including investment earnings thereon~ shan on June I, 2004, be applied to pay the interest on the Bonds. 13, Actions taken by officials of the District or by officials of the County, acting on behalf of the District, to select paying and transfer agents, and a bond registrar, or alternate or successor agents and registrars pW'Suant to Section 159E-8 of the Registered Public Obligations Act, Chapter 159E of the General Statutes of North Carolina, are hereby authorized and approved, 14. The Local Government Commission is hereby requested to sell the Bonds to Ferris, Baker Watts, Incorporated at a negotiated price to be determined by the Local Government Commission. 15. The Vice Chairman of the Board, the COWlty Manager, the Finance Director and the Clerk to the Board of the County, each acting on behalf of the Distric~ are hereby authorized and directed to cause the Bonds to be prepared and, when they shall have been duly sold by the Local Government Commission to Ferns, Baker Wans, Inoorporated, to execute the Bonds and to twn the Bonds over to the Registrar and transfer agent of the District for delivery to the purchaser or purchasers to whom they may be sold by Ferris, Baker Watts, Incorporated. ) 6. 1be form and content of the financial infonnation relating to the District provided in the PrehmJnary Offering Memorandwn to be dated on or about April 12, 2004, together with the flnal Offering Memorandum to be dated on or about April 2S, 2004 are in all respects authorized, approved and confirmed, and the Vice Chairman of the Board, the CoWlty Manager, the Finance Director and the Clerk to the Board of the COWlty are authorized, empowered and directed to act on behalf of the District and execute and deliver the Offering Memorandum in substantially the form and content presented to the Board, but with such changcs, modifications, additions or deletions therein as sha)) to the Vice Chairman of the B~ CQunty Manager or the Finance Director of the County, acting on hehal f of the District, 6 CL T 75167Jv2 273 274 seem necessary, desirable Or appropriate, their execution thereof to constitute conclusive evidence of the approval of the Board of any and all changes, modifications.. additions or deletions therein from the fonn and content of the District's Cmancial information in the Offering Memorandum presented to the Board. 17. The Vice Chainnan of the Board, the County Manager, the Finance Director and the Clerk to the Board of the County are authorized and directed to execute and deliver for and on behalf of the District any and all additional certificates, documents, opinions or other papers and perform all other acts as may be required by the documents contemplated hereinabove or 8..<i may be deemed necessary or appropriate to implement and carry out the intent and purposes of this Resolution. 18. The County agrees, on ~half of the District and in accordance with Rule 15c2-12 (the "Rule ') promulgated by the Securities and Exchange Commission (the "SEC'). and for the benefit of the Registered Owners and beneficial owners of the Bonds, as follows: (l) by not later than seven months after the end of each Fiscal Year, beginning with the Fiscal Year ending June 30, 2004, to provide to each nationally rcc<lgnized municipal securities infonnation repository (UNRMSJR 'J and to the state information depository ("SID'), if any, for the Stak, the audited fmancial statements of the County (which include the District) for such Fiscal Year, if available, prepared in accordance with Section 159-34 of the General Statutes of North Carolina, as it may be amended from time to time, or any successor statute, or, if such audited fmancial statements are not then available, unaudited fmancial statements of the County for such Fiscal Year to be replaced subsequently by audited financial statements of the County to be delivered within 15 days after such audited financial statements become available for distribution; (2) by not later than seven months after the end of each Fiscal Year, beginning with the Fiscal Year ending June 30,2004, to provide to each NRMSIR and to the SID, if any, (a) the financial and statistical data as of a date not earlier than the end of the preceding Fiscal Year (which data shall be prepared at least annually, shall specify the date as to which such information was prepared and shall be delivered together with any subsequent material events notices specified in (3) below) for the type of infonnation included under the captions "TOE COUNTY-DEBT IN FORMA TlON" and 44__ T AX INFORMATION" (including the infonnation with respect to the District but excluding information on overlapping or other underlying units) in the Offering Memorandum referred to in Section 16 and (b) the combined budget of the County for the current Fiscal Year to the extent such items are not included in the audited financial statements referred to In clause ( 1) above; (3) to provide in a timely manner to each NRMSIR or to the Municipal Securities Rulemaking Board (the "MSRB''}t and to the SID, ifanYt notice of any of the following events with respect to the Bonds, ifmaterial: (a) principal and interest payment delinquencies; (b) non-payment related defaults; (c) WlSCheduled draws on the debt service reserves reflecting financial difficulties; 7 CLT 751671v2 (d) unscheduled draws on any -credit enhancements reflecting fmancial difficulties; (e) perform; substitution of any credit or liquidity providers, or their failure to (f) the Bonds; adverse tax opinions or events affecting the tax-exempt status of (g) (h) modification to the rights of the beneficial owners of the Bonds; Bond calls; (j) defeasances; (j) release, substitution or sale of any property securing repayment oCtile Bonds; and (k) rating changes; and (4) to provide in a timely manner to each NRMSIR or to the MSRB, and to the SID, if any. notice of a failure of the COlmty to provide required annual financial infonnation described in (1) or (2) above on or before the date specified. The County agrees that its undertaking under this Paragraph is intended to be for the benefit of the registered owners and the beneficial owners of the Bonds and is enforceable by any of the registered owners and the beneficial owners of the Bonds, including an action for specific performance of the COWlty'S obligations under this Paragraph, but a failure to comply will not be an event of default and will not result in acceleration of the payment of the Bonds. An action must be instituted, had and maintained in the manner provided in this Paragraph for the benefit of all of the registered owners and beneficial owners of the Bonds, The County, as the governing body oftbe Djstric~ may modify from time to time, consistent wlth the Rule~ the information provided or the format of the presentation of such information, to the extent necessary or appropriate in the judgment oftbe County, but (1) any such modification may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law or change in the identity, nature or status of the County or the District; (2) the information to be provided. as modified, would have oomplied with the requirements of the Rule as of the date of the Offering Memorandum, after takIng into account any amendments or interpretations of the Rule as well as any changes in circumstances; and (3) any such modification does not materially impair the mterest of the registere(j owners or the beneficial owners, as determined by nationally recognized bond CL T 751671v2 275 276 cOWlsel or by the approving vote of the registered owners of a majority in principal amount of the Bonds. Any annual financial infonnation containing modified operating data or financia.l information will ex.plain, in narrative form, the reasons for the modification and the impact of the change in the type of operating data or financIal information being provided. The provisions of this Paragraph terminate on payment, or provision having been made for payment in a manner consistent with the Rule, in full of the principal of and interest on the Bonds. 19. Those portions of this Resolution other :than Paragraph 18 may be amended or supplemented. from time to time, without the consent of the owners of the Bonds if in the opinion of nationally recognized bond counsel, such amendment or supplement would not adversely affect the interests of the owners of the Bonds and would not cause the interest on the Bonds to be included In the gross income of a recipient thereof for federal income tax purposes. This ResolutIon may be amended or supplemented with the consent of the owners of a majority in aggregate principal amount of the outstanding Bonds, exclusive of Bonds, if any, owned by the District, but a modification or amendment ( 1) may not, without the express consent of any owner of Bonds, reduce the principal amount of any Bon<L reduce the interest rate payable on it, extend its maturity or the times for paying interest, change the monetary medium in which principal and interest is payable. or reduce the percentage of consent required for amendment or modification and (2) as to an amendment to Paragraph 18, must be limited as described thereIn. Any act done pursuant to a modification or amendtnent consented to by the owners of the Bonds is binding on all owners of the Bonds and will not be deemed an infringement of any of the provisions of this Resolution~ whatever the character of the act may be, and may be done and performed as fully and freely as if expressly permitted by the tenns of this Resolution, and after consent has been given, no owner of a Bond has any right or interest to object to the action, to question its propriety or to enjoin or restrain the District from taking any action pursuant to a. modification or amendment. If the District proposes an amendment or supplemental resolution to this Resolution requiring the consent of tIle owners of the Bonds, the Registrar shall, on being satisfactorily indemnified with respect to expenses, cause notice of the proposed amendment to be sent to each owner of the Bonds then outstanding by first-class mail, postage prepaId, to the address of such owner as It appears on the reg1stration books; but the faillD'e to receive such notice by maIling by any owner, or any defect in the mailing thereof, will not affect the validity of any proceedings pursuant hereto. Such notice shall briefly set forth the nature of the proposed amendment and shall state that copies thereof are on file at the princIpal office of the Registrar for inspection by all owners of the Bonds. If, within 60 days or such longer period as shall be prescribed by the District following the giving of such notice, the owners of a majority in aggregate principal amount of Bonds then outstanding have consented to the proposed amendment, the amendment will be effective as of the date stated in the notice. 20. Nothing in this Resolution shall preclude (a) the payment of the Bonds from the proceeds of refunding bonds or (b) the payment of the Bonds from any legally available funds. If the District causes to be paid, or has made provisions to pay, on maturity or on redemption before maturity~ to the owners of the Bonds the principal of the Bonds (including interest to become due thereon), through setting aside trust funds or setting apart in a reserve fimd or special trust account created pursuant to this Resolution or otherwise, or through the irrevocable segregation for that pw-pose in some 9 elT 751671'1;2 sinking fwtd or other fund or crust account with an escrow agent or otherwise~ moneys sufficlent therefor, including. but not limited to, interest earned or to be earned on Federal Securities, the District shall so nobfy Moody's~ S&P and Fitch Ratings, and then such Bonds shall be considered to have been discharged and satisfied. and the principal of the Bonds (including any interest thereon) shall no longer be deemed to be outstanding and unpaid; provided~ however, that nothing in this Resolution requires the deposit of more than such Federal Securities as may be sufficien~ taking into account both the principal amOlmt of such Federal Securities and the interest to become due thereon, to implement any such defeasance. If such a defeasance occW'S and after the District rec-eives an opinion of a nationally recogni:u:d aCCQW1ting firm that the segregated moneys or Federal Securities together with interest earnings thereon are sufficient to effect a defeasance, the District shall execute and deli ver all such instruments as may be necessary to effect such a def~sance and desirable to evidence such release, discharge and satisfaction. ProVtsions shall be made by the District for the mailing of a notice to the owners of the Bonds that such moneys are so available for such payment. 2l. The District accepts all responsibilities assigned to it under the Custody Agreement. a draft of which has been made available to the Board. 22. This resolution amends and restates in its entirety the resolution of the same name adopted by the Board on F ebrnary 16. 2004. Upon motion of Commissioner Hill, seconded by Commissioner Titchener, the foregoing order titled: "A REsoLUTION OF THE BOARD OF COMMISSIONERS OF THE COUNTY OF HARNETT~ NORTH CAROLLN~ Sl1TfNG AS THE GOVERNING BODY OF THE SOUTHWEST WATER AND SEWER D.SfRJCT OF THE COUNTY OF BARNE'IT, NORTH CAROLINA, AUTHORJZINC THE ISSUANCE OF NOT TO EX<'-"EED S4~SOO,OOO GENERAL OOLICA TION REFUNDJNG BoNDS, SERlES 2004" was adopted by tbe following vote; AYES: Commissioner Teddy J. B)Td Commissioner Beatrice B. Hill Commissioner Walt Titchener NA YS: None PASSED, ADOPTED AND APPROVED this 7th day of May, 2004. 10 CL T 7S167lv2 277 278 STATE Of NORm CAROLINA COUNTY OF HARNETT 1. Kay S. Blanchard, Clerk to the Board of Commissioners of the County of Harn~ North Carolina (the "County'), sitting as the governing body (the "Board'') of the Southwest Water and Sewer District of the County (the "District"), DO HEREBY CERTIFY that the foregoing is a true and exact copy of the resolution titled" A REsoLUTION OF THE BoARD OF COMMISSIONERS OF THE COUNTY OF HARNETT, NORTH CAROLINA" SITTING AS THE GOVI.RNING BODY OF THE SOUTHWEST WATER AND SEWER DISTRIC1' OF THE COUNTY OF HARNETT, NORTH CAROLINA, AVmOR1ZlNG THI: issUANCE OF NOT TO EXCEED S4,soo,000 GENERAL OBLIGATION REFUNDING BONDS, SERIES 2004" adopted by the Board in special session convened on the 7th day of May. 2004~ as recorded in the minutes of the Board . WITNESS my hand and the seaJ of the District, this the 7th day of May, 2004. ~) -"I ..:" ~-;. ~.~ ~ ~~-~ Kay S. 1anchard, Clerk to the Board OfCOffiffiJssioners County of Harnett, North Carolina and the Southwest Water and Sewer District of Harnett County (~~)''''''. . .. -LOI.-;L . ~........ -. ... ~ I ... -f .. -11...