HomeMy WebLinkAboutMINUTES - 11091993 - 2.2 -2—
TO: BOARD BOARD OF SUPERVISORS Contra
FROM: , Costa
Phil Batchelor, County Administrator _
County
DATE: November 9 1993
SUBJECT: Pension Obligation Bonds
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS:
1 . Acknowledge that the current historically low interest rates
create an opportunity to reduce the County costs for unfunded
employee retirement costs .
2 . Acknowledge that the County currently has an unfunded accrued
pension obligation approaching , $400,000,000 that is being
amortized, with interest, by annual payments to the Employees
Retirement Association.
3 . . Acknowledge report from the County Administrator that through
the issuance of pension obligation bonds. to fund a one-time
payment to the Retirement Association for the unfunded accrued
obligation, it is possible to reduce the County annual costs .
by at least $900,000 per year.
4 . Acknowledge that the proposal has been presented to the
Retirement Board with a generally favorable response.
5 . Direct the County Administrator to -proceed. with the process
necessary to issue pension obligation bonds .
6 . Adopt resolution authorizing issuance and sale of the pension.
obligation bonds.
7 . Direct the County Administrator to determine the economic
benefits of prepaying the annual regular retirement payments
one or two years in advance and include the prepayment process
in the proposed issue authorization if determined to be
advantageous.
CONTINUED ON ATTACHMENT: x YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ON November 9 19(_)3 . APPROVED AS RECOMMENDED X OTHER
The Board APPROVED the recommendations set forth above and ADOPTED
Resolution No. 93/668 as referenced in Recommendation No . 6 above.
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
X UNANIMOUS(ABSENT I I ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.
ATTESTED November 9 , 199'
Contact: PHIL BATCHELOR;CLERK OF THE BOARD OF.
CC: SUPERVISORS AND COUNTY ADMINISTRATOR
SEE LAST PAGE
BY ,,.._ GY• . DEPUTY
-2-
8 . Accept preliminary legal analysis by the law firm of Orrick,
Herrington & Sutcliffe that indicates that although no assets
are involved in the pension issue it is an acceptable
financing vehicle that requires a validation action in
Superior Court to assure investor and the rating agencies that
the issue is not subject to any legal challenges .
9 . Acknowledge that the bond issue process cannot be completed
until the validation action is concluded and Orrick,
Herrington & Sutcliffe has prepared the necessary documents to
file with the Superior Court the day following Board approval
of the process .
10 . Authorize the County Administrator to contract with Orrick,
Herrington & Sutcliffe for legal counsel for the issue.
11 . Authorize filing of a validation action in the Superior Court
to validate the legal process for the pension obligation
bonds .
12 . Authorize the County Administrator to contract with Prager,
McCarthy & Sealy as financial advisor for the pension
obligation bond issue.
13 . Authorize the County Administrator to issue requests for
proposals for underwriters for the issue.
14 . Authorize the County Administrator to utilize the most
financially advantageous method of sale by using either a
negotiated or competitive process for underwriting dependent
upon what is determined to be the most economic for the County
in consultation with the Auditor-Controller, Treasurer-Tax
Collector and Financial. Advisor.
15 . Direct the County Administrator to direct the underwriting
team to include appropriate MBE/WBE representation if a
negotiated process is selected.
16 . Affirm First Interstate Bank as Trustee for the issue as
having submitted the lowest cost proposal out of responses
received through a cost competitive process by the County
Administrator and the Financial Advisor and authorize - the
County Administrator to execute a contract with First
Interstate Bank for Trustee Services .
17 . Authorize appropriate County officials and consultants to
travel to New York in December to obtain ratings for the
issue.
18 . Authorize the . County Administrator or a Deputy County
Administrator to execute all contracts and documents necessary
to complete the issue.
19 . Direct the County Administrator to provide the Board with a
final report of the total County savings from the issue at the
conclusion of the process .
FINANCIAL IMPACT:
The proposal to issue pension obligation bonds has been determined
to have the potential . for a reduction of County payments for
funding the unfunded accrued retirement obligation by several
million over the next 20 years . All of the costs of issuance will
be included in the issue.
F
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BACKGROUND:
Contra Costa County is covered under the 1937 Retirement Act which
requires the county to contribute both normal contributions for
employees and to fund any future unfunded liability over a period
of time. The annual contribution rate is based on actuarial
projections of the cost of benefits and estimated earnings of the
system over future years . Various events such as improved
benefits, large-than-estimated salary increases, changes in
employee demographics, and changes in the inflation rate are some
of the reasons that the unfunded liability may change over time.
The County is required to provide the funding to cover the
estimated unfunded liability as determined by appropriate actuarial
methods .
The unfunded liability is being amortized through payments to the
Retirement Association and include interest at the interest rate
assumption for the Retirement Association currently at 8 .25% . The
current low interest rates for borrowed funds creates an
opportunity for the County to borrow funds to pay off the liability
at rates less than the interest rate assumption for the Retirement
Association. The interest rate assumption is computed by the
Retirement Association's actuary and adopted by the Retirement
Board. The rate is reviewed regularly but is adjusted very little.
The current rate has been in place since 1986 .
Bond counsel has advised that the borrowing must be with the use of
taxable bonds due to the federal requirements in this area of tax
law. Taxable rates for a highly rated issue would be approximately
6 . 75% . The difference in rates generates the savings potential for
the County. The actual savings will depend upon the final amount
of the issue, interest rates at the time of the issue and the
adopted interest rate assumption for the Retirement Association.
A task force of County officials and consultants has been
conducting an analysis of the program, risks, potential savings and
process for the pension bond program since September 30, 1993 .
Information has been reviewed from other jurisdictions which are
undergoing the same process . Sonoma County has already sold an
issue for $971400,000 of pension obligation bonds . Due to the
absolute requirement for the County to fund the pension obligation,
the rating agencies have considered such issues very favorably.
The bond counsel has advised that the process requires that a
Validation action be filed with the Superior Court in order to
assure the legality of the process . Orrick, Herrington & Sutcliffe
has been preparing the necessary documents and will file the action
the day following Board approval of the documents . The validation
process requires approximately 60 days and the securities cannot be
sold before completion of the action.
The current schedule calls for closing of the issue in early
February 1994 . All staff and consultants are committed to
completion of the issue as soon as legally possible in order to
maximize the savings and benefits to both the County and the
Retirement Board at the earliest date.
Contact: DeRoyce Bell 646-4093
cc: County Administrator
Auditor-Controller
Treasurer-Tax Collector
Retirement Administrator
County Counsel
Orrick, Herrington & Sutcliffe
Prager, McCarthy & Sealy
RESOLUTION NO. 93/668
RESOLUTION OF THE BOARD OF SUPERVISORS OF THE
COUNTY OF CONTRA COSTA AUTHORIZING THE
ISSUANCE OF ONE OR MORE COUNTY OF CONTRA
COSTA PENSION OBLIGATION DEBENTURES, AND THE
ISSUANCE OF ONE OR MORE SERIES OF COUNTY OF
CONTRA COSTA PENSION OBLIGATION BONDS,
APPROVING THE FORM OF AND AUTHORIZING THE
EXECUTION AND DELIVERY OF A TRUST AGREEMENT,
AND AUTHORIZING A VALIDATION ACTION AND OTHER
MATTERS RELATING THERETO
WHEREAS, the County of Contra Costa (the "County")
adopted a retirement plan under the County Employees Retirement
Law of 1937, being Division 4 of Title 3 of the Government Code
of the State of California, Sections 31450 through 31898,
inclusive, as amended (the "Retirement Law") ; and
WHEREAS, the Retirement Law obligates the County to (1)
make annual contributions to the Contra Costa County Employees
Retirement Association (the "Association") , to fund pension
benefits for its employees, (2) amortize the unfunded accrued
actuarial liability with respect to such pension benefits over a
period not exceeding 30 years, and (3) appropriate funds for the
purposes described in (1) and (2) ; and
WHEREAS, the County desires to evidence its obligations
to the Association to pay the unfunded accrued actuarial
liability of the County, and, if the County desires and if
authorized by law, to fund the unpaid amount of its normal
contribution to the Association for Fiscal Year 93-94 and Fiscal
Year 94-9S, by issuing a debenture (the 11.1994 Debenture") to the
Association and to authorize the issuance of additional
debentures in the future from time to time; and
WHEREAS, the County desires to issue bonds (the
"Bonds") in an aggregate principal amount equal to the principal
amount of the 1994 Debenture for the purpose of refunding the
1994 Debenture and thereby providing funds to the Association for
investment and to authorize the issuance of additional bonds in
the future from time to time; and
WHEREAS, the Association has indicated its willingness
to take all necessary actions in connection with the issuance of
the 1994 Debenture and the Bonds;
WHEREAS, there are on file with the Clerk of the Board
of Supervisors the proposed forms of the following documents:
1. the 1994 Debenture.; and
2 . a Trust Agreement (the "Trust Agreement") to be
entered into between the County and First Interstate Bank of
SF2-23263.2
California, as trustee (the "Trustee") , relating to the Bonds,
including the form of Bond attached thereto as an exhibit.
NOW, THEREFORE, IT IS RESOLVED, DETERMINED AND ORDERED
by the Board of Supervisors of the County of Contra Costa as
follows:
Section 1. The Board of Supervisors of the County of
Contra Costa (the "Board") hereby finds and declares that the
issuance of the 1994 Debenture, the issuance of the Bonds to
refund the 1994 Debenture, the prepayment, if any, of the
County's normal annual contribution to the'Association for Fiscal
Year 93-94 and Fiscal Year 94-95, and the other actions
contemplated by this Resolution are in the best interests of the
County and will result in significant savings to the taxpayers of
the County.
Section 2 . The Board hereby authorizes and approves
the issuance of the 1994 Debenture, and additional debentures
from time to time in the future, if necessary, and authorizes and
directs the Treasurer-Tax Collector of the County to execute and
deliver the 1994 Debenture to the Association, substantially in
the form on file with the Clerk of the Board, with such changes
therein, deletions therefrom and additions thereto as the
Treasurer-Tax Collector shall approve, such approval to be
conclusively evidenced by the execution and delivery of the 1994
Debenture to the Association, and the Clerk of the Board is
authorized and directed to affix and attest the seal of the
County; provided, however, that the 1994 Debenture shall be in a
principal amount not to exceed the total of the unfunded accrued
actuarial liability of the County to the Association remaining
unpaid on the date of issuance of the 1994 Debenture, and, to the
extent permitted by law, and if the County determines that it is
desirable, to fund the County's unpaid normal annual contribution
to the Association for Fiscal Year 93-94 and Fiscal Year 94-95
and to pay costs of issuance and underwriter's discount relating
to the financing of such unfunded accrued actuarial liability and
such normal annual contribution, the total principal amount of
the 1994 Debenture shall include such amounts; the stated
interest rate on the 1994 Debenture shall not exceed twelve
percent (12%) per annum; the 1994 Debenture shall be prepayable
at any time without premium; and the 1994 Debenture shall mature
not later than June 1, 2015. Additional debentures authorized
hereunder may be issued pursuant to supplemental resolutions
hereto. The 1994 Debenture as executed shall constitute an
obligation imposed by law, pursuant to the Constitution of the
State of California and the Retirement Law and an obligation of
the County not limited as to payment from any special source of
funds. The 1994 Debenture shall not, however, constitute an
obligation of the County for which the County is obligated or
permitted to levy or pledge any form of taxation or for which the
County has levied or pledged or will levy or pledge any form of
taxation.
SF2-23263.2 2
Section 3 . The Board hereby authorizes and approves
the issuance of the Bonds and hereby authorizes and directs the
Chair of the Board and the Treasurer-Tax Collector of the County
to execute the Bonds, and the Clerk of the Board to affix and
attest the seal of the County and to cause the Bonds to be
authenticated and delivered in accordance with the Trust
Agreement. The Bonds shall be in substantially the form set
forth in Exhibit A to the Trust Agreement, with such changes
therein, deletions therefrom and additions thereto as the Chair
of the Board and the Treasurer-Tax Collecter shall approve, such
approval to be conclusively evidenced by the execution and
delivery of the Bonds;' the Bonds may be issued in a single series
or in two or more series, provided, however, that the aggregate
principal amount of the Bonds shall not exceed the principal
amount of the 1994 Debenture, the interest rate on the Bonds
shall not exceed twelve percent (12%-) per annum, and the Bonds
shall mature not later than June 1, 2015. The Treasurer-Tax
Collector is further authorized to determine the dated date of
the Bonds, provided such date shall not be earlier than the first
day of the month in which the Bonds are issued. Each such
determination by the Treasurer-Tax Collector shall be
conclusively evidenced by the issuance of the Bonds. The Bonds
shall constitute an obligation imposed by law, pursuant to the
Constitution of the State of California and the Retirement Law
and an obligation of the County not limited as to payment from
any special source of funds. The Bonds shall not, however,
constitute an obligation of the County for which the County is
obligated or permitted to levy or pledge any form of taxation or
for which the County has levied or pledged or will levy or pledge
any form of taxation.
Section 4. The proposed form of Trust Agreement, dated
as of January 1, 1994, between the County and the Trustee, on
file with the Clerk of the Board, is hereby approved. The Chair
of the Board is hereby authorized and directed to execute and
deliver the Trust Agreement on behalf of the County,
substantially in the form on file with the Clerk of the Board,
with such changes therein, deletions therefrom and additions
thereto as the Chair shall approve, such approval to be
conclusively evidenced by the execution and delivery of the Trust
Agreement, and the Clerk of the Board is authorized and directed
to affix and attest the seal of the County. Pursuant to the
terms of the Trust Agreement, the Board hereby approves the
issuance of additional series of bonds in the future from time to
time pursuant to supplemental trust agreements, subject to the
limitations contained in the Trust Agreement presented to this
meeting.
Section 5. The County Administrator or his designee is
hereby authorized to execute and deliver on behalf of the County
an interest rate swap agreement and/or a hedging agreement and/or
any other form of derivative agreement or arrangement with an
institutional party; provided, however, that the institutional
party shall have a long-term credit rating by at least one
SF2-23263.2 3
national credit agency equal to AA, the term of the swap
agreement, derivative agreement or hedging agreement shall not
exceed five years, the County's obligations shall be contingent
upon certain performance by the counterparty to the agreement or
arrangement and that the County will have the right to terminate
the agreement or arrangement upon the occurrence of certain
circumstances. The Board hereby finds and determines that such
agreements or arrangements will result in a lower cost of
borrowing to the County.
Section 6. If the County Administrator determines that
it" will be advantageous to the County to purchase municipal bond
insurance with respect to some or all of the Bonds, the County
Administrator or his designee is hereby authorized to purchase
such insurance at market rates.
Section 7. The Board hereby retains Prager, McCarthy &
Sealy, as financial consultant, and Orrick, Herrington &
Sutcliffe, as bond counsel, in connection with the issuance and
sale of the Bonds upon such terms and conditions as may be
determined by the County Administrator. The County Administrator
is hereby authorized to retain co-bond counsel, if any, upon such
terms and condictions as may be determined by the County
Administrator.
Section 8 . The Board hereby authorizes County Counsel,
County officials and Bond Counsel to continue to explore the
possibility of including within the financing of the unfunded
accrued actuarial pension liability of the County the financing
of unfunded accrued actuarial pension liabilities of special
districts governed by the Board of Supervisors of the County, and
if the funding of such liabilities is authorized by law, the
principal amount of the 1994 Debenture referred to in Section 2
hereof and the aggregate principal amount of the Bonds referred
to in Section 3 hereof shall include the financing of such
liabilities.
