OFFICIAL STATEMENT. New Issue Standard & Poor s: AAA (See Other Bond Information Ratings. )

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1 OFFICIAL STATEMENT RATINGS: Moody s: Aa1 Fitch: AA+ New Issue Standard & Poor s: AAA Book-Entry Only (See Other Bond Information Ratings. ) In the opinion of Bond Counsel, as of the date of issue of the Bonds (the Date of Issue ) and assuming compliance by the County with applicable requirements of the Internal Revenue Code of 1986, as amended (the Code ) that must be satisfied subsequent to the issuance of the 2010A Bonds and the 2010E Bonds, under existing federal law, interest on the 2010E Bonds (including any original issue discount properly allocable to an owner thereof) and on the 2010A Bonds is excludable from gross income for federal income tax purposes and is not subject to the federal alternative minimum tax imposed on individuals or corporations. In the further opinion of Bond Counsel, as of the Date of Issue, under existing federal law, interest on the 2010B Bonds, the 2010C Bonds and the 2010D Bonds is includable in gross income for federal income tax purposes. See Legal and Tax Information Tax Matters Tax-Exempt Bonds and Tax Matters Taxable Bonds herein and Appendix A Forms of Bond Counsel Opinions hereto. KING COUNTY, WASHINGTON $25,825,000 $45,035,000 Limited Tax General Obligation Bonds, 2010, Series A Limited Tax General Obligation Bonds, 2010, Series B (Federally Tax-Exempt) (Federally Taxable Build America Bonds) $23,165,000 $5,825,000 Limited Tax General Obligation Bonds, 2010, Series C Limited Tax General Obligation Bonds, 2010, Series D (Federally Taxable Recovery Zone Economic (Federally Taxable Qualified Energy Conservation Development Bonds) Bonds) $10,025,000 Limited Tax General Obligation Bonds, 2010, Series E (Federally Tax-Exempt) DATED: Date of Initial Delivery DUE: December 1, as shown on pages i and ii The King County, Washington, Limited Tax General Obligation Bonds described above (collectively, the Bonds ) are issuable only as fully registered bonds and, when issued, will be registered in the name of Cede & Co., as Bond owner and nominee for The Depository Trust Company, New York, New York ( DTC ). DTC will act as initial securities depository for the Bonds. The Bonds will be issued initially in book-entry form only in denominations of $5,000 or any integral multiple thereof within a single maturity of a series of the Bonds. Purchasers will not receive certificates representing their interest in the Bonds purchased. The Bonds of each series bear interest payable semiannually on each June 1 and December 1, beginning June 1, 2011, to the maturity of such Bonds. The principal of and interest on the Bonds are payable by the fiscal agent of the State of Washington, currently The Bank of New York Mellon in New York, New York (the Bond Registrar ). For so long as the Bonds remain in a book-entry only transfer system, the Bond Registrar will make such payments only to DTC, which, in turn, is obligated to remit such principal and interest to the DTC participants for subsequent disbursement to Beneficial Owners of the Bonds as described herein under Appendix E Book-Entry System. The 2010A Bonds are not subject to optional redemption prior to maturity. The 2010B Bonds, the 2010C Bonds, the 2010D Bonds, and the 2010E Bonds are subject to optional redemption prior to maturity, as described herein. The Bonds are being issued to provide long-term financing for the capital costs of various projects, as described herein under Use of Proceeds for King County, Washington (the County ), and to pay the costs of issuing the Bonds. The Bonds are general obligations of the County. The County has irrevocably covenanted that each year, for as long as any of the Bonds are outstanding and unpaid, it will include in its budget and levy an ad valorem tax within the constitutional and statutory tax limitations provided by law without a vote of the people upon all property within the County subject to taxation in an amount that will be sufficient, together with all other revenues, taxes and money of the County legally available for such purposes, to pay the principal of and interest on the Bonds as the same shall become due. The County has irrevocably pledged its full faith, credit and resources for the annual levy and collection of such taxes and for the prompt payment of the principal of and interest on the Bonds as the same shall become due. The Bonds are offered when, as and if issued, subject to approval of legality by Gottlieb Fisher PLLC, Seattle, Washington, Bond Counsel, and certain other conditions. The forms of Bond Counsel s opinions are attached hereto as Appendix A. Certain legal matters will be passed upon for the Underwriters by their counsel, Foster Pepper PLLC, Seattle, Washington. It is anticipated that the Bonds will be ready for delivery through the facilities of DTC in New York, New York, or to the Bond Registrar on behalf of DTC by Fast Automated Securities Transfer on or about December 1, This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. BofA Merrill Lynch Citi Siebert Brandford Shank & Co., LLC Dated: November 15, 2010

2 No dealer, broker, sales representative or other person has been authorized by the County to give any information or to make any representations with respect to the Bonds other than those contained in this Official Statement, and if given or made, such other information or representation must not be relied upon as having been authorized by the County. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor will there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained by the County from County records and from other sources that the County believes to be reliable, but the County does not guarantee the accuracy or completeness of such information. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of the Official Statement nor any sale of the Bonds will, under any circumstances, create any implication that there has been no change in the affairs of the County since the date hereof. The County makes no representation regarding the accuracy or completeness of the information provided in Appendix E Book-Entry System, which has been furnished by DTC. This Official Statement is not to be construed as a contract or agreement between the County and purchasers or owners of any of the Bonds. The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. Certain statements contained in this Official Statement, including the appendices, reflect not historical facts but forecasts and forward-looking statements. No assurance can be given that the future results discussed herein will be achieved, and actual results may differ materially from the forecasts described herein. In this respect, the words estimate, project, anticipate, expect, intend, believe, and similar expressions are intended to identify forward-looking statements. All projections, forecasts, assumptions, and other forward-looking statements are expressly qualified in their entirety by the cautionary statements set forth in this Official Statement.

