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HomeMy WebLinkAboutMINUTES - 06161987 - 2.1 c TO BOARD OF SUPERVISORS FROM: Phil Batchelor, Contra County Administrator Costa DATE: June 9, 1987 County SUBJECT: 1987-88 BORROWING PROGRAM SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATION- Authorize the County Administrator, Auditor-Controller and Treasurer-Tax Collector to pursue borrowing $100 million in taxable notes, for the 1987-88 Borrowing Program, and approve related documents. FINANCIAL IMPLICATIONS: The issue is being structured so that it will be at least a break even situation for the County. In the best case, the County would net several hundred thousand dollars. BACKGROUND: In May, the Board authorized the County Administrator, Auditor-Controller and Treasurer-Tax Collector to travel to New York to develop the 1987-88 borrowing program and establish a rating for Contra Costa County. Based upon that visit, it is apparent that it is not feasible for the County to pursue a tax exempt issue. This is due to significant changes in the tax lawwhich make it more difficult to. issue viable tax exempt notes. As an alternative, taxable notes look promising at this time. The laws governing taxable notes are more flexible and allow a better chance for the County to meet its cash flow shortages as well as earn interest on funds borrowed. It appears that $100 million is the most advantageous amount for the County to borrow. At this time, specifics about the issue are still being developed. The Board' s authorization would allow the effort to continue. Before any formal obligations are made, the subject will be brought back to the Board for final approval. CONTINUED ON ATTACHWENT: _ YES SIGNATURE: _ RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF OARD COMMITTEE APPROVE OTHER SIGNATURE(S)' (� ACTION OF BOARD ON June 16 , 19 ('7 APPROVED AS RECOMMENDED X OTHER X The Board adopted Resolution No. 87/371 approving the Sale of 1987-1988 Tax and Revenue Anticipation Notes. The Treasurer-Tax Collector was requested to report to the Board prior to the sale of the Series B Notes and to obtain- Board approval prior to their sale. The County Administrator was requested to report to the Board on procedures utilized relative to the borrowing program. VOTE OF SUPERVISORS 1 HEREBY CERTIFY THAT THIS IS A TRUE X UNANIMOUS (ABSENT - - - ) AND CORRECT COPY OF AN ACTION TARN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. cc: Auditor-Controller ATTESTED _ June 16, 1987 Treasurer-Tax Collector PHIL BATCHELOR, CLERK OF THE BOARD OF County Administrator SUPERVISORS AND COUNTY ADMINISTRATOR M382/7-83 BY `S(r (y • �� DEPUTY a � y. cc-1 i 1144S RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF CONTRA COSTA PROVIDING FOR THE BORROWING OF FUNDS FOR FISCAL YEAR 1987-1988 AND THE ISSUANCE AND SALE OF 1987-1988 TAX AND REVENUE ANTICIPATION NOTES THEREFOR RESOLUTION NO. 87/ 371 TABLE OF CONTENTS Page Section 1 . Board Determination . . . . . . . . . 2 Section 2 . Definitions . . . . . . . . . . . . . . . 2 Section 3 . Terms of the Notes . . . . . . . . . . . 5 (a) Authorization of Issuance . . . . . 5 (b) Denominations, Maturity, Payment and Determination of Interest Rates 5 (i ) Interest on Series A Notes 6 (ii ) Interest on Series B Notes 7 (c) Tender for Purchase by Series B Noteholder . . . . . . . . . . . . 7 (d) Registration, Transfer, and Replacement of Notes . . . . . . . . 8 (e) Acceleration of Notes . . . . . . . 10 Section 4. Form of Notes . . . . . . . . . . . . . . 11 Section 5 . Use of Proceeds; Rebate Fund . . . . . . 11 Section 6. Repayment Pledge . . . . . . . . . . . . 12 Section 7 . Repayment Funds . . . . . . . . . . . . 13 (a) Establishment . . . . . . . . . . . 13 (b) Investment . . . . . . . . . . . . . 13 Section 8 . Fiscal Agent . . . . . . . . . . . . . . 14 Section 9 . Execution of Notes . . . . . . . . . . . 14 Section 10. Amendments Permitted . . . . . . . . . . 14 Section 11 . Tax Covenants . . . . . . . . . . . . . . 15 Section 12 . Series B Notes Not Exempt from Federal Taxes . . . . . . . . . . 16 Section 13 . Paying Agent and Registrar . . . . . . . 16 i 1144S Page Section 14. Series A Purchase Agreement and Series B Purchase and Remarketing Agreement . . . 16 Section 15 . Approval of Official Statements . . . . . 17 Section 16. Validity of Proceedings . . . . . . . . . 17 Exhibit A Form of Series A Note . . . . . . . . . . A-1 Exhibit B Form of Series B Note . . . . . . . . B-1 Exhibit C Form of Election Notice . . . . . . . . . C-1 [ to be printed on Series B Note) Exhibit D Form of Fiscal Agency Agreement . . . . . D-1 Exhibit E Form of Contract of Purchase for Series A Notes . . . . . . . . . . . . . E-1 Exhibit F Form of Contract of Purchase for Series B Notes and Dealer Remarketing Agreement . . . . . . . . . . . F-1 Exhibit G Form of Official Statement Relating to the Series A Notes . . . . . . . . . . G-1 Exhibit H Form of Official Statement Relating to the Series B Notes . . . . . . . . . . H-1 ii 11445 RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF CONTRA COSTA PROVIDING FOR THE BORROWING OF FUNDS FOR FISCAL YEAR 1987-1988 AND THE ISSUANCE AND SALE OF 1987-1988 TAX AND REVENUE ANTICIPATION NOTES THEREFOR RESOLUTION NO. 87/371 WHEREAS, pursuant to Sections 53850 et sem. of the Government Code of the State of California, this Board of Supervisors (the "Board" ) has found and determined that the sum of One Hundred Million Dollars ( $100, 000, 000) is needed for the requirements of the County of Contra Costa (the "County" ) to satisfy obligations payable from the General Fund of the County, and that it is necessary that said sum be borrowed for such purpose at this time by the issuance of temporary notes therefor in anticipation of the receipt of taxes, income, revenue, cash receipts and other moneys to be received by the County for the General Fund of the County during or attributable to Fiscal Year 1987-1988; and WHEREAS, the County intends to borrow, for the purposes set forth above, as hereinafter defined, One Hundred Million Dollars ($100, 000, 000) through the issuance and sale of. the Notes (as hereinafter defined) ; and WHEREAS, it appears, and the Board hereby finds and determines, that said sum of One Hundred Million Dollars ( $100, 000, 000) , when added to the interest payable thereon, does not exceed eighty-five per cent (85%) of the estimated amount of the uncollected taxes, income, revenue, cash receipts and other moneys of the County for the General Fund of the County attributable to Fiscal Year 1987-1988, and available for the payment of the Notes and the interest thereon; and WHEREAS, pursuant to Section 53856 of the Government Code of the State of California, certain revenues which will be received by the County for the General Fund of the County during or attributable to Fiscal Year 1987-1988 can be pledged for the payment of the Notes and the interest thereon (as hereinafter provided) ; and WHEREAS, Bank of America National Trust and Savings Association (herein sometimes referred to as the "Underwriter" ) has submitted offers to purchase the Notes and has submitted a form of Contract of Purchase for Series A Notes (the "Series A Agreement" ) and a form of Contract of Purchase for Series B Notes and Dealer Remarketing Agreement (the "Series B Agreement" ) to the Board; and 11445 WHEREAS, the County has determined that, in order to provide for the remarketing of the Series B Notes, to reduce interest costs to the County for such Series B Notes and to provide liquidity and additional security to the holders of such Series B Notes, it is appropriate for the County to enter into the Series B Agreement, which provides for the remarketing by the Underwriter of such Series B Notes and the purchase of such Series B Notes under certain circumstances as described therein; and WHEREAS, the County desires to enter into the Series B Agreement so as to provide for such remarketing, to reduce such interest costs and to provide such liquidity and additional security; NOW, THEREFORE, the Board of Supervisors of the County of Contra Costa hereby finds, determines, declares and resolves as follows: Section 1 . Board Determination. All of the recitals herein set forth are true and correct, and the Board so finds and determines. Section 2 . Definitions. Unless the context. otherwise requires, the terms defined in this Section 2 shall, for all purposes of this Resolution, as it now exists and as it may be from time to time amended or supplemented, have the meanings herein specified, as follows: "Accounting Period" means any of the twelve ( 12 ) accounting periods into which a fiscal year is divided by the County for budgeting and financial. reporting purposes. "Adjusted Rate" means the interest rate per annum, with respect to the Notes of Series B, equal to the rate calculated in accordance with Section 3 (b) hereof. "Board" means the Board of Supervisors of the County of Contra Costa. "Bond Counsel" means Orrick, Herrington & Sutcliffe, attorneys at law, San Francisco, California. "Business Day" means a day on which banks in California and New York, New York are not required or authorized to remain closed and on which The New York Stock Exchange is not closed. "Code" means the Internal Revenue Code of 1986, as amended. 