-" ~ ".... ..'l-Lll. .. ~ ~ ..' ~ \, ~ EXHIBIT A FORM OF BOND No.R- $ UNITED ST A TIS OF AMERICA STATE OF NORTH CAROLINA COUNTY OF HARNETT SOUTHWEST WATER. AND SEWER DISTRICf INTEREST &II l\f.A TURJ1Y DATE JUNE 1,20_ DATED DATE MAy 12,2004 CUSIP REGISfEllED OWNER: FutSf-CITIZENS BANK" TRUST COMPANY PRJNCIPAL SUM: DoLLARS GENERAL OBLIGATION REFUNDING BoND, SERIES 2004 THE SOUTHWEST WATER AND SEWER DISTRiCT OP THE COUNTY OF HARNEIT. NORTH CAROLINA (the- "Distric/') acknowledges itself indebted and for value received hereby promises to pay to the Registered Owner named above, on the Matwity Date specified above, upon surrender hereof, the Principal Sum shown above and to pay to the Registered Owner hereof interest thereon from the date of this Bond until it shall mature at the Interest Rate per annum specified above, payable on June 1, 2004 and semiannually thereafter on June 1 and December 1 of each year. Principal of and interest on this Bond are payable in immediately available funds to the Registered Owner of the Bonds and is payable to the owner of the Bonds shoMl on the records of the District at the dose of business on the ISth day of the month preceding an interest payment date or a, bond payment date. This Bond is issued in accordance with the Registered Public Obligations Act, Chapter 159E of the General Statutes of North Carolina, and pursuant to the Local Government Finance Act and a bond order adopted by the Board of Glmmissioners of the COWlty of Harnett, North Carolina (the "County ''), sitting as the governing body of the District, on February 16, 2004 and effective on Its adoption. The Bonds are being issued to provide funds to refund in advance of their maturities the (I} County of Harnett, North Carolina Southwest Water and Sewer District Bonds, Series 1991A maturing on and after June I, 2004, (2) County of Harnett, North Carolina Southwest Water and Sewer District Bonds, Series 1991 B maturing on and after June 1, 2004, (3) County of Harnett, North Carolina Southwest Water and Sewer District Bonds, Series 1992 maturing on and after March 1,2005, and (4) County of Harnett, North Carolina Southwest Water and Sewer District Bonds, Series 1997 A maturing on and after June I, 2004. The Bonds maturing on or before June I, 2014 are not subject to redemption before maturity. The Bonds matwing on and after Jooe 1,2015 are subject to redemption prior to maturity, at the option of the District. from any moneys that may be made available for such purpose, either in whole or in part on any date not earlier than June 1, 2014, at the following redemption prices (expressed as a percentage of the principal aJnOWlt of Bonds to be redeemed), together with interest accrued thereon to the date fixed for redemption: ifredeemed during the period from JWle 1, 2014 to May 31, 2015, inclusive, 101%~ and if redeemed on or after June I, 2015, 1 ()()<'/ll. If less than all of the Bonds of any one maturity shall be called for redemption, the District shall select the maturity or maturities of the Bonds to be redeemed in such manner as the District in its Cl T 751671v2 279 280 discretion may determine and the District shall determine which of the Bonds withJn a maturity are to be redeemed by lot; provided, however, that the portion of any Bond to be redeemed shall be in an Authorized Denomination and that., in selecting Bonds for redemption, each Bond shall be considered as representing that number of Bonds which is obtained by dividing the pritWipal amount of such Bond by the minimum Authorized Denomination. Notice of redemption shall be given by the District, not less than 30 days nor more than 60 days before the redemption date, by first class mail, postage prepaitL to (I) the Local Government Commission, (2) the then-registered owners of the Bonds or portions thereof to be redeemed at the last address shovm on the registratioo books kept by the registrar, (3) each of the then-existing sectnities depositories and (4) at least two of the then-existing national infonnation services. The notice shall (I) state the redemption date and the redemption price. (2) identify the Bonds or portions thereof to be redeemed by reference to their numbers and (3) state that on the redemptioo date there shall become due and payable on each Bond or portions thereof so to be redeemed. the principal thereQf. redemption premium, if any, and interest accroed to the redemption date and that from and after such date interest thereon shall cease to accrne. It is hereby certified and recited that all conditions, acts and things required by the Constitution or statutes of the State of North Carolina to exist, be perfonned or happen precedent to or in the issuance of this Bond exist, have been perfonned and have happened, and that the amount of this Bond, together with all other indebtedness of the District. is within every debt and other- limit prescribed by said Constitution or statutes. The faith and credit of the District are hereby pledged to the punctual payment of the principal of and interest on this Bond in accordance with i1s terms. This Bond shall not be valid or become obligatory for any pwpose until the certification hereon shall have been signed by an authorized representative of the Local Government Commission. IN WITNESS WHEREOFt the District has caused this Bond to bear the original or facsimile of the signatures of the Vice Chairman of the Board of Commissioners of the County and the Clerk to the Board of Commissioners of the Comty, each acting on behalf of the District. and an original or facsimile of the seal of the Districtto be imprinted hereon and this Bond to be dated as of the dated date set forth above. (SEAL) Clerk to the Board of Commissioners Vice Chainnan of the Board of Commissioners Date of Execution: ,2004 [Counterpart signature page to the County of Harnett, North Carolina Southwest Water and Sewer District General Obligation Refunding Bonds, Series 2004] The issue hereof bas been approved under the provisions of the Local Government Bond Act. JANICE T. BURKE SeCretary of the Local Government Commission FORM OF ASSIGNMENT ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby seUs. assigns and transfers unto (Please print or typewrite Name and Address, including Zip Code, and Federal Taxpayer Identification or Social Security Number of Assignee) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints Attorney to register the transfer of the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated; Signature guaranteed by: NOTICE: Signature must be guaranteed by a Participant in the Securities Transfer Agent Medallion Program ("'Stamp") or sundar program. NOTICE: The signature to this assignment must correspond with the n.ame as it appears on the face of the within Bond in every particular. without alteration, enlargement or any change whatever. TRANSFER FEE MAy BE REQUIRED 281 282 Attachment 2. Extract of Minutes of a special meeting of the Board .of Commissioners of the County of Harnett. North Carolina, sitting as the governing body of the South Central Water and Sewer District of the County of H~ North Carolin~ held in the County Managers Office, 102 East Front Street, Lillington, North Carolina, at II :30 a.m. on May 7, 2004. A special meeting of the Board of Commissioners of the County of Harnett, North Carolina (the "County"), sitting as the governing body (the "Board") of the South Central Water and Sewer District of the County (the "District tf), was held in the County Manager"s Office. I 02 East Front Street, Lillington, North Carolina. 3t II :30 amo on May 7, 2004 (the oOMeetingo'}, after proper notice, and was caUe-d to order by Chairman Teddy J. Byrd, and upon the roll being called, the following members of the Board answered present: Beatrice B. Hill and \Vah Titchener. The following members of the Board were absent: Dan B. Andrews and Tim McNeill. Also present: Neil Emory, Vanessa W. Young and Kay So Blanchard. Commissioner Hill introduced the following resolution, a summary of which had been provided to each Commissioner, a copy of which was available with the Clerk to the Board and which was read by title: A RESOLUTION OF THE BoARD OF COMMISSIONERS OF mE COUNTY OF RARNE1T; NORm CAROLINA, SIlTING AS TJlE GOVERNING BODV OF THE SOUTH CENTRAL WATER AND SEWER DISTRICT OF mE COUNTY OF HARNETT; NORTH CAROUNA, AUTHORIZING THE ISSUANCE OF NOT TO EXCEED S3,400;OOO GENERAl.. OBLIGATION REFUNDING BONDs, SERIES 2004. JVHEREAS. the Bond Order hereinafter-described has been adopted, and it is desirable to make provision for the issuance of the Bonds authorized by said Bond Order; and Jf71EREASo the Board wishes to amend and restate in its entirety the resolution by the same name adopted on February 16. 2004 in the manner set forth herein; NOW. THEREFORE. BE IT RESOL VED by the Board as follows: I. For purposes of this Resolution, the following words will have the meanings ascribed to them below: "Aulhorized Denominalion" means S 1,000 or any integral multiple thereof. 'OBoard" means the Board of Commissioners of the County, sitting as tbe governing body of the Oi strict iOBond Order" means the Bond Order authorizing the Bonds adopted by the Board on February 16, 2004 and effective on its adoption. "Bonds" means the Districfs General Obligation Refunding Bonds, Series 2004 authorized under the Bond Order. CL T 751666\12 "BUJines.r Day" means a day on which First-Citizens is not required or authorized by law to remain closed. "CowIly" means the County of Harnett, North Carolina, and its successors or assigns. "Custody Agreement" means the Custody Agreement dated as of May I, 2004 between Ferris, Baker Watts, Incorporated, as depositor, and First-Citizen~ as custodian, relating to custody receipts evidencing related ownership interests in the Bonds. "District" means the South Central Water and Sewer District of the County. "Federal Securities" means (a) direct obligations of the United States of America for the timely payment of which the full faith and credit of the United States of America is pledged~ (b) obligations issued by any agency controlled or supervised by and acting as an instrumentality of the United States of America, the timely payment of the principal of and interest on which is fully guaranteed as full faith and credit obligations of the United States of America (including any securities described in (a) or (b) issued or held m the name of a trustee in book-entry fonn On the books of the Department of Treasury of the United States of America), which obligations, in either case, are held in the name of a trustee and are not subject to redemption or purchase prior to maturity at the option of anyone other than the holder, (c) any bonds or other obligations of the State of North Carolina or of any agency, instrumentality or local governmental unit of the State of North Carolina which are (1) not callable prior to maturity or (2) as to which irrevocable instructions have been given to the trustee or escrow agent with respect to such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates speciti~ and which are rated by Moody:ts, if the Bonds are rated by Moody's, and S&P, if the Bonds are rated by S&P, within the highest rating category and which are secured as to principal, redemption premium, if any, and interest by a fund consisting only of cash or bonds or other obligations of the character described in clause (a) or (b) hereof which fund may be applied only to the payment of such principal of and mterest and redemption premium, if any, on such bonds or ot~r obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate~ or (d) direct evidence~ of ownership of proportionate interests in future interest and principal payments on specified obligations described in (a) held by a bank or trust company as custodian, wuter which the owner of the investment is the real party in interest and has the right to proceed directly and indi....idually against the obligor on the underlying obligations described in (a). and which underlying obligations are not available to satisfy any claim of the custodian or any person claiming through the custodian or to whom the custodian may be obligated. "Escrow AgenJ" means First-Citizens, as escrow agent under the Escrow Agreement, its successors and assigns. "Escrow Agreement" means the Escrow Agreement dated as of May I, 2004 between the District and the Escrow Agent. "FirsJ-C;lizens" means First-Citizens Bank & Trust Company, a duly organized and existing North Carolina baJ:Iking corporation having an office and place of business in Raleigh, North Carolina. "Filch Ratings" means Fitch, Inc., a corporation organized and existing under the laws of the State of New York, its successors and their assigns and, If such corporation for Wly reason no longer performs the functions of a securities rating agency, "Fitch Ratings" will be deemed to refer to any other nationaJly recognized rating agency other than Moody's or S&P designated by the District 2 CLT 751666v2 283 284 "Moody fS" means Moody~s investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and their assigns and~ if such corporation for any reason no longer perfonns the functions of a securities rating agency, "Moody's" will be deemed to refer to any other nationally recognized rating agency other than Fitch Ratings or S&P designated by the District. "Refunded Bonds" means the Refunded 1990 Bonds, the Refunded 1991 Bonds. the Refunded 1996 Bonds and the Refunded ) 997 A Bonds. "Refunded 1990 Bonds" means the $800,000 County of Harnett, North Carolina South Central Water and Sewer District Bonds~ Series 1990, maturing on and after June It 2004. "Refunded /99/ Bonds" means the $167,000 County of Harnett, North Carolina South Central Water and Sewer District Bonds, Series 1991, maturing on and after June I, 2004. "Refunded 1996 Bonds" means the $90(l;()OO County of Harnett, North Carol ina South Central Water and Sewer District Bonds, Series 1996, maturing on and after June I, 2007. "Refunded J 997 A Bonds" means the $955.000 County of Harnett, North Carol ina South Central Water and Sewer District Bonds. Series 1997 A, maturing on and after June I, 2004. "S&P" means Standard & Poor's Ratings Services.. a Division of The McGraw-Hili Companies, loe., its successors and their assigns and, if such corporation for any reason no longer perfonns the functions of a securities rating agency, "S&P" will be deemed to refer to any other nationally recognized rating agency other than Fitch Ratings or Moody's designated by the District 2. its Bonds, The District shall issue not to exceed S3AOO,OOO in total aggregate principal amount of 3. The Bonds shall be dated as of the dated date set forth on the Bonds and pay interest semiannually on June I and December I, beginning December I, 2004. As long as First..citizens is the registered owner of the Bonds, the District shall make its semiannual payments one Business Day before each June I and December I, The Bonds are being issued to provide funds to refund in advance of their maturities the Refunded Bonds pursuant to and in accordance with the Bond Order. 4. The Board has ascertained and hereby deteffilines that the average period of usefulness of the capital projects being financed by the proceeds of the Refunded Bonds was not less than 25 yearscomputed from the date of the Refunded Bonds, and the weighted average maturity of the Bonds does not exceed the weighted average maturity of the Refunded Bonds. 5. The Bonds are payable in annual installments on June I in each year, as follows: ell 151666v2 YEAR AMilllliI Y.MJi AMOUNT 2005 $65.000 2017 $85,000 2006 70,000 2018 85,000 2007 115,000 2019 90,000 2008 llS,OOO 2020 95,000 2009 115,000 2021 95,000 2010 235,000 2022 95,000 20 II 230.000 2023 95,000 2012 230,000 2024 100,000 2013 235,000 2025 100,000 2014 95,000 2026 105,000 2015 75.000 2027 105,000 2016 80,000 2028 110,000 The Finance Director of the County, acting on behalf of the Distric~ may, so long as net present value savings are at least 2% of the par amount of the Refunded Bonds, (a) increase or decrease the aggregate principal amount and the principal of each maturity of the Bonds or (b) combine or otherwise alter the maturity dates set forth above for any of the Bonds. 6. The Bonds shall be numbered from "R-I" consecutively and upward. All Bonds shall bear interest from their date at a rate or rates which shall be hereafter detennined on the sale thereof computed on the basis ofa 360-day year of twelve 30-day months. 7. The Bonds shall be registered as to principal and interest, and the Finance Director of the County, acting on behalf of the District, is directed to maintain the registration records with respect thereto. The Bonds shall bear the original or facsimile signatures of the Vice Chainnan of the Board and the Clerk to the Board. An original or facsimile of the seal of the District shall be imprinted on each of the Bonds" 8. The Bonds will be issuable as fully registered bonds in any Authorized Denomination. The Bonds initially will be issued in substantially the form set forth in Exhibit A, with such appropriate variations, omissions and insertions as are permitted or required by this resolution. 9. The Bonds maturing on or before June 1, 2014 are not subject to Ndemption before maturity. The Bonds maturing on and after June I, 2015 are subje<:t to redemption prior to maturity, at the option of the District, from any moneys that may be made available for such purpose, either in whole Or in part on any date not earlier than June I, 2014, at the following redemption prices (expressed as a percentage of the principal amount of Bonds to be redeemed)~ together with interest accrued thereon to the date fixed for redemption: if redeemed during the period from June 1, 2014 to May 31, 2015, inclusive, 101%; and if redeemed on or after June I, 2015, 1000/1). The Finance Director of the County, acting on behalf of the District, may alter the redemption provisions of the Bonds by a lNritten certificate delivered on or before the date the Bonds are issued setting forth the new redemption provisions of the Bonds., as long as the first optional redemption date is not later than June 1,2016 and the premium does not exceed 2%. If less than all of the Bonds of anyone maturity shall be called for redemption, the District shall select the maturity or maturities of the Bonds to be redeemed in such manner as the District in its discretion may detennine and the District shall detennine whlch of the Bonds within a maturity are to be redeemed by lot; provided, however, that the ponton of any Bond to be redeemed shall be in an 4 ell 751666..