3 MATURITY SCHEDULES KING COUNTY, WASHINGTON $25,825,000 LIMITED TAX GENERAL OBLIGATION BONDS, 2010, SERIES A (FEDERALLY TAX-EXEMPT) Due Principal Interest _December 1 Amounts Rates Yields Prices CUSIP Numbers* 2011 $ 6,660, % 0.38% % 49474E4D ,790, E4E ,140, E4F ,235, E4G5 $45,035,000 LIMITED TAX GENERAL OBLIGATION BONDS, 2010, SERIES B (FEDERALLY TAXABLE BUILD AMERICA BONDS) SERIAL BONDS Due Principal Interest _December 1 Amounts Rates Yields Prices CUSIP Numbers* 2015 $ 5,500, % 2.851% % 49474E3H ,945, E3J ,050, E3K ,760, E3L ,875, E3M ,010, E3N ,355, E3P ,210, E3Q ,245, E3R ,290, E3S ,330, E3T8 TERM BOND Due Principal Interest _December 1 Amounts Rates Yields Prices CUSIP Numbers* 2030 $ 7,465, % 6.047% % 49474E3U5 * CUSIP is a registered trademark of the American Bankers Association. The CUSIP numbers herein are provided by CUSIP Global Services (CGS), which is managed on behalf of the American Bankers Association by Standard & Poor s. CUSIP numbers are provided for convenience of reference only. CUSIP numbers are subject to change. The County takes no responsibility for the accuracy of such CUSIP numbers. i

4 MATURITY SCHEDULES KING COUNTY, WASHINGTON $23,165,000 LIMITED TAX GENERAL OBLIGATION BONDS, 2010, SERIES C (FEDERALLY TAXABLE RECOVERY ZONE ECONOMIC DEVELOPMENT BONDS) SERIAL BONDS Due Principal Interest _December 1 Amounts Rates Yields Prices CUSIP Numbers* 2021 $ 950, % 4.580% % 49474E3V ,190, E3W ,250, E3X ,310, E3Y ,380, E3Z4 TERM BOND Due Principal Interest _December 1 Amounts Rates Yields Prices CUSIP Numbers* 2030 $ 13,085, % 6.047% % 49474E4A8 $5,825,000 LIMITED TAX GENERAL OBLIGATION BONDS, 2010, SERIES D (FEDERALLY TAXABLE QUALIFIED ENERGY CONSERVATION BONDS) Due Principal Interest _December 1 Amounts Rates Yields Prices CUSIP Numbers* 2020 $ 3,000, % 4.330% % 49474E4B ,825, E4C4 * CUSIP is a registered trademark of the American Bankers Association. The CUSIP numbers herein are provided by CUSIP Global Services (CGS), which is managed on behalf of the American Bankers Association by Standard & Poor s. CUSIP numbers are provided for convenience of reference only. CUSIP numbers are subject to change. The County takes no responsibility for the accuracy of such CUSIP numbers. ii

5 MATURITY SCHEDULES KING COUNTY, WASHINGTON $10,025,000 LIMITED TAX GENERAL OBLIGATION BONDS, 2010, SERIES E (FEDERALLY TAX-EXEMPT) SERIAL BONDS Due Principal Interest _December 1 Amounts Rates Yields Prices CUSIP Numbers (1) 2011 $ 360, % 0.38% % 49474E4H , E4J , E4K , E4L , E4M , E4N , E4P , E4Q , E4R , E4S , (2) E4T , E4U , (2) E4V , E4W , E4X8 TERM BOND Due Principal Interest _December 1 Amounts Rates Yields Prices CUSIP Numbers (1) 2030 $ 3,255, % 4.51% % 49474E4Y6 (1) CUSIP is a registered trademark of the American Bankers Association. The CUSIP numbers herein are provided by CUSIP Global Services (CGS), which is managed on behalf of the American Bankers Association by Standard & Poor s. CUSIP numbers are provided for convenience of reference only. CUSIP numbers are subject to change. The County takes no responsibility for the accuracy of such CUSIP numbers. (2) Priced to the December 1, 2020, par call date. iii

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7 KING COUNTY, WASHINGTON 500 FOURTH AVENUE SEATTLE, WASHINGTON KING COUNTY EXECUTIVE Dow Constantine METROPOLITAN KING COUNTY COUNCIL Bob Ferguson Chair Jane Hague Vice Chair Jan Drago Councilmember Reagan Dunn Councilmember Larry Gossett Councilmember Kathy Lambert Councilmember Julia Patterson Councilmember Larry Phillips Councilmember Pete von Reichbauer Councilmember Dan Satterberg Lloyd Hara Sue Rahr Sherril Huff OTHER ELECTED OFFICIALS Prosecuting Attorney Assessor Sheriff Director of Elections DIRECTOR OF FINANCE AND BUSINESS OPERATIONS DIVISION DEPARTMENT OF EXECUTIVE SERVICES Ken Guy CLERK OF THE COUNCIL Anne Noris BOND COUNSEL Gottlieb Fisher PLLC Seattle, Washington FINANCIAL ADVISOR TO THE COUNTY Seattle-Northwest Securities Corporation Seattle, Washington BOND REGISTRAR The Bank of New York Mellon New York, New York v

