EVERETT SCHOOL DISTRICT NO.2

SNOHOMISH COUNTY, WASHINGTON

UNLIMITED TAX GENERAL

OBLIGATION REFUNDING BONDS, 2008

RESOLUTION NO.

922

A Resolution

of the Board of Directors of Everett School District No.2,

Snohomish County, Washington, providing for the issuance and sale of

general obligation refunding bonds of the District in the aggregate

principal amount

of $9,545,000 for the purpose of providing the funds

necessary to refund certain outstanding unlimited tax general obligation

bonds

of the District; providing for and authorizing the purchase of certain

obligations with the proceeds

of the sale of such refunding bonds and for

the use and application

of the money to be derived from such investments;

providing for the redemption

of the outstanding bonds to be refunded;

providing the date, form, terms and maturities

of said refunding bonds and

for unlimited tax levies to pay the principal thereof and interest thereon;

and approving the sale

of such bonds.

APPROVED ON SEPTEMBER 23,2008

PREPARED BY:

K&L PRESTON GATES ELLIS LLP

Seattle, Washington

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EVERETT SCHOOL DISTRICT NO.2

SNOHOMISH COUNTY, WASHINGTON

RESOLUTION NO. 922

TABLE

OF CONTENTS*

Page

Recitals ......................................................................................................................................... 1

Section

1.

Definitions ............................................................................................................ 2

Section

2.

Authorization of Bonds ........................................................................................ 7

Section

3.

Registration, Payment and Transfer ..................................................................... 8

Section

4.

Redemption and Purchase of Bonds ................................................................... 13

Section 5.

Form of Bonds .................................................................................................... 14

Section 6.

Execution of Bonds ............................................................................................ 16

Section 7.

Lost or Destroyed Bonds .................................................................................... 17

Section 8.

Refunding Plan; Application of Bond Proceeds ................................................. 17

Section 9.

Pledge of Taxes and Credit ................................................................................. 19

Section 10.

Defeasance .......................................................................................................... 20

Section 11.

Tax Covenant. ..................................................................................................... 20

Section 12.

Sale of the Bonds ................................................................................................ 22

Section

13.

Official Statement ............................................................................................... 22

Section

14.

Undertaking to Provide Ongoing Disclosure ...................................................... 23

Section 15.

Credit Enhancement Program .............................................................................. 27

Section 16.

General Authorization and Ratification .............................................................. 27

Section

17.

Severability ......................................................................................................... 28

Section

18.

Effective Date ..................................................................................................... 28

Exhibit A -

Fonn of Escrciw Deposit Agreement

* This Table

of Contents and the cover page are not a part of the following resolution and are

included only for the convenience

of the reader.

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RESOLUTION NO. 922

A Resolution

of the Board of Directors of Everett School District No.2,

Snohomish County, Washington, providing for the issuance and sale of

general obligation refunding bonds of the District in the aggregate

principal amount

of $9,545,000, for the purpose of providing the funds

necessary to refund certain outstanding unlimited tax general obligation

bonds

of the District; providing for and authorizing the purchase of certain

obligations with the proceeds

of the sale of such refunding bonds and for

the use and application

of the money to be derived from such investments;

providing for the redemption

of the outstanding bonds to be refunded;

providing the date, form, terms and maturities

of said refunding bonds and

for unlimited tax levies to pay the principal thereof and interest thereon;

and approving the sale

of such bonds.

WHEREAS, Everett

School District No.2, Snohomish County, Washington (the

"District") has outstanding its Unlimited Tax General Obligation Refunding Bonds, Series

1998A issued as of February

1,

1998 pursuant to Resolution No. 638 adopted by the Board of

Directors of the District (the "Board") on February

11,

1998 (the "1998A Bond Resolution"),

which remain outstanding as follows:

Maturity Dates

(December

1)

2008

2009

2010

2011

2012

(the "1998A Bonds"); and

Principal Amounts

$

3,310,000

4,445,000

5,095,000

8,900,000

9,545,000

Interest Rates

5.00%

5.50

5.50

5.50

4.75

WHEREAS, the 1998A Bond Resolution provides that the District may call the 1998A

Bonds maturing on December

1, 2012 (the "Refunded Bonds"), for redemption on and after

December

1, 2008, in whole or in part on any date, at the price of par plus accrued interest, if

any, to the date of redemption; and

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WHEREAS, after due consideration it appears to this Board that the Refunded Bonds

may be defeased and refunded by the proceeds

of the bonds authorized herein (the "Bonds") at a

substantial savings to the District and its taxpayers; and

WHEREAS, in order to effect such refunding in the most economical manner it is

deemed necessary and advisable that the proceeds

of the sale of the Bonds and, if necessary,

other money available and required for refunding purposes be invested in obligations maturing in

such amounts and at such times

as are required to pay the interest on the Refunded Bonds as the

same become due, and to redeem and retire the Refunded Bonds on the first date on which the

Refunded Bonds may be called for redemption prior to their respective scheduled maturities; and

WHEREAS, the District has received an offer to purchase the Bonds from D.A. Davidson

&

Co., Seattle, Washington, which offer this Board finds acceptable;

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF

EVERETT SCHOOL DISTRICT NO.2, SNOHOMISH COUNTY, WASHINGTON, as

follows:

Section

1.

Definitions. As used in this resolution, the following words shall have the

following meanings:

Acquired Obligations

mean the Government Obligations acquired by the District under

the terms

of this resolution and the Escrow Agreement to effect the defeasance and refunding of

the Refunded Bonds.

Beneficial Owner

means the beneficial owner of all or a portion of a Bond while such

Bond is in fully immobilized form.

Board of Directors

or

Board

means the duly constituted Board of Directors as the

general legislative authority

of the District.

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Bond Register

means the registration records for the Bonds maintained by the Bond

Registrar.

Bond Registrar

means the fiscal agency of the state of Washington, whose duties include

registering and authenticating the Bonds, maintaining the Bond Register, transferring ownership

of the Bonds and paying the principal of and interest on the Bonds.

Bonds

mean the $9,545,000 principal amount of Everett School District No.2,

Snohomish County, Washington, Unlimited Tax General Obligation Refunding Bonds, 2008

issued pursuant to this resolution.

Bond Year

means each one-year period that ends on the date selected by the District.

The first and last Bond Years may be short periods. If no day is selected by the District before

the earlier of the final maturity date of the Bonds or the date that is five years after the date of

issuance of the Bonds, Bond Years end on each anniversary of the date of issue and on the final

maturity date

of the Bonds.

Code

means the Internal Revenue Code of 1986, as amended, together with

corresponding and applicable final, temporary or proposed regulations and revenue rulings

issued or amended with respect thereto by the United States Treasury Department of the Internal

Revenue Service, to the extent applicable to the Bonds.

Commission

means the Securities and Exchange Commission.

Credit Enhancement Program

means the program for enl1ancing the credit of

voter-approved school district general obligation bonds established by Senate Joint Resolution

8206

of the 1999 State Legislature, codified as RCW Ch. 39.98.

Debt Service Fund

means the special fund of the District of that name created in the

office

of the Treasurer pursuant to RCW 28A.320.330.

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Designated Representative

means the Interim Superintendent or the Associate

Superintendent, Finance and Operations

of the District.

District

means Everett School District No.2, Snohomish County, Washington, a

municipal corporation duly organized and existing under and by virtue

of the laws of the state of

Washington.

DTC

means The Depository Trust Company of New York, New York, as depository for

the Bonds, or any successor depository for the Bonds.

Escrow Agent

means U.S. Bank National Association, Seattle, Washington.

Escrow Agreement

means the Escrow Deposit Agreement to be dated as of the date of

closing of the Bonds and substantially in the form attached as Exhibit A hereto.

Government Obligations

means those obligations now or hereafter defined as such in

chapter 39.53 RCW, as such chapter may be hereafter amended or restated.

Letter of Representations

means the Blanket Letter of Representations from the District

to DTC.

MSRB

means the Municipal Securities Rulemaking Board or any successors to its

functions.

Net Proceeds,

when used with reference to the Bonds, means the principal amount of the

Bonds, plus accrued interest and original issue premium,

if any, and less original issue discount,

if any.

1998A Bonds

mean the Unlimited Tax General Obligation Refunding Bonds,

Series 1998A of the District, issued as of February 1, 1998, pursuant to the 1998A Bond

Resolution and presently outstanding in the principal amount

of $31,295,000.

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1998A Bond Resolution

means Resolution No.638 adopted by the Board on

February 11, 1998, authorizing the issuance

of the 1998A Bonds.

NRMSIR

means a nationally recognized municipal securities information repository.

Private Person

means any natural person engaged in a trade or business or any trust,

estate, partnership, association, company or corporation.