2 1144S "County" means the County of Contra Costa, the issuer of the Notes hereunder. "Fiscal Agent" means The Wall Street Trust Company of California, having its principal corporate trust office in Los Angeles, California. "Initial Rate" or "Initial Interest Rate" means, with respect to each series of Notes, the rate of interest initially borne by such series of Notes as set forth in the Series A Agreement and the Series B Agreement, respectively. "Interest Index" means the rate of interest equal to the bond equivalent yield of 91-day United States Treasury bills on the basis of the average per annum discount rate at which such 91-day Treasury bills shall have been sold at the most recent United States Treasury auction. "Interest Payment Date" means (i ) with respect to the Series A Notes, July 27, 1988; and (ii ) with respect to the Series B Notes, February 10, 1988 and every fourth Wednesday (or if such a day is not. a Business Day, the next succeeding Business Day) thereafter. "Interest Payment Period" means, with respect to the Series B Notes, the period commencing on (and including) an Interest Payment Date and ending on (and including) the day immediately preceding the next succeeding Interest Payment Date (or, in the case of the first .Interest Payment Period, the period commencing on (and including) January 13, 1988 (or such other date as shall be the date thereof) , and ending on (and including) the day immediately preceding the first Interest Payment Date. "Interest Period" means, with respect to the Series B Notes, the period commencing on ( and including) a Rate Adjustment Date and ending on (and including) the day immediately preceding the next succeeding Rate Adjustment Date (or, in the case of the first Interest Period, the period commencing on ( and including) January 13, 1988 (or such other date as shall be the date thereof) , and ending on ( and including) the day immediately preceding the first .Rate Adjustment Date. "Munifacts Wire" means the electronic wire service offered by The Bond Buyer known as "Munifacts" which provides information on municipal securities to the subscribers thereof. 3 1144S i c "Note" or "Notes" means the 1987-1988 Tax and Revenue Anticipation Notes authorized to be issued hereunder. "Noteholder" or "Holder" means the registered owner of the Note. "Outstanding, " when used as of any particular time with reference to Notes, means all Notes theretofore, or thereupon being, authenticated and delivered pursuant to this Resolution except ( 1) Notes theretofore cancelled or surrendered for cancellation; (2 ) Notes with respect to which all liability of the County shall have been discharged in accordance with Section 3 (e) or 3 (f) ; and (3 ) Notes for the transfer or exchange of or in lieu of or in substitution for which other Notes shall have been authenticated and delivered pursuant to this Resolution. "Paying Agent" means BankAmerica Trust Company of New York, initially acting as paying agent and registrar hereunder and having a principal office in New York, New York. "Pledged Revenues" shall have the meaning ascribed to such term in Section 6 hereof. "Proceeds Fund" means the 1987-1988 Tax and Revenue Anticipation Note Proceeds Fund which may be established pursuant to Section 5 hereof. "Purchase Price" means with respect to any Series B Notes purchased in accordance with Section 3(c) hereof 100% of the principal amount thereof. "Rate Adjustment Date" means with respect to the Series B Notes the Interest Payment Date for such series. "Rebate Fund" means the 1987-1988 Tax and Revenue Anticipation Note Rebate Fund established pursuant to Section 5 hereof. "Repayment Fund" means the 1987-1988 Tax and Revenue Anticipation Note Repayment Fund established pursuant to Section 7 hereof. "Series A Agreement" means the Contract of Purchase for Series A Notes, between the County and the Underwriter, as executed and delivered. "Series B Agreement" means the Contract of Purchase for Series B Notes and Dealer Remarketing Agreement, between the County and the Underwriter, as executed and delivered. i 4 11445 "Series A Note" or "Series A Notes" means one or more 1987-1988 Tax and Revenue Anticipation Notes, Series A, authorized to be issued hereunder. "Series B Note" or "Series B Notes" means one .or more 1987-1988 Tax and Revenue Anticipation Notes, Taxable Short Term Optional Put Series B, authorized to be issued hereunder. "Treasurer" means the Treasurer-Tax Collector of the County. "Underwriter" means Bank of America National Trust and Savings Association, the purchaser of the Notes issued hereunder and the remarketing agent for the Series B Notes, or its successors or assigns. "Unrestricted Revenues" means taxes, income, revenue, cash receipts, and other moneys which are received for the General Fund of the County during or attributable to Fiscal Year 1987-1988 and which are generally available for the payment of current expenses and other obligations of the County. Section 3 . Terms of the Notes. (a) Authorization of Issuance. Solely for the purpose of anticipating taxes, income, revenue, cash receipts and other moneys to be received by the County for the General Fund of the County during or attributable to Fiscal Year 1987-1988, and not pursuant to any common plan of financing, the County hereby authorizes the borrowing of the aggregate principal amount of One Hundred Million Dollars ( $100, 000, 000) by the issuance of two series of temporary notes under Sections 53850 et seq. of the Government Code of the State of California, generally designated as the "County of Contra Costa 1987-1988 Tax and Revenue Anticipation Notes . " The Notes shall consist of two series of Notes, to be designated (i) the "1987-1988 Tax and Revenue Anticipation Notes, Series A" ; and (ii ) the "1987-1988 Tax and Revenue Anticipation Notes, Taxable Short Term Optional Put Series B. " (b) Denominations, Maturity, Payment and Determination of Interest Rates. The Notes shall each be in the denomination of $25, 000, or any integral multiple thereof. The Series A Notes shall be dated July 1, 1987 and the Series B Notes shall be dated January 13, 1988. The Notes shall mature on July 27, 1988 and shall bear interest from the Interest Payment Date with respect to the applicable series of Notes next preceding the date of authentication thereof, unless (i ) such date of authentication shall be 5 11445 prior to the first Interest Payment Date with respect to such series, in which case it shall bear interest from July 1, 1987 in the case of the Series A Notes and January 13, 1988 in the case of the Series B Notes or (ii ) such date of authentication shall be an Interest Payment Date with respect to such series, in which case such Notes shall bear interest from such date of authentication; provided, however, that if, as shown by the records of the Paying Agent, interest on the Notes of any series shall be in default, Notes of such series issued in exchange for Notes of such series surrendered for transfer or exchange shall bear interest from the last date to which interest has been paid in full on the Notes of such series or, if no interest has been paid on the Notes of such series, from July 1, 1987 in the case of the Series A Notes and January 13 , 1988 in the case of the Series B Notes. Interest on the Series A Notes shall be payable on the Interest Payment Date for the Series A Notes at the applicable interest rate for the Interest Payment Period with respect to the Series A Notes, computed on the basis of a 360-day year of twelve 30-day months. Interest on the Series B Notes shall be payable on each Interest Payment Date with respect to such series at the applicable interest rate or rates for the Interest Payment Period with respect to such series which terminates on the day immediately preceding such Interest Payment . Date, computed on a 365-day year basis and actual days elapsed from and including the preceding Interest Payment Date with respect to such series to which interest has been paid. On the Interest Payment Date for each series of Notes, the Paying Agent shall pay accrued and unpaid interest for each Interest Payment Period with respect to the applicable series of Notes by check or draft mailed to the Holder of each such Note in whose name such Note is registered on the registration books of the Paying Agent at 10: 00 a.m. (New York City time) on such Interest Payment Date . The offer and sale or repurchase of any Series B Note as contemplated by Section 3 (c) hereof, shall cause the purchaser or the Underwriter, as the case may be, to be recognized as the Holder of record of the Notes so offered and sold or repurchased as of 10: 01 a.m. (New York City time) on such Interest Payment Date. The principal of the Notes shall be payable at maturity, only to the registered owner thereof upon surrender thereof, in lawful money of the United States of America, at the principal office of the Paying Agent. (i ) Interest on the Series A Notes. The Series A Notes shall bear interest to and including July 27, 1988 at the Initial Rate for the Series A Notes. 