-2 285 286 Authorized Denomination and that, in selecting Bonds for redemption, each Bond shall be considered as representing that number of Bonds which is obtained by dividing the principal amount of such Bond by the minimum Authorized Denomination. Notice of redemption shall be given by the Distric~ nO( less than 30 days nor more than 60 days before the redemption date, by first class mail, postage prepaid (a) to the Local Government Commission, (b) to the then-registered owners of the Bonds or portions thereof to be redeemed at the last address shown on the registration books kept by the registrar. (c) to each of the then-existing securities depositories and ( d) to at least two of the then-existing national infonnation services. The notice shall (a) state the redemption date and the redemption price. (b) identify the Bonds or portions thereof to be redeemed by reference to their numbers and (c) state that on the redemption date there shall become due and payable on each Bond or portions thereof so to be redeemed, the principal thereof, redemption premium, if any. and interest accrued to the redemption date and that from and after such date interest thereon shall cease to aCCllle. 10, The Bonds and the provisions for the registrati<ln of the Bonds and for the approval of the Bonds by the Secretary of the Local Government Commission shall be in substantially the form attached hereto as Exhibit A. II. The District covenants to take such action as may be required in the opinion of nationally recognized bond counsel to cause the Bonds and all actions of the District with respect to the proceeds thereof to comply with Internal Revenue Code of 1986, as amended (the "Code'l In particular, the District covenants as follows: (a) At least one of the following two conditions will be satisfied for the Bonds: (I) less than I 0% of the proceeds of the Bonds, reduced by costs of issuance, will be used directly or indirectly in the business of a person other than a state or local governmental unit or (2) less than IOO/Q of the principal or interest on the Bonds will be (under the terms of such issue or any underlying arrangement) directly or indirectly (A) secured by an interest in property used or to be used in a private business or any interest in payments made with respect to such property or (B) to be derived from payments made with respect to property. or borrowed money. used or to be used in a private business; (b) Less than 5% of the proceeds of the Bonds, reduced by costs of issUAnce, will be used by nongovernmental persons for a use unrelated to the purposes for which the Bonds are being issued~ (c) It will not loan directly or indirectly more than 5% of the proceeds of the Bonds to nongovernmental persons; (d) It will not enter into any management contract with respect to the facilities refinanced with the proceeds of the Bonds unless it obtains an opinion of nationally reeognized bond counsel that such management contract will not impair the exclusion from a recipient's gross income for federal income tax purposes of the interest on the Bonds; O.T 751666,,2 (e) The District acknowledges that the continued exclusion of interest on the Bonds from a recipient's gross income for federal inc<lme tax purposes depends, in part, on compliance with the arbitrage limitations imposed by Section 148 of the Code. The District covenants to ccmp[y with all the requirements of Se~tion 148 of the Code, including the rebate requirementsl and it shall not pennit at any time any of the proceeds of the Bonds or other funds of the District to be used, directly or indirectly, to acquire any asset or obligation, the acquisition of which would cause the Bonds to be "arbilrage bonds ,.. for purposes of Section 148 of the C()de; (f) The Bonds shaH not be ''federally guaranJeed" as defined in Section 149(b) of the Code; and (g) The District covenants to file or cause to be filed Form 80J8..(} in accordance with Section I 49(e) of the Code. 12. The portion of the proceeds of the sale of the Bonds necessary to defease and redeem the Refunded 1996 Bonds will be deposited with the Escrow Agen~ in an Escrow Fund created pursuant to the Escrow Agreement. The County Manager and the Finan-ce Director of the County~ each acting on behalf of the District, are hereby authorized and directed to enter into the Escrow Agreement, a fonn of which has been made available to the Board, but with such changes, modifications~ additions or deletions therein as shaH to them seem necessary, desirable or appropriate, their execution thereof to constitute conclusive evidence of the Board's approval of any and all changes. modifications, additions or deletions therein from the fonn and content of the Escrow Agreement presented to the Board~ and that from and after the execution and delivery of the Escrow Agreemenr, the County Manager and the Finance Director are hereby authorized, empowered and directed to do all such acts and things and to execute all such documents on behalf of the District as may be necessary to carry out and comply with the provisions of the Escrow Agreement as executed. From the proceeds of the Bonds, an amount sufficient to redeem the Refunded Bonds other than the Refimded 1996 Bonds shall be used by the Local Government Commission, on behalf of the District, to redeem such Refunded Bonds on the day after the Bonds are issued, or such other da)' as the Local Government Commission may determine is in the best interests of the District, and the balance (the "Balance "), including accrued interest on the Bonds from the dated date set forth on the Bonds until the date the Bonds are issued, will be transferred to the District. The Finance Director of the County, acting on behalf of the District, shall deposit the Balaoce in separate accounts and apply the amount of accrued interest to the payment of interest on the Bonds on June I, 2004 and the remainder to pay the costs of issuing the Bonds. Any money remaining in that account, including invesbnent earnings: thereon, shall on June 1,2004, be applied to pay the interest on the Bonds. 13. Actions taken by officials of the District or by officials of the County, acting on behalfof the District; to sele~t paying and transfer agents, and a bond registrar, or alternate or successor agents and registrars pursuant to Section 1 S9E-8 of the Registered Public Obligations Ac~ Chapter 159E of the General Statutes of North Carolina, are hereby authorized and approved. 14. The Local Government Commission is hereby requested to sell the Bonds to Ferris, Baker Watts, Incorporated at a negotiated price to be determined by the local Government Commission. 15. The Vice Chainnan of the Board, the County Manager, the Finance Director and the Clerk to the Board of the L"ounty, each acting on behalf of the District, ace hereby authorized and directed 6 CI.T 7~ I 666 v 2 287 288 to cause the Bonds to be prepared an~ when they shall have been duly sold by the Local Government Commission to Ferris, Baker Watts, Incorporated, to execute the Bonds and to turn the Bonds over to ~ Registrar and transfer agent of the District for delivery to lhe purchaser or purchasers to whom they may be sold by Ferris, Baker Watts, [ncorporated, 16, The form and content of the fmancial information relating to the District provided in the Preliminary Offering Memorandum to be dated on or about April 12, 2004, together with the final Offering Memorandum to be dated on or about April 28, 2004 are in all respects authorized, approved and confirmedt and the Vice Chairman of the Board, the County Manager, the Finance Director and the Clerk to the Board of the County are authorized, empowered and directed to act on behalf of the District and execute and deliver the Offering Memorandum in substantially the form and content presented to the Board, but with such changes, mooificationst additions or deletions therein as shall to the Vice Chairman of the Board, COWlty Manager or the Finance Director of the County, acting on behalf of the District, seem necessary, desirable or appropriate, their execution thereof to oonstitute oonclusive evidence of the approval of the Board of any and all changes, modificatjon~ additions or deletions therein from the form and content of the District's financial information in the Offering Memorandum presented to the Board. 17. The Vice Chairman of the Board: the County Manager, the Finance Director and the Clerk to the Board of the County are authorize-d and directed to execute and deliver for and on behalf of the District any and all additional certificates~ documents. opinions or other papers and perform all other acts as may be, required by the documents contemplated hereinabove or as may be deemed necessary or appropriate to implement and carry out the intent and purposes of this Resolution. 18. The COWlty agrees, on behalf of the District .and in accordance with Rule 15c2-12 (the "Rule ") promulgated by the Securities and Exchange Commission (the "SEe '1. and for the benefit of the Registered Owners and beneficial owners of the Bonds, as follows: (I) by not later than seven months after the end of each Fiscal Year, beginning with the Fiscal Year ending June 30. 2004, to provide to each nationally recognized municipal securities information repository ("NRMSIR ') and to the state infonnation depository ("SID "), if anYt for the State, the audited financial statements of the County (which include the District) for such Fiscal Year, if available, prepared in accordance with Section 159-34 of the General Statutes of North Carolina~ as it may be amended from time to time, or any successor statute, or, if such audited financial statements are not then available, unaudited financial statements of the County for such Fiscal Year to be replaced subsequently by audited fmandal statements of the County to be delivered within 15 days after such audited financial statements become available for distribution; (2) by not later than seven months after lhe end of each Fiscal Year~ beginning with the Fiscal Year ending June 30, 2004, to provide to each NRMSIR and to the SID, if any, (a) the financial and statistical data as of a date not earlier than the end of the preceding Fiscal Year (which data shall be prepared at least annually, shaJl s~ify the date ~ to which such information was prepared and shall be delivered together with any subsequent material events notices specified in (3) below) for the type of information included under the captions "lHE COUNTY-DEBT INFORMATION'" and "-TAX lNFORMA TJON" (including the information with respect to the District but excluding information on overlapping or other underlying units) in the Offering Memorandum referred to in Section 16 and (b) the combined budget of the County for the current Fiscal CLT 7j]666v2 Year to the extent such items are not included in the audited financial statements referred to in clause (1) above; (3) to provide in a timely manner to each NRMSIR or to the Munic-ipal Securities Rulemaklng Board (the "JWSRB"), and to the SID, if any, notice of any of the following events with respect to the Bonds, if material: (a) principal and interest payment delinquencies; (b) non.payment related defaults; (c) unscheduled draws on the debt service reserves refle<:ting financial difficulties; (d) unscheduled draws on any credit enhancements reflecting financial difficulties; (e) perform; substitution of any credit or liquidity providers, or their failure to (f) the Bonds; adverse tax opinions or events affecting the tax--exempt status of (g) (h) modification to the rights of the beneficial owners of the Bonds; Bond calls; (i) defeasances; 0) release, substitution or sale of any property securing repayment of the Bonds; and (k) rating changes; and (4) to provide in a timely manner to each NRMSIR or to the MSRB, and to the SID, if any, notice of a failure of the County to provide requited annual financial information described in (1) or (2) above on or before the date specified. {""~-~', The County agrees that its undertaking under this Paragraph is intended to be for the benefit of the registered owners and the bene-ficial owners of the Bonds and is enforceable by any of the registered owners and the beneficial owners of the Bonds, including an action for specific performance of the County's obligations under this Paragraph, but a failure to comply will not be an event of default and will not result in acceleration of the payment of the Bonds. An action must be instituted, had and maintained in the manner provided in this Paragraph for the benefit of all of the registered owners and beneficial owners of the Bonds. The County, as the governing body of the District, may modify from time to time, consistent with the Rule, the infonnation provided or the format of the prese-ntation of such infonnation, to the extent necessary or appropriate in the judgment of tile County, but: 8 CLT 7$1666v2 289 290 (I) any such modification may only be made in connection with a change in circumstances that arises from a change in legal requirements" {;hange in Jawor change in the identity. nature or status of the County or the District~ (2) the information to be provid~ as modified, would have complied with the requirements of the Rule as of the date of the Offering Memorandum" after taking into account any 3mendments or interpretations of the Rule as well as any changes in circumstances; and (3) any such modification does not materially impair the interest of the registered owners or the beneficial owners~ ~ determined by nationally recognized bond counsel or by the approving vote of the registered owners of a majority in principal amount of the Bonds. Any annual financial information containing modified operating data or financial information will explain, in narrative fonn, the reasons for the modification and the impact of the {;hange in the type of operating data or financial information being provided. The provisions of this Paragraph terminate on payment, or provIsion having been made for payment in a manner consistent with the Rule, in full of the principal of and interest on the Bonds. 19. Those :portions of this Resolution other than Paragraph 18 may be amended or supplemented" from time to time, without the consent of the owners of the Bonds if in the opinion of nationally recognized bond c<lunsel, such amendment or supplement would not adversely affect the interests of the owners of the Bonds and would not cause the interest on the Bonds to be ioc luded in the gross income of a recipient thereof for federal income tax purposes. This Resolution may be amended or supplemented with the consent of the owners of a majority in aggregate principal amount of the outstanding Bonds, exclusive of Bonds, if any. owned by the District, but a modification or amendment ( 1) may not, without the express consent of any owner of Bonds, reduce the principal amount of any Bond, reduce the interest rate payable on it, extend its maturity or the times for paying interest, change the monetary medium in which pri ncipal and interest is payable, or reduce the percentage of consent required for amendment or modification and (2) as to an amendment to Paragraph 18, must be limited as described therein. Any act done pursuant to a modification or amendment consented to by the owners of the Bonds is binding on all owners of the Bonds and will not be deemed an infringement of any of the provisions of this Resolution, whatever the character of the act may be, and may be done and perfonned as fully and freely as if ex.pressly permitted by the terms of this Resolutio~ and after consent has been given, no owner of a Bond has any right or interest to object to the action, to question its propriety or to enjoin or restrain the District from taking any action pursuant to a modifiation or amendment. If the District proposes an amendment or supplemental resolution to this Resolution requiring the consent of the owners of the Bonds, the Registrar shall, on being satisfactorily indemnified with respect to expenses, cause notice of the proposed amendment to be sent to each owner of the Bonds then outstanding by tirst--class mail, postage prepaid, to the address of such owner as it appears on the registration books; but the failure to receive such notice by mailing by any owner. or any defect in the mailing thereof, will not affect the validity of any proc-eedings pursuant hereto. Such notice shall briefly set forth the nature of the proposed amendment and shall state that copies thereof are on file at the 9 CLT 7S l666v2 principal office of the: Registrar for inspeetion by all owners of the Bonds. If, within 60 days or such longer period as shall be prescribed by the District following the giving of such notice, the owners of a majority in aggregate principal amount of Bonds then outstanding have consented to the proposed amendment,. the amendment will be effective as of the date stated in the notice. 