Private Person Use

means the use of property in a trade or business by a Private Person

if such use is other than as a member of the general public. Private Person Use includes

ownership

of the property by the Private Person as well as other arrangements that transfer to the

Private Person the actual or beneficial use of the property (such as a lease, management or

incentive payment contract or other special arrangement) in such a manner as to set the

Private

Person

apart from the general public. Use of property as a member ofthe general public includes

attendance by the

Private Person at municipal meetings or business rental of property to the

Private Person on a day-to-day basis if the rental paid by such Private Person is the same as the

rental paid by any

Private Person who desires to rent the property. Use of property by nonprofit

community groups or community recreational groups is not treated as

Private Person Use if such

use is incidental to the governmental uses

of property, the property is made available for such

use by all such community groups on an equal basis and such community groups are charged

only a

de minimis

fee to cover custodial expenses.

Purchase Contract

means the bond purchase contract between the District and the

Underwriter provided for in

Section 12 of this resolution.

Refunded Bonds

means the $9,545,000 principal amount of the outstanding 1998A

Bonds maturing on December

1, 2012.

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Registered Owner

means the person in whose name a Bond is registered on the Bond

Register. For

so long as District utilizes the book-entry system for the Bonds, DTC shall be

deemed to be the Registered

Owner.

Rule

means the Commission's Rule 15c2-12 under the Securities Exchange Act of 1934,

as amended from time to time.

SID

means a state information depository for the state of Washington (if one is created).

State Treasurer

means the Treasurer of the state of Washington, or any successor to the

functions thereof.

Treasurer

means the Snohomish County Treasurer, as ex officio treasurer of the District,

or any successor to the functions

of the Treasurer.

Underwriter

means D.A. Davidson

&

Co., Seattle, Washington.

Rules

of Interpretation. In this resolution, unless the context otherwise requires:

(a)

The terms

"hereby," "hereof," "hereto," "herein, "hereunder" and any similar

terms, as used in this resolution, refer to this resolution

as a whole and not to any particular

article, section, subdivision or clause hereof, and the term

"hereafter" shall mean after, and the

term

"heretofore" shall mean before, the date of this resolution;

(b)

Words

of the masculine gender shall mean and include correlative words of the

feminine and neuter genders and words importing the singular number shall mean and include

the plural number and vice versa;

(c)

Words importing persons shall include firms, associations, partnerships (including

limited partnerships), trusts, corporations and other legal entities, including public bodies,

as well

as natural persons;

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(d)

Any headings preceding the text of the several articles and sections of this

resolution, and any table

of contents or marginal notes appended to copies hereof, shall be solely

for convenience

of reference and shall not constitute a part of this resolution, nor shall they affect

its meaning, construction or effect; and

(e)

All references herein to

"articles," "sections" and other subdivisions or clauses are

to the corresponding articles, sections, subdivisions or clauses hereof.

Section

2.

Authorization of Bonds. For the purpose of the refunding of the Refunded

Bonds and thereby effecting a substantial savings to the District and its taxpayers, the District

shall now issue and sell unlimited tax general obligation refunding bonds in the aggregate

principal amount

of $9,545,000 (the "Bonds"). The Bonds shall be designated as the Everett

School District No.2, Snohomish County, Washington Unlimited Tax General Obligation

Refunding Bonds,

2008. The Bonds shall be dated as of the date of their initial delivery to the

Underwriter, shall be fully registered as to both principal and interest, shall be in the

denomination

of $5,000 each or any integral multiple thereof, provided that no Bond shall

represent more than one maturity, shall be numbered separately in such manner and with any

additional designation

as the Bond Registrar deems necessary for purposes of identification and

shall bear interest from their date payable on the first days

of each December and June,

commencing on December

1, 2008. The Bonds shall mature in the following years and in the

following principal amounts and shall bear interest at the following per annum rates:

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Maturity Years

(December

1)

2008

2009

2010

2011

2012

2012

Principal

Amounts

$

170,000

85,000

85,000

90,000

1,000,000

8,115,000

Section

3.

Registration, Payment and Transfer.

Interest

Rates

3.00%

3.00

3.00

3.00

3.50

4.00

(a)

Bond Registrar/Bond Register.

The District hereby requests that the Treasurer

specify and adopt the system

of registration and transfer for the Bonds approved by the

Washington State Finance Committee from time to time through the appointment

of a state fiscal

agency. The District shall cause a bond register to be maintained by the Bond Registrar.

So long

as

any Bonds remain outstanding, the Bond Registrar shall make all necessary provisions to

pennit the exchange or registration

of transfer of Bonds at its principal corporate trust office.

The Bond Registrar may be removed at any time at the option

of the Treasurer upon prior notice

to the Bond Registrar, DTC, each entity entitled to receive notice pursuant to Section

14 of this

resolution, and a successor Bond Registrar appointed by the Treasurer. No resignation or

removal

of the Bond Registrar shall be effective until a successor shall have been appointed and

until the successor Bond Registrar shall have accepted the duties

of the Bond Registrar

hereunder. The Bond Registrar is authorized, on behalf

of the District, to authenticate and

deliver Bonds transferred or exchanged in accordance with the provisions

of such Bonds and this

resolution and to carry out all

of the Bond Registrar's powers and duties under this resolution.

The Bond Registrar shall be responsible for its representations contained in the Certificate

of

Authentication on the Bonds.

(b)

Registered Ownership.

The District and the Bond Registrar, each in its discretion,

may deem and treat the Registered

Owner of each Bond as the absolute owner thereof for all

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purposes (except as provided in Section 14 of this resolution), and neither the District nor the

Bond Registrar shall be affected by any notice to the contrary.

Payment of any such Bond shall

be made only as described in Section 3(h) hereof, but such Bond may be transferred

as herein

provided. All such payments made

as described

in

Section 3(h) shall be valid and shall satisfy

and discharge the liability

of the District upon such Bond to the extent of the amount or amounts

so paid.

(c)

DTC Acceptance/Letter of Representations.

To induce DTC to accept the Bonds

as eligible for deposit at DTC, the District has executed and delivered

to DTC a Letter of

Representations.

Neither the District nor the Bond Registrar will have any responsibility or obligation to

DTC participants or the persons for whom they act

as nominees (or any successor depository)

with respect to the Bonds in respect

of the accuracy of any records maintained by DTC (or any

successor depository) or any DTC participant, the payment by DTC (or any successor

depository) or any DTC participant

of any amount in respect of the principal of or interest on

Bonds, any notice which is pennitted or required to be given to Registered

Owners under this

resolution (except such notices

as shall be required to be given by the District to the Bond

Registrar or to DTC (or any successor depository), or any consent given or other action taken by

DTC (or any successor depository)

as the Registered Owner. For so long as any Bonds are held

in fully-immobilized form hereunder, DTC or its successor depository shall be deemed to be the

Registered

Owner for all purposes hereunder (except as provided in Section 14 of this

resolution), and all references herein

to the Registered Owners shall mean DTC (or any

successor depository) or its nominee and shall not mean the owners

of any beneficial interest in

such Bonds.

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If any Bond shall be duly presented for payment and funds have not been duly provided

by the District on such applicable date, then interest shall continue to accrue thereafter on the

unpaid principal thereof at the rate stated on such Bond until such

Bond is paid.

(d)

Use of Depository.

(1)

The Bonds shall 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 therein designated to mature on such date.

Registered ownership of such immobilized Bonds, or any portions thereof, may not thereafter be

transferred except (A) to any successor

of DTC or its nominee, provided that any such successor

shall be qualified under any applicable laws to provide the service proposed to be provided by it;

(B) to any substitute depository appointed by the Designated Representative pursuant to

subsection (2) below or such substitute depository's successor; or (C) to any person

as provided

in subsection (4) below.

(2)

Upon the resignation

of DTC or its successor (or any substitute depository

or its successor) from its functions as depository or a determination by the Designated

Representative to discontinue the system of book-entry transfers through DTC or its successor

(or any substitute depository or its successor), the Designated Representative may hereafter

appoint a substitute depository. Any such substitute depository shall be qualified under any

applicable laws to provide the services proposed to be provided by it.

(3)

In the case

of any transfer pursuant to clause (A) or (B) of subsection (1)

above, the Bond Registrar shall, upon receipt of all outstanding Bonds, together with a written

request from the Designated Representative, issue a single new Bond for each maturity then

outstanding, registered in the name

of such successor or such substitute depository, or their

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nominees, as the case may be, all as specified

In

such written request of the Designated

Representative.