6 11445 (ii) Interest on the Series B Notes. For the Interest Period commencing on January 13 , 1988, and ending on (and including) the day immediately preceding the first Rate Adjustment Date with respect to the Series B Notes, the Series B Notes shall bear interest at the Initial Rate for the Series B Notes. With respect to each Interest Period thereafter, the interest rate shall be adjusted, effective each Rate Adjustment Date with respect to the Series B Notes, to the Adjusted Rate for the Series B Notes. Such Adjusted Rate shall be determined as follows: On the Monday next preceding each Rate Adjustment Date with respect to the Series B Notes (or if such day is not a Business Day, the next preceding Business Day) , the Underwriter, having due regard to prevailing financial market conditions, shall determine the rate which, if borne by the Series B Notes, would, in its judgment, be the interest rate, but would not exceed the interest rate, which would enable the Underwriter to remarket the Series B Notes on the next succeeding Rate Adjustment Date with respect to the Series B Notes at the Purchase Price, and the interest rate so determined shall be the interest rate for the Interest Period commencing on such Interest Payment Date; provided that, if on the date of such determination, the Underwriter holds for its own account 15% or more in aggregate principal amount of the Series B Notes, the Adjusted Rate so determined shall not be more than 125% of 100% of the Interest Index, but, in any event, the rate which would, in its judgment, enable the Underwriter to remarket the Series B Notes on the next succeeding Rate Adjustment Date for the Series B Notes at the Purchase Price. The Underwriter shall disseminate such Adjusted Rate on the Munifacts Wire on the date it is determined and shall also give telephonic notice ( subsequently confirmed by written notice) to the County, the Paying Agent and the Fiscal Agent of such Adjusted Rate. If the Underwriter for any reason fails to determine the Adjusted Rate, or if a court finds the method of determining the Adjusted Rate set forth above to be unenforceable, the Adjusted Rate for the Series B Notes shall be 100% of the Interest Index as of each Rate Adjustment Date. NOTWITHSTANDING THE FOREGOING, THE ADJUSTED RATE WITH RESPECT TO ANY SERIES OF NOTES SHALL NOT EXCEED THE LESSER OF 12% OR THE MAXIMUM RATE PERMITTED BY APPLICABLE LAW. (c) Tender for Purchase by Series B Noteholder. Any registered owner of a Note of Series B shall have the right to tender such Note, or any $25, 000 portion thereof, for purchase by the Underwriter in accordance with the terms of the Series B Agreement on any Rate Adjustment Date for such Note by ( i ) giving telephonic notice to the Paying Agent prior to 10: 00 a.m. (New York City time) on the Tuesday next 7 1144S preceding the Rate Adjustment Date (or if such Tuesday is not a Business Day, on the next preceding Business Day) , and (ii ) delivering such Note, with the Election Notice on the reverse thereof completed and signed by the Noteholder or his duly authorized representative, to the Paying Agent prior to 10: 00 a.m. (New York City time) on such Rate Adjustment Date. Such Election Notice shall be substantially in the form of Exhibit C attached hereto. The Paying Agent shall notify, by telephone, the County and the Underwriter upon receipt of each telephonic notice of tender. Upon the receipt of such notification, the Underwriter will use its best efforts to offer for sale and to sell each Note or portion thereof for which telephonic notice of tender has been given, at the Purchase Price, for delivery on such Rate Adjustment Date. If on such Rate Adjustment Date the Underwriter has not been able to arrange for the resale, at the Purchase Price, of all Notes or portions thereof for which Noteholder' s Election Notices have been filed with the Paying Agent, the Underwriter, pursuant to and subject to the terms and conditions of the Series B Agreement, shall purchase, at the Purchase Price, the aggregate principal amount of Notes or portions thereof which have not been remarketed by 12 : 30 p.m. (New York City time) on such Rate Adjustment Date. The Paying Agent shall pay the Purchase Price of such Notes tendered for purchase by check or draft mailed to each registered owner of any Note or portion thereof for which a Noteholder' s Election Notice has been filed, against delivery of such Note. Funds for the payment of such Purchase Price shall be advanced by the Underwriter to the Paying Agent at 10: 00 a.m. (New York City time) on such Rate Adjustment Date and shall, if the Underwriter is able to remarket such Note, be reimbursed to the Underwriter from the proceeds of such remarketing. Nothing contained herein or in the Series B Agreement shall obligate the County to repurchase any Notes tendered for purchase, such obligation being only that of the Underwriter and then only . in accordance with the terms of the Series B Agreement. (d) Registration, Exchange, Transfer, and Replacement of Notes. Any Note may, in accordance with its terms, be transferred, or exchanged for a like aggregate principal amount of the same series and in authorized denominations, upon the books required to be kept by the Paying Agent pursuant to the provisions hereof, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Note for cancellation, and, in the case of a transfer, accompanied by delivery of a written instrument of transfer, duly executed in a form approved by the Paying Agent. Transfer of a Note shall not be permitted with respect to any Note or Notes or 8 1144S portions thereof for which a notice of tender of purchase has been given in accordance with Section 3 (c) . Whenever any Note shall be surrendered for transfer or exchange or tendered for payment in accordance with . Section 3 (c) , the County shall execute and the Paying Agent shall authenticate, if required, and deliver a new Note or Notes of authorized denominations of the same series for a like aggregate principal amount. The Paying Agent shall require the Noteholder requesting such transfer or •exchange to pay any tax or other governmental charge required to be paid with respect to such transfer or exchange. The Paying Agent will keep or cause to be kept, at its principal office in New York, New York, sufficient books for the registration and transfer of the Notes, which shall at all times be open to inspection by the County. Upon presentation for such purpose, the Paying Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such books, Notes as hereinbefore provided. If any Note shall become mutilated, the County, at the expense of the Holder of said Note, shall execute, and the Paying Agent shall thereupon authenticate and deliver a new Note of like tenor and number in exchange and substitution for the Note so mutilated, but only upon surrender to the Paying Agent of the Note so mutilated. Every mutilated Note so surrendered to the Paying Agent shall be cancelled by it and delivered to, or upon the order of, the County. If any Note shall be lost, destroyed or stolen, evidence of such loss, destruction. or theft may be submitted to the County and the Paying Agent and, if such evidence be satisfactory to both and indemnity satisfactory to them shall be given, the County, at the expense of the owner, shall execute, and the Paying Agent shall thereupon authenticate and deliver a new Note of like tenor and number in lieu of and in substitution for the Note so lost, destroyed or stolen (or if any such Note shall have matured or shall be about to mature, instead of issuing a substitute Note, the Paying Agent may pay the same without surrender thereof) . The Paying Agent may require payment of a sum not exceeding the actual cost of preparing each new Note issued pursuant to this paragraph and of the expenses which may be incurred by the County and the Paying Agent in the premises. Any Note