20. Nothing in this Resolution shall preclude (a) the payment of the Bonds from the proceeds of refunding bonds or (b) the payment of the Bonds from any legally available funds. If the District causes to be paid, or has made provisions to pay, on maturit)' or on redemption before maturity, to the owners of the Bonds the principal of tbe Bonds (including interest to become due thereon), through setting aside trust funds or setting apart in a reserve fund or special trust account created pursuant to this Resolution or otherwise, or through the irrevocable segregation for that purpose in some sinking fund or other fund or trust account with an escrow agent or otherwise, moneys sufficient therefor, including.. but not limited to, interest earned or to be earned on federaJ Securities, the District shall so notify Moody'~ S&P and Fitch Ratings., and then such Bonds shall be considered to have been discharged and satisfied~ and the principal of the Bonds (including any interest thereon) shall no longer be deemed to be outstanding and unpaid; provided, however, that nothing in this Resolution requires the deposit of more than such Federal Securities as may be sufficient, taking into account both the principal amoWlt of such Federal Securities and the interest to become due thereon. to implement any such defeasance . If such a defeasance occurs and after the District receives an opinion of a nationally recognized accounting firm that the segregated moneys or Federal Securities together with interest earnings thereon are sufficient to effect a defeasance, the District shall execute and deliver all such instruments as may be necessary to effect such a defeasance and desirable to evidence such release, discharge and satisfaction. Provisions shaH be made by the District for the mailing of a notice to the owners of the Bonds that such moneys are so available for such payment 21. The District accepts all responsibilities assigned to it under the Custody Agreement. a draft of which has been made available to the Board. 22. This resolution amends and restates in its entirety the resolution of the same name adopted by the Board on February 16.2004. Upon motion of Commissioner Hill, seconded by Commissioner Titchener, the foregoing order titled: ~A REsoLUTION OF THE BoARD OF COMMISSIONERS OF THE COUNTY OF HARNETT. NORTH CAROUNA, SrrrlNG AS THE GOVERNING BODY OF mE SOUTH ClNTRAL WATER AND SEWER DISTRICT OF THE COUNTY OF HARNETT~ NORTH CAROLINA, AUTHORIZiNG THE IsSUANCE OF NOT TO EXCEED $J,400~OOO GENERAL OBUGA TION REFUNDING BONDS, SERJES 2004" was adopted by the following vote: to CL T 7j 1666..2 /,...-~\ 291 292 A YES: Commissioner Teddy J. Byrd Com missioner Beatrice B. Hill Commissioner Walt Titchener NAYS: None P AJ.')SED, ADOPTED AND APPROVED this 7th day of ~1ay, 2004. . . * . STATE OF NORTH CAROLINA COUNTY OF HARNETT J, Kay S. Blanchard, Clerk to the Board of Commissioners of the County of Harnett, North Carolina (the '.County"), sitting as the governing body (the "Board') of the South Central Water and Sewer District of the County (the "District "), DO HEREBY CERTIFY thai the foregoing is a true and exact copy of the resolution tided "A RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE COUNTY OF HARNETT, NORm CAROLINA, SITTING AS THE GOVERNING BODY OF THE SOUTH CENTRAL WATER AND SEWER DISTRICT OF THE COUNTY OF HARNETT, NORTH CAROLINA, AUTHORIZING THE ISSUANCE OF NOT TO EXCEED 53,400,000 GENERAL OBLlGA nON REFUNDING BoNDS, SERIES 2004" adopted by the Board in special session convened on the 7th day of May, 2004, as recorded in the minutes of the Board. WITNESS my hand and the seal of the District, this the 7th day of May.. 2004. .,....,.<,seil\1y'.....,..,I.. ." . . ""oI-..~ .~ .. '" ~~~ Kay S. B nchard, Clerk to the Board of Com missioners County ofH81nett, North Carolina and the South Central Water & Sewer District of Hamett County .. ~ '. ~ '<, . ( .'. .,~) EXHlBIT A FORM OF BOND No. R- UNITED STATES OF AMERICA STATE OF NORTH CAROLINA COUNT\' OF HARNETT SOUTH CENTRAL WATER AND SEWER DISTRICT INTEREST &n MATURITY DATE JUNE 1,20_ DA TKD DA TE MA Y 12, 2004 ~ REGISTERED OWNER: FIRST-CITIZENS BANK" TRUST COMPANY PRINCIPAL SUM: DoLLARS GENERA L ORUGA TION REFUNDING BoND, SERIES 2004 THE SO(ffH CENTRAL WATER AND SEWER DISTRICT OF THE COUNTY OF HARNE7T, NORTH CAROLINA (the "DistriclfJ) acknowledges itself indebted and for value received hereby promises to pay to the Registered Owner named above.. on the Maturity Date specified above. upon surrender hereof, the PrincipaJ Sum shown above and to pay to the Registered Owner hereof interest thereon from the date of this Bond until It shall mature at the Interest Rate per annum specified above, payable on June 1. 2004 and semiannually thereafter on June I and December 1 of each year. Principal of and interest on this Bond are payable in immediately available funds to the Registered Owner of the Bonds and is payable to the owner of the Bonds shown on the records of the District at the close of business on the I Sth day oCthe month preceding an interest payment date or a bond pa>ment date. This Bond is issued in accordance with the Registered Public Obligations Ac~ Chapter 159E of the General Statutes of North Carolin~ and pursuant to the Local Government Finance Act and a bond order adopted by the Board of Commissioners of tile County of Harnett, North Carolina (the "Cowuy /'), sitting as the governing body of the Distric~ on February 16, 2004 and effective 00 its adoption. The Bonds are being issued to provide funds to refund in advance of their maturities the (1) County of Harnett, North Carolina South Centra) Water and Sewer District Bonds, Series 1990 maturing on and after June 1,2004, (2) County ofHamett, North Carolina South Central Water and Sewer District Bonds, Senes 1991 maturing on and after June I, 2004, (3) County of Harnett, North Carolina South Central Water and Sewer District Bonds, Series 1996 maturing on and after June 1. 2004, and (4) Count)' of Harnett, North Carolina South Central Water and Sewer District Bonds, Series 1997A maturing on and after June 1,2004. The Bonds maturing on or before June 1. 2014 are not subject to redemption before maturity. The Bonds maturing on and after June I, 2015 are subject to redemption prior to maturity, at the option of the District. from any moneys that may be made available for such purpose, either in whole or in part on any date not earlier than June 1,2014, at the following redemption prices (expressed as a percentage of the principal amount of Bonds to be redeemed), together with interest accrued thereon to the date fixed for redemption: if redeemed during the period from June I. 2014 to May 31,2015, inclusive, IOI%~ and if redeemed on or after June I, 2015, 100010, CL T 75 166()\' 2 293 294 If less than all of the Bonds of anyone maturity shall be called for redemption. the District shall select the maturitv or maturities of the Bonds to be redeemed in such manner as the District in its discretion may determine and the Oistrict shall detennine which of the Bonds within a maturity are to be redeemed by lot; provided. however, that the portion of any Bond to be redeemed shall be in an Authorized Denomination and that. in selecting Bonds for redemption. each Bond shall be considered as representing that number of Bonds which is obtained by dividing the principal alTKlunt of such Bond by the minimum Authorized Denomination. Notice of redemption shall be given by the District, not less than 30 days nor more than 60 days before the redemption date, by first class mail postage prepaid, to (I) the Local Government Commission, (2) the then-registered owners of the Bonds or portions thereof to be redeemed at the last address shown on the registration books kept by the registrar, (3) each of the then-existing securities depositories and (4) at least two of the then-existing national information services. The notice shall (1) state the redemption date and the redemption price, (2) identify the Bonds or portions thereof to be redeemed by reference to their numbers and (3) state that on the redemption date there shall become due and payable on each Bond or portions thereof so to be redeemed. the principal thereof. redemption premium, if any, and interest accrued to the redemption date and that from and after such date interest thereon shall cease to accrue. It is hereby certified and recited that all conditions, acts and things required by the Constitution or statutes of the State of North Carolina to exist. be performed or h8ppen precedent to Or in the Issuance of this Bond exist, have been performed and have happened, and that the amount of this Bond, together with all other indebtedness of the District, is within every debt and other limit prescribed by said Constitution or statutes, The faith and credit of the District are hereby pledged to the punctual payment of the principal of and interest on this Bond in accordance with its tenns. This Bond shall not be valid or become obligatory for any purpose until the certification hereon shall have been signed by an authorized representative of the Local Government Commission. iN WiTNESS WHEREOF, tbe District has caused this Bond to bear the original or facsimile ofthe signatures of the Vice Chairman of the Board of Commissioners of the County and the Clerk to the Board of Comm issioners of the County, each acting on behalf of the District, and an original or facsimi Ie of the seal of the District to be imprinted hereon and this Bond to be dated as of the dated date set forth above. (5 EAL) Clerk to the Board ofComrnissionet"s Vice Chairman of the Board ofCommissKmers Date of Execution: , 2004 [Counterpart signature page to the County of Harnett, North Carolina South Central Water and Sewer District General Obligation Refunding Bonds, Series 2004) The issue hereof has been approved under the provisions of the Local Government Bond Act. JANICE T. BURKE Secretary of the Local Government Commission FORM OF ASSIGNMENT ASSIGNMENT FOR VALUE RECEIVED the undersigned hereb)' sells, assigns aDd transfers unto (Please print or typewrite Name and Address, including Zip Code, and Federal Taxpayer Identification or Social Security Number of Assignee) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints Attorney to register the transfer of the within Bond on the books kept for registration thereof. with full power of substitution in the premises. D3ted~ Signature guaranteed by: NonCE: Signature must be guaranteed by a Participant in the Securities Transfer Agent Medallion Program ("StampH) or similar program. NOTICE: The signature to this assignment must correspond with the name as it appears on the face of the within Bond in every particulart without aJteratiODt enlargement or any change whatever. TRANSFER FEE lli y BE REQUIRED 295 296 Attachment 3. Extract of Minutes of a special meeting of the Board of Commissioners of the County of Harnett. North Carolina~ sitting as the governing body of the West Central Water and Sewer District of the County of Harnett, North Carolina, held in the County Managers Office, 102 East Front Street, lillington, North Carolill~ at 11 :30 a.m. on May 7.. 2004. * A special meeting of the Board of Commissioners of the County of Harnett. North Carolina (the "COW1/y '), sitting as the governing body (the "Board') of the West Central Water and Sewer District of the County (the "District"), was held in the County Manager's Office, 102 East Front Street.. Lillington. North Carolina, at 11 :30 a.m. on May 7.. 2004 (the "Meeting ')~ after proper notice, and was called to order by Chairman Teddy Byrd, and upon the roll being called, the following members of the Board answered present: Beatrice B. Hill and Walt Titchener. The following members of the Board were absent: Dan Andrews and Tim McNeill, Also present: Neil Emory, Vanessa W. Young and Kay S. Blanchard. Commissioner Hill introduced the following resolution, a summary of which had been provided to each Commissioner, a copy of which was available with the Clerk to the Board and which was read by title: A REsOLUTION OF THE BoARD OF COMMISSIONERS OF TIlE COUNT\' OF HARNETT, NORTH CAROLINA, SITTING AS THE GOVERNING BODY OF THE WEST CENTRAL WATER AND SEWER DISTRICT OF THE COUNTI' OF HARNETT. NORTH CAROLINA. AUTHORIZING THE issUANCE OF NOT TO EXCEED S21'700,OOO GENERAL OBLIGATION REFUNDING BoNDS, SERIES 2004. JJrHEREAS, the Bond Order hereinafter-described has been adopted, and it is desirable to make provision for the issuance of the Bonds authorized by said Bond Order; and WHEREAS, the Board wishes to amend and restate in i15 entirety the resolution by the same name adopted 00 February 16, 2004 in the manner set forth herein; NOW. THEREFORE. BE IT RL)OL VED by the Board .as follows; 1. For purposes of this Resolutio~ the following words will have the meanings ascribed to them below: "Authorized Denomination " means $1.000 or any integral multiple there()f. "Board" means the Board of Commissioners of the County, sitting as the governing body of the District. "Bond Order '. means the Bond Order authorizing the Bonds adopted by the Board 011 February 16,2004 and effective on its adoption. "Bond.." means the District~s General Obligation Refunding Bonds~ Series 2004 authorized under the Bond Order. CLT 7S1675v2 "Business Day" means a day on which First-Citizens is not required or authorized by law to remain closed. "County" means the County of Harnett, North Carolina, and its successors or assigns. "Custody Agreement" means the Custody Agreement dated as of May I, 2004 between Ferris, Baker Watts, Incorporate<l as depositor, and First-C it izens, as custodian. relating to custody receipts evidencing related ownership interests in the Bonds. "District" means the West Centrnl Water and Sewer District of the County. ~'Federal Securilies" means (a) direct obligations of the United States of America for the timely payment of which the full faith and credit of the United States of America is pledged; (b) obligations issued by any agency controlled or supervised by and acting as an instrumentality of the United States of America, the timely payment of the principal of and interest on which is fully guaranteed as full faith and credit obligations of the United States of America (including any securities described in (a) or (b) issued or held in the name of a trustee in book-entry fonn on the books of the Department of Treasury of the United States of America), which obligations, in either case, are held in the name of a trustee and are not subject to redemption or purchase prior to maturity at the option of anyone other than the holder; (c) any bonds or other obligations of the State of North Carolina or of any agency, instnlmentality or local governmental unit of the State of North Carolina which are (I) not callable prior to maturity or (2) as to wh ich irrevocable instructions have been given to the trustee or escrow agent with respect to such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified, and y,-hich are rated by Moody's, if the Bonds are rated by Moody's, and S&P, if the Bonds are rated by S&P, within the highest rating category and which are secured as to principal, redemption premium, if any, and interest by a fund consisting only of cash Or bonds or other obligations of the character described in clause (a) or (b) hereof which fund may be applied only to the payment of such principal of and interest and redemption premium~ if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate; or (d) direct evidences of ownersh ip of proportionate interests in future interest and principal payments on specified obligations described in (a) held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor on the underlying obligations described in (a), and which underlying obligations are not available to satisfy any claim of the custodian or any person claiming through the custodian or to whom the custodian may De obligated. "Fitch Ratings" means Fitch, Inc., a corporation organized and existing under the laws of the State of New Y o~ its successors and their assigns and, if such ~orporation for any reason no longer perfonns the functions of a securities rating agency, "Filch Ratings I' will be deemed to refer to any other nationally recognized rating agency other than Moody's or S&P designated by the District. "First-Citizens" means First-Citizens Bank & Trust Company, a duly organized and existing Nonh Carolina banking corporation having an office and place of business in Raleigh, North Carolina. "J\foody's" means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and their assigns and, if such corporation for any reason no longer perfonns the functions of a securities rating agency, "Afoody's" will be deemed to refer to any other nationally recognized rating agency other than Fitch Ratings or S&P designated by the District. 2 CLT7S1675v2 ~-(~~. " , 297 298 "Refunded Bonds" means the Refunded 1989A Bonds. the Refunded 1989B Bonds and the Refunded 1993 Bonds. "Refunded 1989A Bonds" means the $567.000 County of Harnett. North Carolina West Central Water and Sewer District Bonds. Series 1989A. maturing on and after June 1. 2004. "Refunded 19898 Bonds" means the $109,400 County of Ham~ North Carolina West Central Water and Sewer Distri~t Bonds. Series 1989B, maturing on and after June 1. 