(4)

In the event that (A) DTC or its successor (or substitute depository or its

successor) resigns from its functions as depository, and no substitute depository can be obtained,

or (B) the Designated Representative determines that it is in the best interest of the beneficial

owners

of the Bonds that such owners be able to obtain such Bonds in the form of Bond

certificates, the ownership

of such Bonds may then be transferred to any person or entity as

herein provided, and shall no longer be held in fully-immobilized form. The Designated

Representative shall deliver a written request to the Bond Registrar, together with a supply

of

definitive Bonds, to issue Bonds as herein provided in any authorized denomination. Upon

receipt by the Bond Registrar of all then outstanding Bonds together with a written request on

behalf

of the Board to the Bond Registrar, new Bonds shall be issued in the appropriate

denominations and registered in the names of such persons as are requested in such written

request.

(e)

Registration of Transfer of Ownership or Exchange; Change in Denominations.

The transfer of any Bond may be registered and Bonds may be exchanged, but no transfer of any

such Bond shall be valid unless such Bond is surrendered to the

Bond Registrar with the

assigmnent fom1 appearing on such Bond duly executed by the Registered

Owner or such

Registered Owner's duly authorized agent in a manner satisfactory to the Bond Registrar. Upon

such surrender, the Bond Registrar shall cancel the surrendered Bond and shall authenticate and

deliver, without charge to the Registered Owner or transferee therefor, a new Bond (or Bonds at

the option

of the new Registered Owner) of the same date, maturity, redemption provisions and

interest rate and for the same aggregate principal amount in any authorized denomination,

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naming as Registered Owner the person or persons listed as the assignee on the assigmnent form

appearing on the surrendered Bond, in exchange for such surrendered and cancelled Bond. Any

Bond may be surrendered to the Bond Registrar and exchanged, without charge, for an equal

aggregate principal amount

of Bonds of the same date, maturity, redemption provisions and

interest rate, in any authorized denomination. The Bond Registrar shall not be obligated to

register the transfer or to exchange any Bond during the

15 days preceding the date any such

Bond is to be redeemed.

(f)

Bond Registrar's Ownership of Bonds.

The Bond Registrar may become the

Registered

Owner of any Bond with the same rights it would have if it were not the Bond

Registrar, and to the extent permitted by law, may act as depository for and pemlit any

of its

officers

or directors to act as member of, or in any other capacity with respect to, any committee

formed to protect the right

of the Registered Owners of the Bonds.

(g)

Registration Covenant.

The District covenants that, until all Bonds have been

surrendered and cancelled, it will maintain a system for recording the ownership

of each Bond

that complies with the provisions

of Section 149 of the Code.

(h)

Place and Medium of Payment.

Both principal of and interest on the Bonds shall

be payable in lawful money of the United States of America. Interest on the Bonds shall be

calculated on the basis

of a 360-day year and twelve 30-day months. For so long as all Bonds

are in fully immobilized form, payments

of principal and interest shall be made as provided in

accordance with the operational arrangements

of DTC referred to in the Letter of

Representations.

In the event that the Bonds are no longer in fully immobilized fonn, interest on the Bonds

shall be paid by check or draft mailed to the Registered

Owners at the addresses for such

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Registered Owners appearing on the Bond Register on the 15th day of the month preceding each

interest payment date, and principal

of the Bonds shall be payable upon presentation and

surrender

of such Bonds by the Registered Owners at the principal office of the Bond Registrar;

provided, however, that

ifso 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 date due to an account

with a bank located within the United

States.

Section

4.

Redemption and Purchase of Bonds.

(a)

No Redemption.

The Bonds are not subject

to redemption prior to their scheduled

maturities.

(b)

Purchase

of Bonds.

The District reserves the right to purchase any of the Bonds

offered to the District at any time at a price deemed reasonable by the District.

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Section 5.

Form of Bonds. The Bonds shall be in substantially the following form:

WASHINGTON STATE SCHOOL DISTRICT CREDIT ENHANCEMENT PROGRAM

Payment of principal of and interest on this bond, when due, is guaranteed by the full faith,

credit and taxing power

of the

STATE OF WASHINGTON

under the provisions of the Washington

State School District Credit Enhancement Program.

NO. __ _

UNITED

STATES OF AMERICA

STATE

OF WASHINGTON

EVERETT SCHOOL DISTRICT NO.2

SNOHOMISH COUNTY

$_-----

UNLIMITED TAX GENERAL OBLIGATION REFUNDING BOND, 2008

INTEREST RATE:

MATURITY DATE:

REGISTERED

OWNER: CEDE

&

CO.

PRINCIPAL AMOUNT:

CUSIPNO.:

Everett School District No.2, Snohomish County, Washington, (the "District"), hereby

aclmowledges itself to owe and for value received promises to pay to the Registered

Owner

identified above, or registered assigns, on the Maturity Date identified above, the Principal

Amount indicated above and to pay interest thereon from

October 7, 2008, or the most recent

date to which interest has been paid or duly provided for until payment

of this bond at the

Interest Rate set forth above, payable on December

1, 2008, and semiannually thereafter on the

first day

of each succeeding June and December. Both principal of and interest on this bond are

payable in lawful money of the United States of America. For so long as the bonds of this issue

are held in fully immobilized form, payments

of principal and interest thereon shall be made as

provided in accordance with the operational arrangements

of The Depository Trust Company

("DTC") referred to in the Blanket Issuer Letter of Representations (the "Letter of

Representations") from the District to DTC. The fiscal agency of the state of Washington is

acting as the registrar, authenticating agent and paying agent for the bond

of this issue (the

"Bond Registrar").

This bond shall not be valid or become obligatory for any purpose or be entitled to any

security or benefit under Resolution No. 922

of the District (the "Bond Resolution") until the

Certificate of Authentication hereon shall have been manually signed by the Bond Registrar.

This bond is one

of an authorized issue of bonds of like date, tenor and redemption

provisions, except as to number, amount, rate

of interest and date of maturity in the aggregate

principal amount

of $9,545,000, and is issued for the purpose of refunding certain outstanding

general obligation bonds

of the District.

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The bonds of this issue are issued under and in accordance with the provisions of the

Constitution and applicable statutes

of the state of Washington and resolutions duly adopted by

the Board

of Directors.

The bonds ofthis issue are not subject

to redemption prior to their stated maturities.

The bonds

of this issue are not "private activity bonds" as such term is defined in the

Internal Revenue Code

of 1986, as amended (the "Code"). The District has designated the bonds

as

"qualified tax-exempt obligations" under Section 265(b) of the Code for banks, thrift

institutions and other financial institutions.

The District has irrevocably covenanted that it will levy taxes annually upon all the

taxable property in the District without limitation

as to rate or amount and in amounts sufficient,

with other monies legally available therefor,

to pay the principal of and interest on the bonds of

this issue as the same shall become due. The full faith, credit and resources of the District are

hereby irrevocably pledged for the annual levy and collection

of such taxes and the prompt

payment

of such principal and interest. The pledge of tax levies may be discharged prior to

maturity

of the bonds by making provision for the payment thereof on the terms and conditions

set forth in the Bond Resolution authorizing their issuance.

It

is hereby certified that all acts, conditions and things required by the Constitution and

statutes

of the state of Washington to exist, to have happened, been done and performed

precedent to and in the issuance

of this bond have happened, been done and performed and that

the issuance

of this bond and the bonds of this issue does not violate any constitutional, statutory

or other limitation upon the amount

of bonded indebtedness that the District may incur.

IN

WITNESS WHEREOF, Everett School District No.2, Snohomish County,

Washington has caused this bond to be executed by the manual or facsimile signatures

of the

President and Secretary of its Board of Directors and a facsimile of the seal of the District to be

reproduced, imprinted or impressed hereon as

of this 7th day of October, 2008.

ATTEST:

/s/ manual or facsimile

Secretary, Board

of Directors

EVERETT

SCHOOL DISTRICT NO.2,

SNOHOMISH COUNTY, WASHINGTON

By

/s/ manual or facsimile

President, Board of Directors

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The Bond Registrar's Certificate of Authentication on the Bonds shall be in substantially

the following form:

DATE

OF AUTHENTICATION: _____ _

CERTIFICATE

OF AUTHENTICATION

This bond

is one of the bonds described in the within-mentioned Bond Resolution and is

one of the Unlimited Tax General Obligation Refunding Bonds, 2008 of the District, dated

October

7,2008.

Section 6.

WASHINGTON STATE FISCAL

AGENCY,

as Bond Registrar

By

__________________________ __

Authorized Signatory

Execution

of Bonds. The Bonds shall be executed on behalf of the District

with the facsimile or manual signatures

of the President and Secretary of its Board and the seal

of the District shall be impressed, imprinted or otherwise reproduced thereon. In case either or

both

of the officers who have signed or attested any of the Bonds cease to be such officer before

such Bonds have been actually issued and delivered, such Bonds shall be valid nevertheless and

may be issued by the District with the same effect

as though the persons who had signed or

attested such Bonds had not ceased

to be such officers, and any Bond may be signed or attested

on behalf

of the District by officers who at the date of actual execution of such Bond are the

proper officers, although at the nominal date

of execution of such Bond such officer was not an

officer

of the District.