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9 TABLE OF CONTENTS Page INTRODUCTION... 1 Designation of the Taxable Bonds... 2 Interest on the Taxable Bonds... 3 THE BONDS... 3 Description... 3 Optional Redemption Tax-Exempt Bonds... 3 Optional Redemption Taxable Bonds... 3 Extraordinary Optional Redemption Taxable Bonds... 4 Extraordinary Mandatory Redemption 2010E Bonds... 5 Mandatory Redemption... 5 Selection of Bonds and Notice of Redemption... 6 Book-Entry System... 7 Open Market Purchase... 7 Defeasance of Bonds... 7 USE OF PROCEEDS... 7 Purpose... 7 Sources and Uses of Funds... 8 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS... 9 DEBT INFORMATION... 9 Debt Repayment Record... 9 Debt Limitation... 9 Debt Capacity and Debt Service Summary Net Direct and Overlapping Debt Outstanding FUTURE FINANCING PLANS PROPERTY TAX INFORMATION Authorized Property Taxes Allocation of Tax Levies KING COUNTY General Organization of the County The County s Budget Process Finance and Business Operations Division Auditing County Employees Retirement Programs Other Post-Employment Benefits Risk Management and Insurance County Fund Accounting Major Revenue Sources (Governmental Funds Only) Investment Policy Operating Deficits Financial Results Management Discussion of Financial Results Adopted Budget Adopted Budget King County Investment Pool INITIATIVES AND REFERENDA Initiatives on the November 2010 Ballot Future Initiatives and Legislative Action LEGAL AND TAX INFORMATION Litigation Recent Developments in Non-Tort Litigation Approval of Counsel Conflicts of Interest Tax Matters Tax-Exempt Bonds Tax Matters Taxable Bonds Continuing Disclosure Undertaking OTHER BOND INFORMATION Ratings Financial Advisor Underwriters of the Bonds Official Statement Forms of Bond Counsel Opinions... Appendix A Excerpts from the County s 2009 Comprehensive Annual Financial Report... Appendix B King County s Investment Policy... Appendix C Demographic and Economic Information... Appendix D Book-Entry System... Appendix E vii

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11 OFFICIAL STATEMENT KING COUNTY, WASHINGTON $25,825,000 $45,035,000 Limited Tax General Obligation Bonds, 2010, Series A Limited Tax General Obligation Bonds, 2010, Series B (Federally Tax-Exempt) (Federally Taxable Build America Bonds) $23,165,000 $5,825,000 Limited Tax General Obligation Bonds, 2010, Series C Limited Tax General Obligation Bonds, 2010, Series D (Federally Taxable Recovery Zone Economic (Federally Taxable Qualified Energy Conservation Development Bonds) Bonds) $10,025,000 Limited Tax General Obligation Bonds, 2010, Series E (Federally Tax-Exempt) INTRODUCTION This Official Statement contains certain information concerning the issuance by King County, Washington (the County ), of: $25,825,000 aggregate principal amount of its Limited Tax General Obligation Bonds, 2010, Series A (Federally Tax-Exempt) (the 2010A Bonds ), $45,035,000 aggregate principal amount of its Limited Tax General Obligation Bonds, 2010, Series B (Federally Taxable Build America Bonds) (the 2010B Bonds ), $23,165,000 aggregate principal amount of its Limited Tax General Obligation Bonds, 2010, Series C (Federally Taxable Recovery Zone Economic Development Bonds) (the 2010C Bonds ), $5,825,000 aggregate principal amount of its Limited Tax General Obligation Bonds, 2010, Series D (Federally Taxable Qualified Energy Conservation Bonds) (the 2010D Bonds ), and $10,025,000 aggregate principal amount of its Limited Tax General Obligation Bonds, 2010, Series E (Federally Tax-Exempt) (the 2010E Bonds ). The 2010A Bonds and the 2010E Bonds are referred to collectively in this Official Statement as the Tax- Exempt Bonds. The 2010B Bonds, the 2010C Bonds and the 2010D Bonds are referred to collectively in this Official Statement as the Taxable Bonds. The Tax-Exempt Bonds and the Taxable Bonds are referred to collectively in this Official Statement as the Bonds. The Bonds are issued under and in accordance with the provisions of chapters and of the Revised Code of Washington ( RCW ) and the County Charter, and are authorized under the provisions of County Ordinance (the Bond Ordinance ), as well as Motions (2010A Bonds), (2010B Bonds), (2010C Bonds), (2010D Bonds), and (2010E Bonds) of the County Council (collectively, the Sale Motions ). Information contained herein has been obtained from County officers, employees, records, and other sources the County believes to be reliable. This Official Statement is not to be construed as a contract or agreement between the County and the purchasers or owners of any of the Bonds. Quotations, summaries and explanations of constitutional provisions, statutes, resolutions, ordinances, and other documents in this Official Statement do not purport to be complete and are qualified by reference to the 1