2004. "Refimded 1993 Bonds" means the $1.626.000 County of Harnett, North Carolina West Central Water and Sewer District Bonds. Series 1993. maturing on and after June 1.2004, "S&P" means Standard & Poor's Ratings. Services, a Division of The McGraw-Hill Companies, Tnc., its successors and their assigns and. if such corporation for any reason no longer performs the functions of a securities rating agency, "S&P" will be deemed to refer to any other nationally recognized rating agency other than Fitch Ratings or Moody's designated by the District. 2. its Bonds. The District shall issue not to exceed $2,700.000 in total aggregate principal amount of 3. The Bonds shall be dated as of the dated date set forth on the Bonds and pay interest sem iannually on June I and December 1,. beginning December 1 ~ 2004. As long as First-Citizens is the registered owner of the Bonds. the District shall make its semiannual payments one Business Day before each June I and De~ember I. The Bonds are being issued to provide funds to reftmd in advance of their maturities the Refunded Bonds pursuant to and in accordance with the Bond Order. 4. The Board has ascertained and hereby detennines that the average period of usefulness of the capital projects being financed by the proceeds of the Refunded Bonds was not less than 25 years computed from the date of the Refunded Bonds, and the weighted average maturity of the Bonds does not exceed the weighted average maturity of the Refunded Bonds. 5. The Bonds are payable in annual installments on June 1 in each year. as follows; YEAR 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20]6 AMilllrIT $65.000 70.000 70.000 75,.000 80.,000 80.000 85,000 85.000 85.000 90.000 95,000 95.000 YEAR 20]7 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 AMQUill $95.000 100.000 105.000 105.000 110.000 115.000 120.000 120.000 125.000 125,000 120,000 115.000 The Finance Director of the County. acting on behalf of the District. may, so long as net present value savings are at least 2% of the par amount of the Refunded Bonds. (a) increase or decrease the CLT 751675""2 aggregate principal amount and the principal of each maturity of the Bonds or (b) combine or othelVlise alter the maturity dates set forth above for any of the Bonds. 6. The Bonds shall be numbered from ""R-I tt consecutively and upward. All Bonds shall bear interest from their date at a rate or rates which shall be hereafter detennined on the sale thereof computed on the basis of a 360-day year of twelve 3O-day months. 7. The Bonds shall be registered as to principal and interest, and the Finance Director of the County. acting on behalF of the District, is directed to maintain the registration records with respe<:t thereto. The Bonds shall bear the original or facsimile signatures of the Vice Chairman of the Board and the Clerk to the Board. An original or facsimile of the seal of the District shall be imprinted on each of the Bonds. 8. The Bonds will be issuable as fully re:gistered bonds in any Authorized Denomination. The Bonds initially will be issued in substantially the fonn set forth in Exhibit A. whh such appropriate variations, omissions and insertions as are permitted or required by this resolution. 9. The Bonds maturing on or before June I, 2014 are not subject to redemption before maturity. The Bonds maturing on and after June 1, 2015 are subject to redemption prior to maturity, at the option of the District, from any mone)'s that may be made available for such purpose. either in whole or in part on any date not earlier than June I, 2014, at the following redemption prices (expressed as a percentage of the principal amount of Bonds to be redeemed). together with interest accrued thereon to the date fixed for redemption: if redeemed during the peri()d from June 1, 2014 to May 31, 2015, inclusive, 10 10/0.; and if redeemed on or after June L. 20 IS, 1000/0. The Finance Director of the County, acting on behalf of the District, may alter the redemption provisions of the Bonds by a written certificate delivered on or before the date the Bonds are issued setting forth the new redemption provisions of the Bon~ as long as the first optional redemption date is not later than June I, 2016 and the premium does not exceed 2%. If less than all of the Bonds of anyone maturity shall be called for redemption, the District shall select the maturity or maturities of the Bonds to be redeemed in such manner as the District in its discretion may detennine and the District shall determine which of the Bonds within a maturity are to be redeemed by lot; provided, however. that the portion of any Bond to be redeemed shall be in an Authorized Denomination and that. in selecting Bonds for redemption, each Bond shall be considered as representing that number of Bonds which is obtained by dividing the principal amount of such Bond by the minimum Authorized Denom ination. Notice of redemption shall be given by the District, not less than 30 days nor more than 60 days before the redemption date, by first class mail. postage prepaid (a) to the LocaJ Government Commission, (b) to the then-registered owners of the Bonds or portions thereof to be redeemed at the last address shown on the registration books kept by the registrar, (c) to each of the then-existing securities depositories and (d) to at least two of the then-existing nationaJ information services. The notice shall (a) state the redemption date and the redemption price, (b) identify the Bonds or portions thereof to be redeemed by reference to their numbers and (c) state that on the redemption date there shall become due and payable on each Bond or portions thereof so to be redeemed, the principal thereof, redemption premium, if any, and interest accrued to the redemption date and that from and after such date interest thereon shall cease to accrue. 4 CLT 751 675v2 299 300 10. The Bonds and the provisions for the registration of the Bonds and for the approval of the Bonds by the Secretary of the Local Government Commission shall be in substantially the fonn attached hereto as Exhibit A. 11. The District covenants to take such action as may be required in the opinion of nationally recognized bond counsel to cause the Bonds and all actions of the District with respect to the proceeds thereof to comply with Internal Revenue Code of 1986, as amended (the <iCode U). In particular, the District covenants as follows: (a) At least one of the following two conditions will be satisfied for the Bonds: (I) less than 10% of the proceeds of the Bonds, reduced by costs of issuance, wi 11 be used directly or indirectly in the business of a person other than a state or local governmental unit or (2) less than lOO-fo of the principal or interest on the Bonds will be (under the tenns of such issue or any underlying arrangement) directly or indirectly (A) secured by an interest in property used or to be used in a private business or any interest in payments made with re~t to such property or (B) to be derived from payments made with respect to property, or borrowed money, used or to be used in a private business~ (b) Less than 50/0 of the proceeds of the Bonds, reduced by costs of issuance, will be used by nongovernmental persons for a use unrelate-d to the purposes for which the Bonds are being issued; (c) It will not loan directly or indirectly more than 5% of the proceeds of the Bonds to nongovernmental persons~ (d) It will not enter into any management contract with respect to the facilities refinanced with the proceeds of the Bonds unless it obtains an opinion of nationally recognized bond counsel that such management contract will not impair the exclusion from a recipient's gross income for federal income tax purposes of the interest on the Bonds~ (e) The District acknowledges that the continued exclusion of interest on the Bonds from a recipient's gross income for federal income tax purposes depends, in part, on compliance with the arbitrage limitations imposed by Section 148 of the Code. The District covenants to comply with all the requirements of Section 148 of the Code, including the rebate requirements, and it shall not pennit at any time any of the proceeds of the Bonds or other funds of the District to be used, directly or indirectly, to acquire any asset or obligation, the acquisition of which would cause the Bonds to be .'arbitrage bonds .. for purposes of Section 148 of the Code; (0 The Bonds shall not be 'federally g1lOranteed'. as defined in Section 1 49(b ) of the Code; and (g) The District CQvenants to file or cause to be filed Fonn 8038-G in accordance with Section I 49(e) of the Code. 12. From the proceeds of the Bonds, an amount sufficient to redeem the Refunded Bonds shall be used by the Local Government Commission, on behalf of the District, to redeem the Refunded CL T 751675\.2 Bonds on the day after the Bonds are issued, or such other day as the lAx:al Government Commission may detennine is in the best interests of the District, and the balance (the "Balance 'f), including accrued interest on the Bonds from the dated date set forth on the Bonds until the date the Bonds are issued, will be transferred to the District The Finance Director of the County, acting on behalf of the District, shall deposit the Balance in separate accounts and apply the amount of accrued interest to the payment of interest on the Bonds on June I, 2004 and the remainder to pay the costs of issuing the Bonds. Any money remaining in that account, including investment earnings thereon, shall on June I, 2(J()4, be applied to pay the interest on the Bonds. 13. Actions taken by officials of the District or by officials of the County, ac.ting on behalf of the District, to select paying and transfer agen~ and a bond registrar, or alternate or successor agents and registrars pursuant to Section 159E-8 of the Registered Public Obligations Ac~ Chapter 159E of the General Statutes of North Carolin~ are hereby authorized and approved. 14. The Local Government Commission is hereby requested to sell the Bonds to Ferris, Baker Watts, Incorporated at a negotiated price to be detennined by the Local Government Commission. 15. The Vice Chainnan of the Boar<L the Count)' Manager, the Finance Director and the Clerk to the Board of the County, each acting on behalf of the District, are hereby authorized and directed to cause the Bonds to be prepared an~ when they shall have been duly sold by the Local Government Commission to Ferris, Baker Watts, Incorporated, to ex.ecute the Bonds and to turn the Bonds over to the Registrar and transfer agent of the District for delivery to the purchaser or purchasers to whom they may be sold by Ferri~ Baker Watts, Incorporated. 16. The form and content of the financial infonnatiQn relating to the District provided in the Preliminary Offering Memorandum to be dated on or about April 12, 2004, together with the final Offering Memorandum to be dated on or about Apri128~ 2004 are in all respects authorized, approved and confinned, and the Vice Chainnan of the Board, the County Manager, the Finance Director and the Clerk to the Board of the County are authorized, empowered and directed to act on behalf of the District and execute and deliver the Offering Memorandum in substantially the form and content presented to the Board, but with such changes, modifications, additions or deletions therein as shall to the Vice Chainnan of the Board, County Manager or the Finance Director of the County, acting on behalf of the District, seem necessary, desirable or appropriate, their execution thereof to constitute conclusive evidence of the approval of the Board of any and all changeSy modifications, additions or deletions therein from the form and content oftbe District's financial infonnation in the Offering Memorandum presented to the Board. 17. The Vice Chainnan of the Board, the County Manager, the Finance Director and the Clerk to the Board of the County are authorized and directed to execute and deliver for and on behalf of the District any and all additional certificates, documents, opinions or other papers and perform all other acts as may be required by the documents contemplated hereinabove or as may be deemed necessal)' or appropriate to implement and carry out the intent and purposes of this Resolution. 18. The County agrees, on behalf of the District and in accordance with Rule l5c2-l2 (the "Rule ") promulgated by the Securities and Exchange Commission (the "SEe "), and for the benefit of the Registered Owners and beneficial owners of the Bonds, as follows: (1) by not later than seven months after the end of each Fiscal Year, beginning with the Fiscal Year ending June 30, 2004, to provide to each nationally recognized municipal securities information repository ("NRAfSIR 'J and to the state 6 CL T 751675.....2 301 302 information depository ("SID "). if any, for the State, the audited financial statements of the County (which include the District) for such Fis<:al Year, if available, prepared in accordance with Section 159-.34 of the General Statutes of North Carolina, as it may be amended from time to time, or any successor statute, or, jf such audited financial statements are not then available, unaudited financial statements of the County for such Fiscal Year to be replaced subsequently by audited financial statements of the County to be delivered within 15 days after such audited financial statements become available for distribution; (2) by not later than seven months after the end of each Fiscal Year, beginning with the Fiscal Year ending June 30, 2004, to provide to each NRMSIR and to the SID, if any, (a) the financial and statistical data as of a date not carlier than the end of the preceding Fiscal Year (which data shall be prepared at least 8finuaJly~ shall specify the date as to which such information was prepared and shall be delivered together with any subsequent material events notices specified in (3) below) for the type of infonnation included under the captions "TIlE COUNTY-DEBT INFORMATION" and "- TAX INFORMATION" (including the infonnation with respect to the District but excluding information on overlapping or other underlying units) in the Offering Memorandum referred to in Section 16 and (b) the combined budget of the County for the current Fiscal Year to the extent such items are not included in the audited financial statements referred to in clause () ) above~ (3) to provide in a timely manner to each NRMSIR or to the Municipal Securities Rulemaking Board (the "MSRB'), and to the SID, if any, notice of any of the following events with respect to the Bonds, if material: (a) principal and interest payment delinquencies; (b) non.payment related defaults; (c) unscheduled draws on the debt service reserves reflecting financial difficulties; (d) unscheduled draws on any craiit enhancements reflecting financja1 difficulties~ {e} perform~ substitution of any credit or liquidity providers, or their f,,"lure to {f) the Bonds; adverse tax opinions or events affecting the tax-exempt status of (g) (h) modification to the rights of the beneficial owners of the Bonds; Bond calls; (i) defeasances; 7 CL T 751675v2 (j) release, substitution or sale of any property securing repayment of the Bonds; and (k) rating changes; and (4) to provide in a timely manner to each NRMSlR or to the MSRB. and to the SID, if any. notice of a failure of the Counl)' to provide required annual financial infonnation described in (I) or (2) above on or before the date spe.cified. The County agrees that its undertaking under this Par.agraph is intended to be for the benefit of the registered owners and the beneficial owners of the Bonds and is enforceable by any of the registered owners and the beneficial owners of the Bonds, including an action for specific perfonnance of the County's obligations under this Paragraph. but a failure to comply will not be an event of default and will not result in acceleration of the payment of the Bonds. An action must be instituted, had and maintained in the manner provided in this Paragraph for the benefit of all of the registered owners and beneficial owners of the Bonds. The County, as the governing body of the Distric~ may modify from time to time, consistent with the Rule, the information provided or the format of the presentation of such information, to the extent necessary or appropriate in the judgment of the County, but: (I) any such modification may only be made in connection with a change in circwnstances that arises from a change in legal requirements, change in law or change in the identity, nature or status of the County or the District; (2) the infonnation to be provided, as modified, would have complied with the requirements of the Rule as of the date of the Offering Memorandum, after taking into account any amendments or interpretations of the Rule as well as any changes in circumstances; and (3) any such modification does not materially impair the interest of the registered owners or the beneficial owners, as determined by nationally recognized bond counselor by the approving vole of the registered owners of a majority in principal amount of the Bonds. Any annual fmandal information containing modified operating data or financial information will explain, in narrative form, the reasons for the modification and the impact of the change in the type of operating data or financ~1 information being provided. The provisions of this Paragraph terminate on payment, or provision having been made for payment in a manner consistent with the Rule. in full of the principal of and interest on the Bonds. 