Only Bonds that bear a Certificate of Authentication in the form set forth in Section 5 of

this resolution, manually executed by the Bond Registrar, shall be valid or obligatory for any

purpose or entitled to the benefits

of this resolution. Such Certificate of Authentication shall be

conclusive evidence that the Bonds

so authenticated have been duly executed, authenticated and

delivered and are

entitled to the benefits of this resolution.

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Section 7.

Lost or Destroyed Bonds.

If

any Bonds are lost, stolen or destroyed, the

Bond Registrar may authenticate and deliver a new Bond or Bonds

of like amount, maturity and

tenor to the Registered

Owner upon the owner's paying the expenses and charges of the Bond

Registrar and the District in connection with preparation and authentication

of the replacement

Bond or Bonds and upon his or her filing with the Bond Registrar and the District evidence

satisfactory

to both that such Bond or Bonds were actually lost, stolen or destroyed and of his or

her ownership, and upon furnishing the District and the Bond Registrar with indemnity

satisfactory to both.

Section

8.

Refunding Plan; Application of Bond Proceeds.

(a)

Refunding Plan.

For the purpose of. realizing a debt serVIce savmgs and

benefiting the taxpayers

of the District, the Board shall issue the Bonds. Proceeds of the Bonds

shall provide for the payment

of the principal of and interest on and the redemption price (or

principal due at maturity)

of the $9,545,000 principal amount of the outstanding 1998A Bonds

maturing on December

1, 2012.

The Refunded Bonds shall be called for redemption at 100% of par on December 1, 2008.

(b)

Refunding Proceeds.

The net proceeds of sale of the Bonds in the dollar amount

certified by the District to the Escrow Agent shall be delivered to the Escrow Agent for the

purpose

of defeasing the Refunded Bonds and paying related costs of issuance.

Money received by the Escrow Agent from the Bond proceeds and other money provided

by the District shall be used immediately by the Escrow Agent upon receipt thereof in

accordance with the terms

of the Escrow Agreement to defease the Refunded Bonds as

authorized by the 1998A Bond Resolution, and to pay costs of issuance of the Bonds. The

District shall defease the Refunded Bonds and discharge such obligations by the use

of money

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deposited with the Escrow Agent to purchase certain Government Obligations (which obligations

so purchased, are herein called

"Acquired Obligations"), bearing such interest and maturing as to

principal and interest in such amounts and at such times which, together with any necessary

beginning cash balance, will provide for the payment:

(1)

interest on the Refunded Bonds coming due on December

1,2008;

(2)

the redemption price of the Refunded Bonds (100% of the principal

amount thereof)

on December 1, 2008;

Such

Acquired Obligations shall be purchased at a yield not greater than the yield

permitted

by the Code and regulations relating to acquired obligations in connection with

refunding bond issues.

(c)

Escrow Agent/Escrow Agreement.

The District hereby appoints U.S. Banlc

National Association, Seattle, Washington as the Escrow Agent for the Refunded Bonds (the

"Escrow Agent"). A beginning cash balance, if any, and the Acquired Obligations shall be

deposited irrevocably with the Escrow Agent in an amount sufficient to defease the Refunded

Bonds. The proceeds

of the Bonds remaining after acquisition of the Acquired Obligations and

provision for the necessary begilming cash balance shall be utilized to pay expenses of the

acquisition and safekeeping of the Acquired Obligations and expenses of the issuance of the

Bonds.

In order to carry out the purposes

of this Section 8, the President or the Secretary of the

Board are authorized and directed to execute and deliver to the Escrow Agent, an Escrow

Deposit Agreement, substantially in the form attached hereto as Exhibit

A.

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(d)

Call for Redemption of Refunded Bonds.

The District hereby irrevocably sets

aside sufficient funds out

of the purchase of Acquired Obligations from proceeds of the Bonds to

make the payments described in Subsections (b)(l) through (4)

of this Section 8.

The District hereby irrevocably calls the Refunded Bonds for redemption on December 1,

2008 in accordance with the provisions of the 1998A Bond Resolution.

Said defeasance and call for redemption

of the Refunded Bonds shall be irrevocable after

the final establishment

of the escrow account and delivery of the Acquired Obligations to the

Escrow Agent.

The Escrow Agent is hereby authorized and directed to provide for the giving

of notices

of the redemption of the Refunded Bonds in accordance with the applicable provisions of the

1998A Bond Resolution. The Treasurer

is authorized and requested to provide whatever

assistance

is necessary to accomplish such redemption and the giving of notices therefor. The

costs

of pUblication of such notices shall be an expense of the District.

The District will take such actions

as are found necessary to ensure that all necessary and

proper fees, compensation and expenses

of the Escrow Agent shall be paid when due.

Section

9.

Pledge of Taxes and Credit. The District hereby irrevocably covenants

that, unless the principal

of and interest on the Bonds are paid from other sources, it will make

annual levies

of taxes without limitation as to rate or amount upon all of the property in the

District subject to taxation in amounts sufficient to pay such principal and interest as the same

shall become due and will pay the same into the Debt Service Fund. The full faith, credit and

resources

of the District are hereby irrevocably pledged for the annual levy and collection of

such taxes and for the prompt payment of such principal and interest.

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Section 10.

Defeasance. In the event that money and/or Government Obligations

maturing at such time or times and bearing interest to be earned thereon in amounts (together

with such money,

if necessary) sufficient to redeem and retire part or all of the Bonds in

accordance with their terms, are set aside in a special account

of the District to effect such

redemption and retirement, and such moneys and the principal

of and interest on such

Government

Obligations are irrevocably set aside and pledged for such purpose, then no further

payments need be made into the Debt Service Fund for the payment

of the principal of and

interest on the Bonds

so provided for, and such Bonds shall cease to be entitled to any lien,

benefit or security

of this resolution except the right to receive the moneys so set aside and

pledged, and such Bonds shall be deemed not

to be outstanding hereunder.

Within

60 days of any defeasance of Bonds the Bond Registrar shall provide notice of

defeasance of Bonds to Registered Owners and to each party entitled to receive notice in

accordance with Section

14 of this resolution.

Section

11.

Tax Covenant.

(a)

Arbitrage Covenant.

The District hereby covenants that it will not make any use

of the proceeds of sale of the Bonds or any other funds of the District which may be deemed to

be proceeds

of such Bonds pursuant to Section 148 of the Code which will cause the Bonds to be

"arbitrage bonds" within the meaning of said section and the Regulations promulgated

thereunder. The District will comply with the requirements

of Section 148 of the Code (or any

successor provision thereof applicable

to the Bonds) and the applicable Regulations thereunder

throughout the term

of the Bonds.

(b)

Private Person Use Limitation/or Bonds.

The District covenants that for as long

as the Bonds are outstanding, it will not permit:

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date except for the omission of information dependent upon the pricing of the Bonds and the

completion

of the Purchase Contract. The District authorizes the Underwriter to use the Official

Statement, substantially in the

fom1 of the preliminary Official Statement, in connection with the

sale

of the Bonds. The Secretary of the Board and/or the Associate Superintendent, Finance and

Operations are hereby authorized to review and approve on

behalf of the District the final

Official Statement relative to the Bonds with such additions and changes as may be deemed

necessary or advisable.

Section 14.

Undertaking to Provide Ongoing Disclosure.

(a)

Contract/Undertaking.

This Section 14 constitutes the District's written

undertaking for the benefit

of the owners (including Beneficial Owners) of the Bonds as required

by

Section (b)(5) of the Rule.

(b)

Financial Statements/Operating Data.

The District agrees to provide or cause to

be provided to each

NRMSIR and to the SID, if any, in each case as designated by the

Commission in accordance with the Rule, the following annual financial information and

operating data for the prior fiscal year (commencing in

2009 for the fiscal year ended

August 31,

2008):

1.

AIIDual financial statements showing ending fund balances prepared in

accordance with regulations prescribed by the Superintendent of Public Instruction and the State

Auditor pursuant to RCW 28A.505.020, RCW 28A.505.090, RCW 28A.505.l40 and

RCW 43.09.200 (or any successor statutes) from time to time and generally of the type included

in the final Official Statement for the Bonds under the headings

"Statement of Revenues,

Expenditures and Changes in General Fund Balance" and "Statement of Revenues, Expenditures

and Changes in Debt

Service Fund Balance";

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2.

The assessed valuation of taxable property in the District;

3.

Property taxes due and property taxes collected;

4.

Property tax levy rates per $1,000 of assessed valuation; and

S.