Section 9 . In the event this Board fails or neglects
to make appropriations for transfer in respect of its obligation
to pay the Bonds, the Auditor-Controller is hereby authorized and
directed, pursuant to the Retirement Law, to transfer from any
money available in any fund of the County amounts necessary to
make such payments with such transfer having the same force and
effect as an appropriation by this Board.
Section 10. The officers of the County are, and each
of them hereby is, authorized and directed to do any and all
things, including bringing a validation action under Section 860
of the California Code of Civil Procedure, and to execute and
deliver any and all documents which they or any of them deem
necessary or advisable in order to consummatethe transactions
contemplated by this Resolution and otherwise to carry out, give
effect to and comply with the terms and intent of this
Resolution.
SP2-23263.2 4
Section 11. This Resolution shall take effect from and
after its date of adoption.
PASSED AND ADOPTED this 9th day of November, 1993 by
the following vote:
AYES: Supervisors Powers , Bishop, McPeak, Torlakson
NOES: None
ABSENT: Supervisor Smith
ABSTAIN: None
Chair of the Board of Supervisors
County of Contra Costa, California
[Seal]
ATTEST: Phil Batchelor, Clerk of the
Board of Supervisors and
County Administrator
By e-��9. 2 Lz�
Deputy Clerk of he Board of
Supervisors of the County of
Contra Costa, State of California
SP2-23263.2 5
O
[FORM OF DEBENTURE]
No. $
COUNTY OF CONTRA COSTA
STATE OF CALIFORNIA
PENSION OBLIGATION DEBENTURE
The County of Contra Costa (the "County") , a political
subdivision of the State of California, acknowledges itself
indebted, and for value received hereby promises to pay, to the
Contra Costa County Employees Retirement Association (the
"Association") , a retirement association existing under the
County Employees Retirement Law of 1937 of the State of
California, or assigns (the "Holder") , the sum of
Dollars ($ ) , together with interest
thereon from the date hereof at the rate of per
annum. Principal and interest shall be paid at
, Martinez, California.
Interest on such principal amount shall be payable from the date
of this Debenture or from the most recent interest payment date
to which interest has been paid or duly provided for, commencing
on , 1994, and semiannually thereafter on
and at the rate set
forth above, until the principal hereof is paid or made available
for payment and principal shall be payable in accordance with the
following schedule:
provided, however, that the County shall prepay each fiscal
year' s obligations within thirty days of the commencement of such
fiscal year.
This Debenture is a duly authorized debenture of the
County designated its "Pension Obligation Debenture" (the
"Debenture") in the aggregate principal amount of $
issued under and in full compliance with the Constitution and
statutes of the State of California, particularly the County
Employees Retirement Law of 1937, as amended (the "Act") , and
under and pursuant to Resolution No. adopted by the Board
of Supervisors of the County on November 9, 1993 (the
"Resolution") . This Debenture and payment hereunder are subject
to the terms and conditions of the Resolution, copies of which
are on file at the office of the Clerk of the Board of
Supervisors of the County, and reference to the Resolution and
any and all supplements thereto and modifications and amendments
SF2-23263.2
thereof and to the Act is made for a complete statement of such
terms and conditions.
This Debenture may, at any time and from time to time,
be prepaid in whole or in part without premium and without prior
notice.
The obligations of the County hereunder, including the
obligation to make all payments of interest and principal when
due, are obligations of the County imposed by law and are
absolute and unconditional, without any right of set-off or
counterclaim. This Debenture does not constitute an obligation
of the County for which the County is obligated or permitted to
levy or pledge any form of taxation or for which the County has
levied or pledged or will levy or pledge any form of taxation.
Neither the Debenture nor the obligation of the County to make
payments on the Debenture constitute an indebtedness of the
County, the State of California, or any of its political
subdivisions within the meaning of any constitutional or
statutory debt limitation or restriction.
Pursuant to Section 31584 of the Act, the Board of
Supervisors of the County is obligated to make appropriations to
pay the unfunded accrued actuarial liability which is evidenced
by this Debenture and such Section and the Resolution require the
Auditor-Controller of the County to transfer from any money
available in any fund in the County treasury the sums specified
if the Board of Supervisors fails to make such appropriations.
Notwithstanding any dispute between the County and the
Association, or any assignee of the Association or any assigns of
the Association, the County shall make all payments required
hereunder when due, unless made earlier pursuant to optional
prepayment, and shall not withhold any such payments pending the
final resolution of such dispute or for any other reason
whatsoever. The County hereby waives presentment, protest,
notice, demand or any action on delinquency.
It is hereby certified and recited that all conditions,
acts and things required by law and the Resolution to exist, to
have happened and to have been performed do exist, have happened
and have been performed in due time, form and manner as required
by law.
SF2-23263.2
IN WITNESS WHEREOF, THE COUNTY OF CONTRA COSTA,
CALIFORNIA has caused this Debenture to be signed in its name and
on its behalf by the manual or facsimile signature of the
Treasurer-Tax Collector of the County and its seal (or a
facsimile thereof) to be hereunto affixed, imprinted, engraved or
otherwise reproduced, as of the day of ,
19 9 .
COUNTY OF CONTRA COSTA, CALIFORNIA
By:
Treasurer-Tax Collector
[SEAL]
Attest:
By:
Clerk of the Board of Supervisors
SF2-23263.2
2 .2
OH&S DRAFT
11/08/93
TRUST AGREEMENT
between the
COUNTY OF CONTRA COSTA
and
FIRST INTERSTATE BANK OF CALIFORNIA,
as Trustee
Dated as of January 1, 1994
$ County of Contra Costa
Pension Obligation Bonds
SF2-23139.3
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; EQUAL SECURITY
1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.02. Trust Agreement Constitutes Contract. . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE II
ISSUANCE OF 1994 SERIFS A BONDS; GENERAL BOND PROVISIONS
2.01. Authorization and Purpose of 1994 Series A Bonds . . . . . . . . . . . . . . . . . 10
2.02. Terms of the 1994 Series A Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.03. Redemption of 1994 Series A Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.04. Form of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.05. Execution of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.06. Transfer and Payment of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.07. Exchange of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.08. Bond Registration Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.09. Mutilated, Destroyed, Stolen or Lost Bonds . . . . . . . . . . . . . . . . . . . . . . 16
2.10. Temporary Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.11. Procedure for the Issuance of 1994 Series A Bonds . . . . . . . . . . . . . . . . . 16
2.12. Validity of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.13. Special Covenants as to Book-Entry Only System for 1994 Series A Bonds . . . 17
ARTICLE III
ISSUANCE OF ADDITIONAL BONDS
3.01. Conditions for the Issuance of Additional Bonds . . . . . . . . . . . . . . . . . . . 19
3.02. Procedure for the Issuance of Additional Bonds . . . . . . . . . . . . . . . . . . . . 20
ARTICLE IV
FUNDS AND ACCOUNTS
4.01. Bond Fund; Deposits to Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.02. Allocation of Moneys in Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.03. Deposit and Investments of Money in Accounts and Funds . . . . . . . . . . . . . 24
SF2-23139.3 1
Page
ARTICLE V
COVENANTS OF THE COUNTY
5.01. Punctual Payment and Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.02. Extension of Payment of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.03. Additional Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.04. Power to Issue Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.05. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.06. Accounting Records and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.07. Prosecution and Defense of Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.08. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.09. Waiver of Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VI
THE TRUSTEE
6.01. The Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.02. Liability of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.03. Compensation and Indemnification of Trustee . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE VII
AMENDMENT OF THE TRUST AGREEMENT
7.01. Amendment of the Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.02. Disqualified Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.03. Endorsement or Replacement of Bonds After Amendment . . . . . . . . . . . . . . 31
7.04. Amendment by Mutual Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.05. Attorney's Opinion Regarding Supplemental Agreements . . . . . . . . . . . . . . 31
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF HOLDERS
8.01. Events of Default and Acceleration of Maturities . . . . . . . . . . . . . . . . . . . 31
8.02. Application of Funds Upon Acceleration . . . . . . . . . . . . . . . . . . . . . . . . 33
8.03. Institution of Legal Proceedings by Trustee . . . . . . . . . . . . . . . . . . . . . . 33
8.04. Non-Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.05. Actions by Trustee as Attorney-in-Fact . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.06. Remedies Not Exclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.07. Limitation on Bondholders' Right to Sue . . . . . . . . . . . . . . . . . . . . . . . . 34
8.08. Absolute Obligation of County . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SF2-23139.3 ll
Page
ARTICLE IX
DEFEASANCE
9.01. Discharge of Bonds . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.02. Unclaimed Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE X
MISCELLANEOUS
10.01. Benefits of the Trust Agreement Limited to Parties . . . . . . . . . . . . . . . . . 37
10.02. Successor Is Deemed Included In All References To Predecessor . . . . . . . . 37
10.03. Execution of Documents by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.04. Waiver of Personal Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.05. Acquisition of Bonds by County . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.06. Destruction of Cancelled Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.07. Content of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.08. Publication for Successive Weeks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.09. Accounts and Funds; Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.10. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.11. Article and Section Headings and References . . . . . . . . . . . . . . . . . . . . . 39
10.12. Partial Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.13. Execution in Several Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.14. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.15. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Exhibit A: Form of Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
SF2-23139.3 lll
THIS TRUST AGREEMENT made and entered into as of January 1, 1994
(the "Trust Agreement") by and between FIRST INTERSTATE BANK OF CALIFORNIA, a
state banking corporation duly organized and existing under and by virtue of the laws of laws
of the State of California, as Trustee (the "Trustee") and the COUNTY OF CONTRA
COSTA (the "County"), a political subdivision, duly organized and existing under the
Constitution and laws of the State of California,
WITNESSETH:
WHEREAS, the County is obligated by the County Employees Retirement
Law of 1937, Division 4 of Title 3 of the Government Code of the State of California,
Sections 31450 through 31899.10, inclusive, as amended (the "Retirement Law"), to make
payments to the Contra Costa County Employees Retirement Association (the "Association")
relating to pension benefits accruing to the Association's members; and
WHEREAS, the County has issued a Pension Obligation Debenture dated as
of , 1994 (the "1994 Debenture") in the amount of$ in favor of the
Association, evidencing the County's obligation to pay the County's unfunded accrued
actuarial liability and a portion of the County's normal contribution for the fiscal years
ending June 30, 1994 and June 30, 1995; and
WHEREAS, the County is authorized pursuant to Articles 10 and 11
(commencing with Section 53570) of Chapter 3 of Division 2 of Title 5 of the Government
Code of the State of California (the "Act") to issue bonds for the purpose of refunding any
evidence of indebtedness of the County; and
WHEREAS, for the purpose of refunding the County's obligations to the
Association evidenced by the 1994 Debenture, the County has determined to issue its County
of Contra Costa Pension Obligation Bonds, 1994 Series A, in the aggregate principal amount
of $ (the "Bonds"), all pursuant to and secured by this Trust Agreement
providing for the issuance of the Bonds, all in the manner provided herein; and
WHEREAS, in order to provide for the authentication and delivery of the
Bonds, to establish and declare the terms and conditions upon which the Bonds are to be
issued and to secure the payment of the principal thereof and interest thereon, the County has
authorized the execution and delivery of this Trust Agreement; and
WHEREAS, all acts and proceedings required by law necessary to make the
Bonds, when executed by the County, authenticated and delivered by the Trustee and duly
issued, the valid, binding and legal obligations of the County payable in accordance with
their terms, and to constitute this Trust Agreement a valid and binding agreement of the
parties hereto for the uses and purposes herein set forth in accordance with its terms, have
SF2-23139.3
been done and taken, and the execution and delivery of this Trust Agreement have been in all
respects duly authorized;
NOW, THEREFORE, THIS TRUST AGREMENT WITNESSETH, that
in order to secure the payment of the principal of, premium, if any, and the interest on all
Bonds at any time issued and outstanding under this Trust Agreement, according to their
tenor, and to secure the performance and observance of all the covenants and conditions
therein and herein set forth, and to declare the terms and conditions upon and subject to
which the Bonds are to be issued and received, and in consideration of the premises and of
the mutual covenants herein contained and of the purchase and acceptance of the Bonds by
the holders thereof, and for other valuable considerations, the receipt whereof is hereby
acknowledged, the County does hereby covenant and agree with the Trustee, for the benefit
of the respective holders from time to time of the Bonds, as follows:
ARTICLE I
DEFINITIONS; EQUAL SECURITY
SECTION 1.01. Definitions. Unless the context otherwise requires, the terms
defined in this section shall for all purposes hereof and of any Supplemental Trust Agreement
and of any certificate, opinion, request or other document herein or therein mentioned have
the meanings herein specified:
Act
The term "Act" means Articles 10 and 11 (commencing with Section 53570)
of Chapter 3, Division 2, Title 5 of the Government Code of the State of California.
Association
The term "Association" means the Contra Costa County Employees Retirement
Association.
Board of Retirement
The term 'Board of Retirement" means the Board of Retirement of the County
of Contra Costa, California.
Bond Fund
The term 'Bond Fund" means the Bond Fund established in Section 4.01(b) of
this Trust Agreement.
SF2-23139.3 2
Bonds 1994 Series A Bonds Additional Bonds Serial Bonds Term Bonds
The term "Bonds" means the 1994 Series A Bonds and all Additional Bonds.
The term "1994 Series A Bonds" means all bonds of the County authorized by
and at any time Outstanding pursuant hereto and executed, issued and delivered in
accordance with Article II.
The term "Additional Bonds" means all bonds of the County authorized by and
at any time Outstanding pursuant hereto and executed, issued and delivered in accordance
with Article III.
The term "Serial Bonds" means Bonds for which no sinking fund payments are
provided.
The term "Term Bonds" means Bonds which are payable on or before their
specified maturity dates from sinking fund payments established for that purpose and
calculated to retire such Bonds on or before their specified maturity dates.
Bond Year
The term "Bond Year" means the twelve-month period ending on June 1 of
each year to which reference is made; provided that the first Bond Year shall commence on
the date the 1994 Series A Bonds are originally delivered and shall end on June 1, 1994.
Business Pav
The term "Business Day" means any day other than a Saturday or Sunday or
day upon which the Trustee is authorized by law to remain closed.
Certificate of the Count
The term "Certificate of the County" means an instrument in writing signed by
the County Administrator of the County or his designee, or by a Deputy County
Administrator of the County or by any other officer of the County duly authorized by the
Board of Supervisors of the County in writing to the Trustee for that purpose. If and to the
extent required by the provisions of Section 10.07, each Certificate of the County shall
include the statements provided for in Section 10.07.
Closing Date for the 1994 Series A Bonds
The term "Closing Date" means the date on which the 1994 Series A Bonds
are delivered to the Original Purchaser for the 1994 Series A Bonds.
SM-23139.3 3
Code
The term "Code" means the Internal Revenue Code of 1986, as amended.
Corporate Trust Office
Corporate Trust Office
The term "Corporate Trust Office" means such corporate trust office of the
Trustee as may be designated from time to time by written notice from the Trustee to the
County, initially being San Francisco, California and Los Angeles, California; provided,
however, that the Trustee may designate in writing to the County and the Owners such other
office or agency from time to time for purposes of registration, transfer, exchange, payment
or redemption of Bonds.