issued under these provisions in lieu of any Note alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the County whether or not the Note so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be 9 1144S entitled to the benefits of this Resolution with all other Notes secured by this Resolution. The County and the Paying Agent may treat the person in whose name any Note is registered as the owner of such Note for the purpose of receiving payment of principal of and interest on such Note and for all other purposes whatsoever, and neither the County nor the Paying Agent shall be affected by notice to the contrary. All Notes surrendered for payment or registration of transfer, if surrendered to any person other than the Paying Agent, shall be delivered to the Paying Agent and shall be promptly cancelled by it. The County may at any time deliver to the Paying Agent for cancellation any Notes previously authenticated and delivered hereunder which the County may have acquired in any manner whatsoever, and all Notes so delivered shall promptly be cancelled by the Paying Agent. No Note shall be authenticated in lieu of or in exchange for any Notes cancelled as provided herein, except as expressly permitted hereunder. All cancelled Notes held by the Paying Agent shall be disposed of as directed by the County. (e) Acceleration of Notes. If the County fails to pay interest on any Series B Note on any Interest Payment Date occurring prior to the Interest Payment Date on July 27, 1988, all Notes shall become due and payable ten Business Days thereafter. Notice of such acceleration of maturity of the Notes shall be given by the County which notice shall specify the date on which all Notes shall mature. Notice of acceleration of maturity shall be deemed given when deposited in the United States mail, first class postage prepaid, addressed to the Paying Agent and to each registered owner at the address shown on the books of registration maintained by the Paying Agent for that purpose, or if there is no such address, in care of the Paying Agent. Any failure to receive such notice or any defect therein shall not affect the accelerated maturity date of the Notes. The amount payable by the County on acceleration of the Notes shall be the principal amount of the Notes, without any premium or penalty, plus accrued and unpaid interest to the date specified in such notice as the date of maturity. The Notes shall bear interest until paid at the rate of interest in effect on the date of such default in the payment of interest. If on the maturity date specified in the notice the County deposits or causes to be deposited with the Paying Agent, in immediately available funds, a sum sufficient to pay the aggregate principal amount of Notes Outstanding and interest thereon to the date specified in the notice, then interest on such Notes shall cease to accrue from and after 10 1144S such date and the obligation of the County with respect to such Notes shall be discharged and thereafter such Notes shall be payable only from the moneys on deposit therefor with the Paying Agent. Section 4. Form of Notes. The Notes shall be issued only in fully registered form, without coupons. The Series A Notes and the Series B Notes shall be substantially in the form and substance set forth in Exhibit A and Exhibit B, respectively, attached hereto and by reference incorporated herein, the blanks in said form to be filled in with appropriate words and figures. Section S. Use of Proceeds; Rebate Fund. The proceeds of the sale of the Notes shall be used and expended by the County for any purpose for which it is authorized to expend funds from the General Fund of the County, and shall either, at the option of the County, be deposited in the General Fund of the County or deposited as received in a special fund designated as "1987-1988 Tax and Revenue Anticipation Note Proceeds Fund. " On the date that is six months from the date of issuance of the Series A Notes, the Treasurer shall calculate the cash flow of the General Fund during the preceding six-month period. That calculation shall take into account the expenditures from and moneys in the General Fund and all other available funds, including proceeds of the Series A Notes. If such calculations show that the amount of available moneys held in such funds was at no time during such six-month period less than 11% of the proceeds of the Series A Notes, the County shall promptly notify Bond Counsel and, to the extent of its power and authority, comply with the written instructions received from Bond Counsel as to the means of satisfying the rebate requirements of Section 148 of the Code. The County shall also establish and maintain a fund separate from any other fund established and maintained hereunder designated as the "1987-1988 Tax and Revenue Anticipation Notes Rebate Fund" and within such Fund there shall be established and maintained two separate accounts designated as the Excess Account and the Earnings Account. There shall be deposited in each account of the Rebate Fund such amounts as are required to be deposited therein in accordance with the written instructions from Bond Counsel pursuant to this Section. Section 6. Repayment Pledge. The principal amount of the Notes, together with the interest thereon, shall be payable from taxes, income, revenue, cash receipts and other 11 1144S moneys which are received by the County for the General Fund of the County during or attributable to Fiscal Year 1987-1988. As security for the payment of the principal of and interest on the Notes, the County hereby pledges the first Thirty Million Dollars ($30, 000, 000) together with an amount sufficient to pay the interest on the Series A Notes unpaid after the date of such deposit to maturity of the first installment of property taxes (to be received by the County during December 1987, and attributable to the County on the secured roll which becomes due and payable on November 1, 1987 and delinquent on December 10, 1987) which is transferred to the general fund of the County in the Accounting Period ending January 13, 1988; the first Ten Million Dollars ($10, 000, 000) of unrestricted revenues received by the County during the Accounting Period ending March 11, 1988; the first Fifteen Million Dollars ($15, 000, 000) of unrestricted revenues received by the County during the Accounting Period ending April 12, 1988; and the first Forty-Five Million Dollars ($45, 000, 000) , together with an amount sufficient (net of earnings to the date of such deposit on moneys in the Repayment Fund) ( i ) to satisfy and make up any deficiency in the amount required to be deposited in the Repayment Fund during any prior Accounting Period and (ii ) to pay the interest on the Series B Notes accruing and unpaid after the date of such deposit to maturity at an assumed interest rate of the lesser of 12% per annum or the maximum legal rate of interest (to the extent the actual interest rate cannot be determined) , of unrestricted revenues received by the County during the Accounting Period ending on , May 11, 1988. The moneys required to be deposited in the Repayment Fund are hereinafter called the "Pledged Revenues. " In the event that by the next to last Business Day of any such Accounting Period there are insufficient secured property taxes or unrestricted revenues, as the case may be, so transferred to permit the deposit into the Repayment Fund of the full amount thereof to be deposited from said secured property taxes or unrestricted revenues in such Accounting Period, then the amount of any deficiency shall be satisfied and made up on such date from any other moneys of the County lawfully available for the payment of the principal of the Notes and the interest thereon. In the event that on such date the amount of other moneys of the County lawfully available for said payment is insufficient to fully satisfy and make up any deficiency in the deposit into the Repayment Fund required hereunder, then such deficiency shall be satisfied and made up from the first other moneys of the County lawfully available for said payment when the same are received by the County. The principal of the Notes and the interest thereon shall constitute a first lien and charge against and shall be payable from the first moneys received by the County from the Pledged Revenues, and, to the extent 12 11445 not so paid, shall be paid from any other moneys of the County lawfully available therefor (all as provided in Sections 53856 and 53857 of the Government Code) . Section 7 . Repayment Fund. (a), Establishment. In the Accounting Period in which received, the Pledged Revenues (in cash or in investments permitted by Section 7(b) hereof which have a market value on such Business Day equal to the amount