Outstanding general obligation debt of the District.

Such annual information and operating data described above shall be so provided on or

before the expiration

of nine months after the end of the District's fiscal year. The District may

adjust such date

if the District changes its fiscal year by providing written notice of the change of

fiscal year and the new reporting date to each then existing NRMSIR and the SID, if any. In lieu

of providing such annual financial information and operating data, the District may

cross-reference to other documents provided

to the NRMSIR's, the SID or to the Commission

and,

if such document is a final official statement within the meaning of the Rule, available from

the

MSRB.

If not provided as part of the annual financial information discussed above, the District

shall provide the District's audited annual financial statement prepared in accordance with

regulations prescribed by the Superintendent

of Public Instruction and the State Auditor pursuant

to RCW

28A.SOS.020,

RCW

28A.SOS.090,

RCW

28A.SOS.140

and RCW 43.09.200 (or any

successor statutes), when and

if available, to each then existing NRMSIR and the SID, if any.

(c)

Material Events.

The District agrees to provide or cause to be provided, in a

timely manner, to the

SID, if any, and to each NRMSIR notice of the occurrence of any of the

following events with respect to the Bonds, ifmaterial:

• Principal and interest payment delinquencies;

• Non-payment related defaults;

• Unscheduled draws on debt service reserves reflecting financial difficulties;

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• Unscheduled draws on credit enhancements reflecting financial difficulties;

• Substitution of credit or liquidity providers, or their failure to perform;

• Adverse tax opinions or events affecting the tax-exempt status of the Bonds;

• Modifications to rights of owners;

• Optional, contingent or unscheduled Bond calls other than scheduled sinking

fund redemptions for which notice is given pursuant to Exchange Act Release

34-23856;

• Defeasances;

• Release, substitution or sale of property securing the repayment of the Bonds;

and

• Rating changes.

Solely for purposes

of disclosure, and not intending to modify this undertaking, the

District advises that there is

no property securing repayment of the Bonds, and there is no debt

service reserve fund or account for the Bonds, as the District lacks legal authority for either

measure.

If further changes in the law permit such measures, and if the District subsequently

chooses to establish such reserves or provide such property as security for the Bonds, the District

will provide notice of such establishment or provision and undertake to provide notices of

material events relating thereto, should such events occur.

(d)

Notification Upon Failure to Provide Financial Data.

The District agrees to

provide or cause to be provided, in a timely manner, to each NRMSIR and to the SID, if any,

notice

of its failure to provide the annual financial infonnation described in subsection (b) above

on or prior to the date set forth in subsection (b) above.

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(e)

Termination/Modification.

The District's obligations to provide annual financial

information and notices

of material events shall terminate upon the defeasance, prior redemption

or payment in full

of all of the Bonds. This Section 14, or any provision hereof, shall be null and

void

if the District (1) obtains an opinion of nationally recognized bond counsel to the effect that

those portions

of the Rule which require this Section 14, or any such provision, are invalid, have

been repealed retroactively or otherwise

do not apply to the Bonds; and (2) notifies each then

existing NRMSIR and the

SID, if any, of such opinion and the cancellation of this Section 14.

Notwithstanding any other provision

of this resolution, the District may amend this Section 14

and any provision

of this Section 14 may be waived with an approving opinion of nationally

recognized bond counsel.

In the event

of any amendment of or waiver of a provision of this Section 14, the District

shall describe such amendment in the next annual report, and shall include, as applicable, a

narrative explanation

of the reason for the amendment or waiver and its impact on the type (or in

the case

of a change of accounting principles, on the presentation) of financial information or

operating data being presented by the District. In addition,

if the amendment relates to the

accounting principles to be followed in preparing financial statements, (1) notice

of such change

shall be given in the same manner as for a material event under Subsection (c), and (2) the

annual report for the year in which the change is made should present a comparison (in narrative

form and also,

if practical, in quantitative form) between the financial statements as prepared on

the basis

of the new accounting principles and those prepared on the basis of the former

accounting principles.

(f)

Bond Owner's Remedies Under This Section.

A Bond owner's right to enforce

the provisions

of this Section 14 shall be limited to a right to obtain specific enforcement of the

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District's obligations hereunder, and any failme by the District to comply with the provisions of

this undertaking shall not be an event of default with respect to the Bonds under this resolution.

(g)

No Default.

The District is not and has not been in default in the perfonnance of

its obligations of any prior undertaking for ongoing disclosme with respect to its bond

obligations.

(h)

Disclosure USA.

The District may elect to submit the infonnation required by this

Section 14 to be filed with the NRMSIRs and the SID, if any, directly to DisclosmeUSA.org

unless or until the SEC withdraws its approval of this submission process.

Section

15.

Credit Enhancement Program. The Board of Directors by Resolution

No.

913 has requested that the State Treasmer issue a certificate of eligibility in favor of the

District for participation by the District in the Credit Enhancement

Program with respect to the

Bonds, and has authorized and directed the Designated Representative

to submit such

applications, resolutions and certifications as shall be required by the

State Treasmer in review

of the District's request for participation. The State Treasmer has issued a certificate of

eligibility in favor of the District for participation by the District in the Credit Enhancement

Program with respect to the Bonds.

Section 16.

General Authorization and Ratification. The President and Secretary of

the Board of Directors and other appropriate officers of the District are authorized to take any

actions and to execute documents

as in their judgment may be necessary or desirable in order to

carry out the tenns of, and complete the transactions contemplated by, this resolution. All acts

taken pmsuant to the authority

of this resolution but prior to its effective date are hereby ratified.

Section 17.

Severability. If any provision in this resolution is declared by any court of

competent jmisdiction to be contrary to law, then such provision shall be null and void and shall

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be deemed separable from the remaining provision of this resolution and shall in no way affect

the validity

of the other provisions of this resolution or of the Bonds.

Section

18.

Effective Date. This resolution shall become effective immediately upon

its adoption.

ADOPTED by the Board of Directors of Everett School District No.2, Snohomish

County, Washington,

at a regular meeting thereof held this 23rd day of September, 2008.