12 complete text of such documents, which may be obtained from the Treasury Operations Section of the Finance and Business Operations Division of the King County Department of Executive Services, 500 Fourth Avenue, Room 600, Seattle, Washington Capitalized terms that are not defined herein have the same meanings as set forth in the Bond Ordinance. Designation of the Taxable Bonds 2010B Bonds. The County expects to apply the provisions of Section 54AA(d) of the Code to the 2010B Bonds and intends that the 2010B Bonds be treated as Build America Bonds within the meaning of Section 54AA(d) of the Internal Revenue Code of 1986, as amended (the Code ). In addition, the County expects to elect to treat the 2010B Bonds as qualified bonds within the meaning of Section 54AA(g)(2) of the Code such that the 2010B Bonds will be eligible for direct payment by the federal government of Refundable Credits with respect thereto. Pursuant to the Bond Ordinance, the term Refundable Credits means, with respect to the 2010B Bonds, the amounts which are payable by the federal government under Section 6431 of the Code, which the County has elected to receive under Section 54AA(g)(1) of the Code. The Refundable Credits with respect to the 2010B Bonds are anticipated to be received by the County from the United States Department of the Treasury in an amount equal to 35% of the interest payable by the County on the 2010B Bonds as of each interest payment date therefor. 2010C Bonds. Pursuant to County Ordinance 16787, adopted on March 29, 2010, the County has designated all of King County as a recovery zone for purposes of Sections 1400U-1, 1400U-2 and 1400U-3 of the Code. The County has been allocated $23,169,000 of the State s volume cap for the issuance of recovery zone economic development bonds under the Code, and the 2010C Bonds are expected to be issued pursuant to that volume cap allocation. The County expects to apply the provisions of Section 54AA(d) of the Code to the 2010C Bonds and intends that the 2010C Bonds be treated as Build America Bonds within the meaning of Section 54AA(d) of the Code. In addition, the County expects to elect to treat the 2010C Bonds as qualified bonds within the meaning of Section 54AA(g)(2) of the Code such that the 2010C Bonds will be eligible for direct payment by the federal government of Refundable Credits with respect thereto. Finally, the County expects to designate the 2010C Bonds as Recovery Zone Economic Development Bonds for purposes of Section 1400U-2 of the Code. Pursuant to the Bond Ordinance, the term Refundable Credits means, with respect to the 2010C Bonds, the amounts which are payable by the federal government under Section 6431 of the Code, which the County expects to elect to receive under Section 54AA(g)(1) of the Code. The Refundable Credits with respect to the 2010C Bonds are anticipated to be received by the County from the United States Department of the Treasury in an amount equal to 45% of the interest payable by the County on the 2010C Bonds as of each interest payment date therefor. 2010D Bonds. The County has been allocated $12,033,825 of the State s volume cap for the issuance of Qualified Energy Conservation Bonds under the Code, and the 2010D Bonds are expected to be issued pursuant to that volume cap allocation. The County expects to apply the provisions of Section 54D of the Code to the 2010D Bonds and intends that the 2010D Bonds be treated as Qualified Energy Conservation Bonds within the meaning of Section 54D of the Code that are qualified tax credit bonds within the meaning of Section 54A of the Code. In addition, the County expects to elect to treat the 2010D Bonds as specified tax credit bonds within the meaning of Section 6431(f)(3) of the Code such that the 2010D Bonds will be eligible for direct payment by the federal government of the Refundable Credits with respect thereto. The Refundable Credits with respect to the 2010D Bonds are anticipated to be received by the County from the United States Department of the Treasury on each interest payment date therefor in an amount equal to the lesser of (i) the interest due thereon on each interest payment date, or (ii) 70% of the amount of interest which would have been payable on such 2010D Bonds on such interest payment date if such interest were determined at a rate of 5.41%, which rate is equal to the credit rate determined under Section 54(A)(b)(3) of the Code had the 2010D Bonds been issued as tax credit bonds on the date of this Official Statement. 2

13 Interest on the Taxable Bonds As a result of these designations, interest on the Taxable Bonds is not excludable from gross income of owners of the Taxable Bonds for federal income tax purposes, and owners of the Taxable Bonds will not be allowed any federal tax credits as a result of ownership of or receipt of interest payments on the Taxable Bonds. The obligation of the United States Treasury under Section 6431 of the Code to make payments of Refundable Credits to the County in respect of interest payments on the Taxable Bonds does not constitute a full faith and credit guarantee of the Taxable Bonds by the United States of America. See Legal and Tax Information Tax Matters Taxable Bonds. THE BONDS Description The Bonds will be dated and bear interest from the date of their initial delivery (the Date of Issue ). The Bonds will be fully registered as to both principal and interest, and will be in the denomination of $5,000 or any integral multiple thereof within a single maturity of a series of the Bonds. When issued, the Bonds will be registered in the name of Cede & Co. as registered owner and nominee of The Depository Trust Company, New York, New York ( DTC ). The Bonds of each series bear interest payable semiannually on each June 1 and December 1, beginning June 1, 2011, to the maturity of such Bonds. Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The Bonds will mature on December 1 in the years and amounts set forth on pages i and ii of this Official Statement. DTC will act as initial securities depository for the Bonds. Individual purchases may be made in book-entry form only. Purchasers will not receive certificates representing their interest in the Bonds purchased. So long as Cede & Co. is the registered owner of the Bonds, as nominee of DTC, references herein to the registered owners or Bond owners will mean Cede & Co. and will not mean the Beneficial Owners of the Bonds. In this Official Statement, the term Beneficial Owner means the person for which a DTC participant acquires an interest in the Bonds. The principal of and interest on the Bonds are payable by the fiscal agent of the State of Washington (the State ), currently The Bank of New York Mellon (the Bond Registrar ), in New York, New York. For so long as the Bonds remain in a book-entry only transfer system, the Bond Registrar is required to make such payments to DTC, which, in turn, is obligated to remit such principal and interest to the DTC participants for subsequent disbursement to the Beneficial Owners of the Bonds, as further described herein in Appendix E Book-Entry System. Optional Redemption Tax-Exempt Bonds 2010A Bonds. The 2010A Bonds are not subject to optional, extraordinary optional, or mandatory redemption prior to maturity. 2010E Bonds. The County reserves the right to redeem outstanding 2010E Bonds maturing on December 1, 2021, in whole or in part at any time on or after December 1, 2020, at the price of par plus accrued interest, if any, to the date fixed for redemption. Optional Redemption Taxable Bonds The County reserves the right and option to redeem the Taxable Bonds of each series prior to their stated maturity dates, as a whole or in part, on any Business Day, at the Make-Whole Redemption Price determined by the Designated Investment Banker. Make-Whole Redemption Price means, with respect to any redemption date for a particular Taxable Bond, the greater of (i) the issue price of such Taxable Bond (as set forth on pages i and ii of this Official Statement), but not less than 100% of the principal amount of such Taxable Bond, or (ii) the sum of the present values of 3