required to be deposited on such Business Day) shall be deposited by the County with, and held in trust by, the Fiscal Agent, as hereinafter appointed, in a special fund designated the 1987-1988 Tax and Revenue Anticipation Note Repayment Fund and shall be applied as directed in this Resolution. The principal of and interest on the Notes shall constitute a first lien and charge on amounts deposited in the Repayment Fund and any money deposited in the Repayment Fund shall be for the ratable benefit of the Holders of the Notes. I.f on the date that is six months from the date of issuance of the Series A Notes, proceeds of the Series A Notes deemed spent for federal arbitrage rebate purposes do not exceed ninety percent (90%) of the principal amount of the Series A Notes (or such other amount as the County is advised in writing by Bond Counsel) , the amounts to be deposited in the Repayment Fund during the Accounting Periods in which received shall be deposited as soon as received. Until the principal of the Notes and all interest due thereon are paid in full or until provision has been made for the payment in full of the principal of and interest on the Notes, the moneys in the Repayment Fund shall be applied only for the purposes for which such Repayment Fund was created. On each Interest Payment Date after May 4, 1988, the Fiscal Agent shall transfer to the Paying-Agent the amount necessary to pay interest on the Notes on such Interest Payment Date if and to the extent the County has not provided funds to the Paying Agent for such purpose. On the maturity date of the Notes the amount of money in the Repayment Fund necessary to pay principal of and interest due at maturity on the Notes shall be transferred to the Paying Agent. (b) Investment. Moneys in the Repayment Fund shall be invested as permitted by Section 53601 of the Government Code, provided that no moneys shall be invested in investments permitted by subsection (h) (except that moneys may be invested in negotiable certificates of deposit of the fifty largest banks in the United States or domestic subsidiaries of the largest fifty world banks, so long as such world banks are domiciled in the following countries: Western Hemisphere - United States and Canada; Europe - France, Germany (West) , Netherlands, Norway, Sweden, Switzerland and the United Kingdom; Asia - Australia and Japan, as ranked by size of deposits) and subsection (i ) (to 13 11445 the extent that subsection ( i) applies to reverse repurchase agreements) of said Section 53601 . Investments of moneys on deposit in the Repayment Fund shall not have maturity dates later than the maturity date of the Notes. The proceeds of any such investments shall be retained by the Fiscal Agent in the Repayment Fund until the principal of all of the Notes and the unpaid interest thereon shall have been fully paid or until provision shall have been made for such payment, at which time any excess amount shall be transferred to the General Fund of the County. Section 8. Fiscal Agent. The Wall Street Trust Company of California in Los Angeles, California, is hereby appointed fiscal agent for the Notes (the "Fiscal Agent" ) . Funds held by the Fiscal Agent in the Repayment Fund shall be held and invested as herein provided. The form of Fiscal Agency Agreement attached hereto as Exhibit D is hereby approved, and the Treasurer is hereby authorized to execute and directed to execute the same substantially in the form attached with such changes as he deems necessary. Section 9 . Execution of Notes. The Treasurer is hereby authorized to sign the Notes by use of his facsimile signature, and the Clerk of the Board of Supervisors of the County is hereby authorized to countersign the Notes by use of his facsimile signature and to affix the seal of the Board thereto by facsimile impression thereof, and said officers are hereby authorized to cause the blank spaces thereof to be filled in as may be appropriate. The Notes shall not be valid, however, unless and until the Paying Agent shall have manually authenticated such Notes. Section 10. Amendments Permitted. (a) This Resolution and the rights and obligations of the County and of the Noteholders and of the Fiscal Agent and of the Paying Agent may be modified or amended at any time by a resolution of the Board which shall become binding when the written consents of the Hoiders of sixty per cent ( 60%) in aggregate principal amount of the Notes then Outstanding shall have been filed with the Fiscal Agent. No such modification or amendment shall ( i ) extend the fixed maturities of the Notes, or reduce the rate of interest thereon, or extend the time of payment of interest, or reduce the amount of principal thereof, without the consent of the Holder of each Note so affected, or ( ii ) reduce the aforesaid percentage of Noteholders whose consent is required for the execution of any modification or amendment of this Resolution, or (iii ) modify any of the rights or obligations of the Fiscal Agent or the Paying Agent without its written consent thereto, as applicable. 14 1144S (b) This Resolution and the rights and obligations of the County and of the Noteholders may also be modified or amended at any time by a resolution of the Board which shall become binding upon adoption, without the consent of any Noteholders but only to the extent permitted by law and only for any one or more of the following purposes: ( i) to add to the covenants and agreements of the Noteholders contained in this Resolution other covenants and agreements thereafter to be observed or to surrender any right or power herein reserved to or conferred upon the County; (ii ) to cure, correct or supplement any ambiguous or defective provision contained in this Resolution or in regard to questions arising under this Resolution, as the County may deem necessary or desirable and not inconsistent with this Resolution, and which shall not materially adversely affect the interests of the Noteholders, and (iii ) to amend the provisions herein relating to the Series B Notes prior to the issuance thereof, so long as such mofifications or amendments do not materially adversely affect the interests of the Holders of the Series A Notes. Section 11 . Tax Covenants. ( a) The County covenants that it shall make. all calculations in a reasonable and prudent fashion relating to any rebate of excess investment earnings on the proceeds of the Notes due to the United States Treasury, shall segregate and set aside from lawfully available sources the amount such calculations may indicate may be required to be paid to the United States Treasury and shall otherwise at all times do and perform all acts and things necessary and within its power and authority, including complying with each applicable requirement of Section 103 and Sections 141 through 150 of the Code and complying with the instructions of Bond Counsel referred to in Section 5 hereof, to assure that interest paid on the Series A Notes shall, for the purposes of federal income taxes and California personal income taxation, be excludable from the gross income of the recipients thereof and exempt from such taxation. As part of the performance of the covenant contained in the preceding sentence, promptly after six months from the date of the issuance of the Series A Notes, the County will reasonably and prudently calculate the amount of the Series A Note proceeds which have been expended, with a view to determining whether or not the County has met the safe harbor requirements of Section 148(f) (4) (B) ( ii ) of the Code with respect to the Series A Notes, and if it has not met such safe harbor requirements, it will reasonably and prudently calculate the amount, if any, of investment profits which must be rebated to the United States and will immediately set aside, from revenues attributable to the 1987-1988 Fiscal Year or, to the extent 15 11445 not available from such revenues, from any other moneys lawfully available, the amount of any such rebate in the Rebate Fund referred to in Section 5 hereof. (b) Notwithstanding any other provision of this Resolution to the contrary, upon the County' s failure to observe, or refusal to comply with, the covenants contained in this Section 11, no one other than the Holders or former Holders of the Notes shall be entitled to exercise any right or remedy under this Resolution on the basis of the County' s failure to observe, or refusal to comply with, such covenants. (c) The covenants contained in this Section 11 and in Section 5 hereof shall survive the payment of the Notes. Section 12 . Series B Notes Not Exempt from Federal Taxes. The Board, as issuer of the Series B Notes on behalf of the County, has determined that interest on the Series B Notes will not be