Secretary, Board of Directors

EVERETT

SCHOOL DISTRICT NO.2,

SNOHOMISH COUNTY, WASHINGTON

~~~:u-

President and Director

M/}§;

Director

v

Director

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EXHIBIT A

ESCROW DEPOSIT AGREEMENT

EVERETT SCHOOL DISTRICT NO.2

SNOHOMISH COUNTY, WASHINGTON

UNLIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, 2008

THIS ESCROW AGREEMENT, dated as of October 7, 2008, (herein, together

with any amendments or supplements hereto, called the

"Agreement"), is entered into by and

between the EVERETT

SCHOOL DISTRICT NO.2, Snohomish County, WASHINGTON

(herein called the "District") and U.S. Bank National Association, Seattle, Washington, as

Escrow Agent (herein, together with any successor in such capacity, called the "Escrow Agent").

The notice addresses of the District, the District Treasurer and the Escrow Agent are shown on

Exhibit A attached hereto and made a part hereof.

WITNESSETH:

WHEREAS, the District has issued and there presently remain outstanding the

obligations described in Exhibit B (the

"Refunded Bonds"); and

WHEREAS, pursuant to Resolution No. 922 adopted on September 23,2008 (the

"Bond Resolution"), the District has determined to issue its Unlimited Tax General Obligation

Refunding Bonds,

2008 (the "Bonds") for the purpose of providing funds to pay the costs of

refunding the Refunded Bonds; and

WHEREAS, the Escrow Agent has reviewed this Agreement and the Bond

Resolution, and is willing to serve

as Escrow Agent; and

WHEREAS, pursuant to the Bond Resolution, the Refunded Bonds have been

designated for redemption prior to their scheduled maturity date and, after provision

is made for

such redemption, the Refunded Bonds will come due in the amount and at the time set forth in

Exhibit

C; and

WHEREAS, when Escrowed Securities have been deposited with the Escrow

Agent for the payment

of all principal and interest of the Refunded Bonds when due, then the

Refunded Bonds shall no longer be regarded

as outstanding except for the purpose of receiving

payment from the funds provided for such purpose; and

WHEREAS, the Bonds have been duly authorized to be issued, sold, and

delivered for the purpose

of obtaining the funds required to provide for the payment of the

redemption price

of the Refunded Bonds as shown on Exhibit C; and

WHEREAS, the District desires that, concurrently with the delivery of the Bonds

to the purchasers, the proceeds

of the Bonds, together with certain other available funds of the

District, shall be applied to purchase certain direct obligations

of the United States of America

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hereinafter defined as (the "Escrowed Securities") for deposit to the credit of the Refunding

Account and

to establish a beginning cash balance (if needed) in the Refunding Account; and

NOW, THEREFORE, in consideration of the mutual undertakings, promises and

agreements herein contained, the sufficiency

of which hereby are acknowledged, and to secure

the full and timely payment

of principal of and the interest on the Refunded Bonds, the District

and the Escrow Agent mutually undertake, promise and agree for themselves and their respective

representatives and successors,

as follows:

Article 1. Definitions

Section 1.1. Definitions.

Unless the context clearly indicates otherwise, the following terms shall have the

meanings assigned to them below when they are used in this Agreement:

District Treasurer

means the Snohomish County Treasurer, as

ex officio

treasurer

of the District, or any successor to the functions of the Treasurer.

Escrowed Securities

means the noncallable Government Obligations described in

Exhibit D, or cash or other noncallable obligations substituted therefor pursuant to Section 4.2

of

this Agreement.

Government Obligations

means direct, noncallable (a) United States Treasury

Obligations, (b) United States Treasury Obligations -

State and Local Government Series,

(c) non-prepayable obligations which are unconditionally guaranteed

as to full and timely

payment

of principal and interest by the United States of America or (d) REFCORP debt

obligations unconditionally guaranteed by the United States.

Paying Agent

means the fiscal agency of the state of Washington, as the paying

agent for the Refunded Bonds.

Refunding Account

means the fund created by this Agreement to be established,

held and administered by the Escrow Agent pursuant to the provisions

of this Agreement.

Section 1.2. Other Definitions.

The terms "Agreement," "Bonds," "District," "Escrow Agent," "Bond

Resolution"

and "Refunded Bonds" when they are used in this Agreement, shall have the

meanings assigned to them in the preamble to this Agreement.

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Section 1.3. Interpretations.

The titles and headings

of the articles and sections of this Agreement have been

inserted for convenience and reference only and are not

to be considered a part hereof and shall

not in any way modify or restrict the terms hereof. This Agreement and all

of the terms and

provisions hereof shall be liberally construed

to effectuate the purposes set forth herein and to

achieve the intended purpose

of providing for the refunding of the Refunded Bonds in

accordance with applicable law.

Article 2. Deposit of Funds and Escrowed Securities

Section 2.1. Deposits in the Refunding Account.

Concurrently with the sale and delivery

of the Bonds, the District shall deposit, or

cause

to be deposited, with the Escrow Agent, for deposit in the Refunding Account, the funds

sufficient to purchase the Escrowed Securities and pay costs

of issuance described in Exhibit D,

and the Escrow Agent shall, upon the receipt thereof, acknowledge such receipt

to the District in

writing.

Article 3. Creation and Operation of Refunding Account

Section 3.1. Refunding Account.

The Escrow Agent has created on its books a special trust fund and irrevocable

escrow to be known as the Refunding Account. The Escrow Agent agrees that upon receipt it

will deposit to the credit

of the Refunding Account the funds and the Escrowed Securities

described in Exhibit D. Such deposit, all proceeds therefrom, and all cash balances on deposit

therein (a) shall be the property

of the Refunding Account, (b) shall be applied only in strict

conformity with the terms and conditions

of this Agreement, and (c) are hereby irrevocably

pledged to the payment

of the principal of and interest on the Refunded Bonds, which payment

shall be made by timely transfers

of such amounts at such times as are provided for in

Section 3.2. When the final transfers have been made for the payment of such principal of and

interest on the Refunded Bonds, any balance then remaining in the Refunding Account shall be

transferred to the District, and the Escrow Agent shall thereupon be discharged from any further

duties hereunder.

Section 3.2.

Payment of Principal and Interest.

The Escrow Agent is hereby irrevocably instructed to transfer to the

Paying Agent

from the cash balances on deposit in the Refunding Account, the amounts required to pay the

principal

of the Refunded Bonds at their redemption date and interest thereon to such redemption

date in the amounts and at the times shown in Exhibit

C.

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Section 3.3. Sufficiency of Refunding Account.

The District represents that, based upon the information provided by D.A.

Davidson

&

Co., the receipts of the principal of and interest on the Escrowed Securities will

assure that the cash balance on deposit from in the Refunding Account will be

at all times

sufficient

to provide money for transfer to the Paying Agent at the time and in the amount

required to pay the interest on the Refunded Bonds and the principal

of the Refunded Bonds on

the redemption date, all

as more fully set forth in Exhibit

E.

If, for any reason, at any time, the

cash balances on deposit or scheduled to be on deposit in the Refunding Account shall be

insufficient to transfer the amounts required by the Paying Agent

to make the payments set forth

in

Section 3.2, the District shall timely deposit in the Refunding Account, from any funds that

are lawfully available therefor, additional funds in the amounts required to make such payments.

Notice

of any such insufficiency shall be given promptly as hereinafter provided, but the Escrow

Agent shall not in any manner be responsible for any insufficiency

of funds in the Refunding

Account or the District's failure to make additional deposits.

Section 3.4. Trust Fund.

The Escrow Agent shall hold at all times the Refunding Account, the Escrowed

Securities and all other assets

of the Refunding Account, wholly segregated from all other funds

and securities on deposit with the Escrow Agent; it shall never allow the Escrowed Securities or

any other assets

of the Refunding Account to be commingled with any other funds or securities

of the Escrow Agent; and it shall hold and dispose of the assets of the Refunding Account only

as set forth herein. The Escrowed Securities and other assets

of the Refunding Account shall

always be maintained by the Escrow Agent

as trust funds for the benefit of the owners of the

Refunded Bonds; and a special account shall at all times

be maintained on the books of the

Escrow Agent. The amounts received by the Escrow Agent under this Agreement shall not be

considered

as a banking deposit by the District, and the Escrow Agent shall have no right to title

with respect thereto except as an agent and Escrow Agent under the terms

of this Agreement.

Article 4. Limitation on Investments

Section 4.1. Investments.

Except for the initial investment in the Escrowed Securities, and except as

provided in

Section 4.2, the Escrow Agent shall not have any power or duty to invest or reinvest

any money held hereunder, or to make substitutions

of the Escrowed Securities, or to sell,

transfer, or otherwise dispose

of the Escrowed Securities.

Section 4.2. Substitution of Securities.

At the written request of the District, and upon compliance with the conditions

hereinafter stated, the Escrow Agent shall utilize cash balances in the Refunding Account, or

sell, transfer, otherwise dispose

of or request the redemption of the Escrowed Securities and

apply the proceeds therefrom to purchase Refunded Bonds or Government Obligations which

do

not permit the redemption thereof at the option of the obligor. Any such transaction may be

A-4

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effected by the Escrow Agent only if (a) the Escrow Agent shall have received a written opinion

from a firm

of certified public accountants that such transaction will not cause the amount of

money and securities in the Refunding Account to be reduced below an amount sufficient to

provide for the full and timely payment

of principal of and interest on all of the remaining