19. Those ponions of this Resolution other than Paragraph 18 may be amended or supplemented, from time to time. without the consent of the owners of the Bonds if in the opinion of nationally recognized bond counsel, such amendment or supplement would not adversely affect the interests of the owners of the Bonds and would not cause the interest on the Bonds to be included in the gross income of a recipient thereof for federal income tax purposes. This Resolution may be amend\Xi or supplemented with the consent of the oWners of a majority in aggregate principal amount of the outstanding Bonds, exclusive of Bonds, if any, owned by the District, but a modification or amendment CL T 751675v2 303 304 (1) may not, without the express consent of any owner of Bonds~ reduce the principal amount of any Bon~ reduce the interest rate payable on it, extend its maturity or the times for paymg interest, change the monetary medium in which principal and interest is payable~ or reduce the perc.entage of consent required for amendment or modification and (2) as to an amendment to Paragraph 18. must be limited as described therein. Any act done pursuant to a modification or amendment consented to by the owners of the &ods is binding on all owners of the Bonds and will not be deemed an infringement of any of the provisions of this Resolution. whatever the character of the act may be. and may be done and performed as fully and freely as if expressly pennitted by the tenns of this Resolution) and after consent has been given. no owner of a Bond has any right or interest to object to the action. to question its propriety or to enjoin or restrain the District from taking any action pursuant to a modification or amendment. If the District proposes an amendment or supplemental resolution to this Resolution requiring the consent of the owners of the Bonds, the Registrar shall, on being satisfactorily indemnified with respect to expenses, cause notice of the proposed amendment to be sent to each owner of the Bonds then outstanding by first-class mail, postage prepaid, to the address of such owner as it appears on the registration books; but the failure to reeeive such notice by mailing by any owner. or any defect in the mailing theroof. will not affect the validity of any proceedings pursuant hereto. Such notice shall briefly set fot1h the nature of the proposed amendment and shall stale that copies thereof are on file at the principal office of the Registrar for inspection by all owners of the Bonds. If, within 60 days or such longer period as shall be prescribed by the District following the giving of such notice. the owners of a majority in aggregate principal amount of Bonds then outstanding have consented to the proposed amendment, the amendment will be effective as of the date stated in the notice. 20. Nothing in this Resolution shall preclude (a) the payment of the Bonds from the proceeds of refunding bonds or (b) the payment of the Bonds from any legally available funds. If the District causes to be paid. or has made provisions to pay. on maturity or on redemption before maturity. to the owners of the Bonds the principal of the Bonds (including interest to become due thereon). through setting aside trust funds or setting apart in a reserve fund or special trust account create,(j pursuant to this Resolution or otherndse, or through the irrevocable segregation for that purpose in some sinking fund or other fund or trust account with an escrow agent or otherwise. moneys sufficient therefor, incl uding. but not limited to. interest earned or to be earned on Federal Securities. the District shall so notify Moody's. S&P and Fitch Ratings. and then such Bonds shall be considered to have been discharged and satisfied) and the principal of the Bonds (including any interest thereon) shall no longer be deemed to be outstanding and unpaid~ provided. however. that nothing in this Resolution requires the deposit of more than such Federal Securities as may be sufficient, taking into account both the principal amount of such Federal Securities and the interest to become due thereon, to implement any such defeasance. ff such a defeasance occurs and after the District receives an opinion of a nationally recognized accounting firm that the segregated moneys or Federal Securities together with interest earnings thereon are sufficient to effect a defeasance. the District shall execute and deliver all such instruments as may be necessary to effect such a defeasance and desimble to evidence such release, discharge and satisfaction. Provisions shall be made by the District for the mailing of a notice to the owners of the Bonds that such moneys are so available for such payment. 9 CLT 7~J67Sv2 21. The District accepts all responsibilities assigned to it under the Custody Agr~ment. a draft of which has been made available to the Board. 22. This resolution amends and restates in its entirety the resolution of the same name adopted by the Board on February 16, 2004. Upon motion of Commissioner Hill, seconded by Commissioner Titchener.. the foregoing order titled: UA REsOLUTION OF THE BoARD OF COMMISSIONERS OF THE COUNTY OF IlARNETT~ NORTH CAROUNA, SRTING AS THE GOVERNING BODY OF THE WEST CENTRAL WATER AND SEWER DISTRICT OF THE COUNTY OF HARNErr, NORTH CAROLINA, AlJTHORlZING THE ISSUANCE OF NOT TO EXCEED $2,700,000 GENERAL OBUGATION REFtINDING BoNOS, SERIES 2004" was adopted by the following vote: AYES: Commissioner Teddy J. Byrd Commissioner Beatrice B. Hill Commissioner Walt Titchener NAYS: None PASSED, ADOPTEDAiVDAPPROVEDthis 7th day ofMay~ 2004. 305 306 STATE OF NORTH CAROliNA COUNTY OF HARNETT I, Kay S. Blanchard; Clerk to the Board of Commissioners of the County of Harnett. North Carolina (the "County'1 sitting as the governing body (the "Board") of the West Central Water and Sewer District of the County (the "District")~ DO HEREBY CERTIFY that the foregoing is a true and exact copy of the resolution titled. "A RESOLUTION OF mE BOARD OF COMMISSIONERS OF THE COUNT\' OF HARNElT, NORTH CAROLINA, SITIING AS TIlE GOVERNING BODY OF THE WEST CENTRAL WATER AND SEWER DISTRICT OF THE COUNTY OF HARNETT, NORTH CAROLINA, AUTHORIZINC mE ISSUANCE OF NOT TO EXCEED S2,700~OOO GENERAL OBLIGATION REFUNDINC BONDS, SERIES 2004" a.dopted by the Board in special session convened on the 7th day of May. 2004. as recorded in the minutes of the Board. WITNESS my hand and the seal of the Distri~ this the 7th day of May, 2004. (SEAl.) ~..!. ~ Kay S. B chard, Clerk. to the Board of Commissioners County of Harnett. North Carolina and the West Central Water and Sewer District of Harnett County EXHIBIT A FORM OF BOND No. R- UNITED STATES OF AMERICA STATE OF NORTH CAROLINA COUNTI OF HARNETT WEST CENTRAL WATER AND SEWER DISTRICT INTEREST BAn MA TURlTY DA TE JUNE J, 20_ DA TED DA TE MAY 12,2004 ~ REGISTERED OWNER: FIRST...QTIZENS BANK &; TRUST COMPANY PRINCIPAL SUM: Do LI...A RS GENERAL OBLIGATION REFUNDING BoND~ SERlES 2004 THE WEST CENTRAL WATER AND SEWER DISTJUCT OF THE COUNTY OF HARNETT. NORTH CAROLINA (the "District ") acknowledges itself indebted and for value received hereby promises to pay to the Registered Owner named above, on the Maturity Date specified above, upon surrender hereof, the Principal Sum shown above and to pay to the Registered Owner hereof interest thereon from the date of this Bond until it shall mature at the Interest Rate per annum specified above, payable on June 1,2004 and semiannually thereafter on June I and December I of each year. Principal of and interest on this Bond are payable in immediately available funds to the Registered Owner of the Bonds and is payable to the owner of the Bonds shown on the records of the District at the close of business on the IS. day of the month preceding an interest payment date or a bond payment date. This Bond is issued in accordance with the Registered Public Obligations Act, Chapter 159E of the General Statutes of North Carolina, and pursuant to the Local Government Finance Act and a bond order adopted by the Board of Commissioners of the County of Harnett, North Carolina (the "County"), sitting as the governing b<xJy of the District. on February 16" 2004 and effective on its adoption. The Bonds are being issued to provide funds to refund in advance of their maturities the (I) County of Harnett. North Carolina West Central Water and Sewer District Bonds, Series 1989A maturing on and after June I, 2004. (2) County of Harnett, North Carolina West Central Water and Sewer District Bonds, Series 1989B maturing on and after June 1,2004, and (3) County of Hamett, North Carolina West Central Water and Sewer District Bonds~ Series 1993 maturing on and after June I, 2004. The Bonds maturing on or before June ). 20) 4 are not subject to redemption before maturity. The Bonds maturing on and after June I, 2015 are subject to redemption prior to maturity, at the option of the District, from any moneys that may be made available for such purpose, either in whole or in part on any date not earlier than June 1,2014, at the following redemption prices (expressed as a percentage of the principal amount of Bonds to be redeemed), together with interest accrued thereon to the date fixed for redemption: if redeemed during the perioo from June 1,2014 to May 31, 2015, inclusive, 101%; and if redeemed on or after June I, 2015, I ooa/~. If less than all of the Bonds of anyone maturity shall be called for redemption. the District shall select the maturity or maturities of the Bonds to be redeemed in such manner as the District in its discretion may detennine and the District shall determine which of the Bonds within a maturity are to be CI.T 75167$'0'2 .i-f'{........-''" 3107 308 redeemed by lot; provided, however, that the portion of any Bond to be redeemed shall be in an Authorized Denomination and that. in selecting Bonds for redemption. each Bond shall be considered as representing that number of Bonds which is obtained by dividing the principal amount of such Bond by the minimum Authorized Denomination. Notice of redemption shall be given by the District. not less than 30 days nor more than 60 days before the redemption date. by first class mait postage prepaid. to (1) the Local Government Commissiony (2) the then-registered owners of the Bonds or portions thereof to be redeemed at the last address shown on the registration books kept by the registrar. (3) each of the then-existing securities depositories and (4) at least two of the then-existing national in fonnation services. The notice shall (I) state the redemption date and the redemption price. (2) identifY the Bonds or portions thereof to be redeemed by reference to their numbers and (3) state that on the redemption date there shall be~ome due and payable on each Bond or portions thereof so to be redeemed. the principal therc{}f. redemption premium. if any. and interest accrued to the redemption date and that from and after such date interest thereon shall cease to accrue. It is hereby certified and recited that all conditions. acts and things required by the Constitution or statutes of the State of North Carolina to exist, be performed or happen precedent to or in the issuance of this Bond exist. have been perfonned and have happened. and that the amount of this Bond. together with an other indebtedness ()f the District, is within every debt and othff limit prescribed by said Constitution or statutes. The faith and credit of the District are hereby pledged to the punctual payment of the principal of and interest on this Bond in accordance with its terms. This Bond shall not be valid or become obligatory for any purpose until the certification hereon shall have been signed by an authorized representative of the Local Government Commission. IN WITNESS JJfHEREOF, the District has caused this Bond t() bear the original or facsimile of the signatures of the Vice Chairman of the Board of Commissioners of the County and the Clerk to the, Board of Commissioners of the County, each acting on behalf of the Distric~ and an original or tacsimile of the seal of the District to be imprinted hereon and this Bond to be dated as of the dated date set forth above. (SEAL) Clerk to the Board of Commissioners V ice Chainnan of the Board of Commissioners Date of Execution: . 2004 [Counterpart signature page to the County of Harnett, North Carolina West Central Water and Sewer District General Obligation Refunding Bonds, Series 2004] The issue hereof has been approved under the provisions of the local Go\temment Bond Act. JANlCE T. BURKE Secretary of the Local Government Commission FORM Of ASSIGNMENT ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells., assigns and transfers unto (Please print or typewrite Name and Address, including Zip Code, and Federal Taxpayer Identification or Social Security Number of Assignee) the within Bond and all rights thereunder.. and hereby irrevocably constitutes and appoints Attorney to register the transfer of the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: Si gnature guaranteed by: NOTICE: Signature must be guaranteed by a Participant in the Securities Transfer Agent Medallion Program ("Stamp") or similar program. NOTICE: The signature to this assignment must correspond with the name as it appears on the face of the within Bond in every particular. without alteration, enlargement or any change whatever . TRANSFER FEE MAYBE REQUIRED 309 310 Attachment 4. Extract of Minutes of a spec ial meeting of the Board of Commissioners of the County of Harnett. North CarolinaJ sitting as the governing body of the Northwest Water and Sewer District of the County of Harnett, North Carolina, held in the County Managers Office. 102 East Front Stree~ LilIington, North Carolin~ at II :30 a,m. on May 7. 2004. A special meeting of the Board of Commissioners of the County of Harnett. North Carolina (the "County "), sitting as the governing body (the "Board") of the Northwest Water and Sewer District of the County (the "District "), was held in the County Manager's Office, 102 East Front Stree~ LiIlington, North Carolin~ at 11:30 a.m. on May 7. 2004 (the "Meeting'). after proper notice. and was called to order by Chairman Teddy J. Byrd. and upon the roll being called. the following members of the Board answered present: Beatrice B. Hill and Walt Titchener. The following members of the Board were absent: Dan B. Andrews and Tim McNeill. Also present: Neil Emory. Vanessa W. Young and Kay S. Blanchard. Commissioner HiJ I introduced the following resolution, a summary of which had been provided to each Commissioner, a copy of which WaS available with the Clerk to the Board and which was read by title: A RESOLUTION OF THE BoARD OF' COMMISSIONERS OF THE COUNTY OF HARNETT, NORTH CAROLINA, SITTING AS THE GOVERNING BODV OF THE NORTHWEST WATER AND SEWER DISTRICT or THE COUNTY OF HARNETT, NORTH CAROLINA~ AUrnORlzlNG THE ISSUANCE OF NOT TO EXCEED Sl,700~OOO GENERAL OBLIGATION REFUNDING BONDS, SERIES 2004. WHEREAS, the Bond Order hereinafter-aescribed has been adopted, and it is desirable to make provision for the issuance of the Bonds authorized by said Bond Order; and WHEREAS, the Board wishes to amend and re5tate in its entirety the resolution by the same name adopted on Febroary 16,2004 in the manner set forth herein~ NOW. THEREFORE. BE IT RESOLVED by the Board as follows: I. For purposes of this Resolution, the following words will have the meanings ascribed to them below: "AU1Jwrized Denomination" means $1,000 or any integral multiple thereof. "Board" means the Board of Commissioners of the C<JOOt)', sitting as the governing body of the District. "Bond Order" means the Bond Order authorizing the Bonds adopted by the Board on February 16,2004 and effective on its adoption. "Bonds'. means the District's General Obligation Refunding Bonds, Series 2004 authorized under the Bond Order. CL T 75166Sv2 "Business Day" means a day on which First-Citizens is not required or authorized by law to remain closed, "County" means the COWlty of Harnett. North Carolina, and its successors or assigns. "Custody Agreement" means the Custody Agrcemen t dated as of May ]. 