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For purposes of this Undertaking, the term "financial obligation" shall mean a debt <br />obligation; derivative instrument entered into in connection with, or pledged as security or a <br />source of payment for, an existing or planned debt obligation; or a guarantee of either a debt <br />obligation or a derivative instrument entered into in connection with, or pledged as security <br />or a source of payment for, an existing or planned debt obligation. The term "financial <br />obligation" does not include municipal securities as to which a final official statement has <br />been provided to the MSRB consistent with the Rule. <br />Timely notice of a failure by the City to provide required annual financial <br />information on or before the date specified in paragraph (b). <br />(b) Type of Annual Financial Information Undertaken to be Provided. The annual <br />financial information that the City undertakes to provide in paragraph (a): <br />(i) Shall consist of (1) annual financial statements, which statements may or may <br />not be audited, showing ending fund balances, prepared in accordance with regulations <br />prescribed by the Washington State Auditor pursuant to RCW 43.09.200 (or any successor <br />statutes) and generally of the type included in the Official Statement and described as <br />follows: [to be inserted based on the Official Statement]; (2) the principal amount of Parity <br />Bonds then outstanding; and (3) number of Water & Sewer System customers. <br />(ii) Shall be provided not later than the last day of the ninth month after the end <br />of each fiscal year of the City (currently, a fiscal year ending December 31), as such fiscal <br />year may be changed as required or permitted by State law, commencing with the City's <br />fiscal year ending December 31, 2024; and <br />(iii) May be provided in a single or multiple documents, and may be incorporated <br />by specific reference to documents available to the public on the Internet website of the <br />MSRB or filed with the SEC. <br />(c) Amendment of Undertaking. This Undertaking is subject to amendment after the <br />primary offering of the Bonds without the consent of any holder of any Bond, or of any broker, <br />dealer, municipal securities dealer, participating underwriter, Rating Agency or the MSRB; under the <br />circumstances and in the manner permitted by Rule 15c2-12. The City will give notice to the MSRB <br />of the substance (or provide a copy) of any amendment to the Undertaking and a brief statement of <br />the reasons for the amendment. If the amendment changes the type of annual financial information to <br />be provided, the annual financial information containing the amended financial information will <br />include a narrative explanation of the effect of that change on the type of information to be provided. <br />(d) Beneficiaries. This Undertaking shall inure to the benefit of the City and the holder of <br />each Bond and shall not inure to the benefit of or create any rights in any other person. <br />(e) Termination of Undertaking. The City's obligations under this Undertaking shall <br />terminate upon the legal defeasance of all of the Bonds. In addition, the City's obligations under this <br />Undertaking shall terminate if the provisions of Rule 15c2-12 that require the City to comply with <br />this Undertaking become legally inapplicable in respect of the Bonds for any reason, as confirmed by <br />an opinion of Bond Counsel delivered to the City, and the City provides timely notice of such <br />termination to the MSRB. <br />(f) Remedy for Failure to Comply with Undertaking. As soon as practicable after the <br />City learns of any material failure to comply with this Undertaking, the City will proceed with due <br />diligence to cause such noncompliance to be corrected. No failure by the City or other obligated <br />person to comply with this Undertaking shall constitute a default in respect of the Bonds. The sole <br />