Refunded Bonds as they become due, taking into account any optional redemption thereof

exercised by the District in connection with such transaction; and (b) the Escrow Agent shall

have received the unqualified written legal opinion

of its bond counsel or tax counsel to the

effect that such transaction will not cause any

of the Bonds or Refunded Bonds to be an

"arbitrage bond" within the meaning of Section 148 of the Internal Revenue Code of 1986, as

amended.

Article 5. Application of Cash Balances

Section 5.1. In General.

Except as provided in Section 2.1, 3.2 and 4.2 hereof, no withdrawals, transfers or

reinvestment shall be made

of cash balances in the Refunding Account.

Article 6. Redemption of Refunded Bonds

Section 6.1. Call for Redemption.

The District hereby irrevocably calls the Refunded Bonds for redemption on their

earliest redemption date, as shown on Appendix A attached hereto.

Section 6.2. Notice of Redemption/Notice of Defeasance.

The Escrow Agent agrees to give a notice

of defeasance and a notice of the

redemption

of the Refunded Bonds to the Paying Agent for dissemination in accordance with the

terms

of Resolution No. 638 of the Board of Directors of the District and in substantially the

forms attached hereto as Appendices A and B to the

Paying Agent for distribution as described

therein. The notice

of defeasance shall be given immediately following the execution of this

Agreement, and the notice

of redemption shall be given in accordance with the ordinance or

resolution authorizing the Refunded Bonds. The Escrow Agent hereby certifies that provision

satisfactory and acceptable to the Escrow Agent has been made for the giving

of notice of

redemption of the Refunded Bonds.

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Article 7. Records and Reports

Section 7.1. Records.

The Escrow Agent will keep books of record and account in which complete and

accurate entries shall be made

of all transactions relating to the receipts, disbursements,

allocations and application

of the money and Escrowed Securities deposited to the Refunding

Account and all proceeds thereof, and such books shall be available for inspection during

business hours and after reasonable notice.

Section 7.2. Reports.

While this Agreement remains in effect, the Escrow Agent annually shall prepare

and send to the District a written report summarizing all transactions relating to the Refunding

Account during the preceding year, including, without limitation, credits to the Refunding

Account as a result

of interest payments on or maturities of the Escrowed Securities and transfers

from the Refunding Account for payments on the Refunded Bonds or otherwise, together with a

detailed statement of all Escrowed Securities and the cash balance on deposit in the Refunding

Account as

of the end of such period.

Article 8. Concerning the Paying Agent and Escrow Agent

Section 8.1. Representations.

The Escrow Agent hereby represents that it has all necessary power and authority

to enter into this Agreement and undertake the obligations and responsibilities imposed upon it

herein, and that it will carry out all

of its obligations hereunder.

Section 8.2. Limitation on Liability.

The liability of the Escrow Agent to transfer funds for the payment of the

principal

of and interest on the Refunded Bonds shall be limited to the proceeds of the Escrowed

Securities and the cash balances from time to time on deposit in the Refunding Account.

Notwithstanding any provision contained herein to the contrary, the Escrow

Agent shall have no

liability whatsoever for the insufficiency

of funds from time to time in the Refunding Account or

any failure

of the obligors of the Escrowed Securities to make timely payment thereon, except

for the obligation to notify the District promptly

of any such occurrence.

The recitals herein and

in the proceedings authorizing the Bonds shall be taken as

the statements

of the District and shall not be considered as made by, or imposing any obligation

or liability upon, the Escrow Agent.

It

is the intention of the parties that the Escrow Agent shall never be required to

use or advance its own funds or otherwise incur personal financial liability in the performance

of

any of its duties or the exercise of any of its rights and powers hereunder.

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The Escrow Agent shall not be liable for any action taken or neglected to be taken

by it in good faith in any exercise

of reasonable care and believed by it to be within the

discretion or power conferred upon it by this Agreement, nor shall the Escrow Agent be

responsible for the consequences

of any error of judgment; and the Escrow Agent shall not be

answerable except for its own action, neglect or default, nor for any loss unless the same shall

have been through its negligence or want

of good faith.

Unless it

is specifically otherwise provided herein, the Escrow Agent has no duty

to determine or inquire into the happening or occurrence

of any event or contingency or the

performance or failure

of performance of the District with respect to arrangements or contracts

with others, with the Escrow Agent's sole duty hereunder being to safeguard the Refunding

Account, to dispose

of and deliver the same in accordance with this Agreement. If, however, the

Escrow Agent is called upon by the terms

of this Agreement to determine the occurrence of any

event or contingency, the Escrow Agent shall be obligated, in making such determination, only

to exercise reasonable care and diligence, and in event

of error in making such determination the

Escrow Agent shall be liable only for its own misconduct or its negligence. In determining the

occurrence

of any such event or contingency the Escrow Agent may request from the District or

any other person such reasonable additional evidence

as the Escrow Agent in its discretion may

deem necessary to determine any fact relating to the occurrence

of such event or contingency,

and in this connection may make inquiries of, and consult with, among others, the District at any

time.

Section 8.3. Compensation.

The District shall pay to the Escrow Agent fees for performing the services

hereunder and for the expenses incurred or to be incurred by the Escrow Agent in the

administration

of this Agreement pursuant to the terms of the Fee Schedule attached as

Appendix C. The Escrow Agent hereby agrees that in no event shall it ever assert any claim or

lien against the Refunding Account for any fees for its services, whether regular or extraordinary,

as Escrow Agent, or in any other capacity, or for reimbursement for any

of its expenses as

Escrow Agent or in any other capacity.

Section 8.4. Successor Escrow Agents.

If at any time the Escrow Agent or its legal successor or successors should

become unable, through operation or law or otherwise, to act as Escrow Agent hereunder, or

if

its property and affairs shall be taken under the control of any state or federal court or

administrative body because

of insolvency or bankruptcy or for any other reason, a vacancy shall

forthwith exist in the office

of Escrow Agent hereunder. In such event the District, by

appropriate action, promptly shall appoint an Escrow Agent to fill such vacancy.

If no successor

Escrow Agent shall have been appointed by the District within

60 days, a successor may be

appointed by the owners

of a majority in principal amount of the Refunded Bonds then

outstanding by an instrument or instruments in writing filed with the District, signed by such

owners or by their duly authorized attorneys-in-fact. If, in a proper case, no appointment

of a

successor Escrow Agent shall be made pursuant to the foregoing provisions

of this Section

within three months after a vacancy shall have occurred, the owner of any Refunded Bond may

A-7

---

apply to any court of competent jurisdiction to appoint a successor Escrow Agent. Such court

may thereupon, after such notice,

if any, as it may deem proper, prescribe and appoint a

successor Escrow Agent.

Any successor Escrow Agent shall

be a corporation organized and doing business

under the laws

of the United States or any state, authorized under such laws to exercise corporate

trust powers, having a combined capital and surplus

of at least $100,000,000 and subject to the

supervision or examination by federal or state authority.

Any successor Escrow Agent shall execute, acknowledge and deliver to the

District and the Escrow Agent an instrument accepting such appointment hereunder, and the

Escrow Agent shall execute and deliver an instrument transferring to such successor Escrow

Agent, subject

to the terms of this Agreement, all the rights, powers and trusts of the Escrow

Agent hereunder.

Upon the request of any such successor Escrow Agent, the District shall

execute any and all instruments in writing for more fully and certainly vesting in and confirming

to such successor Escrow Agent all such rights, powers and duties.

The obligations assumed by the Escrow Agent pursuant to this Agreement may be

transferred by the Escrow Agent to a successor Escrow Agent

if (a) the requirements of this

Section 8.4 are satisfied; (b) the successor Escrow Agent has assumed all the obligations of the

Escrow Agent under this Agreement; and (c) all

of the Escrowed Securities and money held by

the Escrow Agent pursuant to this Agreement have been duly transferred to such successor

Escrow Agent.

Section 9.1. Notice.

Any notice, authorization, request, or demand required or permitted to be given

hereunder shall be in writing and shall be deemed to have been duly given when mailed by

registered or certified mail, postage prepaid addressed to the District, the District Treasurer or the

Escrow Agent at the address shown on Exhibit A attached hereto. The

United States Post Office

registered or certified mail receipt showing delivery

of the aforesaid shall be conclusive evidence

of the date and fact of delivery. Any party hereto may change the address to which notices are to

be delivered by giving to the other parties not less than ten days prior notice thereof.

Section 9.2. Termination of Responsibilities.

Upon the taking of all the actions as described herein by the Escrow Agent, the

Escrow Agent shall have no further obligations or responsibilities hereunder

to the District, the

owners

of the Refunded Bonds or to any other person or persons in connection with this

Agreement.

A-8

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Section 9.3. Binding Agreement.

This Agreement shall be binding upon the District and the Escrow Agent and their

respective successors and legal representatives, and shall inure solely to the benefit

of the owners

of the Refunded Bonds, the District, the Escrow Agent and their respective successors and legal

representati ves.

Section 9.4. Severability.