2004 between ferris. Baker Watts. Inrorporat~ as depositor, and First..Citizens, as custodian. relating to custody receipts evidencing related ownership interests in the Bonds, "District" means the Northwest Water and Sewer District of the County. UFederal Securities" means (a) direct obligations of the United States of America for the timely payment of which the full faith and credit of the United States of America is pledged; (b) obligations issued by any agency controlled or supervised by and acting as an instrumentality of the United States of Armrica. the timely payment of the principal of and interest on which is fully guaranteed as full faith and credit obligations of the United States of America (including any securities described in (a) or (b) issued or held in the name of a trustee in book-entry form on the books of the Department of Treasury of the United States of America), which obligations, in either case, are held in the name of a trustee and are not subject to redemption or purchase prior to maturity at the option of anyone other than the holder; (c) any bonds or other obligations of the State of North Carolina or of any agency. instrumentality or local govemmentalWlit of the State of North Carolina which are (I) not callable prior to maturity or (2)as to which irrevocable instructions have been given to the trustee or escrow agent with res~t to such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified. and which are rated by Moody's, if the Bonds are rated by Moody's. and S&P. if the Bonds are rated by S&P, within the highest rat ing category and which are secured as to prim:ipal. redemption premium. if any. and interest by a fund consisting only of cash or bonds or other obligations of the character described in clause (8) Or (b) hereof which fund may be applied only to the payment of such principal of and interest and redemption premium., if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions. as appropriate; or (d) direct evidences of ownership of proportionate interests in future interest and principal payments on specified obligations described in (8) held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor on the underlying obligations described in (a). and which underlying obligations are not available to satisfy any claim of the custodian or any person claiming through the custodian or to whom the custodian may be obligated. "First-Citizens " means First-Citizens Bank & Trust Company. a duly organized and existing North Carolina banking cQrpOratiQn having an office and place of business in Raleigh. North Carolina. UFitch Ratings" means Fitch. Inc.. a corporation organized and existing under the laws of the State of New York, its successors and their assigns an~ if such corporation for any reason no longer performs the functions of a securities rating agency, uFitch Ratings" will be deemed to refer to any other nationally recognized rating agency other than Moody's or S&P designated by the District. "Moody's" means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and their assigns and, if such corporation for any reason no longer perfonns the functions of a securities rating agency, ",~oody 's" will be deemed to refer to any other nationally recognized rating agency other than Fitch Ratings or S&P designated by the District. 2 el.l751665\12 311 312 "Refunded Bonds" means the $1,376,000 County of Harnett, North Carolina Northwest Water and Sewer District Bonds, Series 1990, maturing on and after June 1, 2004. "S&P" means Standard & Poor's Ratings Services, a Division of The McGraw-Hill Companies. [nc., its successors and their assigns and, if such corporation for any reason no longer perfonns the functions of a securities rating agency, "S&P" will be deemed to refer to any other nationally recognized rating agency other than Fitch Ratings or Moody's designated by the District. 2. its Bonds, The District shall issue not to exceed SI~700,000 in total aggregate principal amount of 3. The Bonds shall be dated as of the dated date set forth on the Bonds and pay interest semiannually on June I and December 1, beginning December 1, 2004. As long as First-Citizens is the registered owner of the Bonds, the District shan make its sem iannual payments one Business Day before each June 1 and December 1. The Bonds are being issued to provide funds to refund in advance of their maturities the Refunded Bonds pursuant to and in accordance with the Bond Order. 4. The Board has ascertained and hereby determines that the average period of usefulness of the capital projects being financed by the proceeds of the Refunded Bonds was not less than 25 years computed from the date of the Refunded Bonds, and the weighted average maturity of the Bonds does not exceed the weighted average maturity of the Refunded Bonds. 5. The Bonds are payable in annllal installments on June I in each year, as follows: Y.f:.O.R 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 AMOUNT $45,000 45,000 50,000 50,000 50.000 50,000 55,000 55.000 55.000 60,000 60.000 65,000 YEAR 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 ~ $65,000 65,000 65,000 65.000 65.000 65,000 65,000 65.000 60,000 6O~000 60,000 60,000 The Finance Director of the County. acting on behalf of the District, may~ so long as net present value savings are at least 2% of the par amount of the Refunded Bond~ (a) increase or decrease the aggregate principal amount and the principal of each maturity of the Bonds or (b) combine or otherwise alter the maturity dates set forth above for any of the Bonds. 6. The Bonds shall be numbered from "R-I" consecutively and upward. All Bonds shall bear interest from their date at a rate or rates which shall be hereafter detennined on the sale thereof computed on the basis of a 360-day year of twelve 30..da): months. 7. The Bonds shall be registered as to principal and interest, and the Finance Director of the County, acting on behalf of the District, is directed to maintain the registration records with respect Cl T 7~166$v2 thereto. The Bonds shall bear the original or facsimile signatures of the Vice Chairman of the Board and the Clerk to the Board. An original or facsimile of the seal of the District shall be imprinted on each of the Bonds. 8. The Bonds will be issuable as fully registered bonds in any Authorized Denomination. The Bonds initially will be issued in substantially the form set forth in Exhibit A, with such appropriate variations, omissions and insertions as are pennitted or required by this resolution. 9. The Bonds maturing on or before June I, 2014 are not subject to. redemption before maturity, The Bonds maturing on and after June I, 2015 are subject to redemption prior to maturity, at the option of the Distric~ from any moneys that may be made available for such purpose, either in whole or in part on any date not earlier than June I, 2014, at the following redemption prices (expressed as 8 percentage of the principal amount of Bonds to be redeemed), together with interest accrued thereon to the date f1.xed for redemption: if redeemed during the period from June I, 2014 to May 3 I, 2015, inclusive, 10 I %; and if redeemed on or after June I, 2015. 100'%. The Finance Director of the County, acting on behalf of the District, may alter the redemption provisions of the Bonds by a written certificate delivered on or before the date the Bonds are issued setting forth the new redemption provisions of the Bonds, as long as the first optional redemption date is not later than June 1, 2016 and the premium does not exceed 2%. If less than all of the Bonds of anyone maturity shall be called for redemption, the District shall select the maturity Or maturities of the Bonds to be redeemed in such manner as the District in its discretion may determine and the District shall determine which of the &nds within a maturity are to be redeemed by lot; provided. however, that the portion of any Bond to be redeemed shall be in an Authorized Denomination and that, in selecting Bonds for redemption, each Bond shall be considered as representing that number of Bonds which is obtained by dividing the principal amount of such Bond by the minimum Authorized Denomination. Notice of redemption shall be given by the District, not less than 30 days nor more than 60 days before the redemption date, by fll'St class mail, postage prepaid (a) to the Local Government Commission, (b) to the then-registered owners of the Bonds or portions tberC()f to be redeeffiOO at the last address shown on the registration books kept by the registrar, (c) to each of the then-existing securities depositories and (d) to at least two of the then-existing natiooaJ information services. The notice shall (a) state the redemption date and the redemption price, (b) identity the Bonds or portions thereof to be redeemed by reference to their numbers and (c) state that on the redemplion date there shall become due and payable on each Bond or portion s thereof so to be redeemed, the principaJ thereof, redemption premium, if any. and interest accrued to the redemption date and that from and after such date interest thereon shall cease to accrue. 10. The &nds and the provisions for the registration of the Bonds and for the approval of the Bonds by the Secretary of the Local Government Commission sball be in substantially the form attached hereto AS Exhibit A. 11. The District covenants to take such action as may be required in the opinion of nationally recognized bond counsel to cause the Bonds and all actions of the District with respect to the proceeds thereof to comply with Internal Revenue Code of 1986, as amended (the "Code n). In particular, the District covenants as follows: 4 CL T 75]663..1 313 314 (a) At least one of the following two conditions will be satisfied for the Bonds: (l) less than 100/0 of the proceeds of the Bonds.. reduced by costs of issuance. will be used directly or indirectly in the business of a person other than a state or local governmental unit or (2) less than 100/0 of the principal or interest on the Bonds will be (under the terms of such issue or any underlying arrangement) directly or indirectly (A) secured by an interest in property used or to be used in a private business or any interest in payments made with respect to such property or (B) to be derived from payments made with respect to property. or borrowed money.. used or to be used in a private business; (b) Less than 5% of the proceeds of the Bonds, reduced by costs of issuance. will be used by nongovernmental persons for a use unrelated to the purposes for which the Bonds are being issued~ (c) It will not loan directly or indirectly more than 5% of the proceeds of the Bonds to nongovernmental persons~ (d) It will not enter into any management contract with respect to the facilities refinanced with the proceeds of the Bonds unless it obtains an opinion of nationally recognized bond counsel that such management contract will not impair the exclusion from a recipient's gross income for federal income tax purposes of the interest on the Bonds~ (e) The District acknowledges that the continued exclusion of interest on the Bonds from a recipienf s gross income for federal income tax purposes depends, in part, on compliance with the arbitrage limitations imposed by Section 148 of the Code. The District covenants to compl)' with all the requirements of Section 148 of the Code" including the rebate requirements, and it shan not permit at any time any of the proceeds of the Bonds or other funds of the District to be used. directly or indirectly. to acquire any asset or obligation. the acquisition of which would cause the Bonds to be "arbitrage bonds ., for purposes of Section 148 of the Code; (t) The Bonds shall not be "federally guaranteed" as defined in Section I 49(b} of the Code; and (g) The District covenants to file or cause to be filed Fonn 8038-G in accordance with Section 149( e) of the Code. 12. From the proceeds of the Bonds, an amount sufficient to redeem the Refunded Bonds shall be used by the Local Government Commission~ on behalf of the District to redeem the Refunded Bonds on the day after the Bonds are issued) or such other day as the Local Government Commission may detennine is in the best interests of the District, and the balance (the .'Balance "). including accrued interest on the Bonds from the dated date set forth on the Bonds until the date the Bonds are issued. will be transferred to the District. The Finance Director of the County. acting on behalf of the District) shall deposit the Balance in separate accounts and apply the amount of accrued interest to the payment of interest on the Bonds on June I. 2004 and the remainder to pay the costs of issuing the Bonds. Any money remaining in that accoun~ including invesbnent earnings thereon, shall on June l. 2004. be applied to pay the interest on the Bonds, 5 CLT 751665,,2 13. Actions taken by officials of the District or by officials of the County, acting on behalf of the District, to select paying and transfer agents, and a bond registrar, or alternate or successor agents and registrars pursuant to Section 159E~8 of the Registered Public Obligations Act, Chapter 159E of the GeneraJ Statutes of North Carolina, are hereby authorized and approved. 14, The Local Government Commission is hereby requested to sell the Bonds to Ferri~ Baker Watts, Incorporated at a negotiat.ed price to be detennined by the Local Government Commission, /'''-~', 15. The Vice Chainnan of the Board, the County Manager, the Finance Director and the Clerk to the Board of the County, each acting on behalf of the Distric~ are hereby authorized and directed to cause the Bonds to be prepared and, when they shall have been duly sold by the Local Government Commission to Ferris, Baker Watts, Incorporated, to execute the Bonds and to turn the Bonds over to the Registrar and transfer agent of the District for delivery to the purchaser or purchasers to whom they may be sold by Ferris, Baker 'A/atts, Incorporated. 16. The fonn and content of the financial information relating to the District provided in the Preliminary Offering Memorandum to be dated on Or about April 12, 2004, together with the final Offering Memorandum to be dated on or about April 28, 2004 are in all respects authorized, approved and confmned, and the Vice Chainnan of the Board, the County Manager, the Finance Director and the Clerk to the Board of the County are authorize~ empowered and directed to act on behal f of the District and execute and deliver the Offering Memorandum in substantially the fonn and content presented to the Board, but with such changes, modifications, additions or deletions therein as shall to the Vice Chainnan of the Board, County Manager or the Finance Director of the County~ acting on behalf of the District, seem necessary, desirable or appropriate, their execution thereof to constitute conclusive evidence of the approval of the Board of any and all changes, modifications, additions or deletions therein from the fonn and content of the District's tinandal infonnation in the Offering f\.1emorandum presented to the Board. 17. Th~ Vice Chainnan of the Board, the County Manager, the Finance Director and the Clerk to the Board of the County are authorized and directed to execute and deliver for and on behalf of the District an)' and all additional certificates, documents, opinions or other papers and perfonn all other acts as may be required by the documents contemplated hereinabove or as may be deemed necessary or appropriate to implement and carry out the intent and purposes of this Resolution. 