14 the remaining scheduled payments of principal of and interest on such Taxable Bond (taking into account any mandatory sinking fund redemptions), not including any portion of those payments of interest accrued and unpaid as of such date, discounted on a semi-annual basis to such date, assuming a 360-day year consisting of twelve 30-day months, at the Treasury Rate plus 25 basis points, plus accrued and unpaid interest on such Taxable Bond on such date. Treasury Rate means, with respect to any redemption date for a particular Taxable Bond, the rate per annum, expressed as a percentage of the principal amount, equal to the semi-annual equivalent yield to maturity or interpolated maturity of the Comparable Treasury Issue, assuming that the Comparable Treasury Issue is purchased on such date for a price equal to the Comparable Treasury Price, as calculated by the Designated Investment Banker. Comparable Treasury Issue means, with respect to any redemption date for a particular Taxable Bond, the United States Treasury security or securities selected by the Designated Investment Banker that has an actual or interpolated maturity comparable to the remaining average life of such Taxable Bond, and that would be utilized in accordance with customary financial practice in pricing new issues of debt securities of comparable maturity to the remaining average life of such Taxable Bond. Comparable Treasury Price means, with respect to any redemption date for a particular Taxable Bond: (i) (ii) if the Designated Investment Banker receives at least five Reference Treasury Dealer Quotations, the average of such quotations for such date, after excluding the highest and lowest such Reference Treasury Dealer Quotation, or if the Designated Investment Banker obtains fewer than five Reference Treasury Dealer Quotations, the average of all such quotations. Designated Investment Banker means one of the Reference Treasury Dealers appointed by the County. Reference Treasury Dealer means each of five firms, specified by the County from time to time, that are primary United States Government securities dealers in the City of New York (each, a Primary Treasury Dealer ), which may include one or more of the Underwriters; provided, that if any of them ceases to be a Primary Treasury Dealer, the County will substitute another Primary Treasury Dealer. Reference Treasury Dealer Quotations means, with respect to each Reference Treasury Dealer and any redemption date for a particular Taxable Bond, the average, as determined by the Designated Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the County and the Bond Registrar by such Reference Treasury Dealer at 3:30 p.m., New York City time, on a date that is no earlier than four days prior to the date the redemption notice is mailed. Extraordinary Optional Redemption Taxable Bonds The Taxable Bonds of each series are subject to extraordinary optional redemption at any time prior to their stated maturity at the option of the County, in whole or in part, upon the occurrence of an Extraordinary Event, at a redemption price (the Extraordinary Optional Redemption Price ) equal to the greater of (i) 100% of the principal amount of the Taxable Bonds of such series to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal of and interest on the Taxable Bonds of such series to be redeemed (taking into account any mandatory sinking fund redemptions), not including any portion of those payments of interest accrued and unpaid as of the date on which the Taxable Bonds of such series are to be redeemed, discounted on a semi-annual basis to such date, assuming a 360-day year consisting of twelve 30- day months, at the Treasury Rate plus 100 basis points, plus accrued and unpaid interest on such Taxable Bonds on such date. An Extraordinary Event will have occurred if (i) Section 54AA, Section 1400U-2 or Section 6431 of the Code is modified or amended in a manner pursuant to which the Refundable Credit payment due to the County from the United States Treasury with respect to the 2010B Bonds, the 2010C Bonds, or the 2010D Bonds is reduced or eliminated, or (ii) guidance is published by the Internal Revenue Service or the United 4

15 States Treasury with respect to such Code sections that places one or more substantive new conditions on the receipt by the County of such Refundable Credit payments and such condition(s) are unacceptable to the County. Extraordinary Mandatory Redemption 2010E Bonds The outstanding 2010E Bonds are subject to extraordinary mandatory redemption prior to maturity at a redemption price of par plus accrued interest to the date fixed for redemption on (i) April 1, 2021, if the first automatic extension of the Data Center lease (through April 30, 2026, as provided therein) does not become effective for any reason; and (ii) on April 1, 2026, if the second automatic extension of the Data Center lease (through April 30, 2031, as provided therein) does not become effective for any reason. Mandatory Redemption 2010B Term Bonds. If not previously redeemed as described above or purchased under the provisions as described below, the 2010B Term Bonds maturing on December 1, 2030 (the 2010B Term Bonds ), will be called for redemption at a price of par, plus accrued interest to the date fixed for redemption, on December 1 in the years and amounts as follows: 2010B TERM BONDS Years Amounts 2026 $ 1,380, ,435, ,490, ,550, * 1,610,000 * Maturity. 2010C Term Bonds. If not previously redeemed as described above or purchased under the provisions as described below, the 2010C Term Bonds maturing on December 1, 2030 (the 2010C Term Bonds ), will be called for redemption at a price of par, plus accrued interest to the date fixed for redemption, on December 1 in the years and amounts as follows: 2010C TERM BONDS Years Amounts 2026 $ 2,450, ,530, ,615, ,700, * 2,790,000 * Maturity. 2010E Term Bonds. If not previously redeemed as described above or purchased under the provisions as described below, the 2010E Term Bonds maturing on December 1, 2030 (the 2010E Term Bonds ), will be called for redemption at a price of par, plus accrued interest to the date fixed for redemption, on December 1 in the years and amounts as follows: 2010E TERM BONDS Years Amounts 2026 $ 595, , , , * 710,000 * Maturity. 5