In case anyone or more of the provisions contained in this Agreement shall for

any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality

or unenforceability shall not affect any other provisions of this Agreement, but this Agreement

shall be construed as

if such invalid or illegal or unenforceable provision had never been

contained herein.

Section 9.5. Washington Law Governs.

This Agreement shall be governed exclusively by the provisions hereof and by the

applicable laws

of the state of Washington.

Section 9.6. Time of the Essence.

Time shall be of the essence in the performance of obligations from time to time

imposed upon the Escrow Agent

by this Agreement.

Section 9.7. Notice to Moody's and Standard

&

Poor's.

In the event that this agreement or any provision thereof is severed, amended or

revoked, the District shall provide written notice

of such severance, amendment or revocation to

Moody's Investors Service at 7 World Trade Center at 250 Greenwich Street, New York,

New York, 10007, Attention: Public Finance Rating Desk! Refunded Bonds and to Standard and

Poor's Ratings Services, a Division of The McGraw Hill Companies, 55 Water Street,

New York, NY, 10041, Attention: Public Finance Rating Desk/Refunded Bonds.

Section 9.8. Amendments.

This Agreement shall not be amended except to cure any ambiguity or formal

defect or omission in this Agreement. No amendment shall be effective unless the same shall be

in writing and signed by the parties thereto. No such amendment shall adversely affect the rights

of the holders of the Refunded Bonds. No such amendment shall be made without first receiving

written confirmation from the rating agencies,

(if any) which have rated the Refunded Bonds that

such administrative changes will not result

in a withdrawal or reduction of its rating then

assigned to the Refunded Bonds.

If this Agreement is amended, prior written notice and copies

of the proposed changes shall be given to the rating agencies which have rated the Refunded

Bonds.

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EXECUTED as of the date first written above.

Exhibit A

Exhibit B

Exhibit C

Exhibit D

Exhibit E

Appendix A

Appendix B

Appendix C

EVERETT SCHOOL DISTRICT NO.2,

SNOHOMISH COUNTY, WASHINGTON

Secretary, Board of Directors

U.S. BANK NATIONAL ASSOCIATION,

SEATTLE, WASHINGTON

Authorized Signatory

Addresses

of the District, the District Treasurer and the Escrow Agent

Description

of the Refunded Bonds

Schedule

of Debt Service on Refunded Bonds

Description

of Beginning Cash Deposit (if any) and Escrowed Securities

Escrow Fund Cash Flow

Notice

of Redemption for the 1998 Bonds

Notice

of Defeasance for the 1998 Bonds

Fee Schedule

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EXHIBIT A

Addresses

of the District, the District Treasurer and Escrow Agent

District:

Everett School District No.2

4730 Colby Avenue

Everett, W A

98203

Attention:

Robert Collard, Associate Superintendent, Finance and

Operations

District Treasurer: Snohomish County Treasurer

3000 Rockefeller Avenue, MS501

Everett, WA 98201-4046

Attention: Kirke Sievers, Treasurer

Escrow Agent:

U.S. Bank National Association

Corporate Trust Services

PD-W A-T7CT

1420 Fifth Avenue, 7th Floor

Seattle, WA

98101

Attention: Carolyn Morrison, Vice President

A-A-1

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EXHIBITB

Description of the Refunded Bonds

Everett School District

No.2

Snohomish County, Washington

Unlimited Tax General Obligation Refunding Bonds, Series 1998A

Maturity Date

Principal Amount

Interest Rate

December

1,2012

$9,545,000

4.75%

A-B-1

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EXHIBIT C

Schedule of Debt Service on Refunded Bonds

Date

Interest

12/0112008

$

226,693.75

TOTAL

$

226,693.75

Principal/

Redemption Price

$

9,545,000.00

$

9,545,000.00

A-C-1

Total

$ 9,771,693.75

$ 9,771,693.75

---

EXHIBITD

Escrow Deposit

I.

Cash $0.19

II.

Other Obligations

Description

SLGS-Cert.

Totals

Maturity Date

12/0112008

Principal

Amount

$

9,764,925

$

9,764,925

Yield

0.460%

III.

Costs of Issuance

Escrow Agent Fee (US. Bank) .................. " $

275.00

Bond Counsel Fee (K&L POE) ................... "

20,000.00

Rating Agency Fee (Moody's) .................... "

5,250.00

Rating Agency Fee (S&P)

6,750.00

Total: ....................................................... " $

32,275.00

Total Cost

$

9,764,925.00

$

9,764,925.00

A-D-1

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Date

10107/2008

12/01/2008

$

$

Refunding Account Cash Flow

Escrow

Net Escrow

Excess

Requirement

Receipts

Receipts

$

0.19

$

0.19

9,771,693.75

9,771.693.56

(0.19}

9,771,693.75

$ 9,771,693.75

0.00

A-E-l

Cash

Balance

$

0.19

0.00

P:1202B7 _CMWI202B7 _B70

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APPENDIX A

Notice

of Redemption*

Everett School District No.2

Snohomish County, Washington

Unlimited Tax General Obligation Refunding Bonds, Series 1998A

NOTICE IS HEREBY GIVEN that Everett School District No.2, Snohomish

County, Washington has called for redemption on December

1, 2008, its then outstanding

Unlimited Tax General Obligation Refunding Bonds,

Series 1998 (the "1998A Bonds").

The 1998A Bonds will be redeemed at a price of one hundred percent (100%) of

their principal amount, plus interest accrued to December 1, 2008. The redemption price of the

1998A Bonds is payable on presentation and surrender

of the 1998A Bonds at the office of:

The Bank

of New York

Mellon

Worldwide Securities

Processing

2001

Bryan Street, 9th Floor

Dallas, TX 75201

-or-

Wells Fargo Bank, National Association

Corporate Trust Department

14th Floor -

MIS 257

999 Third Avenue

Seattle, W A 98104

Interest on all 1998A Bonds or portions thereof which are redeemed shall cease to

accrue on December

1, 2008.

The following 1998A Bonds are being redeemed:

Maturity Date

Principal Amount

Interest Rate

CUSIPNo.

December 1, 2012

$ 9,545,000

4.75%

833119QL7

By Order of Everett School District No.2, Snohomish County, Washington

The Bank of New York Mellon, as Paying Agent

Dated:

_____________ _

Withholding

of 28% of gross redemption proceeds of any payment made within the

United States may be required by the Jobs and Growth Tax Relief Reconciliation Act of 2003

(the "Act") unless the Paying Agent has the correct taxpayer identification number (social

security or employer identification number) or exemption certificate

of the payee. Please furnish

*

This notice shall be given not more than 60 nor less than 30 days prior to December 1, 2008, by first-class

mail to each registered owner

of the Refunded Bonds. In addition notice shall be mailed at least 30 days prior to

December

1, 2008, to The Depository Trust Company of New York, New York; BancAmerica ROBERTSON

STEPHENS,

Citigroup Global Markets, Inc.; MBIA Insurance Corporation; The Bank of New York Mellon, as

Fiscal Agent; Moody's Investors Service, New York, New York; and Standard

&

Poor's Ratings Services, a

Division

of the McGraw-HiIl Companies, Inc., New York, New York, and to Disc1osureUSA.

Page I-Appendix A

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a

properly completed Form W-9 or exemption certificate or equivalent when presenting your

Bonds.

Page 2-Appendix A

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APPENDIXB*

Notice of Defeasance*

Everett School District No.2, Snohomish County, Washington

Unlimited Tax General Obligation Refunding Bonds, Series 1998A

NOTICE

IS HEREBY GIVEN to the owners of that portion of the above-captioned

bonds with respect to which, pursuant

to an Escrow Agreement dated October 7, 2008, by and

between Everett

School District No.2, Snohomish County, Washington (the "District") and U.S.

Bank National Association (the "Escrow Agent"), the District has deposited into an escrow

account, held by the Escrow Agent, cash and non-callable direct obligations

of the United States

of America, the principal of and interest on which, when due, will provide money sufficient to

pay each year, to and including the respective maturity or redemption dates of such bonds so

provided for, the principal thereof and interest thereon (the

"Defeased Bonds"). Such Defeased

Bonds are therefore deemed to be no longer outstanding pursuant to the provisions

of Resolution

No.638 of the District, authorizing the issuance of the Defeased Bonds, but will be paid by

application

of the assets of such escrow account.

The Defeased Bonds are described

as follows:

Unlimited Tax General Obligation Refunding Bonds,

Series 1998A (dated February 1,

1998)

Maturity

Par Amount

Call Date

Interest

Defeased

(At 100%)

Rate

CUSIPNo.

December 1, 2012

$

9,545,000

12/01/2008

4.75%

833119QL7

Information for Individual Registered

Owner

The addressee of this notice is the registered owner of Bond Certificate No. __ of the

Defeased Bonds described above, which certificate is in the principal amount

of $ __ _

_____ ,2008

*

This notice shall be given immediately by first-class mail to each registered owner of the Defeased Bonds.

In addition notice shall

be mailed to The Depository Trust Company of New York, New York; BancAmerica

ROBERTSON STEPHENS, Citigroup Global Markets, Inc.; MBIA Insurance Corporation; The Bank of New York

Mellon,

as Fiscal Agent; Moody's Investors Service, New York, New York; and Standard

&

Poor's Ratings

Services, a Division

of the McGraw-Hill Companies, Inc., New York, New York, and to DisclosureUSA.

Page 1 - Appendix B

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Fee Schedule

Escrow Agent Fee: See Attached

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CERTIFICATE

I, the undersigned, Secretary of the Board of Directors of Everett School District No.2,

Snohomish County, Washington, (the "District"), and keeper of the records of the Board of

Directors (herein called the "Board"), DO HEREBY CERTIFY:

1.

That the attached resolution is a true and correct copy of Resolution No. 922 of

the Board (herein called the "Resolution"), duly adopted at a regular meeting thereof held on the

23rd day

of September, 2008.

2.

That said meeting was duly convened and held in all respects in accordance with

law, and to the extent required by law, due and proper notice

of such meeting was given; that a

legal quorum was present throughout the meeting and a legally sufficient number

of members of

the Board voted in the proper manner for the adoption of the Resolution; that all other

requirements and proceedings incident

to the proper adoption of the Resolution have been duly

fulfilled, carried out and otherwise observed; and that I am authorized to execute this certificate.

IN

WITNESS WHEREOF, I have hereunto set my hand this 23rd day of September,

2008.

Secretary, Board of Directors

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