Costs of Issuance
The term "Costs of Issuance" means all items of expense directly or indirectly
payable by or reimbursable to the County and related to the 1994 Series A Bonds, including,
but not limited to, costs of preparation and reproduction of documents, costs of rating
agencies and costs to provide information required by rating agencies, filing and recording
fees, initial fees and charges of the Trustee, legal fees and charges, fees and disbursements
of consultants and professionals, fees and expenses of the underwriter, fees and charges for
preparation, execution and safekeeping of the 1994 Series A Bonds, and any other cost,
charge or fee in connection with the original execution and delivery of the 1994 Series A
Bonds.
Costs of Issuance Fund
The term "Costs of Issuance Fund" means the Costs of Issuance Fund
established in Section 2.11(c) of this Trust Agreement.
County
The term "County" means the County of Contra Costa, a political subdivision
and body corporate and politic of the State.
Financial Newspaper
The term "Financial Newspaper" means The Wall Street Journal or The Bond
Buyer, or any other newspaper or journal printed in the English language, publishing
financial news and selected by the Trustee, who shall be under no liability by reason of such
selection.
SF2-23139.3 4
Fiscal Year
The term "Fiscal Year" means the twelve-month period terminating on June 30
of each year, or any other annual accounting period hereafter selected and designated by the
County as its Fiscal Year in accordance with applicable law.
Holder
The term "Holder" means any person who shall be the registered owner of any
Outstanding Bond.
Independent Certified Public Accountant
The term "Independent Certified Public Accountant" means any certified
public accountant or firm of such accountants duly licensed and entitled to practice and
practicing as such under the laws of the State or a comparable successor, appointed and paid
by the County, and who, or each of whom --
(1) is in fact independent according to the Statement of Auditing Standards
No. 1 and not under the domination of the County;
(2) does not have a substantial financial interest, direct or indirect, in the
operations of the County; and
(3) is not connected with the County as a member, officer or employee of
the County, but who may be regularly retained to audit the accounting records of and
make reports thereon to the County.
Information Services
The term "Information Services" means Financial Information, Inc.'s "Daily
Called Bond Service," 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 17302,
Attention: Editor; Kenny Information Services' "Called Bond Service," 55 Broad Street,
28th Floor, New York, New York 10004; Moody's Investors Service's "Municipal and
Government," 99 Church Street, 8th Floor, New York, New York 10007, Attention:
Municipal News Reports; and Standard & Poor's Corporation's "Called Bond Service," 25
Broadway, 3rd Floor, New York, New York 10004; or, in accordance with then current
guidelines of the Securities and Exchange Commission, such other addresses and/or such
other services providing information with respect to called bonds, or such services as the
County may designate in a Certificate of the County delivered to the Trustee.
SF2-23139.3 5
Interest Payment Date
The term "Interest Payment Date" means a date on which interest is due on the
Bonds, being June 1 and December 1 of each year to which reference is made, commencing
on June 1, 1994.
1994 Debenture
The term "1994 Debenture" means the Pension Obligation Debenture issued by
the County on in favor of the Association in the principal amount of
OQpinion of Counsel
The term "Opinion of Counsel" means a written opinion of counsel of
recognized national standing in the field of law relating to municipal bonds, appointed and
paid by the County.
Original Purchaser of the 1994 Series A Bonds
The term "Original Purchaser of the 1994 Series A Bonds" means
as original purchaser of the 1994 Series A Bonds.
Outstanding
The term "Outstanding," when used as of any particular time with reference to
Bonds, means (subject to the provisions of Section 7.02) all Bonds except
(1) Bonds theretofore cancelled by the Trustee or surrendered to the
Trustee for cancellation;
(2) Bonds paid or deemed to have been paid within the meaning of Section
9.01; and
(3) Bonds in lieu of or in substitution for which other Bonds shall have
been executed, issued and delivered by the County pursuant hereto.
Permitted Investments
The term "Permitted Investments" means any of the following to the extent
permitted by the laws of the State:
(1) United States Treasury notes, bonds, bills, or certificates of
indebtedness, or obligations for which the faith and credit of the United States of
America are pledged for the payment of principal and interest (including obligations
SF2-23139.3 6
issued or held in book-entry form on the books of the Department of the Treasury of
the United States of America and securities which represent an undivided interest in
such direct obligations), and also any securities now or hereafter authorized, the
timely payment of both the principal of and interest on which is guaranteed fully and
directly by the full faith and credit of the United States of America;
(2) Bonds or debentures of the Federal Home Loan Bank Board established
under the Federal Home Loan Bank Act and bonds of any federal home loan bank
established under said act; bonds, debentures, participation certificates or other
obligations of the Government National Mortgage Association or the Federal National
Mortgage Association established under the National Housing Act, as amended;
(3) Demand deposits, time certificates of deposit or negotiable certificates
of deposit issued by a state or nationally chartered bank or trust company, including
the Trustee, or a state or national savings and loan association, provided that such
certificates of deposit shall be (i) continuously and fully insured by the Federal
Deposit Insurance Corporation or (ii) issued by any bank or trust company organized
under the laws of any state of the United States, or any national banking association
(including the Trustee), having a combined capital and surplus of at least
$500,000,000, whose non-guaranteed senior debt is rated "A" or equivalent or better
by the Rating Agencies and such certificates shall have maturities of six months or
less;
(4) Any repurchase agreement with any bank or trust company organized
under the laws of any state of the United States (including the Trustee) or any national
banking association or government bond dealer reporting to, trading with and
recognized as a primary dealer by, the Federal Reserve Bank of New York, which
agreement is secured at all times by collateral security described in clause (1) or (2)
of this definition and in which the Trustee has a perfected security interest, and which
collateral (a) is held by the Trustee or a third party agent, (b) is not subject to liens or
claims of third parties, (c) has a market value determined as frequently and in an
amount sufficient to satisfy the collateralization levels required by the Rating
Agencies, and (d) failure to maintain the requisite collateral level will require the
liquidation of the collateral;
(5) Bankers' acceptances which are issued by a bank or trust company
organized under the laws of any state of the United States or any national banking
association (including the Trustee) rated "A" or equivalent or better by the Rating
Agencies; provided, that such banker's acceptances may not exceed 270 days'
maturity;
(6) Commercial paper of "prime" quality of the highest ranking or of the
highest letter and numerical rating as provided by the Rating Agencies, which
commercial paper is limited to issuing corporations that are organized and operating
within the United States of America and that have total assets in excess of five
SF2-23139.3 7
hundred million dollars ($500,000,000) and that have an "A" or equivalent or higher
rating for the issuer's debentures, other than commercial paper, as provided by the
Rating Agencies; provided that purchases of eligible commercial paper may not
exceed one hundred eighty (180) days' maturity nor represent more than ten percent
(10%) of the outstanding commercial paper of an issuer corporation;
(7) Bonds, notes, warrants or other evidence of indebtedness of any of the
states of the United States or of any political subdivision or public agency thereof
which are rated in the highest short-term or one of the two highest long-term rating
categories by the Rating Agencies;
(8) Government money market portfolios or money market funds restricted
to obligations issued or guaranteed as to payment of principal and interest by the full
faith and credit of the United States, which portfolios shall have an "AAA" or
equivalent by the Rating Agencies, including funds for which First Interstate Bancorp,
its affiliates or subsidiaries provide investment advisory or other management
services;
(9) Tax exempt securities rated "AAA" or equivalent by the Rating
Agencies, for which the interest and principal has been provided by an escrow deposit
which, in the opinion of an Independent Certified Public Accountant, is fully
sufficient to pay the principal of and interest and redemption premium, if any, on
such tax exempt securities at their stated maturity or redemption date;
(10) Guaranteed investment contracts in a form approved by the Rating
Agencies with entities the unsecured debt securities of which are rated in one of the
two highest long-term rating categories by the Rating Agencies or the equivalent of
such ratings by virtue of guarantees or insurance arrangements;
(11) The pooled investment fund of the County of Contra Costa, California,
which is administered in accordance with the investment policy of said County as
established by the Treasurer/Tax Collector thereof, as permitted by Section 53601 of
the Government Code of the State, copies of which policy are available upon written
request to said Treasurer/Tax Collector; and
(12) The Local Agency Investment Fund (as that term is defined in Section
16429.1 of the Government Code of the State, as such Section may be amended or
recodified from time to time).
Rating Agencies
The term "Rating Agencies" means Moody's Investors Service, Inc. and
Standard & Poor's Corporation, or, in the event that Moody's Investors Service, Inc. or
Standard & Poor's Corporation no longer maintains a rating on the Bonds, any other
nationally recognized bond rating agency then maintaining a rating on the Bonds, but, in each
SF2-23139.3 8
instance, only so long as Moody's Investors Service, Inc., Standard & Poor's Corporation or
other nationally recognized rating agency then maintains a rating on the Bonds.
Record Date
The term "Record Date" means, with respect to an Interest Payment Date, the
fifteenth day of the month immediately preceding such Interest Payment Date.
Representation Letter
The term "Representation Letter" means the letter of representation dated the
date of issuance of the 1994 Series A Bonds, to The Depository Trust Company, New York,
New York, from the County and the Trustee relating to the 1994 Series A Bonds.
Retirement Law
The term "Retirement Law" means the County Employees Retirement Law of
1937, consisting of Division 4 of Title 3 of the Government Code of the State of California.
Securities Depositories
The term "Securities Depositories" means: The Depository Trust Company,
711 Stewart Avenue, Garden City, New. York 11530, Fax-(516) 227-4039 or 4190; Midwest
Securities Trust Company, Capital Structures-Call Notification 440 South LaSalle Street,
Chicago, Illinois 60605, Fax-(312) 663-2343; Philadelphia Depository Trust Company,
Reorganization Division, 1900 Market Street, Philadelphia, Pennsylvania 19103, Attention:
Bond Department, Fax-(215) 496-5058; or such other addresses and/or such other securities
depositories as the County may designate to the Trustee.
State
The term "State" means the State of California.
Supplemental Trust Agreement
The term "Supplemental Trust Agreement" means any trust agreement then in
full force and effect which has been duly executed and delivered by the County and the
Trustee amendatory hereof or supplemental hereto; but only if and to the extent that such
Supplemental Trust Agreement is specifically authorized hereunder.
Trust Agreement
The term "Trust Agreement" means this Trust Agreement, dated as of
January 1, 1994, between the County and the Trustee, as originally executed and as it may
SF2-23139.3 9
from time to time be amended or supplemented by all Supplemental Trust Agreements
executed pursuant to the provisions hereof.
Trustee
The term "Trustee" means First Interstate Bank of California, or any other
association or corporation which may at any time be substituted in its place as provided in
Section 6.01.
Written Request of the County
The term "Written Request of the County" means an instrument in writing
signed by the County Administrator of the County or his designee, or by a Deputy County
Administrator of the County or by any other officer of the County duly authorized by the
Board of Supervisors of the County in writing to the Trustee for that purpose.
SECTION 1.02. Trust Agreement Constitutes Contract. In consideration of
the acceptance of the Bonds by the Holders thereof, the Trust Agreement shall be deemed to
be and shall constitute a contract among the County, the Trustee and the Holders from time
to time of all Bonds authorized, executed, issued and delivered hereunder and then
Outstanding to provide for the payment of the interest on and principal of and redemption
premiums, if any, on all Bonds which may from time to time be authorized, executed, issued
and delivered hereunder, subject to the agreements, conditions, covenants and provisions
contained herein; and all agreements and covenants set forth herein to be performed by or on
behalf of the County shall be for the equal and proportionate benefit, protection and security
of all Holders of the Bonds without distinction, preference or priority as to security or
otherwise of any Bonds over any other Bonds by reason of the number or date thereof or the
time of authorization, sale, execution, issuance or delivery thereof or for any cause
whatsoever, except as expressly provided herein or therein.
ARTICLE lI
ISSUANCE OF 1994 SERIES A BONDS; GENERAL BOND PROVISIONS
SECTION 2.01. Authorization and Purpose of 1994 Series A Bonds. The
County has reviewed all proceedings heretofore taken relative to the authorization of the
1994 Series A Bonds and has found, as a result of such review, and hereby finds and
determines that all acts, conditions and things required by law to exist, to have happened and
to have been performed precedent to and in the issuance of the 1994 Series A Bonds do
exist, have happened and have been performed in due time, form and manner as required by
law, and that the County is now duly authorized, pursuant to each and every requirement of
the Act, to issue the 1994 Series A Bonds in the form and manner and for the purpose
provided herein and that the 1994 Series A Bonds shall be entitled to the benefit, protection
and security of the provisions hereof.
SM-23139.3 10
SECTION 2.02. Terms of the 1994 Series A Bonds. The 1994 Series A
Bonds shall be designated "County of Contra Costa Pension Obligation Bonds, 1994
Series A" and shall be in the aggregate principal amount of
dollars ($ ). The 1994 Series A Bonds shall
be dated as of January 1, 1994, shall be issued only in fully registered form in denominations
of five thousand dollars ($5,000) or any integral multiple of five thousand dollars ($5,000)
(not exceeding the principal amount of 1994 Series A Bonds maturing at any one time), and
shall mature on the dates and in the principal amounts and bear interest at the rates as set
forth in the following.schedule:
Maturity Date Principal Interest
June 1 Amount Rate
The 1994 Series A Bonds shall bear interest at the rates (based on a 360-day
year of twelve 30-day months) set forth above, payable on June 1, 1994, and semiannually
thereafter on December 1 and June 1 in each year. The 1994 Series A Bonds shall bear
interest from the interest payment date next preceding the date of authentication thereof,
unless such date of authentication is an Interest Payment Date or during the period from the
sixteenth day of the month preceding an Interest Payment Date to such interest payment date,
in which event they shall bear interest from such Interest Payment Date, or unless such date
of authentication is prior to the first Record Date, in which event they shall bear interest
from January 1, 1994; provided, however, that if at the time of authentication of any 1994
Series A Bond interest is then in default on the Outstanding 1994 Series A Bonds, such 1994
Series A Bond shall bear interest from the Interest Payment Date to which interest has
previously been paid or made available for payment on the Outstanding 1994 Series A
Bonds. Payment of interest on the 1994 Series A Bonds due on or before the maturity or
prior redemption thereof shall be made to the person whose name appears in the 1994 Series
A Bonds registration books kept by the Trustee pursuant to Section 2.08 as the registered
owner thereof as of the close of business on the Record Date for an interest payment date,
whether or not such day is a Business Day, such interest to be paid by check mailed on the
Interest Payment Date by first-class mail to such registered owner at the address as it appears
in such books; provided that upon the written request of a Holder of $1,000,000 or more in
aggregate principal amount of Bonds received by the Trustee prior to the applicable Record
Sn-23139.3 1 1
Date, interest shall be paid by wire transfer in immediately available funds. Any such
written request shall remain in effect until rescinded in writing by the Holder.
The principal of the 1994 Series A Bonds shall be payable in lawful money of
the United States of America at the Corporate Trust Office of the Trustee. Payment of the
principal of the 1994 Series A Bonds shall be made upon the surrender thereof at maturity or
on redemption prior to maturity at the Corporate Trust Office of the Trustee.
The obligations of the County under the Bonds, including the obligation to
make all payments of interest and principal when due, are obligations of the County imposed
by law and are absolute and unconditional, without any right of set-off or counterclaim. The
Bonds do not constitute an obligation of the County for which the County is obligated to levy
or pledge any form of taxation. Neither the Bonds nor the obligation of the County to make
payments on the Bonds constitute an indebtedness of the County, the State of California, or
any of its political subdivisions within the meaning of any constitutional or statutory debt
limitation or restriction. Pursuant to Section 31584 of the County Employees Retirement
Law of 1937, the Board of Supervisors of the County is obligated to make appropriations to
pay the unfunded accrued actuarial liability which is evidenced by the Bonds and requires the
Auditor of the County to transfer from any money available in any fund in the County
treasury the sums specified if the Board of Supervisors fails to make such appropriation.