16 If the County redeems Term Bonds of any series under the optional redemption provisions described above or purchases or defeases the Term Bonds of any series, the Term Bonds of such series and maturity so redeemed, purchased or defeased (irrespective of their actual redemption or purchase prices) will be credited at the par amount thereof against one or more scheduled mandatory redemption amounts for those Term Bonds in the manner described below regarding the selection of Bonds of such series for redemption, as applicable. Selection of Bonds and Notice of Redemption Selection of Bonds for Redemption 2010E Bonds. If fewer than all of the 2010E Bonds are to be redeemed prior to maturity, the County will select the maturity or maturities to be redeemed. If fewer than all of the 2010E Bonds of a single maturity are to be redeemed prior to maturity, then: (i) if the 2010E Bonds are in book-entry form at the time of such redemption, DTC is required to select the specific 2010E Bonds in accordance with the Letter of Representations; and (ii) if the 2010E Bonds are not in book-entry form at the time of such redemption, on each redemption date, the Bond Registrar is required to select the specific 2010E Bonds for redemption by lot or in such manner as the Bond Registrar in its discretion may deem to be fair and appropriate. Selection of Bonds for Redemption Taxable Bonds. If fewer than all of a series of Taxable Bonds are to be redeemed prior to maturity, the County will select the maturity or maturities to be redeemed. If, at the time notice of redemption is given: (i) the Taxable Bonds of such series are in book-entry form and DTC operational arrangements allow for redemption on a pro rata pass-through distribution of principal basis, then the Bond Registrar, upon written instruction from the County, will select the Taxable Bonds of such series to be redeemed on a pro rata pass-through distribution of principal basis in accordance with DTC procedures; (ii) the Taxable Bonds of such series are in book-entry form and DTC operational arrangements do not allow for redemption on a pro rata pass-through distribution of principal basis, then the Taxable Bonds of such series are to be selected for redemption, in accordance with DTC procedures, by lot; and (iii) the Taxable Bonds of such series are not in book-entry form, then the Bond Registrar is required to select the Taxable Bonds of such series for redemption on a pro rata basis. It is the County s intent that redemption allocations of Taxable Bonds of a series made by DTC be made on the pro rata pass-through distribution of principal basis described in (i) above. However, none of the County, the Underwriters or the Bond Registrar can provide any assurance that DTC, DTC s direct and indirect participants, or any other intermediary will allocate the redemption of the Taxable Bonds on such basis. See Appendix E Book-Entry System. Notice of Redemption. Notice of any intended redemption of Bonds of any series subject to redemption will be given not less than 20 nor more than 60 days prior to the date fixed for redemption by first-class mail, postage prepaid, to the registered owner of each Bond to be redeemed at the address for such registered owner appearing on the Bond Register at the time the Bond Registrar prepares the notice. The requirements of this section will be deemed to have been fulfilled when notice is mailed, whether or not it actually is received by the owner of any such Bond to be redeemed. As long as the Bonds of a series are held in book-entry form, redemption notices with respect to the Bonds of such series will be given in accordance with procedures established by DTC. See Book-Entry System and Appendix E. In the case of an optional redemption, the redemption notice may state that the County retains the right to rescind the redemption notice and the related optional redemption by giving a notice of rescission to the affected registered owners at any time prior to the scheduled optional redemption date. Any notice of such optional redemption that is so rescinded will be of no effect, and the specific Bonds for which the notice of optional redemption has been rescinded will remain outstanding. Effect of Redemption. Interest on Bonds called for redemption will cease to accrue on the date fixed for redemption unless such Bonds called are not redeemed when presented pursuant to the call. 6

17 Book-Entry System Book-Entry Bonds. The Bonds initially issued will be held in fully immobilized form by DTC acting as depository. Bonds will be registered initially in the name of Cede & Co., as nominee of DTC, with one Bond maturing on each of the maturity dates for the Bonds in a denomination corresponding to the total principal designated to mature on such date. Neither the County nor the Bond Registrar has any responsibility or obligation to DTC participants or the persons for whom they act as nominees with respect to the Bonds in respect of the accuracy of any records maintained by DTC or any DTC participant, the payment by DTC or any DTC participant of any amount in respect of the principal of or interest on the Bonds, any notice which is permitted or required to be given to registered owners under the related Bond Ordinance (except such notices as are required to be given by the County to the Bond Registrar or to DTC), or any consent given or other action taken by DTC as the registered owner. See Appendix E for additional information. The County makes no representation as to the accuracy or completeness of information in Appendix E provided by DTC. Purchasers of the Bonds should confirm its contents with DTC or its participants. Termination of Book-Entry System. If DTC or its successor (or substitute depository or its successor) resigns from its functions as depository, and no substitute depository can be obtained, or if the County determines that it is in the best interest of the Beneficial Owners of any of the Bonds that they be able to obtain such Bonds in the form of bond certificates, the ownership of Bonds may then be transferred to any person or entity as provided in the related Bond Ordinance, and the Bonds will no longer be held in fully immobilized form. In that event, interest on the Bonds will be paid by check or draft mailed to the registered owners at the addresses for such registered owners appearing on the Bond Register on the 15th day of the month preceding the interest payment date. If so requested in writing by the registered owner of at least $1,000,000 principal amount of Bonds, interest will be paid by wire transfer on the interest payment date to an account with a bank located in the United States. Principal of the Bonds will be payable upon presentation and surrender of such Bonds by the registered owners at the principal office of the Bond Registrar. Open Market Purchase The County has reserved the right to purchase any or all of the Bonds in the open market at any time at any price. Defeasance of Bonds If money and/or noncallable Government Obligations maturing at such time or times and bearing interest in amounts sufficient to redeem and retire, refund or defease part or all of the Bonds in accordance with their terms are set aside in a special account to effect such redemption and retirement, and such money and the principal of and interest on such Government Obligations are irrevocably set aside and pledged for such purpose, then such Bonds will cease to be entitled to any lien, benefit or security of the related Bond Ordinance except the right to receive the money so set aside and pledged, and such Bonds will be deemed to be not outstanding under such related Bond Ordinance. USE OF PROCEEDS Purpose The proceeds from the sale of the Bonds will be used to provide long-term financing for the capital costs of the following projects, and to pay the costs of issuing the Bonds: (i) the construction and equipping of a new operations building for the County s Metro Transit Division s combined Atlantic and Central Operating Bases (the Atlantic/Central Base Operations Building Project ); (ii) the design, acquisition and installation of security video cameras and recording equipment in the County Department of Adult and Juvenile Detention s facilities (the Camera Recording System Project ); 7