18. The County agree-~ on behalf of the District and in accordance with Rule I Sc2~ 12 (the "Rule 'J promulgated by the Seeurities and Exchange Commission (the "SEe '), and for the benefit of the Registered Owners and beneficial ow~rs of the Bonds, as follows; (1) by not later than seven months after the end of e-ach Fiscal Year, beginning with the Fiscal Year ending June 30, 2004, to provide to each nationally recognized municipal securities infonnation repository ("NRMSIR to) and to the state infonnation depository ("SID "), if any, for the State, the audited financial statements of the County (which include the District) for such Fiscal Year, if available, prepared in a"ordance with Section 159.34 of the General Statutes of North Carolina, as it may be amended from time to time, or any successor statute, or, if such audited financial statements are not then available, unaudited financial statements of the County for such Fiscal Year to be replaced subsequently by audited financial statements of the County to be delivered within 15 days after such audited financial statements become available for distribution~ 6 CL T 751665\12 J~' 315 316 (2) by not later thon seven months after the end of each Fiscal Year, beginning with the Fiscal Year ending June 30, 2004, to provide to each NRMSIR and to the SID. if any, (a) the financial and statistical data as of a date not earlier than the end of the preceding Fiscal Year (which data shall be prepared at least annually~ shall specify the date as to which such information was prepared and shall be delivered together with any subsequent material event~ notices specified in (3) below) for the type of information included under the captions "THE COUNTY-D~BT INFORMATION'" and "-TAX INFORMATION" (including the information with respect to the District but excluding information on overlapping or other underlying units) in the Offering Memorandum referred to in Section 16 and (b) the combined budget of the County for the current Fiscal Year to the extent such items are not included in the audited financial statements referred to in clause (I) above; (3) to provide in a timely manner to each NRMSIR or to the Municipal Securities Rulemaking Board (the "'MSRB '). and to the SID, if any. notice of any of the following events with respect to tht Bonds., if material; (a) principal and interest payment delinquencies~ (b) non-payment related defauhs; (c) unscheduled draws on the debt service reserves renecting financial difficulties; (d) unscheduled draws on any credit enhancements reflecting financial difficulties; (e) perform ; substitution of any credit or liquidity providers. or their failure to (0 the Bonds~ adverse tax opinions or events affecting the tax..exempt status of (g) (h) modification to the rights of the beneficial owners of the Bonds; Bond calls; (i) defeasances~ (j) release. substitution or sale of any property securing repayment of the Bonds; and (k) rating changes; and (4) to provide in 8 timely manner to each NRMSIR or to the MSRB. and to the SID. if any, notice of a failure of the County to provide required annual financial information described in (1) or (2) above on or before the date specified. CL T 7~ ]665\"2 The County agree; that its undertaking under this Paragraph is intended to be for the benefrt of the registered owners and the beneficial owners of the Bonds and is enforceable by any of the registered owners and the beneficial owners of the Bond~ including .an action for specific performance of the County's obligations under this Parngrap~ but a failure to comply will not be an event of default and will not result in acceleration of the payment of the Bonds. An action must be instituted, had and maintained in the manner provided in this Paragraph for the benefit of aU of the registered owners and beneficial owners of the Bonds. The County, as the governing body of the District, may modify from time to time, consistent with the Rule, the information provided or the format of the presentation of such information, to the extent necessary or appropriate in the judgment of the County, but: (I) any such modification may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law or change in the identity, Dature or status of the County or the District; (2) the information to be provided, as modified, would have complied with the requirements of the Rule as of the date of the Offering Memorandum, after taking into account any amendments or interpretations of the Rule as well as any changes in circumstances~ and (3) any such modification does not materially impair the interest of the registered owners or the beneficial owne~ as determined by nationally recognized bond counselor by the approving vote of the registered owners of a majority in principal amount of the Bonds. Any annual financial information containing modified operating data or financial infonnation will explain, in narrative fonn, the reasons for the modification and the impact of the change in the type of operating data or financiaJ information being provided. The provisions of this Paragraph terminate on payment, or provision having been made for payment in a manner consistent with the Rule, in full of the principal of and interest on the Bonds. 19. Those portions of this Resolution other than Paragraph 18 may be amended or supplemented. from time to time, without the consent of the owners of the Bonds if in the opinion of nationally ftcognized bond counsel, such amendment or supplement would not adversely affect the interests of the owners of the Bonds and would not cause the interest on the Bonds to be included in the gross income of a recipient thereof for federal income tax pUl]X)Ses. This Resolution may be amended or supplemented with the consent of the owners of a majority in aggregate principal amount of the outstanding Bon~ exclusive of Bonds, if any, owned by the District1 but a modification or amendment (I) may not, without the express consent of any owner of Bonds, reduce the principal amount of any Bond, reduce the interest rate payable on it, extend its maturity or the times for paying interest. change the monetary medium in which principal and interest is payable1 or reduce the percentage of consent required for amendment or modification and (2) as to an amendment to Paragraph 18, must be limited as described therein. Any act done pursuant to a modification or amendment consented to by the owners of the Bonds is binding on all owners of the Bonds and will not be deemed an infringement of any of the provisions of this Resolution, whatever the character of the act may be, and may be done and performed as fully and 8 CL T 15166$\'2 317 318 freely as if expressly permitted by the terms of this Resoltrrion, and after consent has been given, no owner of a Bond has any right or interest to object to the action, to question its propriety or to enjoin or restrain the District from taking any action pursuant to a modification or amendment. I[the District proposes an amendment or supplemental resolution to this Resolution requiring the consent of the owners of the Bonds, the Registrar shall, on being satisfactorily indemnified with respect to expenses, cause notice of the proposed amendment to be sent to each owner of the Bonds then outstanding by first-class mail, postage prepaid, to the address of such owner as it appears 00 the registration books; but the failure to receive such notice by mailing by any owner, or any defect in the mailing thereof, will not affect the validity of any proceedings pursuant hereto. Such notice shall briefly set forth the nature of the proposed amendment and shan state that copies thereof are on file at the principal (lffice of the Registrar for inspection by an owners of the Bonds. If, within 60 days or such longer period as shall be prescribed by the District folloVwing the giving of such notice. the owners of 8 majority in aggregate principal amount of Bonds then outstanding have consented to the proposed amendment, the amendment will be effective as of the date stated in the notice. 20. Nothing in this Resolution shall preclude (a) the payment of the Bonds from the proceeds of refunding bonds or (b) the payment of the Bonds from any legally available funds. If the District causes to be paid, or has made provisions to pay, on maturity or on redemption before maturity, to the owners of the Bonds the principal of the Bonds (including interest to become due thereon), through setting aside trust funds or setting apart in a reserve fund or special trust account created pursuant to this Resolution or otherndse, or through the irrevocable segregation for that purpose in some sinking fund or other fund or trust account with an escrow agent or otherwise, moneys sufficient therefor, including. but not limited to, interest earned or to be earned on Federal Securities, the District shall so notify Moody's" S&P and Fitch Ratings, and then such Bonds shall be considered to have been discharged and satisfied, and the principal of the Bonds (including any intereSt thereon) shall no longer be deemed to be outstanding and unpaid~ provided, however, that nothing in this Resolution requires the deposit of more than such Federal Securities as may be sufficient, taking into account both the principal amount of such Federal Securities and the inte~st to become due thereon, to implement any such defeasance. If such a defeasance occurs and after the District receives an opinion of a nationally recognized accounting firm that the segregated moneys or Federal Securities together with interest earnings thereon are sufficient to effect a defeasance, the District shall execute and deliver all such instruments as may be necessary to effect such a defeasance and desirable to evidence such release~ discharge and satisfaction. Provisions shall be made by the District for the mailing of a notice to the owners of the Bonds that such moneys are so available for such payment. 21. The District acc~pts all responsibilities assigned to it under the Custody Agreernen~ a draft of which has been made available to the Board. 22. This resolution amends and restates in its entirety the resolution of the same name adopted by the Board on Februaf)/ 16, 2004. Upon motion of Commissioner HiII~ seconded by Commissioner Titchener. the foregoing order titled: "A REsoLUTION OF THE BoARD OF COMMISSIONERS OF THE COUNTY OF HARNETT, NORTH CAROLINA, SITTING AS THE GOVERNING BODV OF THE NORTHWEST WATER AND SEWER DISTRICT OF THE COUNTY OF HARNETT, NORTH CAROLIN.-\, AUTHORIZING THE ISSUANCE OF NOT TO EXCEED 9 CL T 151665v2 319 SI,700,000 GENERAL OBLIGATION REFUNDING BONDS, SERIES 2004" was adopted by the following vote: A YES: Commissioner Teddy J" Byrd Commissioner Beatrice B. Hill Commiss ioner Walt Titchener NAYS: None PASSED, ADOPTED AND APPROVED this 7th day of May, 2004. . ST^ TB OF NORTH CAROLINA COUNTY OF HARNETT L Kay S" Blanchard, Clerk to the Board of Commissioners of the County of Harnett, North Carolina (the "-County"), sitting as the governlng body (the "Board'') of the Northwest Water and Sewer District of the Comty (the nDistrid'1, DO HEREBY CERTIFY that the foregoing 1S a true and exact copy of the resolution titled" A REsoLUTION OF THE BOARD OF COMMISSIONERS OF THE COUNTY OF IIARNE'IT, NORTH CAROLINA, SITIlNG AS THE GOVERNING BODY OF THE NORntwEST WATER AND SEWER. DISTRICT OF THE COUNTY OF HARNETT, NORTH CAROLINA, AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $1,100,000 GENERAL OBLJGA TION REFUNDING 8ON1>s, SERIES 1004" adopted by the Board in special session convened on the 7th day of May, 2004, as recorded in the minutes of the Board, WITNESS my hand and the seal of the District, this the 7th day of May, 2004. (SEAL) ~~~~ Kay S. anchard. Clerk to the Board of Commissioners County of Harnett. North Carolina and the Northwest Water and Sewer District of Harnett COWlty ,," 11t~..~~1.. .. ~. ~ .' . ..<:.< - "= : \..; = 320 EXHIBIT A FORM OF BOND No, R- $ UNITED STATES OF AMERICA STATE OF NORTH CAROLINA COUNTY OF IURNEn NORTHWEST WATER AND SEWER DISTRICT INTEREST B!!! l\{ATURJTY DATE JeNE 1,20_ DATED DATE MAY 12, 2004 CUSIP REGISTERED OWNER: FIRST-CITJZ.ENS BANK & TRUST COMPANY PRINCIPAL SliM: DOLLARS GENERAL OBLIGATION REFUNDING BOND, SERIES 2004 THE NORTHWEST w..f TER AND SEWER DISTRICT OF THE C01JNTY OF HARl'./E1T. NORTH CA ROLEVA (the "Db;trict ") acknowledges itself indebted and for value received hereby promises to pay to the Registered Owner named above. on the Maturity Date specified above. upon surrender hereof, the Principal Sum shown above and to pay to the Registered Owner hereof interest thereon from the date of this Bond until it shall mature at the Interest Rate per annum specified above, payable on June I. 2004 and semiannually thereafter on June I and December I of each year. Principal of and interest on this Bond are payable in immediately available funds to the Registered Owner of the Bonds and is payable to the owner of the Bonds shown on the records of the District at the close of business on the 15th day of the month preceding an interest payment date or a bond payment date. This Bond is issued in accordance with the Registered Public Obligations Ac~ Chapter 159E of the General Statutes of North Carolina. and pursuant to the Local Government finaw;e Act and a bond order adopted by the Board of Commissioners of the County of Harnett. North Carolina (the "County"). sitting as the governmg body of the District, on February 16. 2004 and effective on its adoption. The Bonds are being issued to provide funds to refund in advance of their maturities the County of Harne~ North Carol ina Northwest Water and Sewer District Bonds. Series 1990 maturing on and after June I, 2004. The Bonds maturing on or before June I, 2014 are not subject to redemption before maturity. The Bonds maturing on and after June 1.2015 are subject to redemption prior to maturity. at the option of the District. from any moneys that may be made available for such purpose. either in whole or in part on any date not earlier than June I, 2014, at the following redemption prices (expressed as a percentage of the principal amount of Bonds to be redeemed), together with interest accrued thereon to the date fixed for redemption: if redeemed during the period from June 1, 2014 to May 31. 20 I 5. inclusive, 10 I %~ and ifredeemed on or after June 1,2015, 100%, If less than all of the Bonds of anyone maturity shall be called for redemption, the District shall select the maturity or maturities of the Bonds to be redeemed in such manner as the District in its discretion may determine and the District shall determine which of the Bonds within a maturity are to be redeemed by lo~ provided. however. that the JX1I1ion of any Bond to be redeemed shall be in an Authorized Denomination and that, in selecting Bonds for redemption, each Bond shall be considered as CL T 75]665\'2 representing that number of Bonds which is obtained by dividing the principal amount of such Bond by the minimum Authorized Denomination. Notice of redemption shall be given by the District~ not less than 30 days nor more than 60 days before the redemption date, by first class mail, postage prepaid, to (I) the Local Government Commission~ (2) the then-registered owners of the Bonds or portions thereof to be redeemed at the last address shown on the registration books kept by the registrar, (3) each of the then-existing securities depositories and (4) at least two of the then-existing national information services. The notice shall (I) state dle redemption date and the redemption price, (2) identify the Bonds or portions thereof to be redeemed by rere~ncc to their numbers and (3) state that on the redemption date there shall become due and payable- on each Bond Qf portions thereof so to be redeemed, the principal thereof, redemption premium, if any, and interest accrued to the redemption date and that from and after such date interest thereon shall cease to accrue. It is hereby c.ertified and redted that all conditions. acts and things required by the Constitution or statutes of the State of North Carolina to exist, be performed or happen precedent to or in the issuance of this Bond exiS4 have been perfonned and have happened, and that the amount of this Bond, together with all other indebtedness of the District, is within every debt and other limit prescribed by said Constitution or statutes. The faith and credit of the District are hereby pledged to the punctual payment of the principal of and interest on this Bond in accordance with its terms. This Bond shall not be valid or become obligatory for any purpose until the certification hereon shall have been signed by an authorized representative of the Local Government Commission. IN WITNESS WHEREOF~ the District has caused this Bond to bear the original or facsimile of the signatures of the Vice Chairman of the Board of Commissioners of the County and the Clerk to the Board of Commissioners of the County, each acting on behalf of the District, and an original or facsimile of the seal of the District to be imprinted hereon and this Bond to be dated as of the dated date set forth above. (SEAL) Clerk to the Board of Commissioners V ice Chairman of the Board of Commissioners Date of Execution: , 2004 321 322 [Counterpart signature page to the County ofHamett~ North Carolina Northwest Water and Sewer District General Obligation Refunding Bonds, Series 2004] The issue hereof has been approved under the provisions of the Local Government Bond Act J~~ICE T. BURKE Secretary of the Local Govemnlel1t Commission FORM Of ASSIGNMENT ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (Please print or type""Tite Name and Address, including Zip Code. and Federal Ta.xpayer Identification or Social Security Number of Assignee) the \\'ithin Bond and all rights thereunder, and hereby irrevocably constitutes and appoints Attorney to register the transfer ofthe within Bond on the books kept for registration thereof, with full power of substitution in the premises, Dated: __ Signature guaranteed by: NOTICE: Signature must be guaranteed by a Participant in the Securities Transfer Agent Medallion Program ("Stamp") or simifar program. NonCE: TIle si gnature to this assignment must correspond with the name as it appears on the face of the within Bond in e\'er)' particular, without alteration, enlargement or any change whatever. TRANSFER FEE MA \' BE REQUIRED