SECTION 2.03. Redemption of 1994 Series A Bonds.
(a) Optional Redemption. The 1994 Series A Bonds maturing on and after
June 1 are subject to redemption prior to their respective stated maturities at the option
of the County as a whole on any date, or in part (in such maturities as are designated by the
County to the Trustee) on any Interest Payment Date on or after June 1, , at the
following redemption prices (expressed as percentages of the principal amount of 1994
Series A Bonds called for redemption), together with accrued interest to the date fixed for
redemption:
Redemption Period
(dates inclusive) Redemption Price
June 1, through May 31, %
June 1, through May 31,
June 1, and thereafter
(b) Mandatory Sinking Fund Redemption. The 1994 Series A Bonds
maturing on June 1, _, upon notice as hereinafter provided, shall also be subject to
mandatory sinking fund redemption prior to maturity, in part on June 1 of each year on and
after June 1, _, by lot, from mandatory sinking account payments in the amounts set forth
below at a redemption price equal to the sum of the principal amount thereof, without
premium, plus accrued interest thereon to the redemption date.
SF2-23139.3 12
Mandatory Sinking
Account Payment Date Mandatory Sinking
June 1 Account Payment
(c) Selection of Bonds for Redemption. If less than all Outstanding Bonds
maturing by their terms on any one date are to be redeemed at any one time, the Trustee
shall select the Bonds of such maturity date to be redeemed in any manner that it deems
appropriate and fair and shall promptly notify the County in writing of the numbers of the
Bonds so selected for redemption. For purposes of such selection, Bonds shall be deemed to
be composed of$5,000 multiples and any such multiple may be separately redeemed.
(d) Notice of Redemption. If the County elects to redeem Bonds pursuant
to Section 2.03(a), it shall notify the Trustee of the redemption date and the principal amount
of Bonds to be redeemed at least 45 days before the redemption date. The Trustee may, at
its option, waive such notice or accept notice at a later date. Notice of redemption shall be
mailed by first-class mail by the Trustee, not less than thirty (30) nor more than sixty (60)
days prior to the redemption date to (i) the respective Holders of the Bonds designated for
redemption at their addresses appearing on the registration books of the Trustee, (ii) the
Securities Depositories and (iii) one or more Information Services. Notice of redemption to
the Securities Depositories and the Information Services shall be given by registered mail or
overnight delivery or facsimile transmission. Each notice of redemption shall state the date
of such notice, the redemption price, if any, (including the name and appropriate address of
the Trustee), the CUSIP number (if any) of the maturity or maturities, and, if less than all of
any such maturity is to be redeemed, the distinctive certificate numbers of the Bonds of such
maturity, to be redeemed and, in the case of Bonds to be redeemed in part only, the
respective portions of the principal amount thereof to be redeemed. Each such notice shall
also state that on said date there will become due and payable on each of said Bonds the
redemption price, if any, thereof and in the case of a Bond to be redeemed in part only, the
specified portion of the principal amount thereof to be redeemed, together with interest
accrued thereon to the redemption date, and that from and after such redemption date interest
thereon shall cease to accrue, and shall require that such Bonds be then surrendered at the
address of the Trustee specified in the redemption notice. Failure to receive such notice or
any defect therein shall not invalidate any of the proceedings taken in connection with such
redemption.
In the event of redemption of Bonds (other than sinking fund redemptions), the
Trustee shall mail a notice of redemption upon receipt of a Written Request of the County
but only after the County shall file a Certificate of the County with the Trustee that on or
before the date set for redemption, the County shall have deposited with or otherwise made
SF2-23139.3 13
available to the Trustee for deposit in the Principal Account the money required for payment
of the redemption price, including accrued interest, of all Bonds then to be called for
redemption (or the Trustee determines that money will be deposited with or otherwise made
available to it in sufficient time for such purpose), together with the estimated expense of
giving such notice.
If notice of redemption has been duly given as aforesaid and money for the
payment of the redemption price of the Bonds called for redemption is held by the Trustee,
then on the redemption date designated in such notice Bonds so called for redemption shall
become due and payable, and from and after the date so designated interest on such Bonds
shall cease to accrue, and the Holders of such Bonds shall have no rights in respect thereof
except to receive payment of the redemption price thereof.
r All Bonds redeemed pursuant to the provisions of this section shall be
cancelled by the Trustee and shall be destroyed with a certificate of destruction furnished to
the County and shall not be reissued. The County agrees to reimburse the Trustee for costs
incurred in connection with the microfilming or other permanent record relating thereto.
SECTION 2.04. Form of Bonds. The Bonds and the authentication
endorsement and assignment to appear thereon shall be substantially in the form set forth in
Exhibit A hereto attached and by this reference herein incorporated (provided that on the face
of each Bond that is not registered pursuant to Section 2.13 at the place where the portion of
the form set forth below appears on the reverse side of such Bond, there shall be inserted the
following sentence: REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS
OF THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER
PROVISIONS SHALL, FOR ALL PURPOSES, HAVE THE SAME EFFECT AS IF SET
FORTH AT THIS PLACE).
SECTION 2.05. Execution of Bonds. The Chair of the Board of Supervisors
of the County is hereby authorized and directed to execute each of the Bonds on behalf of the
County and the Clerk of the Board of Supervisors of the County is hereby authorized and
directed to countersign each of the Bonds on behalf of the County. The signatures of such
Chair and Clerk may be by printed, lithographed, engraved or otherwise reproduced by
facsimile reproduction. In case any officer whose signature appears on the Bonds shall cease
to be such officer before the delivery of the Bonds to the purchaser thereof, such signature
shall nevertheless be valid and sufficient for all purposes as if such officer had remained in
office until such delivery of the Bonds.
Only those Bonds bearing thereon a certificate of authentication in the form
hereinbefore recited, executed manually and dated by the Trustee, shall be entitled to any
benefit, protection or security hereunder or be valid or obligatory for any purpose, and such
certificate of the Trustee shall be conclusive evidence that the Bonds so authenticated have
been duly authorized, executed, issued and delivered hereunder and are entitled to the
benefit, protection and security hereof.
SF2-23139.3 14
SECTION 2.06. Transfer and Payment of Bonds. Any Bond may, in
accordance with its terms, be transferred in the books required to be kept pursuant to the
provisions of Section 2.08 by the person in whose name it is registered, in person or by his
duly authorized attorney, upon surrender of such Bonds for cancellation at the Corporate
Trustee Office of the Trustee, accompanied by delivery of a duly executed written instrument
of transfer in a form acceptable to the Trustee. Whenever any Bond or Bonds shall be
surrendered for transfer, the County shall execute and the Trustee shall authenticate and
deliver to the transferee a new Bond or Bonds of the same series and maturity for a like
aggregate principal amount. The cost of printing Bonds and any services rendered or
expenses incurred by the Trustee in connection with any transfer shall be paid by the County.
The Trustee shall require the payment by the Holder requesting such transfer of any tax or
other governmental charge required to be paid with respect to such transfer as a condition
precedent to the exercise of such privilege.
The County and the Trustee may deem and treat the registered owner of any
Bond as the absolute owner of such Bond for the purpose of receiving payment thereof and
for all other purposes, whether such Bonds shall be overdue or not, and neither the County
nor the Trustee shall be affected by any notice or knowledge to the contrary; and payment of
the interest on and principal of and redemption premium, if any, on such Bonds shall be
made only to such registered owner, which payments shall be valid and effectual to satisfy
and discharge liability on such Bonds to the extent of the sum or sums so paid.
The Trustee shall not be required to register the transfer of or exchange any
Bond which has been selected for redemption in whole or in part, from and after the day of
mailing of a notice of redemption of such Bond selected for redemption in whole or in part
as provided in Section 2.03.
SECTION 2.07. Exchange of Bonds. Bonds may be exchanged at the
Corporate Trust Office of the Trustee for a like aggregate principal amount of Bonds of the
same series and maturity of other authorized denominations. The cost of printing Bonds and
any services rendered or expenses incurred by the Trustee in connection with any exchange
shall be paid by the County. The Trustee shall require the payment by the Holder requesting
such exchange of any tax or other governmental charge required to be paid with respect to
such exchange as a condition precedent to the exercise of such privilege. The Trustee shall
not be required to exchange any Bond which has been selected for redemption in whole or in
part, from and after the day of mailing of a notice of redemption of such Bond selected for
redemption in whole or in part as provided in Section 2.03.
SECTION 2.08. Bond Registration Books. The Trustee will keep at its
Corporate Trust Office sufficient books for the registration and transfer of the Bonds which
shall during normal business hours be open to inspection by the County, and upon
presentation for such purpose the Trustee shall, under such reasonable regulations as it may
prescribe, register or transfer the Bonds in such books as hereinabove provided.
SF2-23139.3 15
SECTION 2.09. Mutilated, Destroyed. Stolen or Lost Bonds. If any Bond
shall become mutilated the Trustee at the expense of the Holder shall thereupon authenticate
and deliver, a new Bond of like tenor and amount in exchange and substitution for the Bond
so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every
mutilated Bond so surrendered to the Trustee shall be cancelled.
If any Bond shall be lost, destroyed or stolen, evidence of such loss,
destruction or theft may be submitted to the Trustee and, if such evidence be satisfactory to
the Trustee and indemnity satisfactory to the Trustee shall be given, the Trustee, at the
expense of the Holder, shall thereupon authenticate and deliver, a new Bond of like tenor in
lieu of and in substitution for the Bond so lost, destroyed or stolen.
The Trustee may require payment of a reasonable sum for each new Bond
issued under this Section 2.09 and of the expenses which may be incurred by the County and
the Trustee in the premises. Any Bond issued under the provisions of this Section in lieu of
any Bond alleged to be lost, destroyed or stolen shall be equally and proportionately entitled
to the benefits of this Trust Agreement with all other Bonds of the same series secured by
this Trust Agreement. Neither the County nor the Trustee shall be required to treat both the
original Bond and any replacement Bond as being Outstanding for the purpose of determining
the principal amount of Bonds which may be issued hereunder or for the purpose of
determining any percentage of Bonds Outstanding hereunder, but both the original and
replacement Bond shall be treated as one and the same.
SECTION 2.10. TemporM Bonds. The Bonds issued under this Trust
Agreement may be initially issued in temporary form exchangeable for definitive Bonds when
ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall
be of such denominations as may be determined by the County, shall be in fully registered
form and may contain such reference to any of the provisions of this Trust Agreement as
may be appropriate. Every temporary Bond shall be executed and authenticated as
authorized by the County, in accordance with the terms of the Act. If the County issues
temporary Bonds it will execute and furnish definitive Bonds without delay and thereupon the
temporary Bonds may be surrendered, for cancellation, in exchange therefor at the Corporate
Trust Office of the Trustee, and the Trustee shall deliver in exchange for such temporary
Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations.
Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this
Trust Agreement as definitive Bonds delivered hereunder.
SECTION 2.11. Procedure for the Issuance of 1994 Series A Bonds:
Application of 1994 Series A Bond Proceeds. At any time after the sale of the 1994 Series
A Bonds in accordance with the Act, the County shall execute the 1994 Series A Bonds for
issuance hereunder and shall deliver them to the Trustee, and thereupon the 1994 Series A
Bonds shall be authenticated and delivered by the Trustee to the purchaser thereof upon the
Written Request of the County and upon receipt of payment therefor from the purchaser
thereof. Upon receipt of payment for the 1994 Series A Bonds from the purchaser thereof,
the Trustee shall set aside and deposit the proceeds received from such sale in the following
SF2-23139.3 16
respective accounts or funds or with the following respective persons, in the following order
of priority:
(a) The Trustee shall deposit in the Interest Account established within the
Bond Fund pursuant to Section 4.02 hereof the accrued interest received by the
Trustee upon the delivery of the 1994 Series A Bonds in the amount of $
(b) The Trustee shall deposit the remainder of the 1994 Series A Bonds
proceeds in the Refunding Fund, which fund is hereby established. On the Closing
Date for the 1994 Series A Bonds, the Trustee shall promptly take all actions required
to withdraw from the Refunding Fund an amount equal to the principal amount of the
1994 Debenture, plus accrued interest, if any, to the date of refunding and shall
transfer such amount to the Board of Retirement.
(c) The Trustee shall deposit $ in the Costs of Issuance Fund,
which fund is hereby created and which fund the County hereby agrees to maintain
with the Trustee until June 1, 1994. All money in the Costs of Issuance Fund shall
be used and withdrawn by the County to pay the Costs of Issuance of the 1994
Series A Bonds upon receipt of a Written Request of the County filed with the
Trustee, each of which shall be sequentially numbered and shall state the person to
whom payment is to be made, the amount to be paid, the purpose for which the
obligation was incurred and that such payment is a proper charge against said fund.
On June 1, 1994 or upon the earlier Written Request of the County, any remaining
balance in the Costs of Issuance Fund shall be transferred to the Interest Account.
SECTION 2.12. Validity of Bonds. The recital contained in the Bonds that
the same are issued pursuant to the Act and pursuant hereto shall be conclusive evidence of
their validity and of the regularity of their issuance, and all Bonds shall be incontestable from
and after their issuance. The Bonds shall be deemed to be issued, within the meaning
hereof, whenever the definitive Bonds (or any temporary Bonds exchangeable therefor) shall
have been delivered to the purchaser thereof and the proceeds of sale thereof received.
- SECTION 2.13. dial Covenants as to Book-Entry Only System for 1994
Series A Bonds. (a) Except as otherwise provided in subsections (b) and (c) of this Section
2.13, all of the 1994 Series A Bonds initially issued shall be registered in the name of Cede
& Co., as nominee for The Depository Trust Company, New York, New York ("DTC"), or
such other nominee as DTC shall request pursuant to the Representation Letter. Payment of
the interest on any 1994 Series A Bond registered in the name of Cede & Co. shall be made
on each interest payment date for such 1994 Series A Bonds to the account, in the manner
and at the address indicated in or pursuant to the Representation Letter.
(b) The 1994 Series A Bonds initially shall be issued in the form of a
single authenticated fully registered bond for each stated maturity of such 1994 Series A
Bonds, representing the aggregate principal amount of the 1994 Series A Bonds of such
maturity. Upon initial issuance, the ownership of all such 1994 Series A Bonds shall be
SF2-23139.3 17
registered in the registration records maintained by the Trustee pursuant to Section 2.08
hereof in the name of Cede & Co., as nominee of DTC, or such other nominee as DTC shall
request pursuant to the Representation Letter. The Trustee, the County and any paying agent
may treat DTC (or its nominee) as the sole and exclusive owner of the 1994 Series A Bonds
registered in its name for the purposes of payment of the principal or redemption price of
and interest on such 1994 Series A Bonds, selecting the 1994 Series A Bonds or portions
thereof to be redeemed, giving any notice permitted or required to be given to Bondholders
hereunder, registering the transfer of 1994 Series A Bonds, obtaining any consent or other
action to be taken by Bondholders of the 1994 Series A Bonds and for all other purposes
whatsoever; and neither the Trustee nor the County or any paying agent shall be affected by
any notice to the contrary. Neither the Trustee nor the County or any paying agent shall
have any responsibility or obligation to any Participant (which shall mean, for purposes of
this Section 2.13, securities brokers and dealers, banks, trust companies, clearing
corporations and other entities, some of whom directly or indirectly own DTC), any person
claiming a beneficial ownership interest in the 1994 Series A Bonds under or through DTC
or any Participant, or any other person which is not shown on the registration records as
being a Bondholder, with respect to (i) the accuracy of any records maintained by DTC or
any Participant, (ii) the payment by DTC or any Participant of any amount in respect of the
principal or redemption price of or interest on the 1994 Series A Bonds, (iii) any notice
which is permitted or required to be given to Holders of 1994 Series A Bonds hereunder,
(iv) the selection by DTC or any Participant of any person to receive payment in the event of
a partial redemption of the 1994 Series A Bonds, or (v) any consent given or other action
taken by DTC as Holder of 1994 Series A Bonds. The Trustee shall pay all principal of and
premium, if any, and interest on the 1994 Series A Bonds only at the times, to the accounts,
at the addresses and otherwise in accordance with the Representation Letter, and all such
payments shall be valid and effective to satisfy fully and discharge the County's obligations
with respect to the principal of and premium, if any, and interest on the 1994 Series A Bonds
to the extent of the sum or sums so paid. Upon delivery by DTC to the Trustee of written
notice to the effect that DTC has determined to substitute a new nominee in place of its then
existing nominee, the 1994 Series A Bonds will be transferable to such new nominee in
accordance with subsection (f) of this Section 2.13.