18 (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) projects for the County s Facilities Management Division to provide infrastructure tenant improvements, fiber optic installation and move planning costs associated with the enterprise data center relocation to the Sabey Facility in Tukwila (the Data Center Relocation and Contingency Projects ); projects for the County s Office of Information Resource Management to provide infrastructure tenant improvements, fiber optic installation and move planning costs associated with the enterprise data center relocation to the Sabey Facility in Tukwila (the the Data Center Specifications Project ); the replacement of the existing HVAC system and uninsulated roof at the Earlington Building with high efficiency HVAC equipment and controls and an R30-insulated roof (the Earlington HVAC and Roof Energy Project ); the replacement of the County Sheriff s Office Incident Reporting and Investigation System ( IRIS ) and The Evidence Support System ( TESS ) hardware and software systems (the IRIS/TESS Replacement Project ); the implementation of the consolidated information technology organization for County Executive branch departments as described in the Executive Recommendation on IT Reorganization Report, March 2006, the Business Case for IT Reorganization, June 2006, and the IT Reorganization Transition Work Plan, June 2006 (the IT Reorganization Project ); the periodic replacement of major building systems and components at County facilities maintained by its Facilities Management Division (the Major Maintenance Reserve Fund Projects ); the implementation of a series of facility energy improvements, including, but not limited to, local boilers in the County courthouse and correctional facility, pursuant to a contract with McKinstry Essention (the McKinstry Essention Contract Energy Efficiencies Project ); the design and construction of the first phase of the County Road Services Division s NE Novelty Hill Road project, including improvements to NE Union Hill Road in the vicinity of 196th Avenue NE, 196th/195th Avenue NE from NE Union Hill Road to NE Novelty Hill Road and NE Novelty Hill Road at 196th Avenue NE, replacement of the Evans Creek Bridge, construction of stormwater facilities and stream and wildlife crossings, and development of mitigation sites (the NE Novelty Hill Road Project ); and the replacement of the HVAC system for the County Metro Transit Division s North Operating Base (the North Base HVAC Replacement Project ). Sources and Uses of Funds The proceeds of the Bonds will be applied as shown on the following page. The proceeds of the 2010A Bonds are intended to be used for the Atlantic/Central Base Operations Building Project, the Camera Recording System Project, the Data Center Specifications Project, the IRIS/TESS Replacement Project, the IT Reorganization Project, the Major Maintenance Reserve Fund Projects, the McKinstry Essention Contract Energy Efficiencies Project, the Northeast Novelty Hill Road Project, and the North Base HVAC Replacement Project. The proceeds of the 2010B Bonds are intended to be used for the Atlantic/Central Base Operations Building Project, the Camera Recording System Project, the Data Center Specifications Project, the IT Reorganization Project, the McKinstry Essention Contract Energy Efficiencies Project, the Northeast Novelty Hill Road Project, and the North Base HVAC Replacement Project. The proceeds of the 2010C Bonds will be used only for the NE Novelty Hill Road Project, the proceeds of the 2010D Bonds will be used only for the Earlington HVAC and Roof Energy Project and the North Base HVAC Replacement Project, and the proceeds of the 2010E Bonds will be used only for the Data Center Relocation and Contingency Projects. 8

19 SOURCES OF FUNDS SOURCES AND USES OF FUNDS (1) Par Amount of Bonds $ 25,825,000 $ 45,035,000 $ 23,165,000 $ 5,825,000 $ 10,025,000 $ 109,875,000 Net Original Issue Premium 2,264, ,660 2,486,440 Total Sources of Funds $ 28,089,779 $ 45,035,000 $ 23,165,000 $ 5,825,000 $ 10,246,660 $ 112,361,440 USES OF FUNDS 2010A Bonds 2010B Bonds 2010C Bonds 2010D Bonds 2010E Bonds Deposit to Project Fund $ 27,950,947 $ 44,717,096 $ 23,000,490 $ 5,777,063 $ 10,181,215 $ 111,626,811 Costs of Issuance (2) 138, , ,510 47,937 65, ,629 Total Uses of Funds $ 28,089,779 $ 45,035,000 $ 23,165,000 $ 5,825,000 $ 10,246,660 $ 112,361,440 (1) Totals may not add due to rounding. (2) Includes rating agency fees, financial advisory fees, Underwriters discount, legal fees, printing costs, and other costs of issuing the Bonds. Total SECURITY AND SOURCES OF PAYMENT FOR THE BONDS The Bonds are general obligations of the County. The County has irrevocably covenanted that each year, for as long as any of the Bonds are outstanding and unpaid, it will include in its budget and levy an ad valorem tax within the constitutional and statutory tax limitations provided by law without a vote of the people upon all property within the County subject to taxation in an amount that will be sufficient, together with all other revenues, taxes and money of the County legally available for such purposes, to pay the principal of and interest on the Bonds as the same become due. The County has irrevocably pledged its full faith, credit and resources for the annual levy and collection of such taxes and for the prompt payment of the principal of and interest on the Bonds as the same shall become due. DEBT INFORMATION Debt Repayment Record The County has met promptly all principal and interest payments on its outstanding bonds and notes. The County never has defaulted on a payment of principal or interest on any of its bonds and notes. Furthermore, the County never has issued refunding bonds for the purpose of avoiding an impending default. Debt Limitation The statutory limitation (RCW ) on non-voted general obligation debt of counties is 1.5% of the assessed value of all taxable property within the county at the time of issuance. Voter approval is required to exceed this limit. Any election to authorize such debt must have a voter turnout of at least 40% of those who voted in the last State general election, and of those voting, 60% must vote in the affirmative. The combination of voted and non-voted general obligation debt for county purposes must not exceed 2.5% of the assessed value of all taxable property within a county at the time of issuance. In 1994, the County assumed the rights, powers, functions, and obligations of the Municipality of Metropolitan Seattle, including the development and operation of a regional transit system and the regional collection and treatment of sewage. A county that has assumed a metropolitan municipality, such as the County, may issue non-voted debt for its authorized metropolitan functions in an amount up to 0.75% of the assessed value of taxable property within the metropolitan county. The statutory provisions applicable to a county that has assumed a metropolitan municipality also permit additional voted debt for its authorized metropolitan functions, up to an additional 2.5% of the assessed value of taxable property within the county. 9