excludable from the gross income of the recipients thereof pursuant to Section 103 of the Code. Section 13 . Paying Agent and Registrar. BankAmerica Trust Company of New York is hereby designated the registrar and paying agent of the County for the payment of principal of and interest on the Notes. The County hereby directs and authorizes the payment by the Paying Agent of the interest on and principal of the Notes when such become due and payable, from an account held by the Paying Agent in the name of the County in the manner set forth herein. The County hereby covenants to deposit funds in such account at such times and in such amounts to provide sufficient moneys to make interest payments on each Interest Payment Date and to pay the principal of and interest on the Notes on the day on which they mature. Payment of the Notes shall be in accordance with the terms of the Notes and this Resolution. This appointment shall not preclude the County from removing the Paying Agent and appointing one or more successors thereto, or appointing additional financial institutions to act as paying agent or registrar, all without notice to or the consent of the registered owner of any Note. Any such successor paying agent shall be a bank or trust company with offices in New York, New York acceptable to the County and the Underwriter. Section 14. Series A Purchase Agreement and Series B Purchase and Remarketing Agreement. The Series A Agreement and the Series B Agreement will be entered into with the Underwriter, substantially in the forms attached hereto as Exhibit E and F, respectively, whereby the Underwriter shall purchase the Notes from the County and 16 1144S purchase or remarket the Notes as more particularly set forth therein. Such Agreements are hereby approved with such additions, changes or corrections as the Treasurer may approve upon consultation with County Counsel . The Treasurer is hereby authorized and directed to reduce the aggregate principal amount of Series B Notes to be issued by the County if the Treasurer determines that such reduction is in the best interests of the County. Such reduction of principal shall be set forth in the Series B Agreement. The Treasurer is hereby authorized and directed to negotiate, with the Underwriter, the Initial Interest Rates, not to exceed twelve percent ( 12%) per annum, on the Notes and the discount, if any, on the purchase prices of the Notes paid by the Underwriter. If such Initial Interest Rates (not to exceed twelve percent ( 12%) per annum) and said purchase prices are acceptable to the Treasurer, the Treasurer is hereby further authorized and directed to execute and deliver the Series A Agreement, and the Series B Agreement, as the case may be, and such other documents required to be executed and delivered thereunder, for and in the name and on behalf of the County. Section 15 . Approval of Official Statements. The form of Official Statement relating to the Series A Notes attached hereto as Exhibit G, and the form of Official Statement relating to the Series B Notes attached hereto as Exhibit H, substantially in the forms presented to this meeting, are hereby approved with such additions, changes and corrections as the Treasurer may approve upon consultation with the County' s Bond Counsel; the distribution of said Official Statement relating to the Series A Notes in preliminary form is hereby ratified; and the Treasurer and the Underwriter are hereby authorized to distribute copies of said Official Statements in final form in connection with the offering and sale of the Notes. Section 16. Validity of Proceedings. It is hereby covenanted and warranted by the County that all representations and recitals contained in this Resolution are true and correct, and that the County, and its appropriate officials, have duly taken all proceedings necessary to be taken by them, and will take any additional proceedings necessary to be taken by them, for the levy, collection and enforcement of the taxes, revenue, income, cash receipts and other moneys pledged hereunder in accordance with law and for carrying out the provisions of this Resolution. 17 11445 PASSED AND ADOPTED by the Board of Supervisors of the County of Contra Costa this 16th day of June , 1987, by the following vote: AYES: Supervisors Powers, Fanden, Schroder, Torlakson, McPeak NOES: None ABSENT: None Sunne Wright McPeak Chair of the Board of Supervisors of the County of Contra Costa (Seal ) Attest ed: June 16 , 1987 Philip J. Batchelor County Administrator and Clerk of the Board of Supervisors of the County of Contra Costa By gte-� 9 �fl' Anne 0. Maglio Deputy Clerk 18 1144S EXHIBIT A COUNTY OF CONTRA COSTA, CALIFORNIA 1987-1988 TAX AND REVENUE ANTICIPATION NOTE SERIES A REGISTERED REGISTERED No. Date: July 1, 1987 Registered Owner: Principal Amount: Interest Rate: FOR VALUE RECEIVED, the County of Contra Costa (the "County" ) , State of California, acknowledges itself indebted to and promises to pay to the Registered Owner set forth above, or registered assigns, the principal sum set forth above on July 27, 1988, unless payment of this Note shall have been duly made or provided for upon acceleration of the maturity hereof, and to pay interest on the balance of said principal sum from time to time remaining unpaid from July 1, 1987, computed on the basis of a 360-day year of twelve 30-day months, at maturity at the rate of interest set forth above, in lawful money of the United States of America until payment in full of said principal sum. Interest shall be paid by check or draft mailed or delivered to the person in whose name this Note is registered -at 10: 00 a.m. (New York City time) on July 27, 1988. The principal of this Note shall be payable only to the registered owner hereof upon presentation and surrender of this Note as the same shall fall due at maturity or upon acceleration at the principal office of BankAmerica Trust Company of New York, as Paying Agent, Attention: Corporate Trust Administration, 40 Broad Street, 4th Floor, New York, New York 10004. No interest shall be payable for any period after maturity during .which the holder hereof fails to properly present this Note for payment. Notwithstanding the foregoing, if the County fails to pay interest on the Notes on any Interest Payment Date for any series of Notes prior to July 27, 1988, all Notes shall become due and payable ten Business Days thereafter. Notice of such acceleration of. maturity of the Notes shall be given by the County which notice shall specify the date on which all Notes shall mature. Any failure to receive such notice A-1 1144S or any defect therein shall not affect the accelerated maturity date of the Notes, all as more fully provided in Section 3 (e) of the Resolution. This Note is transferable by the registered holder hereof in person or by his attorney duly authorized in writing at the office of the Paying Agent in New York, New York, but only in the manner, subject to the limitations and upon payment of the charges provided in the Resolution, and upon surrender and cancellation of this Note. Upon such transfer a new Note or Notes of authorized denominations and for the same aggregate principal amount will be issued to the transferees in exchange herefor. The County and the Paying Agent may deem and treat the registered holder hereof as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof and interest due hereon and for all other purposes and neither the County nor the Paying Agent shall be affected by any notice to the contrary. It is hereby certified, recited and declared that this Note is one of an authorized issue of County of Contra Costa 1987-1988 Tax and Revenue Anticipation Notes, Series A (the "Series A Notes" ) aggregating Thirty Million Dollars ($30, 000, 000) in principal amount issued as one of not to exceed two series of County of Contra Costa 1987-1988 Tax and Revenue Anticipation Notes (the "Notes" ) aggregating not to exceed One Hundred Million Dollars ( $100, 000, 000) in aggregate principal amount; the Notes are all made, executed and given pursuant to and by authority of a Resolution (the "Resolution" ) of the Board of Supervisors of the County duly passed and adopted under and by authority of Article 7 . 