(c) In the event that the County determines that it is in the best interests of
the beneficial owners of the 1994 Series A Bonds that they be able to obtain bond
certificates, the Trustee shall, upon the written instruction of the County, so notify DTC,
whereupon DTC shall notify the Participants of the availability through DTC of bond
certificates. In such event, the 1994 Series A Bonds will be transferable in accordance with
subsection (f) of this Section 2.13. DTC may determine to discontinue providing its services
with respect to the 1994 Series A Bonds at any time by giving written notice of such
discontinuance to the County or the Trustee and discharging its responsibilities with respect
thereto under applicable law. In such event, the 1994 Series A Bonds will be transferable in
accordance with subsection (f) of this Section 2.13. Whenever DTC requests the County and
the Trustee to do so, the Trustee and the County will cooperate with DTC in taking
appropriate action after reasonable notice to arrange for another securities depository to
maintain custody of all certificates evidencing the 1994 Series A Bonds then Outstanding. In
SF2-23139.3 18
such event, the 1994 Series A Bonds will be transferable to such securities depository in
accordance with subsection (f) of this Section 2.13, and thereafter, all references in this Trust
Agreement to DTC or its nominee shall be.deemed to refer to such successor securities
depository and its nominee, as appropriate.
(d) Notwithstanding any other provision of this Trust Agreement to the
contrary, so long as all 1994 Series A Bonds Outstanding are registered in the name of any
nominee of DTC, all payments with respect to the principal of and premium, if any, and
interest on each such 1994 Series A Bond and all notices with respect to each such 1994
Series A Bond shall be made and given, respectively, to DTC as provided in the
Representation Letter.
(e) The Trustee is hereby authorized and requested to execute and deliver
the Representation Letter and, in connection with any successor nominee for DTC or any
successor depository, enter into comparable arrangements, and shall have the same rights
with respect to its actions thereunder as it has with respect to its actions under this Trust
Agreement.
(f) In the event that any transfer or exchange of 1994 Series A Bonds is
authorized under subsection (b) or (c) of this Section 2.13, such transfer or exchange shall be
accomplished upon receipt by the Trustee from the registered owner thereof of the 1994
Series A Bonds to be transferred or exchanged and appropriate instruments of transfer to the
permitted transferee, all in accordance with the applicable provisions of Sections 2.06 and
2.07 hereof. In the event 1994 Series A Bond certificates are issued to Holders other than
Cede & Co., its successor as nominee for DTC as holder of all the 1994 Series A Bonds,
another securities depository as holder of all the 1994 Series A Bonds, or the nominee of
such successor securities depository, the provisions of Sections 2.06 and 2.07 hereof shall
also apply to, among other things, the registration, exchange and transfer of the 1994 Series
A Bonds and the method of payment of principal of, premium, if any, and interest on the
1994 Series A Bonds.
ARTICLE III
ISSUANCE OF ADDITIONAL BONDS
SECTION 3.01. Conditions for the Issuance of Additional Bonds. The
County may at any time issue Additional Bonds on a parity with the 1994 Series A Bonds,
but only subject to the following specific conditions, which are hereby made conditions
precedent to the issuance of any such Additional Bonds:
(a) The County shall be in compliance with all agreements and covenants
contained herein.
SF2-23139.3 19
(b) The issuance of such Additional Bonds shall have been authorized
pursuant to the Act and shall have been provided for by a Supplemental Trust
Agreement which shall specify the following:
(1) The purpose for which such Additional Bonds are to be issued;
provided that such Additional Bonds shall be applied solely for (i) the purpose
of satisfying any obligation to make payments to the Association pursuant to
the Retirement Law relating to pension benefits accruing to the Association's
members, and/or for payment of all costs incidental to or connected with the
issuance of Additional Bonds for such purpose, and/or (ii) the purpose of
refunding any Bonds then Outstanding, including payment of all costs
incidental to or connected with such refunding;
(2) The authorized principal amount and designation of such
Additional Bonds;
(3) The date and the maturity dates of and the sinking fund payment
dates, if any, for such Additional Bonds;
(4) The interest payment dates for such Additional Bonds;
(5) The denomination or denominations of and method of
numbering such Additional Bonds;
(6) The redemption premiums, if any, and the redemption terms, if
any, for such Additional Bonds;
(7) The amount, if any, to be deposited from the proceeds of sale of
such Additional Bonds in the Interest Account hereinafter referred to; and
(8) Such other provisions (including the requirements of a
book-entry Bond registration system, if any) as are necessary or appropriate
and not inconsistent herewith.
SECTION 3.02. Procedure for the Issuance of Additional Bonds. At any
time after the sale of any Additional Bonds in accordance with the Act, the County shall
execute such Additional Bonds for issuance hereunder and shall deliver them to the Trustee,
and thereupon such Additional Bonds shall be delivered by the Trustee to the purchaser
thereof upon the Written Request of the County, but only upon receipt by the Trustee of the
following documents or money or securities, all of such documents dated or certified, as the
case may be, as of the date of delivery of such Additional Bonds by the Trustee:
(a) An executed copy of the Supplemental Trust Agreement authorizing the
issuance of such Additional Bonds;
SF2-23139.3 20
(b) A Written Request of the County as to the delivery of such Additional
Bonds;
(c) An Opinion of Counsel to the effect that (1) the County has executed
and delivered the Supplemental Trust Agreement, and the Supplemental Trust
Agreement is valid and binding upon the County and (2) such Additional Bonds are
valid and binding obligations of the County entitled to the benefits of the Act and
hereof, and such Additional Bonds have been duly and validly issued in accordance
with the Act and herewith;
(d) A Certificate of the County containing such statements as may be
reasonably necessary to show compliance with the conditions for the issuance of such
Additional Bonds contained herein;
(e) Such further documents, money or securities as are required by the
provisions of the Supplemental Trust Agreement providing for the issuance of such
Additional Bonds.
ARTICLE IV
FUNDS AND ACCOUNTS
SECTION 4.01. Bond Fund; Deposits to Bond Fund.
(a) The 1994 Debenture provides that the County is obligated to prepay
each fiscal year's obligations within thirty days of the commencement of such fiscal year. In
order to meet the County's obligations under Section 31453.5 of the Retirement Law, the
County shall deposit or cause to be deposited with the Trustee the amount of the County's
obligations on the Bonds for such fiscal year within thirty days of the commencement of each
fiscal year; provided that the payment due June 1, 1994 shall be deposited no later than
1994.
(b) All amounts payable by the County hereunder shall be promptly
deposited by the Trustee upon receipt thereof in a special fund designated as the "Bond
Fund" which fund is hereby created and shall be held in trust by the Trustee.
SECTION 4.02. Allocation of Moneys in Bond Fund. At least one (1)
Business Day prior to each Interest Payment Date or date fixed for redemption of Bonds, the
Trustee shall transfer from the Bond Fund, in immediately available funds, for deposit into
the following respective accounts (each of which is hereby created and which the Trustee
shall maintain in trust separate and distinct from the other funds and accounts established
hereunder), the following amounts in the following order of priority, the requirements of
each such account (including the making up of any deficiencies in any such account resulting
SF2-23139.3 21
from lack of funds sufficient to make any earlier required deposit) at the time of deposit to
be satisfied before any deposit is made to any account subsequent in priority:
(a) Interest Account,
(b) Principal Account, and
(c) Surplus Account.
All money in each of such accounts shall be held in trust by the Trustee and shall be applied,
used and withdrawn only for the purposes hereinafter authorized in this section.
(a) Interest Account. On each June 1 and December 1, commencing on
June 1, 1994, the Trustee shall set aside from the Bond Fund and deposit in the Interest
Account that amount of money which is equal to the amount of interest becoming due and
payable on all Outstanding Bonds on such June 1 or December 1, as the case may be.
No deposit need be made in the Interest Account if the amount contained
therein is at least equal to the aggregate amount of interest becoming due and payable on all
Outstanding Bonds on such interest payment date.
All money in the Interest Account shall be used and withdrawn by the Trustee
solely for the purpose of paying the interest on the Bonds as it shall become due and payable
(including accrued interest on any Bonds purchased or redeemed prior to maturity).
(b) Principal Account. On each June 1, the Trustee shall set aside from
the Bond Fund and deposit in the Principal Account an amount of money equal to the amount
of all sinking fund payments required to be made on such June 1 into the respective sinking
fund accounts for all Outstanding Term Bonds and the principal amount of all Outstanding
Serial Bonds maturing on such June 1.
No deposit need be made in the Principal Account if the amount contained
therein is at least equal to the aggregate amount of the principal of all Outstanding Serial
Bonds maturing by their terms on such June 1 plus the aggregate amount of all sinking fund
payments required to be made on such June 1 for all Outstanding Term Bonds.
The Trustee shall establish and maintain within the Principal Account a
separate subaccount for the Term Bonds of each series and maturity, designated as the
Sinking Account" (the "Sinking Account"), inserting therein the series and maturity (if more
than one such account is established for such series) designation of such Bonds. With respect
to each Sinking Account, on each mandatory sinking account payment date established for
such Sinking Account, the Trustee shall apply the mandatory sinking account payment
required on that date to the redemption (or payment at maturity, as the case may be) of Term
Bonds of the series and maturity for which such Sinking Account was established, upon the
notice and in the manner provided in Article II; provided that, at any time prior to giving
SF2-23139.3 22
such notice of such redemption, the Trustee may upon the Written Request of the County,
apply moneys in such Sinking Account to the purchase for cancellation of Term Bonds of
such series and maturity at public or private sale, as and when and at such prices (including
brokerage and other charges, but excluding accrued interest, which is payable from the
Interest Account), as may be directed by the County, except that the purchase price
(excluding accrued interest) shall not exceed the redemption price that would be payable for
such Bonds upon redemption by application of such Mandatory Sinking Account Payment.
If, during the twelve-month period immediately preceding said mandatory sinking account
payment date, the Trustee has purchased Term Bonds of such series and maturity with
moneys in such Sinking Account, such Bonds so purchased shall be applied, to the extent of
the full principal amount thereof to reduce said mandatory sinking account payment.
All money in the Principal Account shall be used and withdrawn by the
Trustee solely for the purpose of paying the principal of the Bonds as they shall become due
and payable, whether at maturity or redemption, except that any money in any sinking fund
account shall be used and withdrawn by the Trustee only to purchase or to redeem or to pay
Term Bonds for which such sinking fund account was created.
The Trustee shall establish and maintain within the Principal Account separate
accounts for the Term Bonds maturing on June 1, _, designated as the — Term Bonds
Sinking Account. Subject to the terms and conditions set forth in this Section and Section
2.03(b), the Term Bonds maturing on June 1, _ shall be redeemed (or paid at maturity, as
the case may be) by application of Mandatory Sinking Account Payments in the amounts and
upon the dates hereby established for the Term Bonds Sinking Account, as follows:
Term Bonds Sinking Account
Mandatory Sinking Account Mandatory Sinking
Payment Date (Lune 1) Account Payments
*
*maturity
(c) Surplus Account. Following the deposits set forth above, any moneys
remaining in the Bond Fund shall be deposited by the Trustee in the Surplus Account.
SF2-23139.3 23
Moneys deposited in the Surplus Account shall be transferred by the Trustee to or upon the
order of the County, as specified in a Written Request of the County, provided all of the
County's obligations under this Trust Agreement are then otherwise satisfied.
SECTION 4.03. Deposit and Investments of Money in Accounts and Funds.
All money held by the Trustee in any of the accounts or funds established pursuant hereto
shall be invested in Permitted Investments at the Written Request of the County filed with the
Trustee at least two Business Days in advance of the making of such investment. If no
Written Request of the County is received, the Trustee shall invest funds held by it in
Permitted Investments described in clause 8 of the definition thereof. Such investments shall,
as nearly as practicable, mature on or before the dates on which such money is anticipated to
be needed for disbursement hereunder. All interest or profits received on any money so
invested shall be deposited in the Bond Fund. The Trustee shall have no liability or
responsibility for any loss resulting from any investment made in accordance with the
provisions of this Article IV, except for any loss due to the negligence or willful misconduct
of the Trustee.
ARTICLE V
COVENANTS OF THE COUNTY
SECTION 5.01. Punctual Payment and Performance. The County will
punctually pay the interest on and the principal of and redemption premiums, if any, to
become due,on every Bond issued hereunder in strict conformity with the terms hereof and
of the Bonds, and will faithfully observe and perform all the agreements and covenants to be
observed or performed by the County contained herein and in the Bonds.
SECTION 5.02. Extension of Payment of Bonds. The County shall not
directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or
the time of payment of any claims for interest by the purchase of such Bonds or by any other
arrangement, and in case the maturity of any of the Bonds or the time of payment of any
such claims for interest shall be extended, such Bonds or claims for interest shall not be
entitled, in case of any default hereunder, to the benefits of this Trust Agreement, except
subject to the prior payment in full of the principal of all of the Bonds then Outstanding and
of all claims for interest thereon which shall not have been so extended. Nothing in this
Section shall be deemed to limit the right of the County to issue Bonds for the purpose of
refunding any Outstanding Bonds, and such issuance shall not be deemed to constitute an
extension of maturity of the Bonds.
SECTION 5.03. Additional Debt. The County expressly reserves the right to
enter into one or more other agreements or indentures for any of its corporate purposes, and
reserves the right to issue other obligations for such purposes.
SF2-23139.3 24
SECTION 5.04. Power to Issue Bonds. The County is duly authorized
pursuant to law to issue the Bonds and to enter into this Trust Agreement. The Bonds and
the provisions of this Trust Agreement are the legal, valid and binding obligations of the
County in accordance with their terms. The Bonds constitute obligations imposed by law.
In the event the County fails to deposit with the Trustee the amounts required to pay
principal of, premium, if any, and interest on the Bonds by an Interest Payment Date, in
accordance with Section 31584 of the Retirement Law, the County Auditor shall forthwith
transfer funds from the County Treasury to the Trustee to the extent necessary to pay the
principal of, premium, if any, and interest coming due on the Bonds on such Interest
Payment Date.
SECTION 5.05. LReservedl.