20 Notwithstanding the higher aggregate statutory limitations for a county that has assumed a metropolitan municipality, the State constitution limits non-voted general obligation debt of a county to 1.5% of the assessed value of taxable property within the county, and limits all general obligation debt of the county voted and non-voted debt together to 5% of the assessed value of taxable property within the county. Debt Capacity and Debt Service Summary The assessed value of all property in the County for the 2010 tax year is $341,971,517,465, resulting in a voted and non-voted total general obligation debt capacity of $8,549,287,937 (2.5%) for County purposes and an additional $8,549,287,937 (2.5%) for metropolitan functions. The non-voted general obligation debt capacity within the County s total 2.5% limitation is $5,129,572,762 (1.5%), of which a maximum of $2,564,786,381 (0.75%) may be incurred for metropolitan functions. The following table shows a computation of the County s debt capacity for voted and non-voted general obligation debt for County purposes and for metropolitan functions. The table reflects general obligation debt of the County as of December 31, 2009, adjusted for subsequent County debt issuances and the issuance of the Bonds, and is followed by a table that summarizes the debt service requirements of the County. 10

21 COMPUTATION OF STATUTORY LEGAL DEBT MARGIN (As of December 31, 2009, adjusted for subsequent County debt issuances and the issuance of the Bonds) 2009 Assessed Value (2010 Tax Year) $ 341,971,517,465 Limited Tax General Obligation Debt Capacity for Metropolitan Functions 3/4 of 1% of Assessed Value $ 2,564,786,381 Outstanding Limited Sales Tax General Obligation Bonds 134,230,000 Outstanding Limited Tax General Obligation Bonds (Payable from Sewer Revenues) 833,045,000 General Obligation Long-Term Liabilities for Metropolitan Functions 66,058,804 Capital Leases/Installment Purchase Contracts for Metropolitan Functions - Less: Amount Legally Available for Payment of all Limited Tax General Obligation Indebtedness for Metropolitan Functions (24,436,194) Total Net Limited Tax General Obligation Debt for Metropolitan Functions $ 1,008,897,610 Remaining Capacity: LTGO Debt For Metropolitan Functions $ 1,555,888,771 Limited Tax General Obligation Debt Capacity for County Purposes and Metropolitan Functions 1 1/2 % of Assessed Value $ 5,129,572,762 Net Limited Tax General Obligation Debt for Metropolitan Functions (from above) 1,008,897,610 Outstanding Limited Tax General Obligation Bonds for County Purposes 571,006,000 Outstanding Limited Tax General Obligation Bond Anticipation Notes for County Purposes* 84,290,000 The Bonds 109,875,000 General Obligation Lease Revenue Bonds for County Purposes 402,455,000 General Obligation Long-Term Liabilities for County Purposes 91,205,302 Capital Leases/Installment Purchase Contracts for County Purposes - Less: Amount Legally Available for Payment of All Limited Tax General Obligation Indebtedness for County Purposes (42,715,695) Net Limited Tax General Obligation Debt for County Purposes $ 1,216,115,607 Total Net Limited Tax General Obligation Debt for County Purposes and Metropolitan Functions $ 2,225,013,217 Remaining Capacity: LTGO Debt for County Purposes and Metropolitan Functions $ 2,904,559,545 Total General Obligation Debt Capacity for Metropolitan Functions 2 1/2 % of Assessed Value $ 8,549,287,937 Outstanding Unlimited Tax General Obligation Debt for Metropolitan Functions - Less: Amount Legally Available for Payment of all Unlimited Tax General Obligation Indebtedness for Metropolitan Functions - Net Unlimited Tax General Obligation Debt for Metropolitan Functions - Net Limited Tax General Obligation Debt for Metropolitan Functions (from above) 1,008,897,610 Total Net General Obligation Debt for Metropolitan Functions 1,008,897,610 Remaining Capacity: General Obligation Debt for Metropolitan Functions $ 7,540,390,327 Total General Obligation Debt Capacity for County Purposes 2 1/2 % of Assessed Value $ 8,549,287,937 Outstanding Unlimited Tax General Obligation Debt for County Purposes 203,905,000 Less: Amount Legally Available for Payment of all Unlimited Tax General Obligation Indebtedness for County Purposes (10,261,674) Net Unlimited Tax General Obligation Debt for County Purposes $ 193,643,326 Net Limited Tax General Obligation Debt for County Purposes (from above) 1,216,115,607 Total Net General Obligation Debt for County Purposes $ 1,409,758,933 Remaining Capacity: General Obligation Debt for County Purposes $ 7,139,529,004 * Includes the Limited Tax General Obligation Bond Anticipation Notes, 2010, Series B and Series C (Taxable), closing on December 1, 2010, and due on December 1, Source: King County Finance and Business Operations Division Financial Management Section 11