6 (commencing with Section 53850) of Chapter 4, Part 1, Division 2, Title 5, California Government Code, and that all acts, conditions and things required to exist, happen and be performed precedent to and in the issuance of this Note have existed, happened and been performed in regular and due time, form and manner as required by law, and that this Note, together with all other indebtedness and obligations of the County, does not exceed any limit prescribed by the Constitution or statutes of the State of California. Every capitalized term used herein which is not defined herein shall have the same meaning as provided therefor in the Resolution. The principal amount of the Notes, together with the interest thereon, shall be payable from taxes, income, revenue, cash receipts and other moneys which are received for or accrued to the General Fund of the County during Fiscal Year 1987-1988. As security for the payment of the principal A-2 1144S of and interest on the Notes, the County has pledged to deposit in trust in the Repayment Fund (as that term is defined in the Resolution) : the first $30, 000, 000 together with an amount sufficient to pay the interest on the Series A Notes unpaid after the date of such deposit to maturity of the first installment of secured property taxes (to be received by the County during December 1987, and attributable to the County on the secured roll which becomes due and payable on November 1, 1987 and delinquent on December 10, 1987 ) which is transferred to the general fund of the County in the Accounting Period ending on January 13, 1988; the first $10, 000, 000 of unrestricted revenues received by the County during the Accounting Period ending March 11, 1988; the first $15, 000, 000 of unrestricted revenues received by the County during the Accounting Period ending April 12 , 1988; and the first $45, 000, 000, together with an amount sufficient (net of earnings on moneys to the date of such deposit in the Repayment Fund) (i ) to satisfy and make up any deficiency in the amount required to be deposited in the Repayment Fund during any prior Accounting Period and ( ii ) to pay the interest on the Series B Notes accruing and unpaid after the date of such deposit to maturity at an assumed interest rate of the lesser of 12% per annum or the maximum legal rate of interest (to the extent the actual interest rate cannot be determined) , of unrestricted revenues received by the County during the Accounting Period ending on May 11, 1988. The moneys required to be deposited in the Repayment Fund are hereinafter called the "Pledged Revenues. " The principal of the Notes and the interest thereon shall constitute a first lien and charge against and shall be payable from the first moneys received by the County from the Pledged Revenues, and, to the extent not so paid, shall be paid from any other moneys of the County lawfully available therefor. This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Registrar. A-3 11445 IN WITNESS WHEREOF, the County of Contra Costa has caused this Note to be executed by the facsimile signature of its County Treasurer-Tax Collector and countersigned by the the facsimile signature of the Clerk of the Board of Supervisors of the County, and caused its official seal or a facsimile thereof to be affixed hereto, all as of July 1, 1987. COUNTY OF .CONTRA COSTA By Alfred P. Lomeli County Treasurer-Tax Collector (Seal) Countersigned: Philip J. Batchelor County Administrator and Clerk of the Board of Supervisors A-4 1144S CERTIFICATE OF AUTHENTICATION This note is one of the notes described in the within mentioned Resolution and is one of the 1987-1988 Tax and Revenue Anticipation Notes, Series A of the County of Contra Costa. Date of Authentication: BANKAMERICA TRUST COMPANY OF NEW YORK, as Registrar By Authorized Officer A-5 1144S [FORM OF ASSIGNMENT] For value received the undersigned do(es) hereby sell, assign and transfer unto the within-mentioned registered Note and hereby irrevocably- constitute( s) and appoint( s) attorney, to transfer the same on the books of the Paying Agent with full power of substitution in the premises. Dated: Signature guaranteed: A-6 1144S EXHIBIT B COUNTY OF CONTRA COSTA, CALIFORNIA, 1987-1988 TAX AND REVENUE ANTICIPATION NOTE, TAXABLE SHORT TERM OPTIONAL PUT SERIES B REGISTERED REGISTERED No. Date: January 13, 1988 Registered Owner: Principal Amount: Initial Rate of Interest: FOR VALUE RECEIVED, the County of Contra Costa (the "County" ) , State of California, acknowledges itself indebted to and promises to pay to the Registered Owner set forth above, or registered assigns, the principal sum set forth above on July 27, 1988, unless payment of this Note shall have been duly made or provided for upon acceleration of the maturity hereof, and to pay interest on the balance of said principal sum from time to time remaining unpaid from and including the Interest Payment Date (as hereinafter defined) next preceding the date of authentication hereof, unless this Note is authenticated prior to February 10, 1988 or as of a day that is an Interest Payment Date, in which case it shall bear interest from January 13, 1988 or from such Interest Payment Date, respectively; provided, however, that if at the time of registration of this Note, interest is in default on this Note, such Note shall bear interest from the Interest Payment Date to which interest has previously been paid, or from January 13 , 1988 if no interest has been paid hereon, until the principal hereof shall have become due. Interest, computed on a 365-day year basis and actual days elapsed, is payable on February 10, 1988, and on each fourth Wednesday thereafter or if such day is not a Business Day, on the next succeeding Business Day (each hereinafter referred to as an "Interest Payment Date" ) and at maturity ( and accrued to each such date) , at the Initial Rate to and including February 10, 1988 and then at an Adjusted Rate all as more fully described below, in lawful money of the United States of America until payment in full of said principal sum. Interest paid on an Interest Payment Date shall be paid by check or draft mailed or delivered to the person in whose name this Note is registered at 10: 00 a.m. (New York City time) on such Interest Payment Date. B-1 1144S The principal of this Note shall be payable only to the registered owner hereof upon presentation and surrender of this Note as the same shall fall due at maturity or upon acceleration at the principal office of BankAmerica Trust Company of New York, as Paying Agent, Attention: Corporate Trust Administration, 40 Broad Street, 4th Floor, New York, New York 10004. No interest shall be payable for any period after maturity during which the holder hereof fails to properly present this Note for payment. The Initial Rate shall be the rate of interest per annum set forth above. On and effective as of February 10, 1988 and on each fourth Wednesday thereafter, the interest rate may be adjusted (a "Rate Adjustment Date" ) to an Adjusted Rate. An Adjusted Rate, effective on a Rate Adjustment Date for the period commencing on such Rate Adjustment Date to and including the day immediately preceding the next Rate Adjustment Date (an "Interest Period" ) , shall be a rate determined as follows: On February 8, 1988 and thereafter on the Monday preceding each Rate Adjustment Date (or, if such day is not a Business Day, the next preceding Business Day) , the Bank (as hereinafter defined) , having due regard to prevailing financial market conditions, shall determine the rate which, if borne by the Series B Notes, would, in its judgment, be the interest rate, but would not exceed the interest rate, which would enable the Bank to remarket the Series B Notes on the next succeeding Rate Adjustment Date with respect to the Series B Notes at the Purchase Price, and the interest rate so determined shall be the interest rate for the Interest Period commencing on the next succeeding Wednesday; provided that, if on the date of such determination, the Bank holds for its own account 15% or more in aggregate principal amount of the Series B Notes, the Adjusted Rate for the Series B Notes so determined shall not be more than 125% of 100% of the Interest Index, but, in any event, the rate which would, in its judgment, enable the Underwriter to remarket the Series B Notes on the next succeeding Rate Adjustment Date at the Purchase Price. The Underwriter shall disseminate such Adjusted Rate on the Munifacts Wire on the date it is determined and also shall give telephonic notice ( subsequently confirmed by written notice) to the County, the Paying Agent and the Fiscal Agent of such Adjusted Rate. If Underwriter for any reason fails to determine the Adjusted Rate, or if a court finds the method of determining the Adjusted Rate set forth above to be unenforceable, the Adjusted Rate for the Series B Notes shall be 100% of the Interest Index as of each Rate Adjustment Date . B-2 1144S NOTWITHSTANDING THE FOREGOING, THE ADJUSTED RATE SHALL NOT EXCEED THE LESSER OF 12% OR THE MAXIMUM RATE PERMITTED BY APPLICABLE LAW. Notwithstanding the foregoing, if the County fails to pay interest on the Notes on any Interest Payment Date for any series of Notes prior to July 27, 1988, all Notes shall become due and payable ten