SECTION 5.06. Accounting Records and Reports. The County will keep or
cause to be kept proper books of record and accounts in which complete and correct entries
shall be made of all transactions relating to the receipts, disbursements, allocation and
application of moneys on deposit in the funds and accounts established hereunder, and such
books shall be available for inspection by the Trustee, at reasonable hours and under
reasonable conditions. Not more than one hundred eighty (180) days after the close of each
Fiscal Year, the County shall furnish or cause to be furnished to the Trustee a complete
financial statement covering receipts, disbursements, allocation and application of moneys on
deposit in the funds and accounts established hereunder for such Fiscal Year.
SECTION 5.07. Prosecution and Defense of Suits. The County will defend
against every suit, action or proceeding at any time brought against the Trustee upon any
claim to the extent involving the failure of the County to fulfill its obligations hereunder;
provided that the Trustee or any affected Holder at its election may appear in and defend any
such suit, action or proceeding. The County, to the extent permitted by law, will indemnify
and hold harmless the Trustee against any and all liability claimed or asserted by any person
to the extent arising out of such failure by the County, and will indemnify and hold harmless
the Trustee against any attorney's fees or other expenses which it may incur in connection
with any litigation to which it may become a party by reason of its actions hereunder, except
for any loss, cost, damage or expense resulting from the active or passive negligence, willful
misconduct or breach of duty by the Trustee. Notwithstanding any contrary provision
hereof, this covenant shall remain in full force and effect even though all Bonds secured
hereby may have been fully paid and satisfied.
SECTION 5.08. Further Assurances. Whenever and so often as reasonably
requested to do so by the Trustee or any Holder, the County will promptly execute and
deliver or cause to be executed and delivered all such other and further assurances,
documents or instruments, and promptly do or cause to be done all such other and further
things as may be necessary or reasonably required in order to further and more fully vest in
the Holders all rights, interests, powers, benefits, privileges and advantages conferred or
intended to be conferred upon them hereby.
SF2-23139.3 25
SECTION 5.09. Waiver of Laws. The County shall not at any time insist
upon or plead in any manner whatsoever, or claim or take the benefit or advantage of, any
stay or extension law now or at any time hereafter in force that may affect the covenants and
agreements contained in this Trust Agreement or in the Bonds, and all benefit or advantage
of any such law or laws is hereby expressly waived by the County to the extent permitted by
law.
ARTICLE VI
THE TRUSTEE
SECTION 6.01. The Trustee. First Interstate Bank of California shall serve
as the Trustee for the Bonds for the purpose of receiving all money which the County is
required to deposit with the Trustee hereunder and for the purpose of allocating, applying
and using such money as provided herein and for the purpose of paying the interest on and
principal of and redemption premiums, if any, on the Bonds presented for payment at the
Corporate Trust Office of the Trustee with the rights and obligations provided herein. The
County agrees that it will at all times maintain a Trustee having a corporate trust office in
Los Angeles or San Francisco, California.
The County may at any time, unless there exists any event of default as
defined in Section 8.01, remove the Trustee initially appointed and any successor thereto and
may appoint a successor or successors thereto by an instrument in writing; provided that any
such successor shall be a bank or trust company doing business and having a corporate trust
office in Los Angeles or San Francisco, California, having a combined capital (exclusive of
borrowed capital) and surplus of at least one fifty million dollars ($50,000,000) and subject
to supervision or examination by federal or state authority. If such bank or trust company
publishes a report of condition at least annually, pursuant to law or to the requirements of
any supervising or examining authority above referred to, then for the purpose of this section
the combined capital and surplus of such bank or trust company shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition so published.
The Trustee may at any time resign by giving written notice of such resignation to the
County and by mailing to the Holders notice of such resignation. Upon receiving such notice
of resignation, the County shall promptly appoint a successor Trustee by an instrument in
writing. Any removal or resignation of a Trustee and appointment of a successor Trustee
shall become effective only upon the acceptance of appointment by the successor Trustee. If,
within thirty (30) days after notice of the removal or resignation of the Trustee no successor
Trustee shall have been appointed and shall have accepted such appointment, the removed or
resigning Trustee may petition any court of competent jurisdiction for the appointment of a
successor Trustee, which court may thereupon, after such notice, if any, as it may deem
proper and prescribe and as may be required by law, appoint a successor Trustee having the
qualifications required hereby.
SF2-23139.3 26
The Trustee is hereby authorized to pay or redeem the Bonds when duly
presented for payment at maturity or on redemption prior to maturity. The Trustee shall
cancel all Bonds upon payment thereof or upon the surrender thereof by the County and shall
destroy such Bonds and a certificate of destruction shall be delivered to the County. The
Trustee shall keep accurate records of all Bonds paid and discharged and cancelled by it.
The Trustee shall, prior to an event of default, and after the curing of all
events of default that may have occurred, perform such duties and only such duties as are
specifically set forth in this Trust Agreement and no implied duties or obligations shall be
read into this Trust Agreement. The Trustee shall, during the existence of any event of
default (that has not been cured), exercise such of the rights and powers vested in it by this
Trust Agreement, and use the same degree of care and skill in their exercise, as a prudent
man would exercise or use under the circumstances in the conduct of his own affairs.
SECTION 6.02. Liability of Trustee. The recitals of facts, agreements and
covenants herein and in the Bonds shall be taken as recitals of facts, agreements and
covenants of the County, and the Trustee assumes no responsibility for the correctness of the
same or makes any representation as to the sufficiency or validity hereof or of the Bonds, or
shall incur any responsibility in respect thereof other than in connection with the rights or
obligations assigned to or imposed upon it herein, in the Bonds or in law or equity. The
Trustee shall not be liable in connection with the performance of its duties hereunder except
for its own negligence, willful misconduct or breach of duty.
The Trustee shall not be bound to recognize any person as the Holder of a
Bond unless and until such Bond is submitted for inspection, if required, and such Holder's
title thereto satisfactorily established, if disputed.
The Trustee shall not be liable for any error of judgment made in good faith
by a responsible officer, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts.
The Trustee shall not be liable with respect to any action taken or omitted to
be taken by it in good faith in accordance with the direction of the Holders of not less than a
majority in aggregate principal amount of the Bonds at the time Outstanding, relating to the
time, method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee under this Trust
Agreement.
The Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Trust Agreement at the request, order or direction of any of the
Bondholders pursuant to the provisions of this Trust Agreement unless such Bondholders
shall have offered to the Trustee reasonable security or indemnity against the costs, expenses
and liabilities that may be incurred therein or thereby. The Trustee has no obligation or
liability to the Holders for the payment of interest on, principal of or redemption premium, if
SF2-23139.3 27
any, with respect to the Bonds from its own funds; but rather the Trustee's obligations shall
be limited to the performance of its duties hereunder.
The Trustee shall not be deemed to have knowledge of any event of default
unless and until an officer at the Trustee's Corporate Trust Office responsible for the
administration of its duties hereunder shall have actual knowledge thereof or the Trustee shall
have received written notice thereof at its Corporate Trust Office. The Trustee shall not be
bound to ascertain or inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein or of any of the documents executed in
connection with the Bonds, or as to the existence of a default or event of default thereunder.
The Trustee shall not be responsible for the validity or effectiveness of any collateral given
to or held by it.
The Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through attorneys-in-fact, agents or receivers, shall
not be answerable for the negligence or misconduct or any such attorney-in-fact, agent or
receiver appointed by it in accordance with the standards specified above. The Trustee shall
be entitled to advice of counsel and other professionals concerning all matters of trust and its
duty hereunder, but the Trustee shall not be answerable for the professional malpractice of
any attorney-in-law or certified public accountant in connection with the rendering of his
professional advice in accordance with the terms of this Trust Agreement, if such
attorney-in-law or certified public accountant was selected by the Trustee with due care.
The Trustee shall not be concerned with or accountable to anyone for the
subsequent use or application of any moneys which shall be released or withdrawn in
accordance with the provisions hereof.
Whether or not therein expressly so provided, every provision of this Trust
Agreement, or related documents relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this Article.
The Trustee shall be protected in acting upon any notice, resolution,
requisition, request (including any Written Request of the County), consent, order,
certificate, report, opinion, bond or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties. The Trustee may consult
with counsel, who may be counsel of or to the County, with regard to legal questions, and
the opinion of such counsel shall be full and complete authorization and protection in respect
of any action taken or suffered by it hereunder in good faith and in accordance therewith.
Whenever in the administration of its rights and obligations hereunder the
Trustee shall deem it necessary or desirable that a matter be established or proved prior to
taking or suffering any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by a Certificate of the County,
which certificate shall be full warrant to the Trustee for any action taken or suffered under
SF2-23139.3 28
the provisions hereof upon the faith thereof, but in its discretion the Trustee may in lieu
thereof accept other evidence of such matter or may require such additional evidence as it
may deem reasonable.
No provision of this Trust Agreement shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance or exercise of
any of its duties hereunder, or in the exercise of its rights or powers. The Trustee shall be
entitled to interest on all amounts advanced by it hereunder at its prime rate plus two
percent.
The Trustee shall have no responsibility, opinion, or liability with respect to
any information, statement or recital in any offering memorandum or other disclosure
material prepared or distributed with respect to the issuance of the Bonds.
All immunities, indemnifications and releases from liability granted herein to
the Trustee shall extend to the directors, employees, officers and agents thereof.
Any company into which the Trustee may be merged or converted or with
which it may be consolidated or any company resulting from any merger, conversion or
consolidation to which it shall be a party or any company to which the Trustee may sell or
transfer all or substantially all of its corporate trust business, provided that such company
shall meet the requirements set forth in Section 6.01, shall be the successor to the Trustee
hereunder and vested with all of the title to the trust estate and all of the trusts, powers,
discretions, immunities, privileges and all other matters as was its predecessor hereunder,
without the execution or filing of any paper or further act, anything herein to the contrary
notwithstanding.
SECTION 6.03. Compensation and Indemnification of Trustee. The County
covenants to pay to the Trustee from time to time, and the Trustee shall be entitled to,
reasonable compensation for all services rendered by it in the exercise and performance of
any of the powers and duties hereunder of the Trustee, and the County will pay or reimburse
the Trustee upon its request for all expenses, disbursements and advances incurred or made
by the Trustee in accordance with any of the provisions of this Trust Agreement (including
the reasonable compensation and the expenses and disbursements of its counsel and of all
persons not regularly in its employ) except any such expense, disbursement or advance as
may arise from its negligence, default or willful misconduct, including the negligence or
willful misconduct of any of its officers, directors, agents or employees. The County, to the
extent permitted by law, shall indemnify, defend and hold harmless the Trustee against any
loss, damages, liability or expense incurred without negligence, willful misconduct or bad
faith on the part of the Trustee, (i) arising out of or in connection with the acceptance or
administration of the trusts created hereby or the exercise or performance of any of its
powers or duties hereunder, and (ii) any untrue statement or alleged untrue statement of any
material fact or omission or alleged omission to state a material fact necessary to make the
statements made, in light of the circumstances under which they were made, not misleading
in any official statement or other offering circular utilized in connection with the sale of the
SF2-23139.3 29
Bonds, including costs and expenses (including attorneys' fees) of defending itself against any
claim or liability in connection with the exercise or performance of any of its powers
hereunder. The rights of the Trustee and the obligations of the County under this Section
6.03 shall survive the discharge of the Bonds and this Trust Agreement and the resignation or
removal of the Trustee.
ARTICLE VII
AMENDMENT OF THE TRUST AGREEMENT
SECTION 7.01. Amendment of the Trust Agreement. The Trust Agreement
and the rights and obligations of the County and of the Holders may be amended at any time
by a Supplemental Trust Agreement which shall become binding when the written consents
of the Holders of a majority in aggregate principal amount of the Bonds then Outstanding,
exclusive of Bonds disqualified as provided in Section 7.02, are filed with the Trustee. No
such amendment shall (1) extend the maturity of or reduce the interest rate on or amount of
interest on or principal of or redemption premium, if any, on any Bond without the express
written consent of the Holder of such Bond, or (2) reduce the percentage of Bonds required
for the written consent to any such amendment.
The Trust Agreement and the rights and obligations of the County and of the
Holders may also be amended at any time by a Supplemental Trust Agreement which shall
become binding upon adoption without the consent of any Holders, but only to the extent
permitted by law and after receipt of an approving Opinion of Counsel, for any purpose that
will not materially adversely affect the interests of the Holders, including (without limitation)
for any one or more of the following purposes --
(a) to add to the agreements and covenants required herein to be performed
by the County other agreements and covenants thereafter to be performed by the
County, to pledge or assign additional security for the Bonds (or any portion thereof),
or to surrender any right or power reserved herein to or conferred herein on the
County;
(b) to make such provisions for the purpose of curing any ambiguity or of
correcting, curing or supplementing any defective provision contained herein and in
any Supplemental Trust Agreement or in regard to questions arising hereunder which
the County may deem desirable or necessary and not inconsistent herewith;
(c) to provide for the issuance of any Additional Bonds and to provide the
terms of such Additional Bonds, subject to the conditions and upon compliance with
the procedure set forth in Article III (which shall be deemed not to adversely affect
Holders);
SF2.23139.3 30
(d) to modify, amend or add to the provisions herein or in any
Supplemental Trust Agreement to permit the qualification thereof under the Trust
Indenture Act of 1939, as amended, or any similar federal statutes hereafter in effect,
and to add such other terms, conditions and provisions as may be permitted by such
statute or similar statute; or
. (e) to modify, amend or supplement this Trust Agreement and any
Supplemental Trust Agreement in any manner that does not materially adversely affect
the interest of holders of Bonds.
SECTION 7.02. Disqualified Bonds. Bonds owned or held by or for the
account of the County shall not be deemed Outstanding for the purpose of any consent or
other action or any calculation of Outstanding Bonds provided in this article, and shall not be
entitled to consent to or take any other action provided in this article.
SECTION 7.03. Endorsement or Replacement of Bonds After Amendment.
After the effective date of any action taken as hereinabove provided, the County may
determine that the Bonds may bear a notation by endorsement in form approved by the
County as to such action, and in that case upon demand of the Holder of any Outstanding
Bonds and presentation of his Bond for such purpose at the office of the Trustee a suitable
notation as to such action shall be made on such Bond. If the County shall so determine,
new Bonds so modified as, in the opinion of the County, shall be necessary to conform to
such action shall be prepared and executed, and in that case upon demand of the Holder of
any Outstanding Bond a new Bond or Bonds shall be exchanged at the office of the Trustee
without cost to each Holder for its Bond or Bonds then Outstanding upon surrender of such
Outstanding Bonds.
SECTION 7.04. Amendment by Mutual Consent. The provisions of this
article shall not prevent any Holder from accepting any amendment as to the particular Bonds
held by him, provided that due notation thereof is made on such Bonds.
SECTION 7.05. Attorney's Opinion Regarding Supplemental Agreements.
The Trustee may obtain an opinion of counsel that any amendments or supplements to the
Trust Agreement complies with the provisions of this Article VII and the Trustee may
conclusively rely upon such opinion.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF HOLDERS
SECTION 8.01. Events of Default and Acceleration of Maturities. If one or
more of the following events (herein called "events of default") shall happen, that is to say:
SF2-23139.3 31
(a) if default shall be made by the County in the due and punctual payment
of the interest on any Bond when and as the same shall become due and payable;
(b) if default shall be made by the County in the due and punctual payment
of the principal of or redemption premium, if any, on any Bond when and as the
same shall become due and payable, whether at maturity as therein expressed or by
proceedings for redemption;
(c) if default shall be made by the County in the performance of any of the
agreements or covenants required herein to be performed by the County, and such
default shall have continued for a period of sixty (60) days after the County shall have
been given notice in writing of such default by the Trustee; specifying such default
and requiring the same to be remedied, shall have been given to the County by the
Trustee or the Owners of not less than twenty-five (25%) in aggregate principal
amount of the Bonds at the time Outstanding; provided, however, if the default stated
in the notice can be corrected, but not within the applicable period, the Trustee and
such Owners shall not unreasonably withhold their consent to an extension of such
time if corrective action is instituted by the County within the applicable period and
diligently pursued until the default is corrected.