Business Days thereafter. Notice of such acceleration of maturity of the Notes shall be given by the County which notice shall specify the date on which all Notes shall mature. Any failure to receive such notice or any defect therein shall not affect the accelerated maturity date of the Notes, all as more fully provided in Section 3 (e) of the Resolution. At the option of the registered owner hereof, this Note will be purchased according to the terms and subject to the conditions of that certain Series B Contract of Purchase and Dealer Remarketing Agreement, dated as of _, (the "Agreement" ) , between the County and Bank of America National Trust and Savings Association (the "Bank" ) , on any Rate Adjustment Date by (i ) giving telephonic notice to the Paying Agent prior to 10: 00 a.m. (New York City time) on the Tuesday (or if such Tuesday is not a Business Day, the next preceding Business Day) prior to such Rate Adjustment Date and (ii ) delivery of this Note (with the form of Election Notice attached hereto completed) to the Paying Agent prior to 10:00 a.m. (New York City time) on such Interest Payment Date. THE OBLIGATION TO PURCHASE THIS NOTE AT THE OPTION OF THE REGISTERED OWNER HEREOF IS NOT AN OBLIGATION OF THE COUNTY BUT IS ONLY AN OBLIGATION OF THE BANK PURSUANT TO THE AGREEMENT. THE OBLIGATION OF THE BANK TO SO PURCHASE THIS NOTE IS NOT UNCONDITIONAL. IN THE EVENT THE BANK IS NOT OBLIGATED TO PURCHASE THIS NOTE THEN THERE IS NO OPTION OR OTHER RIGHT TO HAVE THIS NOTE PURCHASED. This Note is transferable by the registered holder hereof in person or by his attorney duly authorized in writing at the office of the Paying Agent in New York, New York, but only in the manner, subject to the limitations and upon payment of the charges provided in the Resolution, and upon surrender and cancellation of this Note. Upon such transfer a new Note or Notes of authorized denominations and for the same aggregate principal amount will be issued to the transferees in exchange herefor. The County and the Paying Agent may deem and treat the registered holder hereof as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof and interest due hereon and for all other B-3 11445 purposes and neither the County nor the Paying Agent shall be affected by any notice to the contrary. It is hereby certified, recited and declared that this Note is one of an authorized issue of County of Contra Costa 1987-1988 Tax and Revenue Anticipation Notes, Taxable Short Term Optional Put Series B (the "Series B Notes" ) aggregating ($ ) in principal amount issued as one of not to exceed two series of County of Contra Costa 1987-1988 Tax and Revenue Anticipation Notes (the "Notes" ) aggregating not to exceed One Hundred Million Dollars ( $100, 000, 000) in aggregate principal amount; the Notes are all made, executed and given pursuant to and by authority of a Resolution (the "Resolution" ) of the Board of Supervisors of the County duly passed and adopted under and by authority of Article 7 . 6 (commencing with Section 53850) of Chapter 4, Part 1, Division 2 , Title 5, California Government Code, and that all acts, conditions and things required to exist, happen and be performed precedent to and in the issuance of this Note have existed, happened and been performed in regular and due time, form and manner as required by law, and that this Note, together with all other indebtedness and obligations of the County, does not exceed any limit prescribed by the Constitution or statutes of the State of California. Every capitalized term used herein which is not defined herein shall have the same meaning as provided therefor in the Resolution. The principal amount of the Notes, together with the interest thereon, shall be payable from taxes, income, revenue, cash receipts and other moneys which are received for or accrued to the General Fund. of the County during Fiscal Year 1987-1988. As security for the payment of the principal of and interest on the Notes, the County has pledged to deposit in trust in the Repayment Fund (as that term is defined in the Resolution) : the first $30, 000, 000, together with an amount sufficient to pay the interest on the Series A Notes unpaid after the date of such deposit to maturity, of the first installment of secured property taxes (to be received by the County during December 1987, and attributable to the County on the secured roll which becomes due and payable on November 1, 1987 and delinquent on December 10, 1987) which is transferred to the general fund of the County in the Accounting Period ending on January 13, 1988; the first $10, 000, 000 of unrestricted revenues received by the County during the Accounting Period ending March 11, 1988; the first $15, 000, 000 of unrestricted revenues received by the County during the Accounting Period ending April 12, 1988; and the first $45, 000, 000, together with an amount sufficient (net of earnings on moneys to the date of such deposit in the Repayment Fund) ( i ) to satisfy and make up B-4 11445 R any deficiency in the amount required to be deposited in the Repayment Fund during any prior Accounting Period and (ii) to pay the interest on the Series B Notes accruing and unpaid after the date of such deposit to maturity at an assumed interest rate of the lesser of 12% per annum or the maximum legal rate of interest (to the extent the actual interest rate cannot be determined) , of unrestricted revenues received by the County during the Accounting Period ending on May 11, 1988. The moneys required to be deposited in the Repayment Fund are hereinafter called the "Pledged Revenues. " The principal of the Notes and the interest thereon shall constitute a first lien and charge against and shall be ' payable from the first moneys received by the County from the Pledged Revenues, and, to the extent not so paid, shall be paid from any other moneys of the County lawfully available therefor. This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Registrar. IN WITNESS WHEREOF, the County of Contra Costa has caused this Note to be executed by the facsimile signature of its County Treasurer-Tax Collector and countersigned by the the facsimile signature of the Clerk of the Board of Supervisors of the County, and caused its official seal or a facsimile thereof to be affixed hereto, all as of January 13, 1988. COUNTY OF CONTRA COSTA By Alfred P. Lomeli County Treasurer-Tax Collector (Seal) Countersigned: Philip J. Batchelor County Administrator and Clerk of the Board of Supervisors B-5 11445 CERTIFICATE OF AUTHENTICATION This note is one of the notes described in the within mentioned Resolution and is one of the 1987-1988 Tax and Revenue Anticipation Notes, Taxable Short Term Optional Put Series B of the County of Contra Costa. Date of Authentication: BANKAMERICA TRUST COMPANY OF NEW YORK, as Registrar By Authorized Officer B-6 1144S [FORM OF ASSIGNMENT) For value received the undersigned do(es) hereby sell, assign and transfer unto the within-mentioned registered Note and hereby irrevocably constitute( s) and appoint( s) attorney, to transfer the same on the books of the Paying Agent with full power of substitution in the premises. Dated: Signature guaranteed: B-7 1144S 14 EXHIBIT C To: ELECTION NOTICE The undersigned, the registered owner (the "Holder" ) of County of Contra Costa, California 1987-1988 Tax and Revenue Anticipation Note( s) , Taxable Short Term Optional Put Series B (the "Notes" ) , hereby notifies (the "Paying Agent" ) of the Holder' s election to have $ _ of the principal amount of this Note purchased on , which is an Rate Adjustment Date (as defined in the hereinafter mentioned Resolution) , and demands payment of: such principal sum, and interest accrued thereon, all as provided in a resolution of the Board of Supervisors of the County of Contra Costa, California authorizing the issuance of the Notes ( "Resolution" ) . The Holder acknowledges that unless this Note is delivered to the Paying Agent prior to 10: 00 a.m. New York City time, on such date, such principal amount will not be purchased on such date. The Holder understands that (a) the obligation to purchase Notes is not an obligation of the County of Contra Costa, but is only an obligation of Bank of America National Trust and Savings Association (the "Bank" ) pursuant to the Series B Agreement referred to in the Resolution and (b) the obligation of the Bank to so purchase Notes is not unconditional . In the event the Bank is not obligated to purchase Notes then the Holder has no right to have this Note or any portion hereof purchased. Name of Registered Owner** Dated: By Authorized Signature * To be printed on reverse side of Series B Note. ** Type or print name exactly as it appears on the Series B Note being tendered for purchase. C-1 11445