(d) if the County shall file a petition or answer seeking arrangement or
reorganization under the federal bankruptcy laws or any other applicable law of the
United States of America or any state therein, or if a court of competent jurisdiction
shall approve a petition filed with or without the consent of the County seeking
arrangement or reorganization under the federal bankruptcy laws or any other
applicable law of the United States of America or any state therein, or if under the
provisions of any other law for the relief or aid of debtors any court of competent
jurisdiction shall assume custody or control of the County or of the whole or any
substantial part of its property;
then and in each and every such case during the continuance of such event of default the
Trustee may, and upon the written request of the Holders of not less than fifty-one percent
(51%) in aggregate principal amount of the Bonds then Outstanding shall, by notice in
writing to the County, declare the principal of all Bonds then Outstanding and the interest
accrued thereon to be due and payable immediately, and upon any such declaration the same
shall become due and payable, anything contained herein or in the Bonds to the contrary
notwithstanding. The Trustee shall promptly notify all Holders of any such event of default
which is continuing.
This provision, however, is subject to the condition that if at any time after the
principal of the Bonds then Outstanding shall have been so declared due and payable and
before any judgment or decree for the payment of the money due shall have been obtained or
entered the County shall deposit with the Trustee a sum sufficient to pay all matured interest
on all the Bonds and all principal of the Bonds matured prior to such declaration, with
interest at the rate borne by such Bonds on such overdue interest and principal, and the
SF2-23139.3 32
J
reasonable fees and expenses of the Trustee, and any and all other defaults known to the
Trustee (other than in the payment of interest on and principal of the Bonds due and payable
solely by reason of such declaration) shall have been made good or cured to the satisfaction
of the Trustee or provision deemed by the Trustee to be adequate shall have been made
therefor, then and in every such case the Holders of not less than fifty-one percent (51%) in
aggregate principal amount of Bonds then Outstanding, by written notice to the County and
to the Trustee, may on behalf of the Holders of all the Bonds then Outstanding rescind and
annul such declaration and its consequences; but no such rescission and annulment shall
extend to or shall affect any subsequent default or shall impair or exhaust any right or power
consequent thereon.
SECTION 8.02. Application of Funds Upon Acceleration. All moneys in the
accounts and funds provided in Sections 2.11, 4.01, 4.02 and 4.03 upon the date of the
declaration of acceleration by the Trustee as provided in Section 8.01 and all amounts in the
funds and accounts (other than amounts on deposit in the Rebate Fund) thereafter received by
the County hereunder shall be transmitted to the Trustee and shall be applied by the Trustee
in the following order--
First, to the payment of the costs and expenses of the Holders in providing for
the declaration of such event of default, including reasonable compensation to their
accountants and counsel, and to the payment of the costs and expenses of the Trustee, if any,
in carrying out the provisions of this article, including reasonable compensation to its
accountants and counsel and any outstanding fees and expenses of the Trustee; and
Second, upon presentation of the several Bonds, and the stamping thereon of
the amount of the payment if only partially paid or upon the surrender thereof if fully paid,
to the payment of the whole amount then owing and unpaid upon the Bonds for interest and
principal, with (to the extent permitted by law) interest on the overdue interest and principal
at the rate borne by such Bonds, and in case such money shall be insufficient to pay in full
the whole amount so owing and unpaid upon the Bonds, then to the payment of such interest,
principal and (to the extent permitted by law) interest on overdue interest and principal
without preference or priority among such interest, principal and interest on overdue interest
and principal ratably to the aggregate of such interest, principal and interest on overdue
interest and principal.
SECTION 8.03. Institution of Legal Proceedings by,Trustee. If one or more
of the events of default shall happen and be continuing, the Trustee may, and upon the
written request of the Holders of a majority in principal amount of the Bonds then
Outstanding, and upon being indemnified to its satisfaction therefor, shall, proceed to protect
or enforce its rights or the rights of the Holders of Bonds under this Trust Agreement by a
suit in equity or action at law, either for the specific performance of any covenant or
agreement contained herein, or in aid of the execution of any power herein granted, or by
mandamus or other appropriate proceeding for the enforcement of any other legal or
equitable remedy as the Trustee shall deem most effectual in support of any of its rights and
duties hereunder.
SF2-23139.3 33
SECTION 8.04. Non-Waiver. Nothing in this article or in any other
provision hereof or in the Bonds shall affect or impair the obligation of the County, which is
absolute and unconditional, to pay the interest on and principal of and redemption premiums,
if any, on the Bonds to the respective Holders of the Bonds at the respective dates of
maturity or upon prior redemption as provided herein, or shall affect or impair the right of
such Holders, which is also absolute and unconditional, to institute suit to enforce such
payment by virtue of the contract embodied herein and in the Bonds.
A waiver of any default or breach of duty or contract by the Trustee or any
Holder shall not affect any subsequent default or breach of duty or contract or impair any
rights or remedies on any such subsequent default or breach of duty or contract. No delay or
omission by the Trustee or any Holder to exercise any right or remedy accruing upon any
default or breach of duty or contract shall impair any such right or remedy or shall be
construed to be a waiver of any such default or breach of duty or contract or an acquiescence
therein, and every right or remedy conferred upon the Holders by the Act or by this Article
may be enforced and exercised from time to time and as often as shall be deemed expedient
by the Trustee or the Holders.
If any action, proceeding or suit to enforce any right or exercise any remedy is
abandoned, the County, the Trustee and any Holder shall be restored to their former
positions, rights and remedies as if such action, proceeding or suit had not been brought or
taken.
SECTION 8.05. Actions by Trustee as Attorney-in-Fact. Any action,
proceeding or suit which any Holder shall have the right to bring to enforce any right or
remedy hereunder may be brought by the Trustee for the equal benefit and protection of all
Holders, whether or not the Trustee is a Holder, and the Trustee is hereby appointed (and
the successive Holders, by taking and holding the Bonds issued hereunder, shall be
conclusively deemed to have so appointed it) the true and lawful attorney-in-fact of the
Holders for the purpose of bringing any such action, proceeding or suit and for the purpose
of doing and performing any and all acts and things for and on behalf of the Holders as a
class or classes as may be advisable or necessary in the opinion of the Trustee as such
attorney-in-fact.
SECTION 8.06. Remedies Not Exclusive. No remedy herein conferred upon
or reserved to the Holders is intended to be exclusive of any other remedy, and each such
remedy shall be cumulative and shall be in addition to every other remedy given hereunder
or now or hereafter existing at law or in equity or by statute or otherwise and may be
exercised without exhausting and without regard to any other remedy conferred by the Act or
any other law.
SECTION 8.07. Limitation on Bondholders' Right to Sue. No Holder of any
Bond issued hereunder shall have the right to institute any suit, action or proceeding at law
or equity, for any remedy under or upon this Trust Agreement, unless (a) such Holder shall
have previously given to the Trustee written notice of the occurrence of an event of default
SF2-23139.3 34
as defined in Section 8.01 hereunder; (b) the Holders of at least a majority in aggregate
principal amount of all the Bonds then Outstanding shall have made written request upon the
Trustee to exercise the powers hereinbefore granted or to institute such suit, action or
proceeding in its own name; (c) said Holders shall have tendered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities to be incurred in compliance
with such request; and (d) the Trustee shall have refused or omitted to comply with such
request for a period of sixty (60) days after such request shall have been received by, and
said tender of indemnity shall have been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission are
hereby declared, in every case, to be conditions precedent to the exercise by any owner of
Bonds of any remedy hereunder; it being understood and intended that no one or more
owners of Bonds shall have any right in any manner whatever by his or their action to
enforce any right under this Trust Agreement, except in the manner herein provided, and that
all proceedings at law or in equity to enforce any provision of the Trust Agreement shall be
instituted, had and maintained in the manner herein provided and for the equal benefit of all
Holders of the Outstanding Bonds.
SECTION 8.08. Absolute Obligation of County. Nothing in Section 8.08 or
in any other provision of this Trust Agreement or in the Bonds contained shall affect or
impair the obligation of the County, which is absolute and unconditional, to pay the principal
of, premium, if any and interest on the Bonds to the respective Holders of the Bonds at their
respective due dates as herein provided.
ARTICLE IX
DEFEASANCE
SECTION 9.01. Discharge of Bonds.
(a) If the County shall pay or cause to be paid or there shall otherwise be
paid to the Holders of all Outstanding Bonds the interest thereon and the principal thereof
and the redemption premiums, if any, thereon at the times and in the manner stipulated
herein and therein, then all agreements, covenants and other obligations of the County to the
Holders of such Bonds hereunder shall thereupon cease, terminate and become void and be
discharged and satisfied. In such event, the Trustee shall execute and deliver to the County
all such instruments as may be necessary or desirable to evidence such discharge and
satisfaction, the Trustee shall pay over or deliver to the County all money or securities held
by it pursuant hereto which are not required for the payment of the interest on and principal
of and redemption premiums, if any, on such Bonds.
(b) Any Outstanding Bonds shall prior to the maturity date or redemption
date thereof be deemed to have been paid within the meaning of and with the effect
expressed in subsection (a) of this section if (1) in case any of such Bonds are to be
SF2-23139.3 35
redeemed on any date prior to their maturity date, the County shall have given to the Trustee
in form satisfactory to it irrevocable instructions to provide notice in accordance with Section
2.03, (2) there,shall have been deposited with the Trustee either (A) money in an amount
which shall be sufficient or (B) Permitted Investments of the type described in clause (1) of
the definition of Permitted Investments and which are not subject to redemption prior to
maturity (including any such Permitted Investments issued or held in book-entry form on the
books of the County or the Treasury of the United States of America) or tax exempt
obligations of a state or political subdivision thereof which have been defeased under
irrevocable escrow instructions by the deposit of such money or Permitted Investments and
which are then rated in the highest rating category by the Rating Agencies, the interest on
and principal of which when paid will provide money which, together with the money, if
any, deposited with the Trustee at the same time, shall be sufficient, in the opinion of an
Independent Certified Public Accountant, to pay when due the interest to become due on
such Bonds on and prior to the maturity date or redemption date thereof, as the case may be,
and the principal of and redemption premiums, if any, on such Bonds, and (3) in the event
such Bonds are not by their terms subject to redemption within the next succeeding sixty (60)
days, the County shall have given the Trustee in form satisfactory to it irrevocable
instructions to mail as soon as practicable, a notice to the Holders of such Bonds that the
deposit required by clause (2) above has been made with the Trustee and that such Bonds are
deemed to have been paid in accordance with this section and stating the maturity date or
redemption date upon which money is to be available for the payment of the principal of and
redemption premiums, if any, on such Bonds.
SECTION 9.02. Unclaimed Money. Anything contained herein to the
contrary notwithstanding, any money held by the Trustee in trust for the payment and
discharge of any of the Bonds or interest thereon which remains unclaimed for two (2) years
after the date when such Bonds or interest thereon have become due and payable, either at
their stated maturity dates or by call for redemption prior to maturity, if such money was
held by the Trustee at such date, or for two (2) years after the date of deposit of such money
if deposited with the Trustee after the date when such Bonds have become due and payable,
shall be repaid by the Trustee to the County as its absolute property free from trust, and the
Trustee shall thereupon be released and discharged with respect thereto and the Holders shall
not look to the Trustee for the payment of such Bonds; provided, however, that before being
required to make any such payment to the County, the Trustee may, and at the request of the
County shall, at the expense of the County, cause to be published once a week for two (2)
successive weeks in a Financial Newspaper of general circulation in Los Angeles and in San
Francisco, California and in the same or a similar Financial Newspaper of general circulation
in New York, New York a notice that such money remains unclaimed and that, after a date
named in such notice, which date shall not be less than thirty (30) days after the date of the
first publication of each such notice, the balance of such money then unclaimed will be
returned to the County.
SF2-23139.3 36
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Benefits of the Trust Agreement Limited to Parties.
Nothing contained herein, expressed or implied, is intended to give to any person other than
the County, the Trustee and the Holders any right, remedy or claim under or by reason
hereof. Any agreement or covenant required herein to be performed by or on behalf of the
County or any member, officer or employee thereof shall be for the sole and exclusive
benefit of the Trustee and the Holders.
SECTION 10.02. Successor Is Deemed Included In All References To
Predecessor. Whenever herein either the County or any member, officer or employee
thereof or the Trustee is named or referred to, such reference shall be deemed to include the
successor or assigns thereof, and all agreements and covenants required hereby to be
performed by or on behalf of the County or the Trustee, or any member, officer or employee
thereof, shall bind and inure to the benefit of the respective successors thereof whether so
expressed or not.
SECTION 10.03. Execution of Documents by Holders. Any declaration,
request or other instrument which is permitted or required herein to be executed by Holders
may be in one or more instruments of similar tenor and may be executed by Holders in
person or by their attorneys appointed in writing. The fact and date of the execution by any
Holder or his attorney of any declaration, request or other instrument or of any writing
appointing such attorney may be proved by the certificate of any notary public or other
officer authorized to make acknowledgments of deeds to be recorded in the state or territory
in which he purports to act that the person signing such declaration, request or other
instrument or writing acknowledged to him the execution thereof, or by an affidavit of a
witness of such execution duly sworn to before such notary public or other officer. The
ownership of any Bonds and the amount, maturity, number and date of holding the same may
be proved by the registration books relating to the Bonds at the office of the Trustee.
Any declaration, request, consent or other instrument or writing of the Holder
of any Bond shall bind all future Holders of such Bond with respect to anything done or
suffered to be done by the Trustee or the County in good faith and in accordance therewith.
SECTION 10.04. Waiver of Personal Liability. No member, officer or
employee of the County or the County of Contra Costa shall be individually or personally
liable for the payment of the interest on or principal of or redemption premiums, if any, on
the Bonds by reason of their issuance, but nothing herein contained shall relieve any such
member, officer or employee from the performance of any official duty provided by the Act
or any other applicable provisions of law or hereby.
SF2-23139.3 37
SECTION 10.05. Acquisition of Bonds by County. All Bonds acquired by
the County, whether by purchase or gift or otherwise, shall be surrendered to the Trustee for
cancellation.
SECTION 10.06. Destruction of Cancelled Bonds. Whenever provision is
made for the return to the County of any Bonds which have been cancelled pursuant to the
provisions hereof, the Trustee shall destroy such Bonds and furnish to the County a
certificate of such destruction.
SECTION 10.07. Content of Certificates. Every Certificate of the County
with respect to compliance with any agreement, condition, covenant or provision provided
herein shall include (a) a statement that the person or persons making or giving such
certificate have read such agreement, condition, covenant or provision and the definitions
herein relating thereto; (b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements contained in such certificate are based; (c) a
statement that, in the opinion of the signers, they have made or caused to be made such
examination or investigation as is necessary to enable them to express an informed opinion as
to whether or not such agreement, condition, covenant or provision has been complied with;
and (d) a statement as to whether, in the opinion of the signers, such agreement, condition,
covenant or provision has been complied with.
Any Certificate of the County may be based, insofar as it relates to legal
matters, upon an Opinion of Counsel unless the person making or giving such certificate
knows that the Opinion of Counsel with respect to the matters upon which his certificate may
be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known
that the same was erroneous. Any Opinion of Counsel may be based, insofar as it relates to
factual matters information with respect to which is in the possession of the County, upon a
representation by an officer or officers of the County unless the counsel executing such
Opinion of Counsel knows that the representation with respect to the matters upon which his
opinion may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should
have known that the same was erroneous.
SECTION 10.08. Publication for Successive Weeks. Any publication
required to be made hereunder for successive weeks in a Financial Newspaper may be made
in each instance upon any Business Day of the first week and need not be made on the same
Business Day of any succeeding week or in the same Financial Newspaper for any
subsequent publication, but may be made on different Business Days or in different Financial
Newspapers, as the case may be.
SECTION 10.09. Accounts and Funds: Business Days. Any account or fund
required herein to be established and maintained by the Trustee may be established and
maintained in the accounting records of the Trustee either as an account or a fund, and may,
for the purposes of such accounting records, any audits thereof and any reports or statements
with respect thereto, be treated either as an account or a fund; but all such records with
respect to all such accounts and funds shall at all times be maintained in accordance with
SF2-23139.3 38
sound accounting practice and with due regard for the protection of the security of the Bonds
and the rights of the Holders. Any action required to occur hereunder on a day which is not
a Business Day shall be required to occur on the next succeeding Business Day.
SECTION 10.10. Notices. All written notices to be given hereunder shall be
given by mail to the party entitled thereto at its address set forth below, or at such other
address as such party may provide to the other party in writing from time to time, namely:
If to the County:
County of Contra Costa
651 Pine Street, 11th Floor
Martinez, CA 94553-0063
Attention: County Administrator
If to the Trustee:
First Interstate Bank of California
345 California Street, 8th Floor
San Francisco, CA 94104
Attention: Corporate Trust Dept.
SECTION 10.11. Article and Section Headings and References. The
headings or titles of the several articles and sections hereof and the table of contents
appended hereto shall be solely for convenience of reference and shall not affect the
meaning, construction or effect hereof. All references herein to "Articles," "Sections" and
other subdivisions or clauses are to the corresponding articles, sections, subdivisions or
clauses hereof; and the words "hereby," "herein," "hereof," "hereto," "herewith,"
"hereunder" and other words of similar import refer to the Trust Agreement as a whole and
not to any particular article, section, subdivision or clause hereof.
SECTION 10.12. Partial Invalidity. If any one or more of the agreements or
covenants or portions thereof required hereby to be performed by or on the part of the
County or the Trustee shall be contrary to law, then such agreement or agreements, such
covenant or covenants or such portions thereof shall be null and void and shall be deemed
separable from the remaining agreements and covenants or portions thereof and shall in no
way affect the validity hereof or of the Bonds, and the Holders shall retain all the benefit,
protection and security afforded to them under the Act or any other applicable provisions of
law. The County and the Trustee hereby declare that they would have executed and
delivered the Trust Agreement and each and every other article, section, paragraph,
subdivision, sentence, clause and phrase hereof and would have authorized the issuance of
the Bonds pursuant hereto irrespective of the fact that any one or more articles, sections,
paragraphs, subdivisions, sentences, clauses or phrases hereof or the application thereof to
any person or circumstance may be held to be unconstitutional, unenforceable or invalid.
SF2-23139.3 39
SECTION 10.13. Execution in Several Counterparts. This Trust Agreement
may be executed in any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original; and all such counterparts, or as many of them as the
County and the Trustee shall preserve undestroyed, shall together constitute but one and the
same instrument.
SECTION 10.14. Governing Law. This Trust Agreement shall be governed
by and construed in accordance with the laws of the State of California.
SECTION 10.15. CUSIP Numbers. Neither the Trustee nor the County shall
be liable for any defect or inaccuracy in the CUSIP number that appears on any Bond or in
any redemption notice. The Trustee may, in its discretion, include in any redemption notice
a statement to the effect that the CUSIP numbers on the Bonds have been assigned by an
independent service and are included in such notice solely for the convenience of the Holders
and that neither County nor the Trustee shall be liable for any inaccuracies in such numbers.
SF2-23139.3 40
IN WITNESS WHEREOF, the COUNTY OF CONTRA COSTA has caused
this Trust Agreement to be signed in its name by the Chair of the Board of Supervisors and
FIRST INTERSTATE BANK OF CALIFORNIA, in token of its acceptance of the trusts
created hereunder, has caused this Trust Agreement to be signed by the officers thereunder
duly authorized, all as of the day and year first above written.
COUNTY OF CONTRA COSTA
By
Chair
Board of Supervisors
FIRST INTERSTATE BANK OF CALIFORNIA,
as Trustee
By
Vice President
By
Assistant Vice President
SF2-23139.3 41
1
F_NHIBIT A
[FORM OF BOND]
COUNTY OF CONTRA. COSTA
PENSION OBLIGATION BONDS
SERIES
No. R- $
THE OBLIGATIONS OF THE COUNTY HEREUNDER,
INCLUDING THE OBLIGATION TO MAKE ALL PAYMENTS OF
INTEREST AND PRINCIPAL WHEN DUE, ARE OBLIGATIONS
OF THE COUNTY IMPOSED BY LAW AND ARE ABSOLUTE
AND UNCONDITIONAL, WITHOUT ANY RIGHT OF SET-OFF
OR COUNTER CLAIM. THIS BOND DOES NOT CONSTITUTE
AN OBLIGATION OF THE COUNTY FOR WHICH THE COUNTY
IS OBLIGATED OR PERMITTED TO LEVY OR PLEDGE ANY
FORM OF TAXATION OR FOR WHICH THE COUNTY HAS
LEVIED OR PLEDGED OR WILL LEVY OR PLEDGE ANY FORM
OF TAXATION. NEITHER THE BONDS NOR THE OBLIGATION
OF THE COUNTY TO MAKE PAYMENTS ON THE BONDS
CONSTITUTE AN INDEBTEDNESS OF THE COUNTY, THE
STATE OF CALIFORNIA, OR ANY OF ITS POLITICAL
SUBDIVISIONS WITHIN THE MEANING OF ANY
CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR
RESTRICTION.
Interest Maturity Original
Rate Dae Issue Date CUSIP
REGISTERED OWNER:
PRINCIPAL SUM: DOLLARS
The COUNTY OF CONTRA COSTA, duly organized and validly existing
under and pursuant to the Constitution and laws of the State of California (the "County"), for
SF2-23139.3 A-1
value received hereby, promises to pay to the registered owner identified above or registered
assigns, on the maturity date specified above (subject to any right of prior redemption
hereinafter provided for) the principal sum specified above, together with interest on such
principal sum from the interest payment date next preceding the date of authentication of this
Bond (unless this Bond is authenticated as of an interest payment date or during the period
from the sixteenth day of the month preceding an interest payment date to such interest
payment date, in which event it shall bear interest from such interest payment date, or unless
this Bond is authenticated prior to May 15, 1994, in which event it shall bear interest from
the original issue date specified above) until the principal hereof shall have been paid at the
interest rate per annum specified above, payable on June 1, 1994, and semiannually
thereafter on each December 1 and June 1. Interest due on or before the maturity or prior
redemption of this Bond shall be payable only by check mailed on the Interest Payment Date
by first-class mail to the registered owner hereof; provided that upon the written request of a
Holder of $1,000,000 or more in aggregate principal amount of Bonds received by the
Trustee prior to the applicable record date, interest shall be paid by wire transfer in
immediately available funds. The principal hereof is payable in lawful money of the United
States of America at the Corporate Trust Office of First Interstate Bank of California, as
Trustee.
This Bond is one of a duly authorized issue of bonds of the County designated
as its "Pension Obligation Bonds, 1994 Series A" (the "Bonds") in aggregate principal
amount of dollars ($XXX,000,000), all of like
tenor and date (except for such variations, if any, as may be required to designate varying
numbers, maturities and interest rates), and is issued under and pursuant to the provisions of
Articles 10 and 11 (commencing with Section 53570) of Chapter 3, Division 2, Title 5 of the
Government Code of the State of California and all laws amendatory thereof or supplemental
thereto (the "Act") and under and pursuant to the provisions of a trust agreement, dated as of
January 1, 1994, between the County and First Interstate Bank of California, as trustee (the
"Trustee") (the "Trust Agreement") (copies of which are on file at the Corporate Trust
Office of the Trustee.
This Bond is one of the duly authorized series of Bonds designated "
Series _" in the aggregate principal amount of$ . Under the Trust Agreement,
Additional Bonds and other obligations may be issued on a parity with the Series
Bonds, but subject to the conditions and upon compliance with the procedures set forth in the
Trust Agreement. The Series _ Bonds and any bonds or other obligations issued on
a parity with the Series _ Bonds are obligations imposed by law payable from funds to be
appropriated by the County pursuant to the County Employees Retirement Law of 1937, as
amended (the "Retirement Law"). Under the Retirement Law, if the Board of Supervisors of
the County fails to appropriate funds to pay the Series Bonds, the County Auditor
is required to transfer from any money available in any fund in the County Treasury the
amount required to pay such obligations, with the same force and effect as such transfer
would have had if the required appropriation had been made by the Board of Supervisors of
the County. Reference is hereby made to the Act and to the Trust Agreement and any and
all amendments thereof and supplements thereto for a description of the terms on which the
SF2-23139.3 A-2
Bonds are issued, the rights of the registered owners of the Bonds, security for payment of
the Bonds, remedies upon default and limitations thereon, and amendment of the Trust
Agreement (with or without consent of the registered owners of the Bonds); and all the terms
of the Trust Agreement are hereby incorporated herein and constitute a contract between the
County and the registered owner of this Bond, to all the provisions of which the registered
owner of this Bond, by acceptance hereof, agrees and consents.
The Bonds are subject to redemption prior to their respective stated maturities
at the option of the County, as a whole on any date, or in part (in such maturities as are
designated by the County) on any Interest Payment Date on or after June 1, , at the
following redemption prices (expressed as percentages of the principal amount of
Series Bonds called for redemption), together with accrued interest to the
date fixed for redemption:
Redemption Period
(dates inclusive Redemption Price
June 1, through May 31, %
June 1, through May 31,
June 1, and thereafter
The Bonds maturing on June 1, are also subject to mandatory sinking
fund redemption prior to maturity in part on June 1 of each year on and after June 1, ,
by lot, from mandatory sinking account payments in the amounts and on the dates set forth in
the Trust Agreement, at a prepayment price equal to the sum of the principal amount thereof,
without premium, plus accrued interest thereon to the redemption date.
Notice of redemption of any Bond selected for redemption shall be given by
first-class mail not less than thirty (30) days nor more than sixty (60) days before the
redemption date to the registered owner hereof, subject to and in accordance with provisions
of the Trust Agreement with respect thereto. If notice of redemption has been duly given as
aforesaid and money for the payment of the above-described redemption price is held by the
Trustee, then this Bond shall, on the redemption date designated in such notice, become due
and payable at the above-described redemption price; and from and after the date so
designated, interest on this Bond shall cease to accrue and the registered owner of this Bond
shall have no rights with respect hereto except to receive payment of the redemption price
hereof.
If an event of default, as defined in the Trust Agreement, shall occur, the
principal of all Bonds (and any additional bonds authorized by the Trust Agreement) may be
declared due and payable upon the conditions, in the manner and with the effect provided in
the Trust Agreement; except that the Trust Agreement provides that in certain events such
SF2-23139.3 A-3
declaration and its consequences may be rescinded under the circumstances as provided
therein.
Pursuant to Section 31584 of the County Employees Retirement Law of 1937,
the Board of Supervisors of the County is obligated to make appropriations to pay the
unfunded accrued actuarial liability which is evidenced by the Bonds and such Section
requires the Auditor of the County to transfer from any money available in.any fund in the
County Treasury the sums specified in the Board of Supervisors fails to make such
appropriations.
This Bond is transferable only on a register to be kept for that purpose at the
above-mentioned office of the Trustee by the registered owner hereof in person or by his
duly authorized attorney upon payment of the charges provided in the Trust Agreement and
upon surrender of this Bond together with a written instrument of transfer satisfactory to the
Trustee duly executed by the registered owner or his duly authorized attorney, and thereupon
a new fully registered Bond or Bonds in the same aggregate principal amount of authorized
denominations will be issued to the transferee in exchange therefor. The County and the
Trustee may deem and treat the registered owner hereof as the absolute owner hereof for the
purpose of receiving payment of the interest hereon and principal hereof and for all other
purposes, whether or not this Bond shall be overdue, and neither the County nor the Trustee
shall be affected by any notice or knowledge to the contrary; and payment of the interest on
and principal of this Bond shall be made only to such registered owner, which payments shall
be valid and effectual to satisfy and discharge liability on this Bond to the extent of the sum
or sums so paid.
This Bond shall not be entitled to any benefit, protection or security under the
Trust Agreement or become valid or obligatory for any purpose until the certificate of
authentication and registration hereon endorsed shall have been executed and dated by the
Trustee.
It is hereby certified that all acts, conditions and things required by law to
exist, to have happened and to have been performed precedent to and in the issuance of this
Bond do exist, have happened and have been performed in due time, form and manner as
required by law and that the amount of this Bond, together with all other indebtedness of the
County, does not exceed any limit prescribed by the Constitution or laws of the State of
California and is not in excess of the amount of Bonds permitted to be issued under the Trust
Agreement.
SF2-23139.3 A-4
IN WITNESS WHEREOF, the County of Contra Costa has caused this Bond
to be executed in its name and on its behalf by the facsimile signature of the Chair of the
Board of Supervisors of the County and countersigned by the facsimile signature of the Clerk
of the Board of Supervisors of said County, and has caused this Bond to be dated as of the
original issue date specified above.
COUNTY OF CONTRA COSTA
By
Chair
Board of Supervisors
[SEAL]
Countersigned:
Clerk
Board of Supervisors
SF2-23139.3 A-5
[FORM OF CERTIFICATE OF AUTHENTICATION]
This is one of the Bonds described in the within- mentioned Trust Agreement
which has been authenticated on
FIRST INTERSTATE BANK OF CALIFORNIA,
as Trustee
By
Authorized Signatory
[FORM OF ASSIGNMENT]
For value received the undersigned hereby sells, assigns and transfers unto
(Taxpayer Identification Number: )the within Bond
and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within bond on the books Dept for registration thereof, with full
power of substitution in the premises.
Dated:
Note: The signature to this Assignment must correspond with the name as written on the
face of the Bond in every particular, without alteration or enlargement or any change
whatever.
Signature Guaranteed:
Notice: Signature must be guaranteed by an eligible guarantor institution.
SF2-23139.3 A-6
2 . 24
THE BOARD OR SUPERVISORS OF
CONTRA COSTA COUNTY, CALIFORNIA
Adopted this Order on _November 9, 1993 by the following vote:
AYES: Supervisors Powers, Bishop, McPeak, Torlakson
NOES: None
ABSENT: Supervisor Smith
ABSTAIN: None
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SUBJECT: Financing for Employee Health Plans
In its consideration of the recommendations of the
County Administrator on the issuance of pension obligation bonds,
Board Members discussed the feasibility of using a similar
approach for funancing employee health plans.
THEREFORE, IT IS BY THE BOARD ORDERED that the County
Administrator is REQUESTED to explore a similar concept for
financing the employee health insurance package
hereby certify that this is a true and correct copy of
an action taken and entered on the minutes of th3
Board of Supervisors on the date shown.
ATTESTED: ? i L 10 9:0 --
PHIL BATCHELOR,Clerk of the Boaro
Of Supervisors and County Administrator
cc: County Administrator
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